Date of Adoption: December 12, 2000.

Purpose: To promulgate and amend department rules in order to implement the law codified in chapters 41.34 and 41.35 RCW creating TRS Plan 3 and SERS, respectively. TRS Plan 3 became effective July 1, 1996. SERS became effective September 1, 2000.

Citation of Existing Rules Affected by this Order:

Statutory Authority for Adoption: Chapters 41.32, 41.34, 41.35, 41.50 RCW.

Adopted under notice filed as WSR 00-22-076 on October 31, 2000.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 69, Amended 20, Repealed 2.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 69, Amended 20, Repealed 2.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 5, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.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: Thirty-one days after filing.

December 12, 2000

John Charles

Director

OTS-4459.1

AMENDATORY SECTION(Amending WSR 95-16-053, filed 7/25/95, effective 8/25/95)

WAC 415-108-0109   System acronyms -- Definition.   The acronyms used in this chapter are defined as follows:

(1) "PERS" means the public employees' retirement system.

(2) "TRS" means the teachers' retirement system.

(3) "SERS" means the school employees' retirement system.

[Statutory Authority: RCW 41.50.050. 95-16-053, 415-108-0109, filed 7/25/95, effective 8/25/95.]

(i) You work for a PERS employer and an employer covered by a retirement system of the city of Seattle, Spokane or Tacoma (First Class City Retirement System); and

(ii) You cannot report service for the First Class City Retirement System in PERS;

(b) The combined service credit under PERS and the retirement system listed in (a) of this subsection may not exceed one month of service for a calendar month of employment.

(c) To qualify for PERS service credit, it is up to the employee to initiate the process by applying under subsection (2) of this section.

Example:

A member works part time for the City of Seattle and part time for the University of Washington (UW). She may receive partial service credit in PERS for the UW service since she cannot report the time she works for Seattle under PERS.

Note:

The combined service credit under PERS and the City of Seattle Retirement System may not exceed one month of service for a calendar month of employment. To receive PERS service credit she must apply to the department.

(2) How do I apply?

(a) To apply for membership and service credit under subsection (1) of this section you must send the department an application. The application is a statement that you want membership and/or service credit in PERS. Include:

(i) Your name;

(ii) Your SSN;

(iii) All period(s) of service that you want to receive service credit for;

(iv) All PERS and non-PERS employer(s) that you worked for during the periods of service referenced in (a)(iii) of this subsection.

(b) After the department receives your application, it will contact your employer(s) to verify how much service credit you have earned. When the department receives the necessary information, it will determine how much service credit you will receive. At that time the department will send you a bill for member contributions and interest that must be paid in order to establish the service credit.

(3) When should I submit my payment?

You should pay contributions and interest required under subsection (2)(b) of this section within twenty-four consecutive months from the last day of the calendar year for which you claim service credit. After that date, you must pay the actuarial cost of purchasing the service credit under RCW 41.40.104 and 41.50.165.

(4) What if I worked before this WAC became effective?

If you worked for a PERS employer and for one of the retirement systems listed in subsection (1) of this section, before this WAC became effective, you have until December 31, 2000, to apply in order to purchase service credit by paying member contributions plus interest. After December 31, 2000, you must pay the actuarial cost of purchasing the service credit under RCW 41.40.104 and 41.50.165.

(5) You may participate in PERS if you are concurrently employed, as described in WAC 415-113-200, in a SERS position.

(6) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed.

(a) "Membership" - RCW 41.40.023.

(b) "Retirement plan" - WAC 415-108-0105.

(c) "Service" - RCW 41.40.010.

(d) "Normally" - WAC 415-108-0102.

[Statutory Authority: RCW 41.50.050. 99-22-043, 415-108-726, filed 10/29/99, effective 11/29/99; 95-16-053, 415-108-726, filed 7/25/95, effective 8/25/95.]

Former TRS Plan ((I)) 1 Members ¹/

Type of ((Concurrent)) Employment 2/	Type of Employer(s)	System You Will Be Reported In
A substitute or less than full-time teaching position and a PERS-eligible position	Same employer	PERS - for both positions.
	Separate TRS employers	PERS - for PERS position only. Your substitute part-time position is not reported unless you qualify for and elect to establish TRS membership under RCW 41.32.240. If you elect to establish TRS membership, your employers will report you in TRS for both positions. Any previously reported service credit and compensation in PERS will be transferred to TRS.
	A TRS employer and non-TRS employer	PERS - for PERS position only. Your substitute part-time position is not reported unless you qualify for and elect to establish TRS membership under RCW 41.32.240. If you elect to establish TRS membership, you must elect either to: 1. Have your TRS service reported in PERS and receive service credit in PERS for both positions; or 2. Have your TRS service reported in TRS and not receive service credit for the PERS position.
A full-time teaching position and an eligible PERS position	Same employer	TRS - for both positions.
	Separate TRS employers	TRS - for both positions.
	A TRS employer and non-TRS employer	You must elect to: 1. Have your TRS service reported in PERS and receive service credit in PERS for both positions; or 2. Have your TRS service reported in TRS and not receive service credit for the PERS position.

TRS Plan ((I)) 1 Members

Type of ((Concurrent)) Employment 2/	Type of Employer(s)	System You Will Be Reported In
A full-time or less than full-time TRS position and an eligible PERS position	Same employer	TRS - for both positions.
	Separate TRS employers	TRS - for both positions.
	A TRS employer and non-TRS employer	You must elect either to: 1. Have your TRS service reported in PERS and receive service credit in PERS for both positions; or 2. Have your TRS service reported in TRS and not receive service credit for PERS position.
A full-time or less than full-time TRS position and an ineligible PERS position	Same employer	TRS - for both positions.
	Separate TRS employers	TRS - for both positions.
	A TRS employer and non-TRS employer	TRS - for the TRS position only; your ineligible PERS position is not reportable.

TRS Plan ((II)) 2 Members

Type of ((Concurrent)) Employment 2/	Type of Employer(s)	System You Will Be Reported In
An eligible TRS position and an ineligible PERS position	Same employer	TRS - for both positions.
	Separate TRS employers	TRS - for TRS position only; your ineligible PERS position is not reported.
	A TRS employer and non-TRS employer	TRS - for TRS position only; your ineligible PERS position is not reported.
An eligible TRS position and an eligible PERS position	Same employer	TRS - for both positions.
	Separate TRS employers	TRS - for both positions.3/
	A TRS employer and non-TRS employer	You must elect either to: 1. Have your TRS service reported in PERS and receive service credit in PERS for both positions; or 2. Have your TRS service reported in TRS and not receive service credit for the PERS position.

PERS Members

Type of ((Concurrent)) Employment 2/	Type of Employer(s)	System You Will Be Reported In
An eligible PERS position and an ineligible TRS or substitute position	Same employer	PERS - for both positions.
	Separate TRS employers	PERS - for the PERS position only, unless you qualify for and elect to establish membership in TRS at the end of the school year under WAC 415-112-125(1). If you elect to establish TRS membership, your employers will report you in TRS for both positions. Any previously reported service credit and compensation in PERS will be transferred to TRS.
	A TRS employer and non-TRS employer	PERS - for the PERS position only. You will not be reported for the TRS position unless you elect to either: 1. Have your TRS service reported in PERS and receive service credit in PERS for both positions; or 2. Have your TRS service reported in TRS and not receive service credit for the PERS position.

Neither TRS Nor PERS Member

Type of ((Concurrent)) Employment 2/	Type of Employer(s)	System You Will Be Reported In
An ineligible TRS and an ineligible PERS position	Same employer	TRS - for both positions if the positions combined, qualify as an eligible position.
	Separate employers, TRS or non-TRS	Neither position reported.
A substitute teaching position and an ineligible PERS position	Same employer	Neither position reported. However, if you qualify, you may elect to establish membership in TRS at the end of the school year for your substitute teaching position under RCW 41.32.013 and WAC 415-112-140.
	Separate employers, TRS or non-TRS	Neither position reported. However, if you qualify, you may elect to establish membership in TRS at the end of the school year for your substitute teaching position under RCW 41.32.013 and WAC 415-112-140.

1/	"Former TRS ((I)) 1 member", as used here, means you terminate your membership by withdrawing your contributions.
2/	(("Concurrently")) Means during the same school year.
3/	EXAMPLE: A TRS ((II)) 2 member teaches in an eligible position and during the summer, she works for a state agency in an eligible position under PERS. Because the member has established membership in TRS ((II)) 2 through employment as a teacher, her state agency employer must report her service and compensation from the PERS position to the Department in TRS ((II)) 2.
	EXAMPLE: A TRS ((II)) 2 member is employed concurrently by School District A in an eligible TRS position and by School District B in an eligible PERS position. Because he is a TRS ((II)) 2 member, School District B employer must report his service and compensation from the PERS position to the Department in TRS ((II)) 2. If the member terminates his employment in the TRS position with School District A, School District B will report him in PERS for the PERS position.

(2) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed.

(a) "Eligible position" - RCW 41.40.010.

(b) "Employer" - RCW 41.40.010 (PERS); RCW 41.32.010 (TRS).

(c) "Ineligible position" - RCW 41.40.010.

(d) "Member" - RCW 41.40.010.

(e) "Membership" - RCW 41.40.023.

(f) "Report" - WAC 415-108-0104

(g) "Service" - RCW 41.40.010.

[Statutory Authority: RCW 41.50.050. 95-16-053, 415-108-728, filed 7/25/95, effective 8/25/95.]

OTS-4460.2

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Example:	An employer has used the twelve consecutive month period from September 1 to August 31 to evaluate the eligibility of positions. When the employer hires a new employee to fill an existing position, the employer must continue to use the September 1 through August 31 period to define a year for the position.
Example:	If the same employer in the above example hires a person to work in a project position beginning in November, the employer will use the twelve-month period beginning in November to evaluate the eligibility of the new position. The employer must consistently apply this twelve-month period to evaluate the eligibility of this position.

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(1) "PERS" means the public employees' retirement system.

(2) "TRS" means the teachers' retirement system.

(3) "SERS" means the school employees' retirement system.

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Any person aggrieved by any final decision must, before he/she appeals to a superior court, file a notice of appeal with the director personally or by mail, within sixty days from the date such decision was communicated to such person. The notice of appeal must contain the information required by WAC 415-08-020 as now existing or hereafter amended.

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(1) As a member, you have the right to designate a beneficiary or beneficiaries to receive a benefit in the event of your death while you are an active member. You may change your beneficiary designation at any time by filing a change of beneficiary form with the department.

(2) You may name:

(a) An organization or person, including your unborn or later adopted children. Unborn or later adopted children will not be included unless you specifically designate them as beneficiaries on the form. You must state the date of birth for any living person you name as a beneficiary;

(b) Your estate;

(c) A trust in existence at the time of death. Before making distribution to any trust the department must receive:

(i) A copy of the trust document;

(ii) The name, address, telephone number of the current trustee; and

(iii) The tax identification number;

(d) A trust to be established under your last will.

(3) You may name contingent beneficiaries in addition to primary beneficiaries.

Examples:

EXAMPLE ONE.

Facts

John, a member, completes a beneficiary designation form.

In the place on the form reserved for persons, he names his daughter Ann. He checks the box to indicate that Ann is a primary beneficiary.

In the place on the form reserved for trust/organizational beneficiaries, he lists the "Barbara Trust." His daughter Barbara is the trust beneficiary. He checks the box to indicate that the trust is a primary beneficiary.

Result

Subject to applicable statute, at John's death, the department will consider both the Barbara Trust and daughter Ann as primary beneficiaries. The department will require the name of the trustee, the tax identification number, a copy of the trust and other information specified in this rule before distribution to the trust.

EXAMPLE TWO.

Facts

John, a member, completes a beneficiary designation form.

In the place on the form reserved for persons, he names his daughter Ann. He checks the box to indicate that Ann is a primary beneficiary.

In the place on the form reserved for trust/organizational beneficiaries, he lists his daughter Barbara personally (no trust name is provided). He checks the box labeled "primary beneficiary." John misunderstands the form and rather than provide the names of the trustee or trust administrator, John writes the word "both" in the blank provided.

Result

At John's death, the department learns that John has created no trusts. Subject to existing statute, if the department receives no notice of competing claims to John's death benefit, the department will distribute the death benefit to Ann. If the department receives notice of competing claims, a court resolution may be required.

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(1) Definition. Qualified service credit -- For purposes of this section, the following types of service credit may be used to qualify for retirement:

(a) SERS Plan 3 service credit;

(b) Service credit earned in a dual member system, but only in combination with SERS Plan 3 service credit (chapter 41.54 RCW); or

(c) Up to forty-five days of sick leave (RCW 41.35.010).

(2) Members must be age 65 to retire with an unreduced defined benefit. SERS Plan 3 members can retire with an unreduced defined benefit at age 65 if they have accumulated the following amounts of qualified service credit:

(a) Ten service credit years;

(b) Five service credit years, including twelve service credit months after attaining age 54; or

(c) Five service credit years by September 1, 2000, under Plan 2.

(3) Members may retire with a reduced benefit after attaining age 55. A SERS Plan 3 member who has attained age 55 may retire with an actuarially reduced defined benefit (RCW 41.35.680) if they have accumulated at least ten years of qualified service credit.

(4) Members may use only qualified service credit to receive a retirement benefit from the SERS Plan 3 defined benefit component.

(5) To be eligible to receive a retirement benefit, SERS Plan 3 members must:

(a) Submit a completed, signed, and notarized SERS Plan 3 retirement application; and

(b) Terminate employment with all retirement system employers from which they are claiming service credit. Termination from non-SERS system employers is required in cases where a member is using dual member rules to qualify for retirement (chapter 41.54 RCW).

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(2) Spousal consent is not needed to enforce a marital dissolution order requiring the department to pay an exspouse under RCW 41.50.790.

(3) "Spousal consent" means that the married member's spouse consents to the retirement option selected by the member. The spouse's notarized signature on a completed retirement application constitutes spousal consent.

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(1) Option one (standard allowance). The department will pay a monthly retirement allowance based solely on the single life of the member, as provided by RCW 41.35.220, 41.35.440, or 41.35.690. When the retiree dies all benefits cease. Any remaining balance of the retiree's accumulated contributions will be paid to:

(a) The retiree's designated beneficiary; or if none, to

(b) The retiree's surviving spouse; or if none, to

(c) The retiree's legal representative.

The member must designate a beneficiary at the time of retirement by filing a completed and notarized form provided by the department.

(2) Benefit options with a survivor feature. A retiring member is allowed to select from several retirement options which create an actuarially equivalent benefit that includes a survivor feature. The survivor feature entitles the survivor to receive a monthly allowance after the retiree dies. If the member chooses one of the survivor options, the monthly benefit the member will receive is actuarially reduced to offset the cost of the survivor feature. After the retiree dies, the department pays the survivor an allowance for the duration of his or her life. If the retiree and the survivor both die before the retiree's accumulated contributions are exhausted, the remaining balance is retained in the retirement fund.

Once retired with a survivor option, the retiree may only change the survivor option upon returning to eligible employment for two consecutive years.

(a) Option two (joint and whole allowance). When the retiree dies, the department pays the survivor an allowance equal to the gross monthly allowance received by the retiree.

(b) Option three (joint and one-half allowance). When the retiree dies, the department pays the survivor an allowance equal to one-half of the retiree's gross monthly retirement allowance.

(c) Option four (joint and two-thirds allowance).

(i) This subsection applies to members retiring on or after January 1, 1996.

(ii) When the retiree dies, the department pays the survivor an allowance equal to two-thirds (66.667%) of the retiree's gross monthly retirement allowance.

(3) If a member retires on or after June 6, 1996, the department is required to pay an exspouse survivor benefits pursuant to a marital dissolution order that complies with RCW 41.50.790.

(4) Benefit increases when survivor predeceases retiree (pop-up provision).

(a) This section applies to members retiring on or after January 1, 1996, who select option two, three, or four.

(b) If the survivor 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 one; plus

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

(c) Pop-up recalculation examples.

Plan two:

Agnes retires from SERS Plan 2 in 2006 (Year 0). Agnes would like Beatrice, her daughter, to receive a monthly allowance after Agnes dies. Therefore, Agnes selects a retirement benefit option with a survivor feature. As a result, her monthly allowance is reduced from $2,000 (standard allowance) to $1,750. Unfortunately, Beatrice dies in 2011 (Year 5). Under the "pop-up" provision, Agnes' monthly benefit will increase to $2,191.05, the amount she would have received had she chosen option one (standard allowance) plus her accumulated COLAs:

Year		Option One (Standard Allow.)	Survivor Option (2, 3, 4) plus COLAs		COLA incr. (3% max)		$ Increase
0 (2006)		2,000.00	1,750.00		(ineligible)		0.00
1 (2007)			1,750.00		.02		35.00
2 (2008)			1,785.00		.03		53.55
3 (2009)			1,838.55		.025		45.96
4 (2010)			1,884.51		.03		56.54
5 (2011)		2,000.00	1,941.05		-		-
					Total COLAs		191.05
	Original Option One Benefit Amount $2000			+ Total COLAs + $191.05		= New Benefit Amount = $2,191.05*

* In the future (i.e. Year 4), COLAs will be based on the increased benefit amount.

(d) If the survivor dies and the retiree's benefit increases under this section, and thereafter the retiree also dies before all contributions are exhausted, the remaining balance is retained by the retirement fund.

(5) Any retiree who retired before January 1, 1996, and who elected to receive a reduced retirement allowance under subsection (2) of this section is entitled to receive a retirement allowance adjustment if the retiree meets the following conditions:

(a) The retiree's designated beneficiary predeceases or has predeceased the retiree; and

(b) The retiree provides to the department proper proof of the designated beneficiary's death. The retiree is not required to apply for the increased benefit provided by this subsection.

The adjusted retirement allowance will be effective on July 1, 1998, or the first of the month following the date of death of the designated beneficiary, whichever comes last. The adjustment is computed as described in RCW 41.35.220 (3)(c) for Plan 2 retirees.

(6) Survivor. For the purposes of this provision, "survivor" means a person nominated by the member to receive a monthly benefit allowance after the member dies. A member nominates the survivor at the time of retirement by filing a completed and notarized form provided by the department.

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SCHOOL EMPLOYEES RETIREMENT SYSTEM

Plant 2 Option 1

Monthly Benefit per $1.00

of Accumulation

SERS 2 Survivor Option Factors

Member Younger

Age Difference	OPTION II (100%)	OPTION IV (66 2/3%)	OPTION III (50%)
-20	0.928	0.951	0.962
-19	0.925	0.949	0.961
-18	0.922	0.946	0.959
-17	0.919	0.945	0.958
-16	0.916	0.942	0.956
-15	0.912	0.940	0.954
-14	0.908	0.937	0.952
-13	0.904	0.933	0.949
-12	0.898	0.930	0.946
-11	0.892	0.925	0.943
-10	0.885	0.920	0.939
-9	0.879	0.916	0.935
-8	0.873	0.911	0.932
-7	0.865	0.906	0.927
-6	0.857	0.900	0.923
-5	0.849	0.894	0.918
-4	0.839	0.887	0.912
-3	0.828	0.878	0.906
-2	0.813	0.867	0.897
-1	0.797	0.855	0.887

Member Older

Age Difference	OPTION II (100%)	OPTION IV (66 2/3%)	OPTION III (50%)
0	0.779	0.841	0.876
1	0.763	0.829	0.866
2	0.748	0.817	0.856
3	0.735	0.807	0.848
4	0.725	0.798	0.841
5	0.716	0.791	0.835
6	0.708	0.785	0.830
7	0.698	0.777	0.823
8	0.687	0.767	0.815
9	0.674	0.757	0.806
10	0.662	0.747	0.797
11	0.653	0.739	0.791
12	0.646	0.733	0.786
13	0.640	0.728	0.781
14	0.634	0.722	0.776
15	0.628	0.717	0.772
16	0.622	0.712	0.767
17	0.616	0.707	0.763
18	0.611	0.702	0.759
19	0.606	0.698	0.755
20	0.602	0.694	0.751
21	0.596	0.689	0.747
22	0.591	0.684	0.743
23	0.587	0.681	0.740
24	0.582	0.676	0.736
25	0.577	0.672	0.732
26	0.573	0.668	0.729
27	0.569	0.665	0.726
28	0.565	0.661	0.722
29	0.562	0.658	0.720
30	0.558	0.655	0.717
31	0.555	0.652	0.714
32	0.552	0.649	0.712
33	0.549	0.647	0.709
34	0.546	0.644	0.707
35	0.543	0.641	0.705
36	0.540	0.638	0.702
37	0.538	0.637	0.700
38	0.535	0.634	0.698
39	0.533	0.632	0.696
40	0.531	0.630	0.695
Age difference = member's age minus beneficiary's age

SCHOOL EMPLOYEES RETIREMENT SYSTEM

PLAN 2

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(a) "Group life insurance policy or plan" means a contract of group life insurance issued by an insurance carrier authorized to do business in the state of Washington which meets one of the group requirements set forth in chapter 48.24 RCW;

(b) "Group disability insurance policy or plan" means a group disability insurance contract issued by an insurance carrier authorized to do business in the state of Washington which meets the requirements of chapter 48.21 RCW, and the term shall also include a group health care service contract as issued pursuant to, and regulated by, the provisions of chapter 48.40 RCW.

(2) Scope. Any beneficiary of a retirement allowance payable for service or disability under the provisions of chapter 41.35 RCW may authorize the director to deduct from his or her retirement allowance, on a monthly basis only, the premiums on any group life or disability insurance policy or plan currently covering the beneficiary, issued to the employer by which the retiree was employed prior to retirement. The department and the director are not and will not be liable for any failure to make such deduction payments on time or in the proper amount.

(3) Procedure. Any beneficiary, who desires to authorize a retirement allowance deduction as provided by this section, shall notify the department of his or her intention in writing at least thirty days prior to the date that the first deduction is to be made and shall file with the department a formal authorization on such form as may be provided by the department.

(4) Revocability. You must submit to the department an express written statement of revocation to revoke an authorization for a retirement allowance deduction for payment of insurance premiums under this section. Such a revocation shall be applicable to the first retirement allowance deduction which would otherwise be made at the end of the calendar month following the month in which the statement of revocation is filed.

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Type of Payment	SERS Plan 2 and Plan 3 Reportable Compensation
Annual Leave Cash Outs	No - WAC 415-110-456
Assault Pay	No - WAC 415-110-468
Base Rate	Yes - WAC 415-110-451
Car Allowances	No - WAC 415-110-485
Cafeteria Plans	Yes - WAC 415-110-455
Deferred Wages	Yes - WAC 415-110-459
Disability Payments	No - WAC 415-110-477
Disability Retirees	No - RCW 41.35.440/ RCW 41.35.690 (until requirements are met)
Disability: Salary lost while on disability leave	Yes - WAC 415-110-468
	RCW 41.35.070
Employer Provided Vehicle	No - WAC 415-110-480
Employer Contributions	No - WAC 415-110-459
Fringe Benefits	No - WAC 415-110-475
Illegal Payments	No - WAC 415-110-482
Legislative Leave	Yes - WAC 415-110-464
Longevity/Education Attainment Pay	Yes - WAC 415-110-451
Nonmoney Maintenance	No - WAC 415-110-470
Optional Payments	No - WAC 415-110-483
Payments in Lieu of Excluded Items	No - WAC 415-110-463
Performance Bonuses	Yes - WAC 415-110-453
Retroactive Salary Increase	Yes - WAC 415-110-457
Reimbursements	No - WAC 415-110-484
Reinstatement Payments	Yes - WAC 415-110-467
Retirement or Termination Bonuses	No - WAC 415-110-487
Severance Pay - Earned Over Time	No - WAC 415-110-458
Severance Pay - Not Earned Over Time	No - WAC 415-110-488
Shared Leave - School/ ESD Employees	Yes - WAC 415-110-468
Sick Leave Cash Outs - School/ESD Employees	No - WAC 415-110-456
Standby Pay	Yes - WAC 415-110-469
Time Off With Pay	Yes - WAC 415-110-456 WAC 415-110-465
Union Leave	Yes - WAC 415-110-4661/
Worker's Compensation	No - WAC 415-110-479

^1/ Only specific types of union leave are reportable. See WAC 415-110-466.

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(1) Payments for personal services rendered. To determine whether a payment meets this definition and can be reported, ask the following questions:

(a) Was the payment earned as a salary or wage for personal services rendered during a fiscal year? If the answer is no, the payment is not reportable. If the answer is yes, ask question (b).

(b) Was the payment paid by an employer to an employee? If the answer is no, the payment is not reportable. If the answer is yes, report the payment.

(2) Payments included that are not for personal services rendered. The legislature has included certain specific payments within the definition of compensation earnable even though those payments are not for personal services rendered by the employee to the employer. (See WAC 415-110-464 through 415-110-469.)

(3) Reportable compensation is earned when the service is rendered, rather than when payment is made.

Example:

If a member works during September but does not receive payment for the work until October, the reportable compensation was earned during September and must be reported to the department as September earnings.

(4) Salary characterizations are based upon the nature of the payment. A payment is reportable compensation if it meets the criteria of subsection (1) or (2) of this section. The name given to the payment or the document authorizing it is not controlling in determining whether the payment is reportable compensation. The department determines whether a payment is reportable compensation by considering:

(a) What the payment is for; and

(b) Whether the reason for the payment brings it within the statutory definition of compensation earnable.

Example:

A payment conditioned upon retirement is not reportable compensation. Attaching the label "longevity" to the payment does not change the fact that the payment is conditioned on retirement. Such a payment is not for services rendered and will not be counted as reportable compensation despite being identified by the employer as a longevity payment.

(5) Differences in reportable compensation between plans. WAC 415-110-445 through 415-110-488 define reportable compensation for each of the two SERS plans. The characterization of payments as reportable compensation or not reportable compensation in WAC 415-110-455 through 415-110-488 is the same for both SERS Plan 2 and SERS Plan 3.

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(1) A member who receives a salary increase based upon longevity or educational attainment receives a higher salary without working more hours. The higher salary indicates a higher level of performance due to greater experience or more education. The payment is therefore a payment for personal service and is reportable compensation.

(2) Simply attaching the label "longevity" to a payment does not guarantee that it will be reportable compensation. If a payment described as a longevity payment is actually based upon some other criteria, such as retirement or notification of intent to retire, the payment may not be reportable.

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Example:

An employer pays each employee in the work group an additional $100 if the work group had no work related accidents in the preceding year. Remaining accident free is a performance goal. Therefore, the payment is for services rendered and qualifies as reportable compensation. The bonus should be prorated over each of the preceding twelve months during which it was earned.

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(2) Annual leave cash outs. Annual leave cash outs are not reportable compensation for SERS Plan 2 and SERS Plan 3 members. Although annual leave cash outs, like payments for leave usage, are deferred compensation earned for services previously rendered, they are excluded from the definition of compensation earnable by statute, see RCW 41.35.010 (6)(a).

(3) Sick leave cash outs. Sick leave cash outs are excluded from the definition of compensation earnable for SERS Plan 2 and SERS Plan 3 members by statute.

Sick leave cash outs are excluded from reportable compensation for:

(i) School district employees by RCW 28A.400.210; and

(ii) Educational service district employees by RCW 28A.310.490. See RCW 41.35.010 (6)(a).

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Note:

A retroactive salary increase is not the same as a retroactive payment upon reinstatement or in lieu of reinstatement of a terminated or suspended employee. For treatment of back payments for periods where services were not rendered, see WAC 415-110-467.

(1) To qualify as reportable compensation under this section, the payment must be a bona fide retroactive salary increase. To ensure that is the case, the retroactive payment must be made pursuant to:

(a) An order or conciliation agreement of a court or administrative agency charged with enforcing federal, state, or local statutes, ordinances, or regulations protecting employment rights;

(b) A bona fide settlement of such a claim before a court or administrative agency;

(c) A collective bargaining agreement; or

(d) Action by the personnel resources board which expressly states the payments are retroactive.

(2) The payments will be deemed earned in the period in which the work was done.

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(1) Retirement contributions. Payments deducted from employee compensation for employee retirement contributions are reportable. Employer contributions are a fringe benefit and are not reportable, see WAC 415-110-475.

(2) Tax withholding. Payments withheld to satisfy federal tax obligations qualify as reportable compensation.

(3) Voluntary deductions. Payments deducted voluntarily, such as I.R.C. section 457 plan contributions or other authorized deductions, are reportable.

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(1) WAC 415-110-464 through 415-110-469 discuss all payments that are not for services rendered that nonetheless qualify as reportable compensation.

(2) WAC 415-110-475 through 415-110-488 discuss some payments that are not a salary or wage for services rendered and so do not qualify as reportable compensation. A payment not for services rendered other than those identified in WAC 415-110-464 through 415-110-469 is not reportable compensation even if it is not listed in WAC 415-110-475 through 415-110-488.

(3) A payment made in lieu of a payment that is not for services rendered (such as a payment made in lieu of a car allowance) will be treated in the same way that the original payment was treated. Such a payment is not for services rendered and is not reportable.

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(1) The employee may choose between:

(a) The reportable compensation he or she would have earned had the member not served in the legislature; or

(b) The actual reportable compensation for nonlegislative public employment and the legislative service combined.

(2) If the member selects option (a) of this subsection, he or she is responsible for paying the additional employer and employee contributions to the extent the reportable compensation reported is higher than it would have been under (b) of this subsection.

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(1) The payment is equal to the salary for the position that the person is on leave from;

(2) The payment is actually from the employer. Payments from an employer that are conditioned upon reimbursement from a third party are payments from the third party. Because the payments are not from the employer, they are not reportable compensation. The only exception is union leave paid by the employer subject to reimbursement from the union under the conditions specified in RCW 41.35.470 (Plan 2) and RCW 41.35.650 (Plan 3) and WAC 415-110-466.

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(1) Assault pay qualifies as reportable compensation only to the extent authorized by RCW 27.04.100, 72.01.045, and 72.09.240.

(2) Imputed compensation for periods of duty disability that a member would have received but for a disability occurring in the line of duty qualify as reportable compensation only to the extent authorized by RCW 41.35.070.

(3) Shared leave.

(a) Compensation that an employee, as defined in RCW 41.04.655, receives due to participation in a leave sharing program to the extent authorized by RCW 41.04.650 through 41.04.670 qualifies as reportable compensation.

(b) Shared leave payments received by members who are not state employees, do not qualify as reportable compensation. Such payments are not for services rendered, nor are they specifically included within the statutory definition of compensation earnable.

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Note:

Mandatory salary deferrals are salary, not benefits. Such payments are reportable, see WAC 415-110-459.

Example:

An employer makes matching payments to employees who participate in a deferred compensation plan. This is not a mandatory salary deferral for purposes of SERS reportable compensation. Since the employer matching payment (employer match) is made contingent upon employee plan participation, it is not payment for services rendered. Therefore, it is a fringe benefit that is not reportable compensation under SERS.

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Example:

Some employees on unpaid disability leave submit their workers' compensation payments to their employer who then issues the employee a check for the same amount through the payroll system. This exchange of payments does not change the character of the workers' compensation payment. Whether the payments come from the department of labor and industries, a self-insured employer, or have the appearance of coming from the employer, workers' compensation payments are not payments for services rendered and do not qualify as reportable compensation.

Note:

A member may elect to make contributions and receive service credit for periods of disability covered by industrial insurance, see RCW 41.35.070.

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Example:

School districts are prohibited from increasing an employee's salary to include a payment in lieu of a fringe benefit per RCW 28A.400.220. If a district increased a person's salary instead of providing a fringe benefit, the payment would be illegal and should not be reported.

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Example:

An employer offers to make a contribution to a deferred compensation plan on behalf of an employee only if the employee agrees to defer a portion of his or her salary. Because the employee does not have a right to receive the contribution based solely on the rendering of service, the employer payment is not reportable compensation.

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(2) The department presumes that any vehicle allowance provided to you by your employer is a payment in lieu of reimbursement for expenses and is not compensation earnable. If the contract authorizing your vehicle allowance states that it is provided solely in lieu of reimbursement for expenses that you incur or expect to incur in using your own vehicle for business purposes, the department's presumption is not rebuttable.

(3) Your vehicle allowance may qualify as compensation earnable to the extent that it exceeds your actual expenses. If your employer documents that your vehicle allowance exceeds the actual expenses you incur in driving your own vehicle for business purposes, the excess amount is compensation earnable. Your employer must maintain monthly contemporaneous records documenting the following:

(a) The dates, if any, on which you used a privately owned vehicle in performing services for your employer;

(b) The miles you drove the vehicle on each of these trips; and

(c) Your itinerary for each of these trips.

(4) How to determine what amount of your vehicle allowance, if any, is reportable as compensation earnable. If your employer documents that your vehicle allowance exceeds the actual expenses you incur in using your own vehicle for business purposes, your employer must report to the department as compensation earnable:

Your Vehicle Allowance LESS (Miles X IRS Rate)

(a) "Miles" above means the number of miles you drove a privately owned vehicle for business purposes during the month.

(b) "IRS rate" above means the Internal Revenue Service mileage rate for use by taxpayers computing the value of the use of a vehicle.

(5) Your vehicle allowance qualifies as compensation earnable if you also receive a separate reimbursement for each occasion you use your own vehicle for business purposes. If, in addition to your vehicle allowance, you receive a separate reimbursement for vehicle expenses for each occasion that you use a privately owned vehicle for business purposes, your vehicle allowance is compensation earnable.

(6) Any part of your vehicle allowance that qualifies as earnable compensation is excess compensation. If any part of your vehicle allowance is included in the calculation of your retirement allowance, your employer will be billed for excess compensation under RCW 41.50.150. Your employer's bill will equal the total estimated cost of the portion of your retirement allowance payment attributable to your vehicle allowance.

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Example:

A collective bargaining agreement authorizes a school district to pay employees a higher salary during the last two years of employment if the employee gives written notice of his or her intent to retire or terminate. Because the payment is in exchange for the agreement to retire or terminate and not for services, the payment is not reportable compensation.

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Example:

At the time of an employee's termination the employer agrees to pay a lump sum payment equal to two months' salary. The employer identifies this payment as "severance pay." Because the payment was not earned for services rendered, it is not reportable compensation and will not be included in the retirement calculation.

For treatment of severance pay earned over time, see WAC 415-110-458.

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(1) Authorized unpaid leave. RCW 41.35.470 (Plan 2) and RCW 41.35.650 (Plan 3) provides members with an option to establish service credit for periods of unpaid leave. RCW 41.35.070 provides members with an option to establish service credit for periods of disability covered by industrial insurance. Salary imputed to members in order to calculate contributions for such periods is not reportable compensation and can not be included as average final compensation in calculating a member's retirement allowance.

(2) Military leave. Salary imputed to a member for purposes of calculating contributions owing for periods of interrupted military service is not reportable compensation. Federal law requires that if a member elects to purchase credit for such periods of military service, and that period falls in the member's average final compensation period, the member is entitled to have the imputed salary he or she would have earned during the period of absence used in the calculation of his or her average final compensation.

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(a) Individuals who are elected or appointed to any vacant elective office at a school district or educational service district; or

(b) Active SERS members who become elected or appointed to any state elective position.

(2) An active member of SERS who is elected to a state elective position may elect to continue membership in SERS or apply for membership in PERS pursuant to RCW 41.40.023(3).

(3) An active member of SERS who is elected or appointed to a nonstate elective position for an employer other than a school district or educational service district, does not have the option to continue membership in SERS pursuant to such elected service. However, the member may apply for membership in PERS pursuant to RCW 41.40.023(3).

(4) Pursuant to RCW 41.35.030 (2)(a), elected officials are exempted from retirement system membership but may apply for membership during the official's current term of elected office. To apply for membership, the official shall submit a written application directly to the department. If the department approves the application, the elected official is entitled to establish membership and service credit retroactive to the first day of the official's current term of elected service. To establish such membership, the official shall pay the required employee contributions for the official's current term of elected service with interest as determined by the department.

(5) Upon establishing membership for the official's current term of elected office, the official is entitled to establish membership and service credit retroactive to the first day of any previous elected term or terms of office. The official will be required to establish membership for all consecutive terms of office. To exercise this option, the official shall apply to the department pursuant to subsection (4) of this section. If the department approves the application, the official shall:

(a) Pay the required employee contributions for such previous term or terms of elected service with interest as determined by the department; and

(b) Pay the required employer contributions for such previous term or terms of elected service with interest as determined by the department. The employer may, at its discretion, pay the required employer contributions plus interest in lieu of the employee making payment of this amount.

(6) If an official is employed in an eligible position at the time of election to office and will hold multiple positions concurrently the official may:

(a) Apply to the department to participate in membership pursuant to the official's elected position as provided in subsection (4) of this section; or

(b) Choose not to participate pursuant to the official's elected position while continuing membership through the nonelected position.

(7) Except as provided under RCW 41.35.030, once an elected official has exercised the option of becoming a member of the retirement system the official shall be a member until the official separates from all eligible public employment. An official does not separate from public employment when that official's term of office ends and the official commences another term of office in the same or a different position for the same employer without a break in service. An official does not separate from service if the official resigns from the official's elected position and is later reappointed to the same position during the same term.

(8) The department will apply this section to service by elected officials which occurred prior to the effective date of this section.

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(2) An individual must be a gubernatorial appointee or be appointed to serve in a position that meets the requirements of RCW 41.35.010 in order to be eligible for membership and service credit.

(3) Pursuant to RCW 41.35.030, appointed officials are exempted from retirement system membership but may apply for membership during the official's current appointed term of office. To apply for membership, the official shall submit a written application directly to the department. If the department approves the application, the official is entitled to establish membership and service credit retroactive to the first day of the official's current term of appointed service. To establish such membership, the official shall pay the required employee contributions for the official's current term of appointed service with interest as determined by the department.

(4) Upon establishing membership for the official's current term of appointed service, the official is entitled to establish membership retroactive to the first day of any previous elected term or terms of office. To exercise this option, the official shall apply to the department pursuant to subsection (3) of this section. If the department approves the application, the official shall:

(a) Pay the required employee contributions for such previous term or terms of elected service with interest as determined by the department; and

(b) Pay the required employer contributions for such previous term or terms of elected service with interest as determined by the department. The employer may, at its discretion, pay the required employer contributions plus interest in lieu of the employee making payment of this amount.

(c) "Current term of appointed service" includes an appointed official's entire current term of service. If the official has not been appointed to a position with a set term of office, "current term of appointed service" includes all uninterrupted service in the official's current appointed position.

(5) If an appointed official is employed in an eligible position at the time of appointment to office and will hold the two positions concurrently, the official may:

(a) Apply to the department to participate in membership pursuant to the appointed position as provided in subsection (3) of this section; or

(b) Choose not to participate pursuant to the official's appointed position while continuing membership through the nonappointive position.

(6) Once an appointed official has exercised the option of becoming a member of the retirement system either at the start of the official's initial term or at a successive term, the official shall be a member until the official separates from all eligible public employment. An appointed official does not separate from public employment when that official's term of office ends and the official commences another term of office in the same or a different position for the same employer without a break in service. An appointed official does not separate from service if the official resigns from the appointed position and is later reappointed to the position during the same term.

(7) The department will apply this section to service by appointed officials which occurred prior to the effective date of this section.

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(2) Except for officials covered under subsection (1) of this section, members who were elected to office or appointed by the governor to positions and elect membership in SERS pursuant to WAC 415-110-550 or 415-110-560, may receive service credit only for months during which they are compensated:

(a) In excess of ninety times the state hourly minimum wage in effect at the time they render the service; and

(b) For ninety or more total hours of work.

(3) On or after September 1, 1991, except for officials covered under subsection (1) of this section, members who were elected to office or appointed by the governor to positions and elect membership in SERS pursuant to WAC 415-110-550 or 415-110-560, may earn:

(a) One month of service credit for each month during which they are compensated:

(i) For ninety or more total hours of work; and

(ii) In excess of ninety times the state hourly minimum wage in effect at the time they render the service; or

(b) One-half month of service credit for each month during which they are compensated:

(i) For less than ninety hours but equal to or more than seventy total hours of work; and

(ii) In excess of ninety times the state hourly minimum wage in effect at the time they render the service; or

(c) One-quarter month of service credit for each month during which they are compensated:

(i) For less than seventy total hours of work; and

(ii) In excess of ninety times the state hourly minimum wage in effect at the time they render the service.

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(2) If you leave an eligible position to serve in a project position, you may retain eligibility. If you are a member and you leave employment in an eligible position to serve in a project position, the project position is eligible if:

(a) The position, as defined by the employer, normally requires at least five months of seventy or more hours of compensated service each month; or

(b) The position requires at least seventy hours per month and you take the position with the understanding that you are expected to return to your permanent eligible position at the completion of the project.

(3) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed.

(a) "Eligible position" - RCW 41.35.010.

(b) "Employer" - RCW 41.35.010.

(c) "Member" - RCW 41.35.010.

(d) "Membership" - RCW 41.35.030.

(e) "Normally" - WAC 415-110-0102.

(f) "Project position" - WAC 415-110-0103.

(g) "Year" - WAC 415-110-0108.

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(a) Leave employment in an eligible position to serve in a project position (see WAC 415-110-680); or

(b) Work in both a SERS and TRS position during the same school year (see WAC 415-110-728).

(2) Your employer will evaluate your position's eligibility for a particular year at the beginning of the year.

(3) Your employer or the department may reclassify your position's eligibility based upon your actual work history. If your employer declares your position to be ineligible at the beginning of a year and by the end of the year, you have actually worked five or more months of seventy or more hours, your employer will, at that time, review your position's eligibility. If at the end of the first year:

(a) Your employer believes your position meets the requirements for an eligible position and declares the position as eligible, you will enter membership and your employer will report you to the department effective from the date your employer declares the position as eligible; or

(b) Your employer believes that the position will not meet the criteria for an eligible position during the next year, your employer may continue to define your position as ineligible. However, if during the next year the position actually requires you to again work seventy or more hours each month for at least five months, the department will declare your position as eligible. You will enter membership in the retirement system.

(i) Except as provided in (b)(ii) of this subsection, your employer will report you to the department effective from the first month of the first year in which your position required you to work for seventy or more hours.

(ii) If:

(A) Your employer has monitored the work history of your position for eligibility;

(B) Has notified you in writing when you entered the position that the position was not considered eligible; and

You will enter membership prospectively.

(4) The department will not reclassify your position's eligibility until history of the position shows that it meets the criteria for an eligible position. If your employer has declared your position ineligible, the department will not reclassify your position as eligible until history of the position shows a period of two consecutive years of at least five months of seventy or more hours of compensated employment each month.

(5) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed.

(a) "Eligible position" - RCW 41.35.010.

(b) "Employer" - RCW 41.35.010.

(c) "Ineligible position" - RCW 41.35.010.

(d) "Membership" - RCW 41.35.030.

(e) "Project position" - WAC 415-110-0103.

(f) "Report" - WAC 415-110-0104.

(g) "Year" - WAC 415-110-0108.

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Example:	A person normally works for one employer as a cook for forty hours each month and as a bus driver for forty hours each month. The person is eligible for membership because he works a total of eighty hours each month for at least five months each year and this is the normal pattern of his employment.
Example:	A person normally works for one employer for forty hours each month as a cook. For one year only, she takes on extra duties by also working forty hours per month as a bus driver. Although she worked eighty hours each month for five or more months during one year, she is not eligible for membership because these hours are not the normal pattern of her employment.
Example:	A person works for one employer for forty hours each month as a cook and also works for another employer for forty hours each month as a bus driver. The person is not eligible for membership because he cannot combine the hours of employment with these separate employers to establish membership.

(2) You may be reported in TRS if you work in two positions and one position is covered under TRS. See WAC 415-110-728.

(3) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed.

(a) "Eligible position" - RCW 41.35.010.

(b) "Employer" - RCW 41.35.010.

(c) "Ineligible position" - RCW 41.35.010.

(d) "Membership" - RCW 41.35.030.

(e) "Normally" - WAC 415-110-0102.

(f) "Report" - WAC 415-110-0104.

(g) "Year" - WAC 415-110-0108.

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(2) You may work for an employer in some circumstances without reentering membership. You may enter employment with an employer after retirement without having to reenter membership if:

(a) You are employed in an ineligible position; or

(b) You are employed in an eligible position on a temporary basis for five months or less in a calendar year.

(i) If you enter compensated employment in an eligible position during a month, that month is counted as a month of employment in the calendar year regardless of the number of hours you worked in the month.

(ii) If you are employed in an eligible position for any five months during a calendar year, the department will count your employment as five months of employment, regardless of whether or not the months are consecutive or your employment is with one or more employers.

(3) You are required to reenter membership if you become reemployed in an eligible position on a temporary basis for more than five months in a calendar year. If you become reemployed in an eligible position on a temporary basis for more than five months in a calendar year, you will reenter membership in the retirement system beginning with the sixth month of your employment. Effective at the beginning of the sixth month of your employment:

(a) Your employer will report you to the department; and

(b) The department will suspend your retirement allowance.

(4) You are required to reenter membership if you become permanently reemployed in an eligible position. If you become reemployed in an eligible position on a permanent basis, you will immediately become a member. Effective from the date of your reemployment in a permanent eligible position:

(a) Your employer will report you to the department; and

(b) The department will suspend your retirement allowance.

(5) Meaning of employment on a temporary or permanent basis.

(a) "Employed on a temporary basis" under subsection (2) of this section means your employer expects your employment to last for five months or less and not be on a recurring basis.

(b) "Employed on a permanent basis" under subsection (3) of this section means either:

(i) Your employer expects you to continue in your position for more than five months in any calendar year; or

(ii) Your employer expects you to continue in the same position for more than one year on a recurring basis and your employment is for five months or less during each year.

(6) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed.

(a) "Eligible position" - RCW 41.35.010.

(b) "Employer" - RCW 41.35.010.

(c) "Ineligible position" - RCW 41.35.010.

(d) "Membership" - RCW 41.35.030.

(e) "Report" - WAC 415-110-0104.

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(2) If you work for a SERS employer after you retire, you are subject to postretirement employment restrictions, even if you are excluded from participating in membership. If you become employed in an eligible position after you retire, you are subject to the postretirement employment restrictions under RCW 41.35.230 even if you are excluded from membership.

(3) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed.

(a) "Eligible position" - RCW 41.35.010.

(b) "Employer" - RCW 41.35.010.

(c) "Ineligible position" - RCW 41.35.010.

(d) "Membership" - RCW 41.35.030.

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(2) If you are receiving a disability allowance from any retirement system administered by the department, you cannot participate in SERS.

(3) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed.

(a) "Membership" - RCW 41.35.030.

(b) "Retirement plan" - WAC 415-110-0105.

(c) "Service" - RCW 41.35.010.

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Former TRS Plan 1 Members ¹/

Type of Employment 2/	Type of Employer(s)	System You Will Be Reported In
A substitute or less than full-time teaching position and a SERS-eligible position	Same SERS employer	SERS - for both positions.
	Separate SERS employers	SERS - for SERS position only. Your substitute part-time position is not reported unless you qualify for and elect to establish TRS membership under RCW 41.32.240. If you elect to establish TRS membership, your employers will report you in TRS for both positions. Any previously reported service credit and compensation in SERS will be transferred to TRS.
A full-time teaching position and an eligible SERS position	Same employer	TRS - for both positions.
	Separate SERS employers	TRS - for both positions.

TRS Plan 1 Members

Type of Employment 2/	Type of Employer(s)	System You Will Be Reported In
A full-time or less than full-time TRS position and an eligible SERS position	Same employer	TRS - for both positions.
	Separate SERS employers	TRS - for both positions.
A full-time or less than full-time TRS position and an ineligible SERS position	Same employer	TRS - for both positions.
	Separate SERS employers	TRS - for both positions.

TRS Plan 2 or 3 Members

Type of Employment 2/	Type of Employer(s)	System You Will Be Reported In
An eligible TRS position and an ineligible PERS position	Same employer	TRS - for both positions.
	Separate SERS employers	TRS - for TRS position only; your ineligible SERS position is not reported.
An eligible TRS position and an eligible SERS position	Same employer	TRS - for both positions.
	Separate SERS employers	TRS - for both positions.3/

SERS Members

Type of Employment 2/	Type of Employer(s)	System You Will Be Reported In
An eligible SERS position and an ineligible TRS or substitute position	Same employer	SERS - for both positions.
	Separate SERS employers	SERS - for the SERS position only, unless you qualify for and elect to establish membership in TRS at the end of the school year under WAC 415-112-125(1). If you elect to establish TRS membership, your employers will report you in TRS for both positions. Any previously reported service credit and compensation in SERS will be transferred to TRS.

Neither TRS Nor SERS Member

Type of Employment 2/	Type of Employer(s)	System You Will Be Reported In
An ineligible TRS and an ineligible SERS position	Same employer	TRS - for both positions if the positions combined, qualify as an eligible position.
	Separate SERS employers	Neither position reported.
A substitute teaching position and an ineligible SERS position	Same employer	Neither position reported. However, if you qualify, you may elect to establish membership in TRS at the end of the school year for your substitute teaching position under RCW 41.32.013 and WAC 415-112-140.
	Separate SERS employers	Neither position reported. However, if you qualify, you may elect to establish membership in TRS at the end of the school year for your substitute teaching position under RCW 41.32.013 and WAC 415-112-140.

1/	"Former TRS 1 member," as used here, means you terminate your membership by withdrawing your contributions.
2/	Means during the same school year.
3/	EXAMPLE: A TRS 2 member is employed concurrently by School District A in an eligible TRS position and by School District B in an eligible SERS position. Because he is a TRS 2 member, School District B employer must report his service and compensation from the SERS position to the department in TRS 2. If the member terminates his employment in the TRS position with School District A, School District B will report him in SERS for the SERS position.

(2) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed.

(a) "Eligible position" - RCW 41.35.010 (SERS); RCW 41.32.010 (TRS).

(b) "Employer" - RCW 41.35.010 (SERS); RCW 41.32.010 (TRS).

(c) "Ineligible position" - RCW 41.35.010 (SERS); RCW 41.32.010 (TRS).

(d) "Member" - RCW 41.35.010 (SERS); RCW 41.32.010 (TRS).

(e) "Membership" - RCW 41.35.030 (SERS).

(f) "Report" - WAC 415-110-0104.

(g) "Service" - RCW 41.35.010 (SERS); RCW 41.32.010 (TRS).

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(2) In computing the interim retirement allowance, the department shall, subject to later correction, consider only the amount of the member's salary actually reported by the employer up to the date of the interim computation, but shall impute the member's earned service credit for the same period.

(3) Following the department's computation of the interim benefit and receipt earnings history, the department shall complete a final computation of the member's retirement allowance. The department's final computation may either increase or decrease the amount of the interim retirement allowance computed pursuant to subsection (1) of this section.

(4) Pursuant to RCW 41.50.130, following the department's final computation of the member's retirement allowance as provided in subsection (3) of this section, the department may subsequently adjust a member's retirement allowance to correct any error in retirement system records. For purposes of this subsection, errors in retirement system records include, but are not limited to, the following:

(a) Applying an incorrect retirement allowance formula in computing the retirement allowance;

(b) Including service that is not creditable to the member;

(c) Including payments that do not constitute earnable compensation to a member in the member's retirement allowance computation, or excluding earnable compensation not reported by an employer;

(d) Benefit overpayments and underpayments;

(e) Including an individual in the membership of the retirement system who is not entitled to such membership.

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(a) Include service credit the member earned following reestablishment of membership if any; and

(b) Account for the actuarial reduction applied to the member's initial retirement if the member initially retired prior to age sixty-five.

(2) If a Plan 2 or Plan 3 retiree reenters membership, upon the individual's next retirement, the department shall reinstate and actuarially recompute the individual's retirement allowance pursuant to RCW 41.35.230 (Plan 2) or RCW 41.35.640 (Plan 3) as follows:

(a) If the member first retired before age sixty-five, the department shall:

(i) Calculate the retirement allowance pursuant to RCW 41.35.400 (Plan 2) or RCW 41.35.620 (Plan 3) using the retiree's total years of career service, including service earned prior to initial retirement and service earned after reentering membership;

(ii) Actuarially reduce the member's retirement allowance based on the present value of the retirement allowance payments the individual received during the initial retirement; and

(iii) Calculate any survivor option selected by the retiree based upon the monthly retirement allowance calculated pursuant to (a)(i) and (ii) of this subsection.

(b) If the member initially retired at or after age sixty-five, the department shall recompute the member's retirement allowance pursuant to RCW 41.35.400 (Plan 2) or RCW 41.35.620 (Plan 3) and include any additional service credit earned and any applicable increase in the member's average final compensation resulting from the member's reentry into membership. Under no circumstances shall a retiree receive a retirement allowance creditable to a month during which that individual earned service credit.

(3) If a retiree's retirement allowance is suspended under RCW 41.35.450 or 41.35.640 due to reemployment but the retiree does not reenter membership, upon the retiree's separation from such employment, the retiree shall receive an actuarially recomputed retirement allowance equal to the sum of:

(a) The amount of the monthly suspended retirement allowance; plus

(b) An actuarially computed increase based upon the retirement allowance payments the member did not receive due to reemployment. The retiree may elect to receive the actuarially computed increase in either:

(i) An amount amortized over the expected term of the recomputed retirement allowance; or

(ii) A lump sum payment equal to the suspended retirement allowance plus interest.

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(a) You were employed with a school district or educational service district in an eligible position as of September 1, 2000;

(b) You participated and then separated in PERS prior to September 1, 2000, and became reemployed in an eligible position at a school district or educational service district after September 1, 2000;

(c) You retired out of PERS Plan 2 and:

(i) Returned to PERS covered employment and became an active PERS membership; and

(ii) Were a member as of September 1, 2000, at a school district or educational service district; or

(d) You retired out of PERS Plan 2 and:

(i) Returned to PERS covered employment and became an active PERS membership;

(ii) Separated from your PERS position; and

(iii) Become employed in an eligible SERS position prior to applying for reretirement in PERS.

(2) What happens to my existing PERS service and account history when I am converted from PERS to SERS membership? All of your PERS service and account history with any PERS employer will be moved to SERS.

(3) How many times will my PERS service be moved to SERS? Your PERS service shall be moved to SERS only once pursuant to subsection (1) of this section. After you have been converted from PERS to SERS, subsequent reenrollment(s) into SERS shall not cause any additional conversions of any PERS service. Any future eligible employment in PERS shall be reported into PERS and any future eligible employment in SERS shall be reported into SERS.

Example:	Employed in PERS prior to conversion. Joe has 15 years of service in PERS. He has been employed by a school district for the last 5 years. Joe previously was employed by a county for 10 years.
	Conversion from PERS to SERS. Since Joe is employed with the school district on September 1, 2000, his PERS service is moved to SERS service. Both his 5 years of service with the school district and his 10 years of service with the county are moved to SERS. Joe's PERS account now has zero service credit and contributions; Joe's SERS account now has 15 years of service credit and contributions.
	Return to PERS service. After another year of service with the school district, Joe separates employment with 16 years of credit in SERS and returns to employment with the county. Joe's 16 years of service remains in SERS and he begins to accrue service in PERS, starting from zero, for his new employment with the county.
	Return to SERS employment. Joe works for the county for 5 years. He now has 5 years of service credit in PERS and he still has 16 years of service credit in SERS. Joe separates employment from the county and goes back to work in a SERS covered position with an educational service district. Joe's PERS employer will stop reporting him and the educational service district will begin reporting Joe into SERS. He will begin accumulating service in SERS starting at 16 years. The 5 years of service that Joe rendered at the county stays in PERS.

(4) If I am a PERS Plan 2 retiree and become employed in an eligible SERS position, will my service be converted from PERS to SERS? Except as allowed in subsection (1)(c) and (d) of this section, a PERS Plan 2 retiree will not have any of their service, account or retirement history converted to SERS.

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OTS-4461.2

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(a) Adhering to published time frames;

(b) Making investment decisions for your defined contribution account;

(c) Reviewing account information provided on statements, such as quarterly statements, and notifying the correct organization of any errors;

(d) Filling out the correct form for a requested action;

(e) Correctly completing the appropriate form for a requested action and submitting the form to the correct organization as directed on each form; and

(f) Monitoring to ensure contributions do not exceed Internal Revenue Code limits (see WAC 415-111-111).

(2) What can happen if I do not fulfill my responsibilities? If you do not fulfill your responsibilities, the consequences may include, but are not limited to:

(a) You may not qualify for certain benefits, such as the transfer payment;

(b) You may have a delay in the correction of errors on your account;

(c) You may have a delay in the processing of your request for a defined contribution withdrawal; or

(d) You may have a delay in the investment of your account as directed.

(3) What responsibilities do employers have? Employers' responsibilities include, but are not limited to:

(a) Adhering to Plan 3 administrative requirements, including the respective roles of employers and employees, communicated to employers by the department in written materials and formal training.

(b) Maintaining a supply of Plan 3 forms;

(c) Submitting contributions to the department as soon as possible and at least in accordance with chapter 41.50 RCW;

(d) Reporting an employee's Plan 3 transfer election as soon as possible after receipt of the appropriate form from the employee;

(e) Submitting to DRS the form on which the member made their Plan 3 transfer election as soon as possible after receipt of the appropriate form;

(f) Reporting an employee's contribution rate election as soon as possible after receipt of the appropriate form from the employee;

(g) Reporting an employee's investment program election as soon as possible after receipt of the appropriate form from the employee; and

(h) Monitoring to ensure that a member's contributions do not exceed Internal Revenue Code limits (see WAC 415-111-111).

(4) What can happen if my employer does not fulfill their responsibilities? If your employer does not fulfill their responsibilities, the consequences may include, but are not limited to:

(a) Your employer may have to make your member account whole;

(b) Your employer may be subject to penalties assessed by the department; or

(c) Your employer may be subject to penalties assessed by the Internal Revenue Service.

If the department determines that an employer has erred in its administrative role, such that an employee incurs an investment loss, the department will determine the amount of loss and bill the employer.

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(2) Who is responsible for ensuring that I do not exceed my tax deferral limits? Both your employer and you are responsible for ensuring that you do not exceed your tax deferral limits:

(a) Employers are responsible for monitoring to ensure that the contributions you make to your employer-sponsored tax deferred plan(s) do not exceed the limits under the Internal Revenue Code.

(b) You are responsible for monitoring to ensure that the total contributions you make to all of your tax deferred plan(s) do not exceed the limits under the Internal Revenue Code if you participate in a tax deferred program(s) outside of your employer sponsored plan(s).

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Pursuant to WAC 415-111-110, you bear the responsibility for completing the correct form for making an investment program election and submitting it to your employer as directed on the form.

(1) Where do I get the form to make my election? Your employer must provide the appropriate form to elect an investment program if you are enrolling into Plan 3, transferring from Plan 2 to Plan 3, or changing your investment program.

(2) When do I have to choose an investment program? If you are a new member or are reenrolling, you must select one of the investment programs (the total allocation portfolio or the self-directed investment program) within ninety calendar days from your date of hire in an eligible position. However, if you are transferring from Plan 2 to Plan 3, you must select an investment program when you transfer. The ninety-day period does not apply to a member transferring from Plan 2 to Plan 3.

If it is determined you should be reported into Plan 3 membership retroactively, the ninety-day period starts from the date it is discovered, as determined by the department, that you should have been reported.

(3) What happens if I do not make an investment program election? You will be assigned to the default investment program described in subsection (4) of this section, if:

(a) You are a new employee or changing your employer and do not make an investment program election within the ninety-day election period described in subsection (2) of this section; or

(b) You are transferring from Plan 2 to Plan 3 and do not make an investment program election at the time of transfer.

(4) What is the default investment program? The default investment program is the total allocation portfolio of the Washington state investment board.

(5) Can I change my investment program? Once you have made an initial investment election or been directed into the default program, you may change your investment program at any time by submitting the appropriate form to your employer.

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Pursuant to WAC 415-111-110, you bear the responsibility for completing the correct form for making a contribution rate election and submitting it in a timely manner to your employer as directed on the form.

(1) Where do I get the form to make my election? Your employer must provide the appropriate form to elect a contribution rate if you are enrolling into Plan 3 or transferring from Plan 2 to Plan 3.

(2) When do I have to elect a contribution rate? You must irrevocably elect a contribution rate within ninety calendar days from your date of hire in an eligible position. However, if you are transferring from Plan 2 to Plan 3, you must elect a contribution rate when you transfer. The ninety-day period does not apply to a member transferring from Plan 2 to Plan 3.

(a) Once a member elects a contribution rate, contributions will begin the first day of the pay cycle in which the member makes the election.

(b) If it is determined that a member should be reported into Plan 3 membership retroactively, the ninety-day period starts from the date it is discovered, as determined by the department, that the member should have been reported.

(c) A Plan 3 member working in eligible positions for more than one employer may select a different contribution rate with each employer.

(3) What happens if I do not make a contribution rate election? Pursuant to RCW 41.34.040, you will be irrevocably assigned to Option A if:

(a) You are a new employee or changing your employer and do not make a contribution rate election within the ninety-day election period described in subsection (2) of this section; or

(b) You are transferring from Plan 2 to Plan 3 and do not make a contribution rate election at the time of transfer. Contributions required under subsection (a) or (b) shall begin effective the first day of the pay cycle in which you are assigned to Option A.

(4) Can I change my contribution rate? Once you elect a contribution rate or are defaulted into Option A, you cannot change your contribution rate unless you change employers. Each time you change employers, you will be allowed the ninety-day period described in subsection (2) of this section to elect a new contribution rate. For the purposes of this section, employer is defined as each school district and each educational service district.

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(1) What is an allocation? An allocation is a set of instructions defining which self-directed investment program funds you wish your money to be invested in. The amount you allocate to each fund must be designated as a whole percentage. The sum of the percentages that you allocate must equal one-hundred percent.

Example:

Martha has elected the self-directed program as her investment manager and is contributing $150 per month. Martha decides to invest into three different funds with the following amounts: $30 invested in fund #1, $45 invested in fund #2 and $75 invested in fund #3. To accomplish this she must establish the following allocation:

Allocation to fund #1	20%
Allocation to fund #2	30%
Allocation to fund #3	50%
Total Allocation	100%

(2) How do I establish an allocation? You must establish your allocation by contacting the department's designated recordkeeper. Once established, you may change your allocation at any time by contacting the department's designated recordkeeper.

(3) What happens if I do not designate an allocation? If you do not provide an allocation prior to any of your investment money being received by the department's designated recordkeeper, or if you provide an allocation where the sum of the allocated portions does not equal one-hundred percent, your investment money will be directed into the default fund such that:

(a) If your total allocations do not equal one-hundred percent, (i) the department will determine the percentage that is unallocated, and (ii) direct the unallocated percentage into 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 directed into the default fund.

(b) If the total allocations exceed one-hundred percent, the entire allocation will be directed into the default fund.

Example:

Chris designates the following allocations: 38% into fund #1, 40% into fund #2, and 10% into fund #3 and 15% into fund #4. Since the total allocation equals 103%, all of Chris' investment money will be directed into the default fund.

(c) If no allocation is provided, the entire allocation will be directed into the default fund: Provided, That if the member previously participated in the self-directed investment program, the member's most recent allocation will be used. If that 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 directed into 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 directed into 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

Since she did not establish a new allocation, her previous allocation will be used. However, fund #2 is no longer available so that part of her allocation will be directed into 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

(4) What is the default fund? The default fund for the self-directed investment program is the Money Market Fund.

(5) Can I change my allocation? Once you have established an allocation or been directed into the default fund, you may change your allocation at any time by contacting the department's designated recordkeeper.

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(a) You must separate from all eligible employment;

(b) Notice of separation must be received by the department from your employer(s) through the retirement transmittal system; and

(c) You must submit the appropriate form for requesting a defined contribution withdrawal. Pursuant to WAC 415-111-110, you bear the responsibility for completing and submitting the form to the department's designated recordkeeper as directed on the form.

(2) Can I still receive my defined contribution withdrawal if I return to work before receiving my withdrawal? If you have made a request for payment and meet all of the criteria in subsection (1) of this section, you may return to work in an eligible position and still take payment of the requested defined contribution withdrawal.

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OTS-4462.1

(1) "PERS" means the Public Employees' Retirement System.

(2) "TRS" means the Teachers' Retirement System.

(3) "SERS" means the School Employees' Retirement System.

[Statutory Authority: RCW 41.50.050. 95-16-053, 415-112-0167, filed 7/25/95, effective 8/25/95.]

(2) If you terminate TRS Plan ((I)) 1 membership, you will not reenter TRS Plan ((I)) 1 unless you requalify for membership or repay withdrawn contributions as a dual member. If you were a Plan ((I)) 1 member and have terminated your membership, you can reestablish your membership and be eligible to participate in the system again only if you:

(a) Become reemployed as a teacher in a position or positions meeting the membership eligibility criteria under RCW 41.32.240 and WAC 415-112-125(1); or

(b) Repaid withdrawn contributions as a dual member under portability. See RCW 41.54.020(2).

(3) If you have service credit in TRS Plan ((II)) 2, you will only reestablish membership if you work as a teacher in an eligible position. If you were a Plan ((II)) 2 member who separated from service, you will reestablish membership and be eligible to participate in the system again only if you:

(a) Become reemployed as a teacher; and

(b) Render service in a position or positions meeting the membership eligibility criteria under WAC 415-112-125(1) or 415-112-140(1).

(4) If you have service credit in TRS Plan 3, you will only reestablish membership if you work as a teacher in an eligible position. If you were a Plan 3 member who separated from service, you will reestablish membership and be eligible to participate in the system again only if you:

(a) Become reemployed as a teacher; and

(b) Render service in a position or positions meeting the membership eligibility criteria under WAC 415-112-125(1) or 415-112-140(1).

(5) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed.

(a) "Dual member" - RCW 41.54.010 and WAC 415-113-041.

(b) "Eligible position" - RCW 41.32.010.

(c) "Employer" - RCW 41.32.010.

(d) "Member" - RCW 41.32.010.

(e) "Service" - RCW 41.32.010.

(f) "Service in an administrative or supervisory capacity" - WAC 415-112-0162.

(g) "Service in an instructional capacity" - WAC 415-112-0163.

(h) "Teacher" - RCW 41.32.010.

[Statutory Authority: RCW 41.50.050. 95-16-053, 415-112-130, filed 7/25/95, effective 8/25/95.]

(a) Possess a valid educational staff associate certificate issued by the office of the superintendent of public instruction under WAC 180-75-055(3); and

(b) Serve in an educational staff associate position.

(2) Positions which qualify as an educational staff associate. "Educational staff associate," includes but is not limited to a person employed by a public school in any of the following positions: Communications disorder specialist, occupational therapist, physical therapist, reading resource technician, school counselor, school nurse, school psychologist, school social worker and school librarian.

(3) If you were enrolled in PERS before June 7, 1984, based on your employment as an educational staff associate, you may remain in PERS. If you were enrolled in the PERS prior to June 7, 1984, based on employment as an educational staff associate, you will remain in PERS unless you choose either to:

(a) Transfer your membership to TRS within the time limits established in RCW 41.32.032; or

(b) Terminate your membership in PERS by withdrawing your accumulated contributions.

(4) If you were enrolled in PERS prior to June 7, 1984, based on employment as an educational staff associate and converted to SERS you may maintain your SERS membership. If you were enrolled in the PERS prior to June 7, 1984, based on employment as an educational staff associate, and were converted to SERS membership under RCW 41.40.750, you will remain in SERS unless you choose either to:

(a) Transfer your membership to TRS within the time limits established in RCW 41.32.032; or

(b) Terminate your membership in SERS Plan 2 by withdrawing your accumulated contributions.

(5) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed.

(a) "Member" - RCW 41.32.010.

(b) "Employer" - RCW 41.32.010.

(c) "Public school" - RCW 41.32.010 and WAC 415-112-0158.

(d) "Service" - RCW 41.32.010.

(e) "Teacher" - RCW 41.32.010.

[Statutory Authority: RCW 41.50.050. 95-16-053, 415-112-135, filed 7/25/95, effective 8/25/95.]

Former TRS Plan ((I)) 1 Members ^1/

TRS Plan ((I)) 1 Members

TRS Plan ((II)) 2 Members

PERS Members

Neither TRS Nor PERS Member

^2/ Means during the same school year.

^3/ EXAMPLE: A TRS 2 member teaches in an eligible position and during the summer, she works for a state agency in an eligible position under PERS. Because the member has established membership in TRS 2 through employment as a teacher, her state agency employer must report her service and compensation from the PERS position to the Department in TRS 2.

EXAMPLE: A TRS 2 member is employed concurrently by School District A in an eligible TRS position and by School District B in an eligible PERS position. Because he is a TRS 2 member, School District B employer must report his service and compensation from the PERS position to the Department in TRS 2. If the member terminates his employment in the TRS position with School District A, School District B will report him in PERS for the PERS position.

(2) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed.

(a) "Eligible position" - RCW 41.32.010 (TRS); RCW 41.40.010 (PERS).

(b) "Employer" - RCW 41.40.010 (PERS); RCW 41.32.010 (TRS).

(c) "Full time" - RCW 41.32.240.

(d) "Ineligible position" - WAC 415-112-0154 (TRS); RCW 41.40.010 (PERS).

(e) "Member" - RCW 41.40.010.

(f) "Membership" - RCW 41.40.023.

(g) "Report" - WAC 415-108-0104.

(h) "Service" - RCW 41.40.010.

[Statutory Authority: RCW 41.50.050. 00-10-015, 415-112-155, filed 4/21/00, effective 5/22/00; 95-16-053, 415-112-155, filed 7/25/95, effective 8/25/95.]