WSR 02-23-037

PERMANENT RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed November 13, 2002, 8:36 a.m. , effective January 1, 2003 ]

Date of Adoption: November 12, 2002.

Purpose: The Department of Retirement Systems is amending chapter 415-103 WAC, Washington State Patrol retirement system (WSPRS and other WACs as needed to implement ESB 5143 (2001) (chapter 329, Laws of 2001). Related "housekeeping" changes and codification of long-standing practices are being made at the same time. Please see Other Authority below for details.

Citation of Existing Rules Affected by this Order: Amending WAC 415-02-030, 415-10-040, 415-103-010, and 415-103-215.

Statutory Authority for Adoption: RCW 41.50.050(5).

Other Authority:


WAC Title Statutory Authority

Statutory authority for adoption for all WACs is RCW 41.50.050(5).

Statutes being implemented are as follows:

415-02-030 Definitions. RCW 41.50.050(5).
415-10-040 Calculation of cost to purchase service credit for members of PERS Plan 1, TRS Plan 1, or WSPRS Plan 1 or 2. Chapter 41.45 RCW, RCW 41.50.165.
415-103-010 WSPRS definitions. Chapter 43.43 RCW.
415-103-100 Are payments I received reportable compensation? Chapter 43.43 RCW.
415-103-215 What are the WSPRS Plan 1 retirement benefit options? RCW 43.43.260, [43.43.]270, [43.43.]278, [43.43.]280(1).
415-103-225 What are the WSPRS Plan 2 retirement benefit options? RCW 43.43.260, [43.43.]271, [43.43.]280(1), [43.43.]295.
415-108-727 Can I transfer service credit earned as a cadet in the public employees' retirement system to the WSPRS Plans 1 or 2? RCW 41.40.092, 43.43.120(6), 43.43.130.

Adopted under notice filed as WSR 02-18-074 on August 30, 2002.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 2, Amended 4, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 2, Amended 4, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.
Effective Date of Rule: January 1, 2003.

November 12, 2002

John Charles

Director

OTS-5606.4


AMENDATORY SECTION(Amending WSR 02-01-120, filed 12/19/01, effective 1/19/02)

WAC 415-02-030   Definitions.   This section contains a central location for definitions of words and phrases used in the department of retirement system's rules. It also serves as a directory for finding definitions within the RCWs and WACs.

(1) Accumulated contributions means the sum of all contributions paid into a member's defined benefit account, including interest.

(2) Appeal means the proceeding through which a party obtains review of a department action in an adjudicative proceeding conducted under chapter 34.05 RCW (the Administrative Procedure Act) and chapter 415-08 WAC (the department's appeal rules).

(3) Average final compensation - is defined in RCW 41.32.010(30) (TRS); RCW 41.35.010(14) (SERS); RCW 41.40.010(17) (PERS); and RCW ((43.42.120)) 43.43.120(15) (((WSP)) WSPRS).

(4) Cafeteria plan means a "qualified" employee benefit program under section 125 of the Internal Revenue Code, such as certain health and welfare plans.

(5) Calendar month refers to one of the twelve named months of the year, extending from the first day of the named month through the last day. For example: January 1st through January 31st is a calendar month. February 1st through February 29th is a calendar month in a leap year. March 13th through April 12th is not a calendar month.

(6) Compensation earnable or earnable compensation definitions can be found in RCW 41.32.010(10) and 41.32.345 (TRS); RCW 41.35.010(6) (SERS); and RCW 41.40.010(8) (PERS).

(((6))) (7) Contribution rate is:

(a) For employees: The fraction (percent) of compensation a member contributes to a retirement system each month.

(b) For employers: The fraction (percent) of payroll a member's employer contributes to a retirement system each month. Contribution rates vary for the different systems and plans.

(((7))) (8) Deferred compensation refers to the amount of the participant's compensation which the participant voluntarily defers from earnings before taxes.

(((8))) (9) Defined benefit plan is a pension plan in which a lifetime retirement benefit is available, based on the member's service credit and compensation.

(((9))) (10) Defined contribution plan is a plan in which part of members' or participants' earnings are deferred into an investment account in which tax is deferred until funds are withdrawn. The benefit is based on the contribution rate and the amount of return from the investment of the contributions. Members or participants receive the full market rate of return minus expenses. There is no guaranteed rate of return and the value of an account will increase or decrease based upon market fluctuations.

(((10))) (11) Department means the department of retirement systems.

(((11))) (12) Dependent care assistance salary reduction plan (DCAP) is a plan that allows an eligible employee of the state of Washington to set aside a "before tax" portion of his or her gross salary before federal income and Social Security taxes to be used for the reimbursement of dependent care expenses.

(((12))) (13) Director means the director of the department of retirement systems.

(((13))) (14) Employee means a worker who performs labor or services for a retirement systems employer under the control and direction of the employer as determined under WAC 415-02-110(2). An employee may be eligible to participate as a member of one of the state-administered retirement systems according to eligibility requirements specified under the applicable retirement system.

(((14))) (15) Employer is defined in RCW 41.26.030(2) (LEOFF), 41.32.010(11) (TRS), 41.34.010(5) (Plan 3), 41.35.010(4) (SERS), and 41.40.010(4) (PERS).

(((15))) (16) Ex-spouse refers to a person who is a party to a "dissolution order" as defined in RCW 41.50.500(3).

(17) Final average salary is defined in RCW 41.26.030(12) (LEOFF).

(((16))) (18) Gainsharing is the process through which members of certain plans share in the extraordinary investment gains on earnings on retirement assets under chapters 41.31 and 41.31A RCW.

(((17))) (19) Independent contractor means a contract worker who is not under the direction or control of the employer as determined under WAC 415-02-110 (2) and (3).

(((18))) (20) Member means a person who is included in the membership of one of the retirement systems created by chapters 2.10, 2.12, 41.26, 41.32, 41.34, 41.35, 41.40, or 43.43 RCW.

(((19))) (21) Participant means an eligible employee who participates in a deferred compensation or dependent care assistance plan.

(((20))) (22) Participation agreement means an agreement that an eligible employee signs to become a participant in a deferred compensation or dependent care assistance plan.

(((21))) (23) Pension plan is a plan that provides a lifelong post retirement payment of benefits to employees.

(((22))) (24) Petition means the method by which a party requests a review of an administrative determination prior to an appeal to the director. The department's petitions examiner performs the review under chapter 415-04 WAC.

(((23))) (25) Plan 1 means the retirement plans in existence prior to the enactment of chapters 293, 294 and 295, Laws of 1977 ex. sess.

(((24))) (26) Plan 2 means the retirement plans established by chapters 293, 294 and 295, Laws of 1977 ex. sess., ((and)) chapter 341, Laws of 1998, and chapter 329, Laws of 2001.

(((25))) (27) Plan 3 means the retirement plans established by chapter 239, Laws of 1995, chapter 341 Laws of 1998, and chapter 247 Laws of 2000.

(((26))) (28) Pop-up is a term that the department uses to refer to the benefit available to a retiree where the survivor of a retiree receiving a benefit reduced by a survivor option predeceases the retiree. Example: Linda is receiving a retirement benefit reduced by a survivor option for her husband, Joe. Joe dies before Linda. Linda's monthly retirement allowance increases. The department refers to the increase as a "pop-up."

(((27))) (29) Portability is the ability to use membership in more than one Washington state retirement system in order to qualify for retirement benefits. See chapters 41.54 RCW and 415-113 WAC.

(((28))) (30) Public record is defined in RCW 42.17.020(36).

(((29))) (31) Restoration is the process of restoring a member's service credit for prior periods.

(((30))) (32) Retirement system employer - see "employer."

(((31))) (33) Rollover means a distribution that is paid to or from an eligible retirement plan within the statutory time limit allowed.

(((32))) (34) Separation date is the date a member ends employment in a position eligible for retirement or disability benefit coverage.

(((33))) (35) Split account is the account the department establishes for a member or retiree's ex-spouse.

(36) Surviving spouse refers to a person who was married to the member at the time of the member's death and who is receiving or is eligible to receive a survivor benefit.

(37) Survivor means a person designated by the member to receive a monthly benefit allowance after the member dies.

(((34))) (38) Survivor benefit is a feature of a retirement plan that provides continuing payments to a beneficiary after the death of a member or retiree.

(39) The Uniform Services Employment and Reemployment Rights Act of 1994 (USERRA) is the federal law that requires employers to reemploy and preserve job security, pension and welfare benefits for qualified employees who engage in military service.

[Statutory Authority: RCW 41.50.050(5). 02-01-120, 415-02-030, filed 12/19/01, effective 1/19/02. Statutory Authority: RCW 41.50.050. 00-10-016, 415-02-030, filed 4/21/00, effective 5/22/00; 94-09-039, 415-02-030, filed 4/19/94, effective 5/20/94; Order 4, 415-02-030, filed 7/27/77.]

OTS-5607.2


AMENDATORY SECTION(Amending WSR 00-22-049, filed 10/27/00, effective 11/27/00)

WAC 415-10-040   Calculation of cost to purchase service credit for members of PERS Plan 1, TRS Plan 1 or WSPRS Plan 1 or 2.   If you are a member of PERS 1, TRS 1 or WSPRS Plan 1 or 2, the department will calculate the actuarial value of the service credit you purchase under RCW 41.50.165(2) using the following three part formula:


Part 1 Cost = Part 2 Cost =
Service Credit Being Purchased Years of Service
x x
Average Earnings Average Earnings
x x
Factor 1 Factor 2
x
Years of Earlier Retirement
x
Factor 3
Cost to purchase service credit = Part 1 Cost + Part 2 Cost.

The Part 1 Cost represents the cost of including the additional service in your retirement allowance calculation. The Part 2 Cost represents the cost of commencing your retirement allowance at the earliest possible age.

[Statutory Authority: Chapter 41.50 RCW. 00-22-049, 415-10-040, filed 10/27/00, effective 11/27/00. Statutory Authority: RCW 41.50.050 and 41.50.165. 97-01-014, 415-10-040, filed 12/6/96, effective 1/6/97.]

OTS-5898.1


AMENDATORY SECTION(Amending WSR 01-13-010, filed 6/8/01, effective 7/9/01)

WAC 415-103-010   WSPRS definitions.   (1) General. The definitions in RCW 43.43.120 and 41.50.010 apply to this chapter. In case of conflict between definitions, RCW 43.43.120 will prevail.

(2) (("Salary," for members commissioned:

(a) Prior to July 1, 2001, shall exclude any overtime earnings related to RCW 47.46.040 or voluntary overtime earned on or after July 1, 2001.

(b) On or after July 1, 2001, shall exclude any overtime earnings related to RCW 47.46.040, voluntary overtime, lump sum payments for deferred annual sick leave, unused accumulated vacation, unused accumulated annual leave, holiday pay, or any form of severance pay.)) Membership.

(a) WSPRS Plan 1 refers to members of the Washington state patrol retirement system commissioned before January 1, 2003.

(b) WSPRS Plan 2 refers to members of the Washington state patrol retirement system commissioned on or after January 1, 2003.

[Statutory Authority: RCW 41.50.050(5), 43.43.142, 43.43.278, 43.43.280. 01-13-010, 415-103-010, filed 6/8/01, effective 7/9/01.]

OTS-5855.2


NEW SECTION
WAC 415-103-100   Are payments I receive reportable compensation?   The following table will help you determine whether certain types of payments are reportable compensation. The department determines reportable compensation based upon the nature of the payment, not the name applied. See RCW 43.43.120(23).
Type of Payment Commission Date: Prior to 7/1/01 Commission Date: On or after 7/1/01
Overtime related to RCW 47.46.040(4) earned prior to 7/1/01 Yes No
Overtime related to RCW 47.46.040(4) earned on or after 7/1/01 No No
Voluntary overtime earned prior to 7/1/01 Yes No
Voluntary overtime earned on or after 7/1/01 No No
Fringe benefits, including, but not limited to, any type of insurance, or contributions for insurance, such as medical, dental, or life insurance, for members and/or their dependents No No
Lump sum payments for:
Deferred annual sick leave1 No No
Unused accumulated annual leave - 240 hour maximum2 Yes No
Holiday pay - 80 hour maximum Yes No

1See also RCW 41.04.340(4).
2See also RCW 43.43.263, 43.01.040 and 43.01.044.

[]

OTS-5907.2


AMENDATORY SECTION(Amending WSR 01-13-010, filed 6/8/01, effective 7/9/01)

WAC 415-103-215   ((WSPRS retirement benefit options.)) What are the WSPRS Plan 1 retirement benefit options?   (((1) When retiring for service, a married member can select either Option A (historic retirement option) under RCW 43.43.270 or Option B under RCW 43.43.278. Both options include a survivor feature that entitles the eligible surviving spouse to receive a monthly allowance after the retiree dies.

(2) As used in this section, the terms "spouse," "surviving spouse" and "eligible spouse" mean "lawful surviving spouse."

(3) Option A (historic retirement option and survivor benefit). The department pays the retiree a monthly retirement allowance in accordance with RCW 43.43.260 (Benefits). The department pays survivor benefits in accordance with RCW 43.43.270 (Retirement allowances).

(a) When the retiree dies, the department pays the retiree's lawful spouse a monthly retirement allowance equal to the gross monthly allowance received by the retiree, or an allowance equal to fifty percent of the average final salary (AFS) used to determine the retiree's benefit, whichever is less. This allowance is paid for the duration of the spouse's lifetime. The surviving spouse allowance will be adjusted by the annual increase amount as provided by RCW 43.43.272 (Surviving spouse allowance -- Annual adjustment).

(b) If a surviving spouse who is receiving benefits under this subsection marries another member of this retirement system and the retiree predeceases the spouse, the spouse can receive only the higher of the two survivor's allowances for which he or she qualifies. The surviving spouse cannot receive more than one survivor allowance at a time under this subsection.

(c) To be eligible for an allowance, the lawful surviving spouse of a retired member must have been married to the member prior to the member's retirement and continuously thereafter until the date of the member's death, or must have been married to the retired member at least two years prior to the member's death.

(d) If the retiree has surviving unmarried children under the age of eighteen years, each child shall be entitled to a benefit equal to five percent of the retiree's AFS at retirement. The combined benefits to the surviving spouse and all children cannot exceed sixty percent of the retiree's AFS.

(e) If there is no surviving spouse or the spouse dies, the child or children will receive a benefit equal to thirty percent of the retiree's AFS for one child and an additional ten percent of AFS for each additional child.

(f) All benefits cease upon the death of the surviving spouse or the youngest unmarried child's attainment of age eighteen, whichever occurs last. Any remaining balance of the member's accumulated contributions will be paid to:

(i) Such person or persons, trust, or organization as the member has nominated by written designation duly executed and filed with the department of retirement systems; or

(ii) The member's estate; or

(iii) If there is neither such designated person or persons still living at the time of death, then to the member's legal representative.

(4) Option B (actuarially equivalent retirement option and survivor benefit). The department pays the retiree a monthly benefit that is actuarially reduced by three percent to offset the cost of the survivor feature. The retiree's annual post-retirement increase (PRI) is based upon the amount of the retiree's reduced benefit.

(a) When the retiree dies, the department pays the retiree's eligible spouse a monthly retirement allowance equal to the gross monthly allowance received by the retiree. This allowance is paid for the duration of the spouse's lifetime. The surviving spouse allowance will be increased every July 1 by the amount of the PRI that had been paid to the retiree under the provisions of RCW 43.43.260(5).

(b) Benefits to the surviving spouse cease upon the spouse's death. Any remaining balance of the member's accumulated contributions will be paid to:

(i) Such person or persons, trust, or organization as the member has nominated by written designation duly executed and filed with the department of retirement systems; or

(ii) The member's estate; or

(iii) If there is neither such designated person or persons still living at the time of death, then to the member's legal representative.

(5) Retiree's benefit increases if spouse ceases to be married to retiree or predeceases retiree (pop-up provision).

(a) This subsection applies to members retiring on or after July 1, 2000, who select Option B.

(b) If the retiree's spouse ceases to be married to the retiree or dies before the retiree, the retiree's monthly retirement allowance increases, effective the first day of the following month, to:

(i) The amount that would have been received had the retiree chosen Option A; plus

(ii) Any post-retirement increases the retiree received prior to the survivor's death or the termination of marriage.

(c) Pop-up recalculation example:

Option B:

Bob retires on August 1, 2000. He selects Option B so that his spouse Linda, to whom he has been married for 30 years, will receive his monthly allowance and post-retirement increases after he dies. As a result, his monthly allowance is reduced by three percent from $3,000, the Option A, historic retirement and survivor benefit, to $2,910. Bob's PRI is $58.20, two percent of his reduced retirement allowance.

Unfortunately, Linda dies in September 2002. Under the "pop-up" provision, Bob's monthly benefit will increase in October 2002 to a total of $3,116.40. His new benefit amount is composed of the $3,000 he would have received had he originally chosen Option A, plus the total of the PRIs he received in 2001 and 2002.


Year Option A (Historic Survivor Benefit) Annual PRI Based on Option A Benefit Option B (Full Survivor Benefit) Annual PRI Based on Optional B Benefit Total Benefit
08/01/2000 2,910.00 (not eligible.) 2,910.00
07/01/2001 2,910.00 58.20 2,968.20
07/01/2002 2,968.20 58.20 3.026.40
10/01/2002 3,000.00 3,116.40
07/01/2003 3,000.00 60.00 3,176.40

On July 1, 2003, Bob's PRI will be two percent of the Option A amount ($60.00) and his benefit will increase to $3,176.40.

(d) If the retiree whose benefit increases under this section thereafter dies before all contributions are exhausted and there is no surviving spouse or eligible child, all benefits cease. Any remaining balance is paid to:

(i) Such person or persons, trust, or organization as the member has nominated by written designation duly executed and filed with the department of retirement systems; or

(ii) The member's estate; or

(iii) If there is neither such designated person or persons still living at the time of death, then to the member's legal representative.)) This section only applies to members commissioned before January 1, 2003 (WSPRS Plan 1).

(1) When retiring for service, a married member can choose either Option A (historic retirement option) under RCW 43.43.260 and 43.43.270 or Option B under RCW 43.43.278. Both options include a survivor feature that entitles the eligible surviving spouse and any eligible children to receive a monthly allowance after the retiree dies.

(2) Option A (historic retirement option and survivor benefit). The department pays the retiree a monthly retirement allowance in accordance with RCW 43.43.260 (Benefits). The department pays survivor benefits in accordance with RCW 43.43.270 (Retirement allowances).

(a) Surviving spouse. When the retiree dies, the department pays the retiree's surviving spouse a monthly retirement allowance equal to the gross monthly allowance then payable to the retiree, or an allowance equal to fifty percent of the average final salary (AFS) used to determine the retiree's benefit, whichever is less.

(b) Surviving children when there is a surviving spouse. If the retiree has a surviving spouse and surviving unmarried children under the age of eighteen years, each child shall be entitled to a benefit equal to five percent of the retiree's average final salary (AFS) at retirement. The combined benefits to the surviving spouse and all children cannot exceed sixty percent of the retiree's AFS.

(3) Option B (actuarially equivalent retirement option and survivor benefit). The department pays the retiree a monthly retirement allowance that is reduced by three percent from the benefit calculated under Option A. The department pays survivor benefits in accordance with RCW 43.43.278.

(a) Surviving spouse. When the retiree dies, the department pays the retiree's surviving spouse a monthly retirement allowance equal to the gross monthly allowance then payable to the retiree.

(b) Surviving children when there is a surviving spouse. If the retiree has a surviving spouse and surviving unmarried children under the age of eighteen years, each surviving unmarried child under the age of eighteen years shall be entitled to a benefit equal to five percent of the retiree's average final salary (AFS) at retirement.

(4) Benefits included in Option A and Option B.

(a) Cost-of-living adjustment. The retiree's annual adjustment every July is based upon the provisions in RCW 43.43.260(5). The annual adjustment applies to the eligible surviving spouse and any eligible children, who receive a monthly allowance after the retiree dies.

(b) Surviving spouse eligibility. To be eligible for an allowance, the surviving spouse of a retiree must either:

(i) Have been married to the retiree prior to his or her retirement and continuously thereafter until the retiree's death; or

(ii) Have been married to the retiree for at least two years prior to the retiree's death.

(c) Remarriage of surviving spouse. If a surviving spouse who is receiving benefits under this subsection marries another member of WSPRS and that retiree dies before the spouse, the spouse will receive only the higher of the two survivors' allowances for which he or she qualifies. The surviving spouse cannot receive more than one survivor allowance at a time under this subsection.

(d) Surviving children when there is no surviving spouse. If there is no surviving spouse or the surviving spouse dies, the unmarried child or children under the age of eighteen years shall be entitled to a benefit equal to thirty percent of the retiree's AFS for one child and an additional ten percent of AFS for each additional child. The combined benefits to the surviving children cannot exceed sixty percent of the retiree's AFS. Benefit payments under this subsection will be divided equally among the children.

(e) End of benefits. All benefits end when the surviving spouse dies or the youngest unmarried child reaches age eighteen, whichever occurs last.

(f) Distribution of remaining contributions. Any remaining balance of the retiree's accumulated contributions will be paid to:

(i) The person(s), trust, organization, or retiree's estate specified by the retiree on the appropriate department designated form, duly executed and properly on file with the department on or before the retiree's death; or

(ii) To the retiree's legal representative, if no person or entity designated in (f)(i) of this subsection is living or in existence at the time of the retiree's death.

(5) Pop-up provision.

(a) This subsection only applies to members retiring on or after July 1, 2000, who select Option B.

(b) If the retiree and spouse divorce, or if the spouse dies before the retiree, the retiree's monthly retirement allowance increases, effective the first day of the following month, to:

(i) The amount that the retiree would have received had the retiree chosen Option A at retirement; plus

(ii) Any cost of living adjustments (COLA) the retiree received prior to the divorce or the spouse's death.

(c) Pop-up recalculation example:

Option B: Bob retired on August 1, 2000. His Option A benefit would have been $3,000. He selected Option B so that his spouse, Linda, will receive his monthly allowance and COLA after he dies. As a result, his monthly allowance was reduced by three percent from $3,000, the Option A, historic retirement and survivor benefit, to $2,910. Bob's COLA for 2001 was $87.30 (three percent of $2,910) and for 2002 was $89.92 (three percent of $2,997.30).

Linda died in September 2002. Under the "pop-up" provision, Bob's monthly benefit increased in October 2002 to a total of $3,177.22. His new benefit amount includes the $3,000 he would have received had he originally chosen Option A, plus the total of the COLAs he received in 2001 ($87.30) and 2002 ($89.92). On July 1, 2003, Bob's COLA will be based on the average consumer price index to a maximum of three percent. See RCW 43.43.260(5).

(d) If a retiree whose benefit increases under this subsection dies and there is no eligible child, all benefit payments end. Any remaining balance of the retiree's accumulated contributions will be paid to:

(i) The person(s), trust, organization, or retiree's estate specified by the retiree on the appropriate department designated form, duly executed and properly on file with the department on or before the retiree's death; or

(ii) To the retiree's legal representative, if no person or entity designated in (d)(i) of this subsection is living or in existence at the time of the retiree's death.

(6) For more information see chapter 415-02 WAC starting with WAC 415-02-300 for the tables, schedules, and factors the department uses for calculating retirement allowances.

(7) Terms used in this section:

"Pop-up" - see WAC 415-02-030.

[Statutory Authority: RCW 41.50.050(5), 43.43.142, 43.43.278, 43.43.280. 01-13-010, 415-103-215, filed 6/8/01, effective 7/9/01. Statutory Authority: RCW 43.43.278 and 41.50.050. 00-11-103, 415-103-215, filed 5/18/00, effective 6/18/00.]


NEW SECTION
WAC 415-103-225   What are the WSPRS Plan 2 retirement benefit options?   This section only applies to members commissioned on or after January 1, 2003 (WSPRS Plan 2). RCW 43.43.271 enables the department to provide retiring WSPRS Plan 2 members with an irrevocable choice of four retirement benefit options for receipt of their retirement benefit. The retiring member must choose an option when applying for service retirement:

(1) Option One: Benefit option without survivor features (standard allowance). The department will pay a monthly retirement allowance based solely on the single life of the retiree, as provided by RCW 43.43.260 (Benefits). When the retiree dies, all benefits end. Any remaining balance of the retiree's accumulated contributions will be paid to:

(a) The person(s), trust, organization, or retiree's estate specified by the retiree on the appropriate department designated form, duly executed and properly on file with the department on or before the retiree's death; or

(b) To the retiree's legal representative, if no person or entity designated in (a) of this subsection is living or in existence at the time of the retiree's death.

(2) Benefit options with a survivor feature.

(a) At retirement, a member may select a survivor option in lieu of the standard allowance. With a survivor option, the retiree's monthly benefit payment is actuarially reduced from the standard allowance to offset the cost of the survivor features. The retiree designates a person to receive a monthly benefit payment after the retiree dies. The designated person or "survivor beneficiary" will receive this monthly allowance for the remainder of his or her life. If the retiree and survivor beneficiary both die before the retiree's accumulated contributions have been exhausted, all monthly payments end. Any remaining balance of the retiree's accumulated contributions will be paid to:

(i) The person(s), trust, organization, or retiree's estate specified by the retiree on the appropriate department designated form, duly executed and properly on file with the department on or before the retiree's death; or

(ii) To the retiree's legal representative, if no person or entity designated in (a)(i) of this subsection is living or in existence at the time of the retiree's death.

(b) Option Two (joint and whole allowance). When the retiree dies, the department pays the survivor beneficiary a monthly benefit equal to the gross monthly allowance then payable to the retiree.

(c) Option Three (joint and one-half allowance). When the retiree dies, the department pays the survivor beneficiary a monthly benefit equal to one-half of the amount of the retiree's gross monthly retirement allowance then payable to the retiree.

(d) Option Four (joint and two-thirds allowance). When the retiree dies, the department pays the survivor beneficiary a monthly benefit equal to two-thirds of the retiree's gross monthly retirement allowance then payable to the retiree.

(3) Pop-up provision.

(a) This subsection only applies to retiring members who select a benefit option with a survivor feature (Option Two, Three, or Four).

(b) If the survivor beneficiary dies before the retiree, the retiree's monthly retirement allowance increases, effective the first day of the following month, to:

(i) The amount that the retiree would have received had the retiree chosen Option One; plus

(ii) Any cost-of-living adjustments (COLA) the retiree received prior to the survivor beneficiary's death based on the original selection.

(c) If a retiree whose benefit increases under this section dies, all benefit payments end. Any remaining balance of the retiree's accumulated contributions will be paid to:

(i) The person(s), trust, organization, or retiree's estate specified by the retiree on the appropriate department designated form, duly executed and properly on file with the department on or before the retiree's death; or

(ii) To the retiree's legal representative, if no person or entity designated in (c)(i) of this subsection is living or in existence at the time of the retiree's death.

(4) Postretirement benefit options.

(a) Postretirement marriage option. A retiree who chose the standard allowance (Option One) at the time of retirement, and then marries has a one time only option to choose a survivor option. The retiree may choose a survivor option that names his or her new spouse as the survivor beneficiary, provided:

(i) The retiree's monthly benefit is not subject to a property settlement agreement from a court decree of dissolution or legal separation;

(ii) The retiree makes the choice during the one year window, on or after the date of the first anniversary and before the second anniversary of the postretirement marriage;

(iii) The retiree provides the department with a copy of a marriage certificate as proof of the postretirement marriage and proof of the birthdate of the new spouse; and

(iv) The retiree properly and timely completes and files the correct forms with the department.

(b) Postretirement survivor change. A retiree who chose a nonspouse as a survivor beneficiary at the time of retirement may remove that survivor designation one time only. The retiree may have the benefit adjusted to a standard allowance provided the retiree properly and timely completes and files the correct forms with the department.

(c) The change selected under (a) or (b) of this subsection will begin the first of the month following receipt of properly completed and filed paperwork with the department. The change becomes irrevocable on the date that the completed paperwork is received by the department.

(5) For more information, see chapter 415-02 WAC starting with WAC 415-02-300 for the tables, schedules, and factors the department uses for calculating retirement allowances.

(6) Terms used in this section:

"Pop-up" - see WAC 415-02-030.

[]

OTS-5608.1


AMENDATORY SECTION(Amending WSR 02-03-120, filed 1/23/02, effective 3/1/02)

WAC 415-108-727   Can I transfer service credit earned as a cadet in the public employees' retirement system to the Washington state patrol retirement system Plans 1 or 2?   (1) A PERS Plan 1 or Plan 2 member may transfer cadet service under RCW 41.40.092.

(2) A person who becomes a PERS Plan 3 member cannot transfer service credit earned as a cadet in PERS, regardless of when the credit was earned.

[Statutory Authority: RCW 41.50.050(5) and 41.40.092. 02-03-120, 415-108-727, filed 1/23/02, effective 3/1/02.]

Washington State Code Reviser's Office