PERMANENT RULES
RETIREMENT SYSTEMS
Effective Date of Rule: Thirty-one days after filing.
Purpose: The purpose of this rule-making order is to adopt changes to WAC 415-111-230 Self-directed investment program allocation. The Washington state investment board selected a new fund as the default investment option for members of Plan 3 who elect to self-direct their investments but do not establish an investment allocation. As a result, the department of retirement systems needs to update one rule to reflect this change.
Citation of Existing Rules Affected by this Order: Amending WAC 415-111-230.
Statutory Authority for Adoption: RCW 41.50.050(5).
Other Authority: Chapter 41.34 RCW.
Adopted under notice filed as WSR 08-15-113 on July 18, 2008.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 1, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 1, Repealed 0.
Date Adopted: September 2, 2008.
Sandra J. Matheson
Director
OTS-1782.1
AMENDATORY SECTION(Amending WSR 06-03-098, filed 1/17/06,
effective 2/17/06)
WAC 415-111-230
Self-directed investment program
allocation.
This section applies only to members who elect
the self-directed investment program pursuant to WAC 415-111-210.
(1) What is an allocation? An allocation is a set of instructions identifying your choice of investment program funds and the percentage of your money you want to invest in each fund. The amount you allocate to each fund must be designated as a whole percentage, and the total must equal one-hundred percent.
| Example: | Martha has elected the self-directed investment
program (( |
| Allocation to fund #1 | 20% |
| Allocation to fund #2 | 30% |
| Allocation to fund #3 | 50% |
| Total Allocation | 100% |
(3) What happens if I do not establish an allocation? If you do not provide an allocation before the department's designated recordkeeper begins receiving your investment money, or if you provide an allocation but the sum of the allocated portions does not equal one-hundred percent, your investment money will be invested as follows:
(a) If the total of the percentages you have allocated is less than one-hundred percent, the department will determine the percentage that is unallocated, and invest the unallocated percentage in the default fund.
| Example: | Ralph designates the following allocation: 33% fund #1, 33% fund #2, and 33% fund #3. Since the total allocation equals 99%, the unallocated 1% will be invested in the default fund. |
| Example: | Chris designates the following allocations: 38% into fund #1, 40% into fund #2, 10% into fund #3, and 15% into fund #4. Since the total allocation equals 103%, all of Chris' investment money will be invested in the default fund. |
(i) If you previously participated in the self-directed investment program, your most recent allocation will be used. However, if your allocation includes a fund or funds that are no longer available, the portion of your investment money allocated to the unavailable fund(s) will be invested in the default fund.
(ii) If you do not meet the conditions in (c)(i) of this subsection, all of your investment money will be invested in the default fund.
| Example: | Lew is a new member and elects the self-directed investment program, but does not establish an allocation. All of Lew's investment money will be invested in the default fund. |
| Example: | Linda becomes reemployed in an eligible position and elects to participate in the self-directed investment program again, but does not provide an allocation. |
| Linda previously participated in the self-directed investment program and had the following allocation: |
| 10% in Fund #1 |
| 10% in Fund #2 |
| 30% in Fund #3 |
| 25% in Fund #4 |
| 25% in Fund #5 |
| Because she did not establish a new allocation, her previous allocation will be used. However, fund #2 is no longer available, so that portion of her money will be invested in the default fund. A new allocation will be established for Linda as follows: |
| 10% in Fund #1 |
| 10% in Default Fund |
| 30% in Fund #3 |
| 25% in Fund #4 |
| 25% in Fund #5 |
(5) May I change my allocation? Once you have established an allocation or been directed into the default fund, you may change your allocation by contacting the department's designated recordkeeper. However, changes must be consistent with any restrictions on trading imposed by the funds involved, and, if necessary to protect the performance results of the investment program funds, the department may:
(a) Limit the number of times you change allocations;
(b) Limit the frequency of the changes;
(c) Limit the manner of making changes; or
(d) Impose other restrictions.
[Statutory Authority: RCW 41.50.050(5) and chapter 41.34 RCW. 06-03-098, § 415-111-230, filed 1/17/06, effective 2/17/06. Statutory Authority: Chapters 41.32, 41.34, 41.35, 41.50 RCW. 01-01-059, § 415-111-230, filed 12/12/00, effective 1/12/01.]