WSR 03-12-014

PERMANENT RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed May 27, 2003, 2:50 p.m. , effective July 1, 2003 ]

Date of Adoption: May 27, 2003.

Purpose: Implementation of chapter 158, Laws of 2002 (ESB 6380), "Retirement systems--Benefits options," also known as the "Survivor Bill." The legislature has required by the Department of Retirement Systems (DRS) adopt rules to implement ESB 6380 and make these rules effective no later than July 1, 2003. At the same time, DRS sought to clarify some of the rules regarding dissolutions and put some long-standing practices into rule.

Citation of Existing Rules Affected by this Order: Repealing WAC 415-111-450; and amending WAC 415-02-380, 415-104-211, and 415-104-215.

Statutory Authority for Adoption: RCW 41.50.050(5).

Other Authority:
WAC TYPE OF ADOPTION TITLE STATUTE(S) THAT WAC IS IMPLEMENTING
415-02-500 New Property division in dissolution orders. RCW 41.50.500, [41.50.]670-[41.50.]710, [41.50.]790; ESB 6380 (2002)

415-02-510 New How can a property division dissolution order give my ex-spouse an interest in my Plan 1 or Plan 2 retirement account?
415-02-520 New

How can my Plan 1 or Plan 2 retirement account be split by a property division dissolution order?
415-02-530 New How can a property division dissolution order give my ex-spouse an interest in part of my Plan 3 retirement account?
415-02-540 New How can my Plan 3 retirement account be split by a property division dissolution order?
415-02-550 New What happens to my defined contributions if I transfer to Plan 3 after DRS accepts my property division dissolution order?
415-02-380 Amend Survivor option factors. RCW 41.26.162, 41.26.164, chapter 41.45 RCW
415-104-202 New Survivor benefit options -- LEOFF Plan 1.
415-104-211 Amend Married LEOFF Plan 2 member's benefit selection -- Spousal consent required. RCW 41.26.460
415-104-215 Amend Retirement benefit options--LEOFF Plan 2.
415-111-450 Repeal How does a court-ordered division of property affect my Plan 3 account? RCW 41.50.670

Adopted under notice filed as WSR 03-05-042 on February 12, 2003.

Changes Other than Editing from Proposed to Adopted Version: REASON FOR ADOPTION: Implementation of ESB 6380 (chapter 158, Laws of 2002), "Retirement Systems--Benefits options," also known as the "Survivor Bill." The legislature has required that DRS adopt rules to implement ESB 6380 and make these rules effective no later than July 1, 2003.

WERE CHANGES MADE SINCE THE RULE WAS PROPOSED? The text of the adopted rule varies from the text of the proposed rule. The changes (other than editing changes) are described below.

SUMMARY OF COMMENTS RECEIVED THE DEPARTMENT CONSIDERED ALL THE COMMENTS. THE ACTIONS TAKEN IN RESPONSE TO THE COMMENTS, OR THE REASONS NO ACTIONS WERE TAKEN, FOLLOW.
Where there is mutual agreement, a divorced couple should be able to just fill out a form and change the survivor benefit option, without having to go to court.

Only a court can enter dissolution orders or amendments. RCW 41.50.500, [41.50.]670-[41.50.]710, [41.50.]790; ESB 6380 (2002). A court must order DRS to split an account (through an order or amended order dated July 1, 2003, or later). The retiree and ex-spouse will then each have his/her own account and the survivor option can be removed from the retiree's account.

The following amendments were read into the record at the rules hearing on May 1, 2003 (the first one was for clarification; the second was to correct a typographical error):

Added to WAC 415-02-520(6) and 415-02-540(10) as new subsection (c). Current (c) will become (d): "At the time the department splits your account, your ex-spouse will be removed as the survivor beneficiary on your account."

In WAC 415-02-540(13) reference to subsections (3) and (6) being changed to (6) and (9).

The following additional amendments are being made in the final rules (for clarification - the rules will also be renumbered, as needed, to make these changes):

WAC 415-02-520 (7)(a) (Step 1) and 415-02-540 (11)(a) (Step 1): Strike "used to reduce your benefit when you retired" and substitute "in effect at the time of the split."

New subsection (9) in WAC 415-02-510: Can my existing order be amended to remove my ex-spouse as my survivor beneficiary? Yes. To remove your ex-spouse as your survivor beneficiary, you must submit a "conformed copy" of the order splitting your account. A conformed copy is a copy of the court order that has been signed by the judge or commissioner on or after July 1, 2003, and filed with the court. Removing your ex-spouse as survivor beneficiary will change your retirement benefit. See WAC 415-02-520(8) for the language that must be used.

New subsection (6) in WAC 415-02-530: Can I amend my existing amended to remove my ex-spouse as my survivor beneficiary? Yes. To remove your ex-spouse as your survivor beneficiary, you must submit a "conformed copy" of the court order splitting your account. A conformed copy is a copy of the order that has been signed by the judge or commissioner and on or after July 1, 2003, and filed with the court. Removing your ex-spouse as survivor beneficiary will change your retirement benefit. See WAC 415-02-540 (9) and (13) for the language that must be used.

New subsection (10) in WAC 415-02-520: Can I amend an existing order that has awarded an interest in my account to my ex-spouse under WAC 415-02-520 and remove my ex-spouse as my survivor beneficiary? Yes. To remove your ex-spouse as your survivor beneficiary, you must submit a "conformed copy" of the order splitting your account. A conformed copy is a copy of the court order that has been signed by the judge or commissioner on or after July 1, 2003, and filed with the court. Removing your ex-spouse as survivor beneficiary will change your retirement benefit. See WAC 415-02-520(8) for the language that must be used.

Example: Julio and May were married when Julio retired. Julio chose survivor option 2 (Joint and 100% survivorship) when he retired. This meant that if Julio died, May would receive monthly survivor benefits. Two years after Julio's retirement, the couple divorced. The court awarded "100% of retirement benefits" to Julio. Julio later learned that this award did not change the survivor option. Julio can return to court and obtain an order stating that May is to receive "$0" as the dollar amount for her separate monthly benefit. The order must use the language in WAC 415-02-520 and be signed by the court no sooner than July 1, 2003.

New subsection (10) in WAC 415-02-540: Can I amend an existing order that has awarded an interest in my account to my ex-spouse under WAC 415-02-530 and remove my ex-spouse as my survivor beneficiary? Yes. To remove your ex-spouse as your survivor beneficiary, you must submit a "conformed copy" of the court order splitting your account. A conformed copy is a copy of the order that has been signed by the judge or commissioner on or after July 1, 2003, and filed with the court. Removing your ex-spouse as survivor beneficiary will change your retirement benefit. See WAC 415-02-540 (9) and (13) for the language that must be used.

Example: Julio and May were married when Julio retired. Julio chose survivor option 2 (Joint and 100% survivorship) when he retired. This meant that if Julio died, May would receive monthly survivor benefits. Two years after Julio's retirement, the couple divorced. The court awarded "100% of retirement benefits" to Julio. Julio later learned that this award did not change the survivor option. Julio can return to court and obtain an order stating that May is to receive "$0" as the dollar amount for her separate monthly benefit. The order must use the language in WAC 415-02-540 and be signed by the court no sooner than July 1, 2003.

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 7, Amended 3, Repealed 1.

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 7, Amended 3, Repealed 1.

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: July 1, 2003.

May 26, 2003

John Charles

Director

OTS-6170.1


AMENDATORY SECTION(Amending WSR 03-02-087, filed 12/31/02, effective 2/1/03)

WAC 415-02-380   Survivor options factors.   (1) What is a "surviving beneficiary"? A surviving beneficiary is a person you designate ((when you retire)) who will receive benefit payments for the duration of his or her life, beginning at your death.

(2) Will selecting a surviving beneficiary affect my retirement benefits? Yes. Retirees who select a surviving beneficiary retirement option receive smaller benefit payments ((upon retirement)) than those retirees who do not select this option.

(3) Does it matter if I am married? Yes. If you are married, you must provide your spouse's written consent to the option you select (except in LEOFF Plan 1). If you are married, and you and your spouse do not give written consent to an option, the department will pay you a joint and fifty percent survivor benefit and record your spouse as the beneficiary. For details, please review:

LEOFF Plan 1: RCW 41.26.162 WAC 415-104-202
LEOFF Plan 2: RCW 41.26.460(2) WAC 415-104-211 and 415-104-215
PERS Plan 1: RCW 41.40.188(2) WAC 415-108-324 and 415-108-326
PERS Plan 2: RCW 41.40.660(2) WAC 415-108-324 and 415-108-326
PERS Plan 3: RCW 41.40.845(2) WAC 415-108-324 and 415-108-326
SERS Plans 2/3: RCW 41.35.220(2) WAC 415-110-324 and 415-110-326
TRS Plan 1: RCW 41.32.530(2) WAC 415-112-710 to 415-112-727
TRS Plan 2: RCW 41.32.785(2) WAC 415-112-710 to 415-112-727
TRS Plan 3: RCW 41.32.851(2) WAC 415-112-710 to 415-112-727
WSPRS Plan 2: RCW 43.43.271(2) WAC 415-103-225

(4) Why does the surviving beneficiary's age matter? The surviving beneficiary's age is used in determining the amount of the payments. The younger the surviving beneficiary, the longer he or she is expected to receive payments. The monthly benefit must be reduced accordingly.

(5) What are the survivor options? The survivor options are described in detail within each plan. For details, please see the list in subsection (3) of this section.

To summarize:

Option 2 - Joint and 100 percent survivorship

Option 3 - Joint and 50 percent survivorship

Option 4 - Joint and 66.67 percent survivorship

(6) Examples

(a) Example (a):

Kendra, a PERS Plan 2 member, chooses Option 3 (joint and 50 percent survivorship) at retirement. She names her nephew, Steve, as her surviving beneficiary. This means that Steve would receive half of Kendra's benefit amount after Kendra's death. Steve is 30 years younger than Kendra. PERS would use the survivor option factor table ("member older") to calculate the adjustment. With a 30-year age difference (member minus beneficiary), the value corresponding to PERS Plan 2 and Option 3 is 0.753. This value, 0.753, is multiplied against the amount Kendra would have received under Option 1. Kendra's retirement benefits will be reduced to about 75% of her Option 1 level.

(b) Example (b):

Mark, a LEOFF Plan 2 member, chooses Option 2 (joint and 100 percent survivorship) at retirement. He names his wife, Susan, as his surviving beneficiary. This means Susan would receive the same benefit amount Mark had received prior to his death. Mark is five years younger than Susan. LEOFF would use the survivor option factors table ("member younger") to calculate the adjustment for the age difference. With a 5-year age difference (member minus beneficiary), the value corresponding to LEOFF Plan 2 and Option 2 is 0.894. This value, 0.894, will be multiplied against the amount Mark would have received under Option 1. Mark's retirement benefits will be reduced to about 89 percent of his Option 1 level.

(7) Table - Member older (PERS and SERS)

Survivor option factor: Member older than beneficiary

Age difference: Member age minus beneficiary age

Age Difference PERS 1

Opt. 2

100%

PERS 1

Opt. 3

50%

PERS 1

Opt. 4

66 2/3%

PERS 2/3

Opt. 2

100%

PERS 2/3

Opt. 3

50%

PERS 2/3

Opt. 4

66 2/3%

SERS 2/3

Opt. 2

100%

SERS 2/3

Opt. 3

50%

SERS 2/3

Opt. 4

66 2/3%

0 .870 .930 .909 .791 .883 .850 .799 .888 .857
1 .862 .926 .904 .778 .875 .840 .773 .872 .836
2 .857 .923 .900 .767 .868 .832 .760 .864 .826
3 .844 .915 .890 .758 .863 .825 .748 .856 .816
4 .840 .913 .887 .751 .858 .819 .741 .851 .811
5 .836 .910 .884 .743 .853 .813 .734 .846 .805
6 .831 .908 .881 .736 .848 .807 .726 .841 .799
7 .818 .900 .871 .728 .843 .801 .719 .836 .793
8 .814 .897 .867 .721 .838 .795 .712 .832 .787
9 .809 .895 .864 .713 .833 .789 .705 .827 .782
10 .805 .892 .861 .706 .828 .783 .698 .822 .776
11 .802 .890 .858 .699 .823 .777 .692 .818 .771
12 .787 .881 .847 .693 .818 .772 .685 .813 .766
13 .784 .879 .845 .686 .814 .766 .679 .809 .760
14 .780 .876 .842 .680 .809 .761 .673 .805 .755
15 .777 .874 .839 .673 .805 .756 .667 .800 .750
16 .773 .872 .836 .667 .801 .751 .662 .796 .746
17 .770 .870 .834 .662 .796 .746 .656 .792 .741
18 .767 .868 .832 .656 .792 .741 .651 .789 .737
19 .764 .866 .829 .651 .788 .736 .646 .785 .732
20 .762 .865 .827 .645 .785 .732 .641 .781 .728
21 .759 .863 .825 .640 .781 .728 .637 .778 .724
22 .756 .861 .823 .636 .777 .724 .632 .775 .720
23 .754 .860 .821 .631 .774 .720 .628 .771 .717
24 .752 .858 .820 .627 .771 .716 .624 .768 .713
25 .750 .857 .818 .622 .767 .712 .620 .765 .710
26 .748 .856 .817 .618 .764 .709 .616 .762 .707
27 .746 .855 .815 .615 .761 .705 .613 .760 .703
28 .744 .853 .814 .611 .758 .702 .609 .757 .700
29 .743 .852 .812 .607 .756 .699 .606 .755 .697
30 .741 .851 .811 .604 .753 .696 .603 .752 .695
31 .740 .850 .810 .601 .751 .693 .600 .750 .692
32 .738 .849 .809 .598 .748 .690 .597 .748 .690
33 .737 .849 .808 .595 .746 .688 .594 .745 .687
34 .736 .848 .807 .592 .744 .685 .592 .743 .685
35 .735 .847 .806 .589 .742 .683 .589 .741 .683
36 .734 .846 .805 .587 .740 .680 .587 .740 .680
37 .733 .846 .804 .584 .738 .678 .585 .738 .678
38 .732 .845 .804 .582 .736 .676 .582 .736 .677
39 .731 .844 .803 .580 .734 .674 .580 .734 .675
40 .730 .844 .802 .578 .732 .672 .578 .733 .673

(8) Table - Member younger (PERS and SERS)

Survivor option factors: Member younger than beneficiary

Age difference: Member age minus beneficiary age

Age Difference PERS 1

Opt. 2

100%

PERS 1

Opt. 3

50%

PERS 1

Opt. 4

66 2/3%

PERS 2/3

Opt. 2

100%

PERS 2/3

Opt. 3

50%

PERS 2/3

Opt. 4

66 2/3%

SERS 2/3

Opt. 2

100%

SERS 2/3

Opt. 3

50%

SERS 2/3

Opt. 4

66 2/3%

-20 .958 .978 .971 .939 .969 .959 .949 .974 .965
-19 .955 .977 .970 .935 .967 .956 .946 .972 .963
-18 .952 .976 .968 .931 .964 .953 .942 .970 .961
-17 .949 .974 .966 .927 .962 .950 .938 .968 .958
-16 .947 .973 .964 .922 .959 .947 .934 .966 .955
-15 .944 .971 .962 .917 .957 .943 .930 .964 .952
-14 .940 .969 .959 .912 .954 .940 .926 .961 .949
-13 .937 .968 .957 .907 .951 .936 .921 .959 .946
-12 .934 .966 .955 .902 .948 .932 .917 .956 .943
-11 .930 .964 .953 .896 .945 .928 .912 .954 .939
-10 .927 .962 .950 .890 .942 .924 .907 .951 .936
-9 .923 .960 .948 .884 .938 .919 .901 .948 .932
-8 .920 .958 .945 .878 .935 .915 .896 .945 .928
-7 .916 .956 .942 .871 .931 .910 .890 .942 .924
-6 .912 .954 .940 .865 .927 .905 .885 .939 .920
-5 .908 .952 .937 .858 .924 .901 .879 .935 .916
-4 .901 .948 .931 .848 .918 .893 .873 .932 .911
-3 .896 .945 .928 .840 .913 .887 .863 .927 .905
-2 .889 .941 .923 .826 .905 .877 .853 .920 .897
-1 .879 .935 .916 .805 .892 .861 .834 .909 .883
0 .870 .930 .909 .791 .883 .850 .799 .888 .857

(9) Table - Member older (LEOFF Plan 2 and WSPRS Plan 2)

Survivor option factors: Member older than beneficiary

Age difference: Member age minus beneficiary age

Age Difference LEOFF 2

Option 2

100%

LEOFF 2

Option 3

50%

LEOFF 2

Option 4

66 2/3%

WSP 2

Option 2

100%

WSP 2

Option 3

50%

WSP 2

Option 4

66 2/3%

0 0.870 0.930 0.909 0.870 0.930 0.909
1 0.865 0.927 0.905 0.865 0.927 0.905
2 0.860 0.924 0.902 0.860 0.924 0.902
3 0.855 0.922 0.898 0.855 0.922 0.898
4 0.850 0.919 0.894 0.850 0.919 0.894
5 0.845 0.916 0.891 0.845 0.916 0.891
6 0.840 0.913 0.887 0.840 0.913 0.887
7 0.835 0.910 0.883 0.835 0.910 0.883
8 0.830 0.907 0.880 0.830 0.907 0.880
9 0.825 0.904 0.876 0.825 0.904 0.876
10 0.821 0.902 0.873 0.821 0.902 0.873
11 0.816 0.899 0.870 0.816 0.899 0.870
12 0.812 0.896 0.866 0.812 0.896 0.866
13 0.808 0.894 0.863 0.808 0.894 0.863
14 0.803 0.891 0.860 0.803 0.891 0.860
15 0.799 0.888 0.857 0.799 0.888 0.857
16 0.795 0.886 0.854 0.795 0.886 0.854
17 0.792 0.884 0.851 0.792 0.884 0.851
18 0.788 0.881 0.848 0.788 0.881 0.848
19 0.784 0.879 0.845 0.784 0.879 0.845
20 0.781 0.877 0.842 0.781 0.877 0.842
21 0.777 0.875 0.840 0.777 0.875 0.840
22 0.774 0.873 0.837 0.774 0.873 0.837
23 0.771 0.871 0.835 0.771 0.871 0.835
24 0.768 0.869 0.832 0.768 0.869 0.832
25 0.765 0.867 0.830 0.765 0.867 0.830
26 0.763 0.865 0.828 0.763 0.865 0.828
27 0.760 0.864 0.826 0.760 0.864 0.826
28 0.757 0.862 0.824 0.757 0.862 0.824
29 0.755 0.860 0.822 0.755 0.860 0.822
30 0.753 0.859 0.820 0.753 0.859 0.820
31 0.750 0.857 0.818 0.750 0.857 0.818
32 0.748 0.856 0.817 0.748 0.856 0.817
33 0.746 0.855 0.815 0.746 0.855 0.815
34 0.744 0.853 0.814 0.744 0.853 0.814
35 0.742 0.852 0.812 0.742 0.852 0.812
36 0.741 0.851 0.811 0.741 0.851 0.811
37 0.739 0.850 0.809 0.739 0.850 0.809
38 0.737 0.849 0.808 0.737 0.849 0.808
39 0.736 0.848 0.807 0.736 0.848 0.807
40 0.734 0.847 0.806 0.734 0.847 0.806

(10) Table - Member younger (LEOFF Plan 2 and WSPRS Plan 2)

Survivor option factors: Member younger than beneficiary

Age difference: Member age minus beneficiary age

Age Difference LEOFF 2

Option 2

100%

LEOFF 2

Option 3

50%

LEOFF 2

Option 4

66 2/3%

WSP 2

Option 2

100%

WSP 2

Option 3

50%

WSP 2

Option 4

66 2/3%

-20 0.953 0.976 0.968 0.953 0.976 0.968
-19 0.950 0.974 0.966 0.950 0.974 0.966
-18 0.947 0.973 0.964 0.947 0.973 0.964
-17 0.944 0.971 0.962 0.944 0.971 0.962
-16 0.940 0.969 0.959 0.940 0.969 0.959
-15 0.937 0.967 0.957 0.937 0.967 0.957
-14 0.933 0.965 0.954 0.933 0.965 0.954
-13 0.929 0.963 0.952 0.929 0.963 0.952
-12 0.925 0.961 0.949 0.925 0.961 0.949
-11 0.921 0.959 0.946 0.921 0.959 0.946
-10 0.917 0.957 0.943 0.917 0.957 0.943
-9 0.913 0.954 0.940 0.913 0.954 0.940
-8 0.908 0.952 0.937 0.908 0.952 0.937
-7 0.904 0.949 0.934 0.904 0.949 0.934
-6 0.899 0.947 0.930 0.899 0.947 0.930
-5 0.894 0.944 0.927 0.894 0.944 0.927
-4 0.890 0.942 0.924 0.890 0.942 0.924
-3 0.885 0.939 0.920 0.885 0.939 0.920
-2 0.880 0.936 0.916 0.880 0.936 0.916
-1 0.875 0.933 0.913 0.875 0.933 0.913
0 0.870 0.930 0.909 0.870 0.930 0.909

(11) Table - Member younger (TRS)

Survivor option factors: Member younger than beneficiary

Age difference: Member age minus beneficiary age

Age Difference TRS 1

Option 2

100%

TRS 1

Option 3

50%

TRS 1

Option 4

66 2/3%

TRS 2/3

Option 2

100%

TRS 2/3

Option 3

50%

TRS 2/3

Option 4

66 2/3%

-20 0.968 0.984 0.979 0.952 0.975 0.967
-19 0.966 0.983 0.977 0.949 0.974 0.965
-18 0.964 0.982 0.976 0.945 0.972 0.963
-17 0.962 0.981 0.974 0.942 0.970 0.960
-16 0.960 0.979 0.973 0.938 0.968 0.958
-15 0.957 0.978 0.971 0.934 0.966 0.955
-14 0.955 0.977 0.969 0.929 0.963 0.952
-13 0.952 0.976 0.968 0.925 0.961 0.949
-12 0.950 0.974 0.966 0.921 0.959 0.946
-11 0.947 0.973 0.964 0.916 0.956 0.942
-10 0.944 0.971 0.962 0.911 0.953 0.939
-9 0.942 0.970 0.960 0.906 0.951 0.935
-8 0.939 0.968 0.958 0.900 0.948 0.931
-7 0.936 0.967 0.956 0.895 0.945 0.927
-6 0.933 0.965 0.954 0.889 0.941 0.923
-5 0.927 0.962 0.950 0.884 0.938 0.919
-4 0.923 0.960 0.947 0.877 0.934 0.914
-3 0.918 0.957 0.944 0.865 0.928 0.906
-2 0.913 0.955 0.941 0.855 0.922 0.899
-1 0.907 0.951 0.936 0.839 0.912 0.887
0 0.898 0.946 0.930 0.815 0.898 0.869

(12) Table - Member older (TRS)

Survivor option factors: Member older than beneficiary

Age difference: Member age minus beneficiary age

Age Difference TRS 1

Option 2

100%

TRS 1

Option 3

50%

TRS 1

Option 4

66 2/3%

TRS 2/3

Option 2

100%

TRS 2/3

Option 3

50%

TRS 2/3

Option 4

66 2/3%

0 0.898 0.946 0.930 0.815 0.898 0.869
1 0.892 0.943 0.925 0.801 0.889 0.858
2 0.888 0.941 0.922 0.790 0.883 0.849
3 0.877 0.935 0.915 0.781 0.877 0.842
4 0.873 0.932 0.912 0.772 0.871 0.835
5 0.869 0.930 0.909 0.765 0.867 0.830
6 0.858 0.924 0.901 0.758 0.862 0.824
7 0.855 0.922 0.898 0.751 0.858 0.819
8 0.851 0.920 0.896 0.744 0.853 0.813
9 0.848 0.918 0.893 0.737 0.849 0.808
10 0.845 0.916 0.891 0.730 0.844 0.802
11 0.842 0.914 0.889 0.724 0.840 0.797
12 0.839 0.912 0.887 0.717 0.835 0.792
13 0.836 0.911 0.884 0.711 0.831 0.787
14 0.824 0.904 0.875 0.705 0.827 0.782
15 0.821 0.902 0.873 0.699 0.823 0.777
16 0.819 0.900 0.871 0.694 0.819 0.773
17 0.816 0.899 0.869 0.688 0.815 0.768
18 0.814 0.897 0.868 0.683 0.812 0.764
19 0.812 0.896 0.866 0.678 0.808 0.760
20 0.809 0.895 0.864 0.673 0.805 0.755
21 0.807 0.893 0.863 0.668 0.801 0.751
22 0.805 0.892 0.861 0.664 0.798 0.748
23 0.803 0.891 0.860 0.660 0.795 0.744
24 0.802 0.890 0.858 0.655 0.792 0.740
25 0.800 0.889 0.857 0.651 0.789 0.737
26 0.798 0.888 0.856 0.648 0.786 0.734
27 0.797 0.887 0.855 0.644 0.783 0.731
28 0.796 0.886 0.854 0.640 0.781 0.728
29 0.794 0.885 0.853 0.637 0.778 0.725
30 0.793 0.885 0.852 0.634 0.776 0.722
31 0.792 0.884 0.851 0.631 0.774 0.719
32 0.791 0.883 0.850 0.628 0.771 0.717
33 0.790 0.882 0.849 0.625 0.769 0.714
34 0.789 0.882 0.848 0.622 0.767 0.712
35 0.788 0.881 0.848 0.620 0.765 0.710
36 0.787 0.881 0.847 0.617 0.763 0.708
37 0.786 0.880 0.846 0.615 0.762 0.706
38 0.785 0.880 0.846 0.613 0.760 0.704
39 0.785 0.879 0.845 0.611 0.758 0.702
40 0.784 0.879 0.845 0.609 0.757 0.700

(13) Table - Member younger (LEOFF Plan 1)

Survivor option factors: Member younger than beneficiary

Age difference: Member age minus beneficiary age


Age Difference Option 2 100% Option 3 50% Option 4 66 2/3 %
-20 0.958 0.978 0.971
-19 0.955 0.977 0.969
-18 0.952 0.975 0.967
-17 0.949 0.974 0.965
-16 0.946 0.972 0.963
-15 0.942 0.970 0.961
-14 0.939 0.969 0.959
-13 0.935 0.967 0.956
-12 0.932 0.965 0.953
-11 0.928 0.963 0.951
-10 0.924 0.960 0.948
-9 0.920 0.958 0.945
-8 0.916 0.956 0.942
-7 0.911 0.954 0.939
-6 0.907 0.951 0.936
-5 0.902 0.949 0.933
-4 0.898 0.946 0.929
-3 0.893 0.943 0.926
-2 0.888 0.941 0.922
-1 0.883 0.938 0.919

(14) Table - Member older (LEOFF Plan 1)

Survivor option factors: Member older than beneficiary

Age difference: Member age minus beneficiary age


Age Difference Option 2 100% Option 3 50% Option 4 66 2/3%
0 0.878 0.935 0.915
1 0.873 0.932 0.912
2 0.868 0.930 0.908
3 0.864 0.927 0.905
4 0.859 0.924 0.901
5 0.854 0.921 0.898
6 0.849 0.918 0.894
7 0.844 0.915 0.890
8 0.839 0.913 0.887
9 0.835 0.910 0.883
10 0.830 0.907 0.880
11 0.826 0.905 0.877
12 0.821 0.902 0.873
13 0.817 0.899 0.870
14 0.813 0.897 0.867
15 0.809 0.894 0.864
16 0.805 0.892 0.861
17 0.801 0.889 0.858
18 0.797 0.887 0.855
19 0.793 0.885 0.852
20 0.790 0.882 0.849
21 0.786 0.880 0.847
22 0.783 0.878 0.844
23 0.780 0.876 0.841
24 0.777 0.874 0.839
25 0.774 0.872 0.837
26 0.771 0.871 0.834
27 0.768 0.869 0.832
28 0.765 0.867 0.830
29 0.763 0.865 0.828
30 0.760 0.864 0.826
31 0.758 0.862 0.824
32 0.756 0.861 0.823
33 0.753 0.859 0.821
34 0.751 0.858 0.819
35 0.749 0.857 0.818
36 0.747 0.855 0.816
37 0.745 0.854 0.815
38 0.744 0.853 0.813
39 0.742 0.852 0.812
40 0.740 0.851 0.810

[Statutory Authority: RCW 41.50.050(5) and chapter 41.45 RCW. 03-02-087, 415-02-380, filed 12/31/02, effective 2/1/03; 02-18-048, 415-02-380, filed 8/28/02, effective 9/1/02.]

OTS-6187.2

PROPERTY DIVISION IN DISSOLUTION ORDERS
NEW SECTION
WAC 415-02-500   Property division in dissolution orders1.   This section applies to all retirement plans that the department of retirement systems (department) administers. This section also directs you to additional sections as needed for your particular situation.

(1) What can a court do? A court can divide your retirement account between you and your ex-spouse through a property division dissolution order or later amendment. A court can do this by either:

(a) Awarding an interest2 in your account to your ex-spouse by using WAC 415-02-510 or 415-02-530; or

(b) Splitting3 your account into two separate accounts (one for you and one for your ex-spouse) by using WAC 415-02-520 or 415-02-540, but only if you are vested, that is, have enough service credit to receive a service retirement when you meet the age requirement for your retirement system and plan.

(2) Which section should I use? Consult the following table for direction to the section to use in developing your property division dissolution order. Different sections are provided depending on whether your property division dissolution order is going to provide an interest to your ex-spouse or whether you are splitting your retirement account with your ex-spouse.

If you are in this system and plan: And the following is true: Use this section:
Any You need general information and rules about drafting dissolution orders related to your retirement plan and system. 415-02-500
JRF, JRS, LEOFF Plan 1, and WSPRS Plan 1 You are drafting a dissolution order. (We recommend that you contact the department for assistance because some exceptions may apply.) 415-02-510
LEOFF Plan 2, PERS Plan 1 or 2, SERS Plan 2, and TRS Plan 1 or 2, WSPRS Plan 2 You are not vested and you are drafting a dissolution order; or

You are vested and you are drafting a dissolution order that awards an interest in your account to your ex-spouse.

415-02-510
You are vested and you are drafting a dissolution order that splits your benefit into two separate accounts (for you and your ex-spouse). 415-02-520
PERS Plan 3, SERS Plan 3, and TRS Plan 3

You do not have enough service credit to receive a service retirement, when eligible, and you are drafting a dissolution order; or

You have enough service credit to receive a service retirement, when eligible, and you are drafting a dissolution order that awards an interest in your account to your ex-spouse.

415-02-530
You are vested and you are drafting a dissolution order that splits your benefit into two separate accounts (for you and your ex-spouse). 415-02-540
PERS Plan 2, SERS Plan 2, and TRS Plan 2 The department has already accepted your property division order, and you are considering a transfer to Plan 3. 415-02-550

(3) What are the requirements for dissolution orders and amendments that provide for a property division of my retirement account? The order must:

(a) Be entered by a court of competent jurisdiction;

(b) Be filed with the department within ninety days of the court's entry of the order;

(c) Establish the right of your ex-spouse to a portion of your retirement;

(d) Provide the name and date of birth of your ex-spouse;

(e) Incorporate the applicable language in this section and one of the following: WAC 415-02-510, 415-02-540, 415-02-520, or 415-02-550; and

(f) Indicate which WAC section was used in support of the order.

(4) What else, besides a copy of the dissolution order, must my ex-spouse and I provide to the department? You must provide address(es) and Social Security numbers for both you and your ex-spouse before the department will honor a dissolution order or amendment. This information can be submitted in a cover letter, in another document, or by other means arranged with the department.

(5) I belong to more than one retirement plan. Does the order have to be written any differently? The order must include specific provisions for each plan.

(a) Example for providing an interest to an ex-spouse (RCW 41.50.670 and WAC 415-02-510): Paul belongs to both TRS Plan 2 and PERS Plan 2. His preretirement dissolution order gives an interest in his retirement accounts to his ex-spouse. The order should include the language provided in:

(i) WAC 415-02-510(2) and 415-02-510 to divide Paul's TRS Plan 2 monthly retirement benefits and accumulated contributions.

(ii) WAC 415-02-510(2) and 415-02-510 to divide Paul's PERS Plan 2 monthly retirement benefits and accumulated contributions.

(b) Example for splitting an account with an ex-spouse: Mary belongs to both TRS Plan 2 and PERS Plan 2. Her preretirement dissolution order provides for splitting her retirement accounts with her ex-spouse. The order should include the language provided in:

(i) WAC 415-02-520 (5)(a) for preretirement splits to divide Mary's TRS Plan 2 retirement account.

(ii) WAC 415-02-520 (5)(a) for preretirement splits to divide Mary's PERS Plan 2 retirement account.

(6) What happens if my ex-spouse misses the ninety-day deadline for filing a copy of the dissolution order with the department?

(a) RCW 51.50.670(6) requires the "obligee" (ex-spouse) to file a copy of the dissolution order with the department within ninety days of the order's entry with court of record.

(b) The department will accept an order after the ninety-day deadline but will not make retroactive payments or split your defined contribution account retroactively.

(7) How will the department divide the "after-tax" and "tax-deferred" dollars in my retirement account between my ex-spouse and me? Depending on your plan and how long you have been a member, your retirement account may include both "after-tax" and "tax-deferred" dollars. The department will divide the "after-tax" and "tax-deferred" dollars based on the amount(s) awarded to your ex-spouse, unless the dissolution order states otherwise.

Example: At the time of John's marriage dissolution, he had $50,000 total contributions in his retirement account with $20,000 in after-taxed dollars and $30,000 in tax-deferred dollars. The dissolution order awards 50% of his accumulated contributions to his ex-spouse, Susan. Therefore, the department will give Susan $10,000 of after-tax dollars and $15,000 of tax-deferred dollars.
(8) If I am in a retirement plan that offers survivor options, can the court order me to name my ex-spouse as a survivor to receive survivor benefits? Yes. To do so, the dissolution order must include the language in RCW 41.50.790(1).

(9) Is there a minimum benefit amount that the department will pay to my ex-spouse if the property division dissolution order splits my retirement account with my ex-spouse? The answer is different depending on if the department accepts the property division dissolution order BEFORE or AFTER you retire.

(a) BEFORE retirement split: Yes. If the court order splits your account with your ex-spouse, and your ex-spouse's monthly benefit is less than the monthly minimum benefit amount for your retirement plan, the department may make a lump sum payment in the amount of the present value of the monthly benefit to the ex-spouse instead of paying monthly benefits. The department will NOT make the lump sum payment until your ex-spouse meets the age requirement for a normal retirement for your system and plan.

(b) AFTER retirement split: No. The department will pay the amount specified in the dissolution order as the ex-spouse's monthly benefit amount even if it is less than the minimum monthly benefit amount for your system and plan.

(10) Is there a maximum payment amount that the department will pay to my ex-spouse? Yes. A court may not order the department to pay more than seventy-five percent of your monthly retirement payments to your ex-spouse. See RCW 41.50.670(4).

(11) How much is the fee the department charges for making payments directly to my ex-spouse? The department charges seventy-five dollars for making the first disbursement and six dollars for each subsequent disbursement. The department will divide the fees evenly between you and your ex-spouse. See RCW 41.50.680.

(12) What happens to my account if I return to retirement system membership? Please contact the department for information if you are in this situation.

(13) What language should the property division order use to divide my deferred compensation program (DCP) account? Refer to WAC 415-501-495 or contact DCP for information about your DCP account and your marriage dissolution.

(14) How do I contact the department for additional assistance? Complete information is available in WAC 415-06-100 (How do I contact the department?).

(15) Where can I find examples of completed property division dissolution orders? Following are examples of the required language from the statutes and WAC sections that must be used in a dissolution order. The information in bold italics will be dictated by your own circumstances.

(a) Example 1. Jane Doe (a nonvested member of PERS Plan 2) and her husband, John Doe, decide to divorce. WAC 415-02-510 applies to Jane's membership status. Jane and John complete the paragraphs in RCW 41.50.670(2) and WAC 415-02-510(2) as follows:

Defined Benefits:

RCW 41.50.670(2), paragraph two, and WAC 415-02-510(2)

If Jane Doe (the obligor) receives periodic retirement payments as defined in RCW 41.50.500, the department of retirement systems shall pay to John Doe (the obligee), N/A dollars from such payments or a fraction where the numerator is equal to 24 (the number of months in which service credit was earned while the marital community was in existence), and the denominator is equal to the number of months of service credit earned by the obligor at the time of retirement X 50 percent of such payments.
If the obligor's debt is expressed as a percentage of his or her periodic retirement payment and the obligee does not have a survivorship interest in the obligor's benefit, the amount received by the obligee shall be the percentage of the periodic retirement payment that the obligor would have received had he or she selected a standard allowance.
Accumulated Contributions:

RCW 41.50.670(2), paragraph three, and WAC 415-02-510(2)

If Jane Doe (the obligor) requests or has requested a withdrawal of accumulated contributions as defined in RCW 41.50.500, or becomes eligible for a lump sum death benefit, the department of retirement systems shall pay to John Doe (the obligee) $5,700 dollars plus interest at the rate paid by the Department of Retirement Systems on member contributions. Such interest will accrue from the date of this order's entry with court of record.

(b) Example 2: Binh Nguyen (a TRS Plan 3 retiree) and his wife, Lan Nguyen, are obtaining a property division dissolution order that splits his retirement account. When he retired, Binh had selected Lan to receive survivor benefits. WAC 415-02-540 applies, and the couple completes the required paragraphs.

Defined Benefits:

WAC 415-02-540(12)

The Department of Retirement Systems (department) shall create a defined benefit account for Lan Nguyen (ex-spouse) in the Teachers' Retirement System Plan 3 (name of retirement system and plan) and pay him or her $350 (amount) for his or her life. To pay for this benefit, Binh Nguyen's (member's) monthly defined benefit payment will be reduced for life. This provision shall become effective no more than 30 days after the department's acceptance of the order.
Defined Contributions:

WAC 415-02-540(9)

The Department of Retirement Systems (department) shall split Binh Nguyen's (member's) defined contribution account in the Teachers' Retirement System Plan 3 (name of retirement system and plan) and create a separate account for Lan Nguyen (ex-spouse). The amount of $25,000 (amount) shall be transferred from Binh Nguyen's (member's) defined contribution account to Lan Nguyen's (ex-spouse's) new account. This provision shall become effective no more than 30 days after the department's acceptance of the order.

(16) Terms used:

(a) Department's acceptance - A dissolution order that fully complies with the department of retirement systems' requirements and with chapter 41.50 RCW.

(b) Dissolution order - RCW 41.50.500.

(c) Ex-spouse - WAC 415-02-030.

(d) JRF - Judicial retirement fund.

(e) JRS - Judicial retirement system.

(f) LEOFF - Law enforcement officers' and fire fighters' system.

(g) Obligee - RCW 41.50.500(5).

(h) Obligor - RCW 41.50.500(6).

(i) PERS - Public employees' retirement system.

(j) Plan 3 retirement systems - WAC 415-111-100.

(k) SERS - School employees' retirement system.

(l) Split account - WAC 415-02-030.

(m) Survivor benefits - WAC 415-02-030.

(n) TRS - Teachers' retirement system.

(o) Vested - The length of service by system and plan required for a service retirement when the age requirement is met.

(p) WSPRS - Washington state patrol retirement system.


Footnotes for section:

1 "Dissolution order" means any judgment, decree, or order of spousal maintenance, property division, or court-approved property settlement incident to a decree of divorce, dissolution, invalidity, or legal separation issued by the superior court of the state of Washington or a judgment, decree, or other order of spousal support issued by a court of competent jurisdiction in another state or country, that has been registered or otherwise made enforceable in this state. RCW 41.50.500(3) (2002).
2 When a court awards an interest in your retirement account, the department is required to pay a portion of your monthly retirement benefit payments or a portion of your contributions to your ex-spouse.
3 When a court splits your retirement account, the department will establish a separate account for your ex-spouse. Once the account has been established, your account and your ex-spouse's account are not tied in any way.

[]

OTS-6188.3


NEW SECTION
WAC 415-02-510   How can a property division dissolution order give my ex-spouse an interest1 in my Plan 1 or Plan 2 retirement account?   (1) Who may use this section?

(a) You MUST use this section if you are a member of LEOFF Plan 1, WSPRS Plan 1, JRF or JRS, or a nonvested member of LEOFF Plan 2, PERS Plans 1 or 2, SERS Plan 2, TRS Plans 1 or 2, or WSPRS Plan 2.

(b) You MAY use this section if you are a vested member of LEOFF Plan 2, PERS Plans 1 or 2, SERS Plan 2, TRS Plans 1 or 2, or WSPRS Plan 2. If you are splitting your retirement account with your ex-spouse, use WAC 415-02-520.

(2) What language must the property division dissolution order or amendment include? The order must include the language in RCW 41.50.670(2), provided below. The order or amendment must state either a specific dollar amount or percentage of the benefit. It cannot state both. (See example in WAC 415-02-500(15).)

If (the obligor) receives periodic retirement payments as defined in RCW 41.50.500, the department of retirement systems shall pay to (the obligee) dollars from such payments or percent of such payments. If the obligor's debt is expressed as a percentage of his or her periodic retirement payment and the obligee does not have a survivorship interest in the obligor's benefit, the amount received by the obligee shall be the percentage of the periodic retirement payment that the obligor would have received had he or she selected a standard allowance.

If (the obligor) requests or has requested a withdrawal of accumulated contributions as defined in RCW 41.50.500, or becomes eligible for a lump sum death benefit, the department of retirement systems shall pay to (the obligee) dollars plus interest at the rate paid by the department of retirement systems on member contributions. Such interest to accrue from the date of this order's entry with the court of record.

(3) How will my account be affected if the department accepts the property division dissolution order BEFORE I retire?

(a) Your ex-spouse will not receive any payments from the department until you terminate your employment or retire.

(b) If you terminate your employment and request a withdrawal of your accumulated contributions, the department will pay your ex-spouse his or her share when you receive your payment. If you terminate your employment and do not request a withdrawal of contributions, your ex-spouse will be unable to receive his or her share until you withdraw your accumulated contributions.

(c) If you die before retirement, the department will pay your ex-spouse his or her share of your accumulated contributions in a lump-sum payment.

(4) How will my account be affected if the department accepts the property division dissolution order AFTER I retire?

(a) If included in the dissolution order, the department will begin paying your ex-spouse his or her portion of your monthly retirement benefit the first month after the department has accepted the order.

(b) If your ex-spouse dies before you, the portion of your monthly benefit being paid to him or her will be paid to you.

(c) If you die before your ex-spouse, payments to your ex-spouse stop unless the department accepted the order at least thirty days before you retired and the order required the department to name your ex-spouse as a survivor beneficiary (if allowed by your retirement system and plan). See RCW 41.50.700(1) and 41.50.790.

(d) If you are a member of LEOFF Plan 1 or WSPRS Plan 1 and if one of the provisions in RCW 41.50.700(3) applies:

(i) Your ex-spouse may be eligible to receive payments for the life of your surviving spouse; or

(ii) If you are a member of LEOFF Plan 1, your ex-spouse may be eligible to receive payments for his or her lifetime.

(5) Is there a maximum payment amount that a property division dissolution order can award to my ex-spouse? Yes. See RCW 41.50.670(4) and WAC 415-02-500(10) for information.

(6) If the property division dissolution order directs the department to make payments to my ex-spouse, how will the payments be made? The department will make the required payments as specified in the dissolution order directly to your ex-spouse.

(7) How much is the fee the department charges for making payments directly to my ex-spouse? See RCW 41.50.680 and WAC 415-02-500(11) for information.

(8) What happens if I transfer to Plan 3 after the department has accepted my property division dissolution order or most recent amendment? See WAC 415-02-550 for information.

(9) Can I amend my existing order to remove my ex-spouse as my survivor beneficiary? Yes. To remove your ex-spouse as your survivor beneficiary, you must submit a "conformed copy" of the court order splitting your account. A conformed copy is a copy of the order that has been signed by the judge or commissioner on or after July 1, 2003, and filed with the court. Removing your ex-spouse as survivor beneficiary will change your retirement benefit. See WAC 415-02-520(8) for the language that must be used.

(10) Terms used:

(a) Department's acceptance - Order that fully complies with the department of retirement systems' requirements and with chapter 41.50 RCW.

(b) Accumulated contributions - WAC 415-02-030.

(c) Dissolution order - RCW 41.50.500.

(d) Ex-spouse - WAC 415-02-030.

(e) JRF - Judicial retirement fund.

(f) JRS - Judicial retirement system.

(g) LEOFF - Law enforcement officers' and fire fighters' retirement system.

(h) Obligee - RCW 41.50.500(5).

(i) Obligor - RCW 41.50.500(6).

(j) PERS - Public employees' retirement system.

(k) Plan 3 retirement systems - WAC 415-111-100.

(l) SERS - School employees' retirement system.

(m) Split accounts - WAC 415-02-030.

(n) Survivor benefits - WAC 415-02-030.

(o) TRS - Teachers' retirement system.

(p) Vested - The length of service by system and plan required for a service retirement when the age requirement is met.

(q) WSPRS - Washington state patrol retirement system.


Footnote to section:

1 When a court awards an interest in your retirement account, the department is required to pay a portion of your monthly retirement benefit payments or a portion of your contributions to your ex-spouse.

[]

OTS-6189.3


NEW SECTION
WAC 415-02-520   How can my Plan 1 or Plan 2 retirement account be split1 by a property division dissolution order?   (1) Who may use this section? Vested members of LEOFF Plan 2, PERS Plans 1 or 2, TRS Plans 1 or 2, SERS Plan 2, or WSPRS Plan 2 who have or will have a property division dissolution order or amendment dated on or after July 1, 20032. If your ex-spouse will be receiving an interest in your account, use WAC 415-02-510.

(2) What are the rules for splitting my account? If you and your ex-spouse are eligible, the department will split your retirement account into two separate accounts -- one for you, and one for your ex-spouse. The rules for splitting your account are different depending on whether your dissolution order or most recent amendment is dated BEFORE or AFTER retirement.

(3) How will my account be affected if the department accepts the property division dissolution order BEFORE my retirement?

(a) The department will split your retirement account into two completely separate accounts and create an account for your ex-spouse under his or her Social Security number for the amount awarded in the dissolution order.

(b) The department will pay each of you out of your separate accounts either a monthly retirement benefit payment or a withdrawal of contributions.

(c) If you retire and receive a monthly retirement benefit payment, your monthly payment will have a permanent reduction to account for the amount awarded as a monthly payment to your ex-spouse.

(d) Your monthly benefit payment will be payable over your lifetime, and your ex-spouse's monthly payment will be payable over his or her lifetime.

(e) You will have the right to pick a survivor option for your monthly benefit payment.

(f) Your ex-spouse will not have the right to pick a survivor option for his or her monthly payment but may name a beneficiary to receive any final death payment that may be due.

(g) If you terminate employment, whatever decision you make about your accumulated contributions will have no effect upon your ex-spouse's separate account.

(h) When you or your ex-spouse dies, there will be no impact to the other person's retirement account because the accounts are independent from one another.

(i) Your ex-spouse may begin receiving monthly payments when he or she reaches retirement age for your retirement plan, or the first day of the month following the department's acceptance of the order, whichever is later. Your ex-spouse must apply for his or her monthly payment according to the rules for your system and plan.

(j) Your ex-spouse may withdraw his or her share of the accumulated contributions at any time before receiving a monthly retirement benefit. Regardless of whether your ex-spouse withdraws or receives a monthly payment, your monthly benefit payment will be permanently reduced to account for your ex-spouse's share of your retirement account.

(4) What happens if my retirement account was split and then I retire early?

(a) If you are eligible and decide to retire early, or must retire early because of a disability, your monthly retirement benefit payment will be reduced by an early retirement factor (ERF). See WAC 415-02-320.

(b) To determine the reduction to your benefit because of your preretirement split (see subsection (3)(c) of this section), the adjustment to the amount awarded to your ex-spouse in the dissolution order will be reduced by the ERF used to reduce your benefit.

Example: You are a member of PERS Plan 2 and retire for disability two years before you are eligible for a service retirement. The dissolution order awarded your ex-spouse a monthly benefit of five hundred dollars.

Your defined benefit before ERF is applied: $2,500
ERF (factor for retiring two years early) 0.82
Your base benefit: $2,050 ($2500 x 0.82 ERF)
Adjustment for divorce split: - $410 (ex-spouse's $500 x

0.82 (ERF))

The defined benefit you will receive: $1640 ($2050 - $410)
Your ex-spouse will receive the full monthly amount ($500) that was awarded to him or her in the dissolution order, regardless of your benefit amount.
(5) What language must be used for a property division dissolution order or amendment that is accepted by the department BEFORE my retirement?

(a) The order must include the language provided below. Do not use the language in RCW 41.50.670(2). The exact dollar amount of your ex-spouse's monthly benefit must be specified. Do not use formulas or percentages.

The Department of Retirement Systems (department) shall create an account for (ex-spouse) in the (name of retirement system and plan) and transfer $ from 's (member's) accumulated contributions account into 's (ex-spouse's) account. If (ex-spouse) does not withdraw the contributions and becomes eligible, the department will pay him or her $ (amount) as a monthly payment for his or her life. If (member) retires and receives a monthly retirement benefit payment, the payment will be permanently reduced to account for 's (ex-spouse's) monthly payment. This provision shall become effective no more than 30 days after the department's acceptance of the order.
(b) If you are a member of PERS Plan 1 or TRS Plan 1, the amount of service credit awarded to your ex-spouse must be specified in the order if he or she is awarded a portion of gainsharing payments and cost-of-living adjustments. Because gainsharing payments and cost-of-living adjustments are based on service credit, the following paragraph must be included:

If (ex-spouse) receives a monthly retirement payment, the department shall use (number) months of service credit to calculate future gainsharing payments, if any, and cost-of-living adjustments when he or she becomes eligible.
(6) How will my account be affected if the department accepts the property division dissolution order AFTER my retirement?

(a) The department will split your retirement account only if you selected your ex-spouse to receive survivor benefits at the time you retired. If you did not select your ex-spouse to receive survivor benefits at the time you retired, you cannot use this section. You must use WAC 415-02-510.

(b) If you selected your ex-spouse to receive survivor benefits at the time you retired, the rules in subsection (3)(a) through (f) of this section will apply.

(c) At the time the department splits your account, your ex-spouse will be removed as the survivor beneficiary on your account.

(d) Regardless of his or her age, your ex-spouse will begin receiving a monthly benefit the first month after the department has accepted the dissolution order.

(7) If the property division dissolution order is dated AFTER my retirement, how will my monthly retirement benefit payment be calculated after the split?

(a) The dissolution order must state the exact dollar amount your ex-spouse is to receive as his or her separate monthly benefit. The following describes how the new amount of your benefit will be calculated, assuming your ex-spouse was awarded a monthly benefit of one thousand dollars in the dissolution order.

Step 1 The department will determine the single life benefit of your current monthly benefit payment by dividing your current monthly benefit payment by the survivor option factor (see WAC 415-02-380) in effect at the time of the split.

Example:


Current monthly benefit = $1679.38

Option factor = 0.9400000

Single life benefit amount = $1679.38/0.9400000 = $1786.57


Step 2 The single life benefit ($1786.57) is divided by your annuity factor (see WAC 415-02-360) to determine the current present value of the single life benefit amount. The annuity factor the department uses is the factor for your age as of the date of the split.

Example:

Your age at time of the split = 61 years old

Annuity factor for age 61 = 0.0084149

Present value of single life benefit = $1786.57/0.0084149 = $212,310.31


Step 3 The department then determines the present value of your ex-spouse's share by dividing your ex-spouse's monthly benefit amount (as awarded in the dissolution order) by your ex-spouse's annuity factor. The annuity factor is the factor for your ex-spouse's age as of date of the split.

Example:

Ex-spouse's monthly benefit amount = $1000

Ex-spouse's age at time of the split = 67

Annuity factor for age 67 = 0.0095028

Present value of your ex-spouse's monthly benefit = $1000/0.0095028 = $105,232.14


Step 4 Next, the department subtracts your ex-spouse's present value from the single life benefit present value. The result is the present value of the benefit you will receive.

Example:

Present value of single life benefit = $212,310.31

Less present value of ex-spouse's benefit = -105,232.14

Your present value = $107,078.17


Step 5 The department determines your new monthly benefit amount by multiplying your present value by your annuity factor.

Example:

Your present value = $107,078.17

Annuity factor = 0.0084149

Your new monthly benefit amount = $107,078.17 x 0.0084149 = $901.05


(b) The department determines the percentage of the total present value each of you will receive by dividing each of your present value amounts by the single life benefit present value amount.


Example:

Your percentage of the single life benefit present value: $107,078.17/$212,310.31 = .5043

Your ex-spouse's percentage of the single life benefit present value: $105,232.14/$212,310.31 = .4957


(8) What language must be used in a property division dissolution order or amendment that is accepted by the department AFTER my retirement?

(a) The order must include the language provided below. Do not use the language in RCW 41.50.670(2). The exact dollar amount of your ex-spouse's monthly benefit must be specified. Do not use formulas or percentages.

The Department of Retirement Systems (department) shall create an account for (ex-spouse) in the (name of retirement system and plan) and pay him or her $ (amount) as a monthly benefit payment for his or her life. To pay for this benefit, 's (retiree's) monthly retirement benefit payment will be reduced for his or her life. If (retiree) has any unused contributions remaining in his or her account, $ (amount) shall be transferred to 's (ex-spouse's) account. This provision shall become effective no more than 30 days after the department's acceptance of the order.
(b) If the member is in PERS Plan 1 or TRS Plan 1, the amount of service credit awarded to the ex-spouse must be specified in the order if he or she is entitled to a portion of gainsharing payments and cost-of-living adjustments. Because gainsharing payments and cost-of-living adjustments are based on service credit, the following paragraph must be included:

If (ex-spouse) receives a monthly retirement payment, the department shall use (number) months of service credit to calculate future gainsharing payments, if any, and cost-of-living adjustments when he or she becomes eligible.
(9) Is there a maximum payment amount that the department will pay to my ex-spouse? Yes. See RCW 41.50.670(4) or WAC 415-02-500(10) for information.

(10) Can I amend an existing order that has awarded an interest in my account to my ex-spouse under WAC 415-02-520 and remove my ex-spouse as my survivor beneficiary? Yes. To remove your ex-spouse as your survivor beneficiary, you must submit a "conformed copy" of the court order splitting your account. A conformed copy is a copy of the order that has been signed by the judge or commissioner on or after July 1, 2003, and filed with the court. Removing your ex-spouse as survivor beneficiary will change your retirement benefit. See WAC 415-02-520(8) for the language that must be used.


Example:

Julio and May were married when Julio retired. Julio chose survivor Option 2 (joint and one hundred percent survivorship) when he retired. This meant that if Julio died, May would receive monthly survivor benefits. Two years after Julio's retirement, the couple divorced. The court awarded "one hundred percent of retirement benefits" to Julio. Julio later learned that this award did not change the survivor option. Julio can return to court and obtain an order stating that May is to receive "$0" as the dollar amount for her separate monthly benefit. The order must use the language in WAC 415-02-520(8) and be signed by the court no sooner than July 1, 2003.


(11) How much is the fee the department charges for making payments directly to my ex-spouse? See RCW 41.50.680 and WAC 415-02-500(11) for information.

(12) What happens if I transfer to Plan 3 after the property division dissolution order has been filed with the department? See WAC 415-02-550 for information.

(13) Terms used:

(a) Department's acceptance - Order that fully complies with the department of retirement systems requirements and RCW 41.50.500.

(b) Dissolution order - RCW 41.50.500.

(c) Ex-spouse - WAC 415-02-030.

(d) LEOFF - Law enforcement officers' and fire fighters' system.

(e) PERS - Public employees' retirement system.

(f) Plan 3 retirement systems - WAC 415-111-100.

(g) Present value -

(h) SERS - School employees' retirement system.

(i) Split account - WAC 415-02-030.

(j) Survivor benefits - WAC 415-02-030

(k) TRS - Teachers' retirement system.

(l) Vested - The length of service, by system and plan, required to receive a service retirement when age requirements are met.

(m) WSPRS - Washington state patrol retirement system.


Footnotes to section:

1 When a court splits your retirement account, the department will establish a separate account for your ex-spouse. Once the account is established, your account and your ex-spouse's account are not tied in any way.
2 If an ex-spouse was not listed as the member's survivor beneficiary at retirement, then no postretirement property division dissolution order (or postretirement amendment) may split the member's retirement account using WAC 415-02-520.

[]

OTS-6190.2


NEW SECTION
WAC 415-02-530   How can a property division dissolution order give my ex-spouse an interest1 in part of my Plan 3 retirement account?   (1) Who may use this section?

(a) You MUST use this section if you are a member of TRS Plan 3, PERS Plan 3 or SERS Plan 3 and do not have enough service credit to receive a service retirement from the defined benefit portion of your retirement plan when you meet the age requirement.

(b) You MAY use this section if you are a member of TRS Plan 3, PERS Plan 3 or SERS Plan 3, and have earned enough service to receive a service retirement from the defined benefit portion of your retirement plan when you meet the age requirement. If you are splitting your retirement account with your ex-spouse, use WAC 415-02-540.

(2) What language must the property division dissolution order or amendment include to pay a portion of my defined monthly retirement benefit to my ex-spouse? The order must use the language in RCW 41.50.670(2), provided below. The order or amendment must state either a specific dollar amount or percentage of the benefit. It cannot state both.

If (the obligor) receives periodic retirement payments as defined in RCW 41.50.500, the department of retirement systems shall pay to (the obligee) dollars from such payments or percent of such payments. If the obligor's debt is expressed as a percentage of his or her periodic retirement payment and the obligee does not have a survivorship interest in the obligor's benefit, the amount received by the obligee shall be the percentage of the periodic retirement payment that the obligor would have received had he or she selected a standard allowance.
(3) How will the defined benefit portion of my retirement account be affected if the department accepts the property division dissolution order BEFORE I retire?

(a) Your ex-spouse will not receive any payments from your defined benefit portion until you retire.

(b) If you or your ex-spouse dies before you retire, the portion of your defined benefit account awarded to your ex-spouse in the dissolution order ends.

(4) How will the defined benefit portion of my retirement account be affected if the department accepts the property division dissolution order AFTER I retire?

(a) If included in the dissolution order, the department will begin paying your ex-spouse his or her portion of your defined benefit payment the first month after the department has accepted the order.

(b) If your ex-spouse dies before you, the portion of your defined benefit payment being paid to him or her will be paid to you.

(c) If you die before your ex-spouse, payments to your ex-spouse stop unless the department accepted the order at least thirty days before you retired and it required the department to name your ex-spouse as a survivor beneficiary. See RCW 41.50.700(1) and 41.50.790.

(5) Is there a maximum payment amount of the defined benefit portion of my retirement account that the property division dissolution order can award to my ex-spouse? Yes. See RCW 41.50.670(4) and WAC 415-02-500(10) for information.

(6) Can I amend my existing order to remove my ex-spouse as my survivor beneficiary? Yes. To remove your ex-spouse as your survivor beneficiary, you must submit a "conformed copy" of the court order splitting your account. A conformed copy is a copy of the order that has been signed by the judge or commissioner on or after July 1, 2003, and filed with the court. Removing your ex-spouse as survivor beneficiary will change your retirement benefit. See WAC 415-02-540 (9) and (13) for the language that must be used.

(7) If the property division dissolution order directs the department to make payments to my ex-spouse, how will the payments be made? The department will make the required payments as specified in the dissolution order directly to your ex-spouse.

(8) How much is the fee the department charges for making payment directly to my ex-spouse? See RCW 41.50.680 and WAC 415-02-500(11).

(9) If the department accepts the property division dissolution order BEFORE I retire, how will the department divide my defined contribution account with my ex-spouse?

(a) The amount the dissolution order awards to your ex-spouse will be deducted from your account and set up in a separate account for your ex-spouse under his or her Social Security number.

(b) You and your ex-spouse will manage your individual portions of the account independently from one another.

(c) You must continue to contribute to your account during your employment.

(d) Your ex-spouse may not contribute to his or her account.

(10) What options does my ex-spouse have in managing his or her separate defined contribution account? Your ex-spouse may:

(a) Transfer money between the state-managed (WSIB) or the self-directed (SELF) investment programs; and

(b) Transfer money among the investment options in the SELF-directed program.

(11) How will the department make distributions to both my ex-spouse and me on each of our defined contribution accounts?

(a) When you separate from employment or retire, the funds in your defined contribution account will be disbursed to you according to your distribution choice.

(b) Your ex-spouse must begin distribution from his or her account at the same time that you request distribution from your account.

(c) Both you and your ex-spouse have the same distribution options as outlined in WAC 415-111-310.

(d) If you die before a distribution has been made from your defined contribution account, your beneficiary(ies) must apply for a lump sum distribution of the funds in your account.

(e) If you die before a distribution has been made from your defined contribution account, your ex-spouse must begin receiving distribution of his or her funds at that time according to the distribution options in WAC 415-111-310.

(f) If your ex-spouse dies before a distribution has been made from his or her defined contribution account, your ex-spouse's beneficiary(ies) must apply for a lump sum distribution of the funds in his or her account.

(g) If you die after you begin receiving funds from your defined contribution account but before your funds have been exhausted, the remaining balance of the funds will be disbursed to your designated beneficiary(ies).

(h) If your ex-spouse dies after receiving funds from his or her account but before the funds have been exhausted, the remaining balance of the funds will be disbursed to your ex-spouse's designated beneficiary.

(12) What language must the dissolution order or most recent amendment include to pay a portion of my defined contribution account to my ex-spouse? The language provided in the following paragraph must be used. The order or amendment must state a specific dollar amount.

The Department of Retirement Systems (department) shall divide 's (member's) defined contribution account in the (retirement system and plan) and create a separate account for (ex-spouse). The amount of $ shall be transferred from 's (member's) defined contribution account to 's (ex-spouse) new account. This provision shall become effective no more than 30 days after the department's acceptance of the order.
(13) If the department accepts the property division dissolution order AFTER I retire, how will the department divide my defined contribution account with my ex-spouse? If your defined contribution account has not been exhausted at the time the department accepts the dissolution order, the department will divide the remaining funds as specified in the dissolution order according to subsections (9) through (12) of this section.

(14) Terms used:

(a) Department's acceptance - Order that fully complies with the department of retirement systems' requirements and chapter 41.50 RCW.

(b) Dissolution order - RCW 41.50.500.

(c) Ex-spouse - WAC 415-02-030.

(d) Obligee - RCW 41.50.500(5).

(e) Obligor - RCW 41.50.500(6).

(f) Plan 3 retirement systems - WAC 415-111-100.

(g) Split accounts - WAC 415-02-030.

(h) Survivor benefits - WAC 415-02-030.


Footnote to section:

1 When a court awards an interest in your retirement account, the department is required to pay a portion of your monthly retirement benefit payments or a portion of your contributions to your ex-spouse.

[]

OTS-6191.3


NEW SECTION
WAC 415-02-540   How can my Plan 3 retirement account be split1 by a property division dissolution order?   (1) Who may use this section? You may use this section if:

(a) You are a member of TRS Plan 3, SERS Plan 3 or PERS Plan 3;

(b) You have enough service credit to receive a defined benefit payment when you meet the age requirement for your system; and

(c) You have or will have a property division dissolution order or amendment dated on or after July 1, 20032. If your ex-spouse will be receiving an interest in your account, use WAC 415-02-530.

(2) What are the rules for splitting my account? If you and your ex-spouse are eligible, the department will split both portions of your retirement account (defined benefit and defined contributions) into two separate accounts - one for you, and one for your ex-spouse. The rules for splitting your account are different depending on whether your dissolution order or most recent amendment is dated before or after retirement.

(3) How will the defined benefit portion of my retirement account be affected if the department accepts the property division dissolution order BEFORE I retire?

(a) The department will split your defined benefit account into two completely separate accounts and create an account for your ex-spouse for the amount awarded in the defined benefit portion of the dissolution order under your ex-spouse's Social Security number.

(b) The department will pay each of you a defined benefit, when eligible, out of your separate accounts.

(c) The amount awarded to your ex-spouse as his or her defined benefit payment will be a permanent reduction to your defined benefit payment amount.

(d) Your defined benefit payment will be payable over your lifetime, and your ex-spouse's defined benefit payment will be payable over his or her lifetime.

(e) You will have the right to pick a survivor option for your defined benefit payment for your own account.

(f) Your ex-spouse will not have the right to pick a survivor option for his or her defined benefit payment but may name a beneficiary to receive any final death payment that may be due.

(g) You may begin receiving your defined benefit payment when eligible according to the rules for your system.

(h) Your ex-spouse may begin receiving benefits the first day of the month following the month in which he or she reaches retirement age for your retirement system, or the first day of the month following the dissolution date, whichever is later. Your ex-spouse must apply for retirement according to the rules for your system.

(i) When you or your ex-spouse dies, there will be no impact to the other person's retirement account, because the accounts are independent from one another.

(4) What happens to my defined benefit if my account was split and then I retire early?

(a) If you are eligible and decide to retire early, or must retire early because of a disability, your monthly retirement benefit payment will be reduced by an early retirement factor (ERF). See WAC 415-02-320.

(b) To determine the reduction to your benefit because of your preretirement split (see subsection (3)(c) of this section), the adjustment to the amount awarded to your ex-spouse in the dissolution order will be reduced by the ERF used to reduce your benefit.

Example: You are a member of TRS Plan 3 and retire for disability five years before you are eligible for a service retirement. The dissolution order awarded your ex-spouse a monthly benefit of two hundred fifty dollars.

Your defined benefit before ERF is applied: $1,000
ERF (factor for retiring two years early) 0.61
Your base benefit: $610 ($1,000 x 0.61 ERF)
Adjustment for divorce split: -$152.50 (ex-spouse's $250 x

0.61 (ERF) )

The defined benefit you will receive: $457.50 ($610 - $152.50)
Your ex-spouse will receive the full monthly amount ($250) that was awarded to him or her in the dissolution order, regardless of your benefit amount.

(5) What language must be used in a property division dissolution order that the department accepts BEFORE I retire to pay a portion of my monthly defined benefit payment to my ex-spouse? The order must use the language provided below. Do not use the language in RCW 41.50.670(2). The exact dollar amount of your ex-spouse's defined monthly benefit payment must be specified. Do not use formulas or percentages.

The Department of Retirement Systems (department) shall create a defined benefit monthly account for (ex-spouse) in the (name of retirement system and plan). When (ex-spouse) becomes eligible for monthly payments, [s]he (upon application) will begin to receive $ per month for the remainder of his/her lifetime. When (member) becomes eligible for monthly payments, [s]he (upon application) will begin to receive the calculated monthly benefit less the amount herein specified for (ex-spouse). This provision shall become effective no more than 30 days after the department's acceptance of the order.
(6) If ordered in the dissolution order, how will the department split my preretirement defined contribution account?

(a) The amount the dissolution order awards to your ex-spouse will be deducted from your defined contribution account and set up in a separate account for your ex-spouse under his or her Social Security number.

(b) You and your ex-spouse will manage your separate accounts independently from one another.

(c) You must continue to contribute to your account during your employment.

(d) Your ex-spouse may not contribute to his or her account.

(7) What options does my ex-spouse have in managing his or her separate defined contribution account? Your ex-spouse may:

(a) Transfer money between investment programs (state-managed (WSIB) or self-directed (SELF)); and

(b) Transfer money among the investment options in the SELF-directed program.

(8) How will the department make distributions to my ex-spouse and me out of our defined contribution accounts?

(a) You must be separated from employment before funds in your account can be distributed according to your distribution choice.

(b) Your ex-spouse may begin receiving distribution of the funds in his or her account at any time according to his or her distribution choice.

(c) Both you and your ex-spouse will have the same distribution options as outlined in WAC 415-111-310.

(d) If you die before a distribution has been made from your defined contribution account, your beneficiary(ies) must apply for a lump sum death benefit from your account.

(e) If your ex-spouse dies before a distribution has been made from his or her account, your ex-spouse's beneficiary(ies) must apply for a lump sum death payment from his or her account.

(f) If you die after you begin receiving funds but before the funds in your account have been exhausted, the balance will be paid to your designated beneficiary(ies).

(g) If your ex-spouse dies after receiving funds but before the funds in his or her account have been exhausted, the balance will be paid to your ex-spouse's designated beneficiary(ies).

(9) What language must be used in a property division dissolution order to award a portion of my defined contribution account to my ex-spouse? The order must include the language provided in the following paragraph. The exact dollar amount to transfer to your ex-spouse's defined contribution account must be specified. Do not use formulas or percentages. (See example in WAC 415-02-500 (15)(b)).

The Department of Retirement Systems (department) shall split (member's) defined contribution account in the (name of retirement system and plan) and create a separate account for (ex-spouse). The amount of $ (amount) shall be transferred from 's (member's) defined contribution account to 's (ex-spouse's) new account. This provision shall become effective no more than 30 days after the department's acceptance of the order.
(10) Can I amend an existing order that has awarded an interest in my account to my ex-spouse under WAC 415-02-530 and remove my ex-spouse as my survivor beneficiary? Yes. To remove your ex-spouse as your survivor beneficiary, you must submit a "conformed copy" of the court order splitting your account. A conformed copy is a copy of the order that has been signed by the judge or commissioner on or after July 1, 2003, and filed with the court. Removing your ex-spouse as survivor beneficiary will change your retirement benefit. See WAC 415-02-540 (9) and (13) for the language that must be used.


Example:

Julio and May were married when Julio retired. Julio chose survivor Option 2 (joint and one hundred percent survivorship) when he retired. This meant that if Julio died, May would receive monthly survivor benefits. Two years after Julio's retirement, the couple divorced. The court awarded "one hundred percent of retirement benefits" to Julio. Julio later learned that this award did not change the survivor option. Julio can return to court and obtain an order stating that May is to receive "$0" as the dollar amount for her separate monthly benefit. The order must use the language in WAC 415-02-540 and be signed by the court no sooner than July 1, 2003.


(11) If the dissolution order or amendment is dated AFTER my retirement, how will my defined monthly retirement benefit payment be split?

(a) The department will split your defined monthly retirement benefit payment only if you selected your ex-spouse to receive a survivor benefit at the time you retired. If you did not select your ex-spouse to receive a survivor benefit at the time you retired, you cannot use this section. You must use WAC 415-02-530.

(b) If you selected your ex-spouse to receive survivor benefits at the time you retired, the rules in subsection (3)(a) through (f) of this section will apply.

(c) At the time the department splits your account, your ex-spouse will be removed as the survivor beneficiary on your account.

(d) Regardless of his or her age, your ex-spouse will begin receiving a monthly benefit payment the first month after the department accepts the property division dissolution order.

(12) If the dissolution order or amendment is dated AFTER my retirement, how will my monthly retirement benefit be calculated after the split?

(a) The dissolution order must state the exact dollar amount your ex-spouse is to receive as his or her separate monthly benefit. The following describes how the new amount of your benefit will be calculated assuming your ex-spouse was awarded a monthly benefit of six hundred dollars in the dissolution order.


Step 1 The department will determine the single life benefit of your current monthly benefit payment by dividing your currently monthly benefit payment by the survivor option factor (see WAC 415-02-380) in effect at the time of the split.

Example:

Currently monthly benefit = $1200

Option factor = 0.865

Single life benefit amount = $1200/0.865 = $1387.28


Step 2 The single life benefit ($1387.28) is divided by your annuity factor (see WAC 415-02-340) to determine the current present value of the single life benefit amount. The annuity factor the department uses is the factor for your age as of the date of the split.

Example:

Your age at time of the split = 61 years old

Annuity factor for age 61 = 0.0065448

Present value of single life benefit = $1387.28/0.0065448 = $211,966.75


Step 3 The department then determines the present value of your ex-spouse's share by dividing your ex-spouse's monthly benefit amount (as awarded in the dissolution order) by your ex-spouse's annuity factor. The annuity factor is the factor for your ex-spouse's age as of date of the split.

Example:

Ex-spouse's monthly benefit amount = $600

Ex-spouse's age at time of the split = 67

Annuity factor for age 67 = 0.0076715

Present value of your ex-spouse's monthly benefit = $600/0.0076715 = $78,211.56


Step 4 Next, the department subtracts your ex-spouse's present value from the single life benefit present value. The result is the present value of the benefit you will receive.

Example:

Present value of single life benefit = $211,966.75

Less present value of ex-spouse's benefit = -78,211.56

Your present value = $133,755.19


Step 5 The department determines your new monthly benefit amount by multiplying your present value by your annuity factor.

Example:

Your present value = $133,755.19

Annuity factor = 0.0065448

Your new monthly benefit amount = $133,755.19 x 0.0065448 = $875.40


(b) The department determines the percentage of the total present value each of you will receive by dividing each of your present value amounts by the single life benefit present value amount.


Example:

Your percentage of the single life benefit present value:

$133,755.19/$211,966.75 = .6310

Your ex-spouse's percentage of the single life benefit present value:

$78,211.56/$211,966.75 = .3690


(13) What language must the postretirement property division dissolution order or most recent amendment include to split my monthly defined benefit payment with my ex-spouse? Do not use the language in RCW 41.50.670(2). The order must include the language provided in the following paragraph. The exact dollar amount of your ex-spouse's monthly benefit payment must be specified. Do not use formulas or percentages. (See example in WAC 415-02-500 (15)(b).)

The Department of Retirement Systems (department) shall create a defined benefit account for (ex-spouse) in the (name of retirement system and plan) and pay him or her $ (amount) for his or her life. To pay for this benefit, (member's) monthly defined benefit payment will be reduced for life. This provision shall become effective no more than 30 days after the department's acceptance of the order.
(14) How will the department split my postretirement defined contribution account? If your defined contribution account has not been fully disbursed at the time of the dissolution order, the department will split the remaining portion of your defined contribution according to the provisions of subsections (6) through (9) of this section.

(15) Is there a maximum payment that a property division dissolution order can award to my ex-spouse? Yes. See RCW 41.50.670(4) and WAC 415-02-500(10) for information.

(16) How much is the fee the department charges for making payments directly to my ex-spouse? See RCW 41.50.680 and WAC 415-02-500(11) for information.

(17) Terms used:

(a) Department's acceptance - A dissolution order that fully complies with the department of retirement systems' requirements and chapter 41.50 RCW.

(b) Dissolution order - RCW 41.50.500.

(c) Ex-spouse - WAC 415-02-030.

(d) Split accounts - WAC 415-02-030.

(e) Survivor benefits - WAC 415-02-030.

(f) Plan 3 retirement systems - WAC 415-111-100.

(g) TRS - Teachers' retirement system.


Footnotes to section:

1 When a court splits your retirement account, the department will establish a separate account for your ex-spouse. Once the account is established, your account and your ex-spouse's account are not tied in any way.
2 If an ex-spouse was not listed as the member's survivor beneficiary at retirement, then no postretirement property division order (or postretirement amendment) may split the member's retirement account using WAC 415-02-540.

[]

Reviser's note: The brackets and enclosed material in the text of the above section occurred in the copy filed by the agency and appear in the Register pursuant to the requirements of RCW 34.08.040.

OTS-6192.1


NEW SECTION
WAC 415-02-550   What happens to my defined contributions if I transfer to Plan 3 after the department of retirement systems accepts my property division dissolution order?   (1) Who may use this section? You may use this section if you were a member of PERS Plan 2, SERS Plan 2, or TRS Plan 2 and first obtained a property division dissolution order using the language in RCW 41.50.670(2) and WAC 415-02-510 or 415-02-520, and then transfer to Plan 3.1

(2) What happens if the property division dissolution order (using the language in RCW 41.50.670(2) and WAC 415-02-510) did not split my account? Refer to WAC 415-03-530 for information about your defined benefit account and about your and your ex-spouse's defined contribution accounts after you transfer to Plan 3.

(3) What happens if the property dissolution order used the language in WAC 415-02-520 and did split my account?

(a) Your ex-spouse's account will remain in Plan 2. Your ex-spouse is ineligible to transfer to Plan 3.

(b) The balance of your accumulated contributions remaining in your Plan 2 account after it was split will be transferred to your Plan 3 defined contributions account. (Refer to chapter 415-111 WAC for information about your defined contribution account.)

(4) How will gainsharing be applied to my account? Gainsharing is not applied to Plan 2 member accounts. If gainsharing is applied after you have transferred to Plan 3, only you will receive the gainsharing amount.

(5) Terms used:

(a) Dissolution order - RCW 41.50.500.

(b) Ex-spouse - WAC 415-02-030.

(c) Gainsharing - Chapter 41.31 RCW (Plan 1); chapter 41.31A RCW (Plan 3); WAC 415-02-030; 415-111-440.

(d) PERS - Public employees' retirement system.

(e) Plan 3 retirement systems - WAC 415-111-100.

(f) SERS - School employees' retirement system.

(g) Split accounts - WAC 415-02-030.

(h) TRS - Teachers' retirement system.


Footnote to section:

1 The section does not apply to retirees, because retirees cannot transfer to Plan 3.

[]

OTS-6094.3


NEW SECTION
WAC 415-104-202   Survivor benefit options -- LEOFF Plan 1.   (1) To whom does this section apply? This section only applies to members of the law enforcement officers' and fire fighters' retirement system who first became members of the system prior to October 1, 1977 (LEOFF Plan 1).

(2) What are flexible survivor benefit options? RCW 41.26.164 allows a retiree to provide a survivor option for a spouse who does not otherwise qualify as an eligible surviving spouse under RCW 41.26.160 or 41.26.161. The survivor option will provide a lifetime benefit for the spouse after the retiree's death.

(3) How will the retiree's benefit be affected by selecting a flexible survivor option? The monthly benefit payment will be actuarially reduced beginning the first month following the month in which the department receives the completed form.

(4) What are the flexible survivor option choices?

(a) Joint and whole allowance option. When the retiree dies, the department pays the surviving spouse a monthly benefit equal to the gross monthly allowance then payable to the retiree.

(b) Joint and one-half allowance option. When the retiree dies, the department pays the surviving spouse a monthly benefit equal to one-half of the amount of the retiree's gross monthly retirement allowance then payable to the retiree.

(c) Joint and two-thirds allowance option. When the retiree dies, the department pays the surviving spouse a monthly benefit equal to two-thirds of the retiree's gross monthly retirement allowance then payable to the retiree.

(5) How does one qualify to add a flexible survivor option? A retiree may qualify to select a flexible survivor option if:

(a) The retiree does not have a spouse who qualifies as an eligible surviving spouse (see subsection (2) of this section);

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

(c) The retiree has not previously selected a flexible survivor option.

(6) What steps must one take to add a flexible survivor option? To add a flexible survivor option, the retiree must:

(a) Make the choice during the one year window, on or after the date of the first anniversary and before the second anniversary of the marriage;

(b) Provide the department with proof of the birth date of the spouse and a copy of a marriage certificate as proof of the marriage; and

(c) Properly and in a timely manner complete and file the correct forms with the department.

(7) What happens if the survivor dies before the retiree? If the spouse dies before the retiree, the retiree's monthly retirement allowance increases, effective the first day of the following month, to the amount that the retiree would have received had the retiree not chosen a flexible survivor option plus any cost-of-living adjustments (COLA) the retiree received prior to the spouse's death.

(8) What happens to the eligible surviving children's share if the retiree selects a flexible survivor option? There is no impact to the benefit provided to surviving children if the retiree selects a flexible survivor option.

(9) Actuarial information. See chapter 415-02 WAC starting with WAC 415-02-300 for the tables, schedules, and factors the department uses for calculating retirement allowances.

Terms used in this section:

(a) Child or children - RCW 41.26.030(7).

(b) Eligible surviving child - RCW 41.26.160 and 41.26.161.

(c) Eligible surviving spouse - RCW 41.26.161 and 41.26.162.

(d) Surviving spouse - RCW 41.26.030(6).

[]


AMENDATORY SECTION(Amending WSR 99-16-075, filed 8/3/99, effective 9/3/99)

WAC 415-104-211   Married LEOFF Plan 2 member's benefit selection -- Spousal consent required.   (1) A LEOFF Plan 2 member, if married, must provide the spouse's written consent to the option selected under WAC 415-104-215. If a married LEOFF Plan 2 member does not provide spousal consent, the department will pay the retired member a joint and one-half survivor benefit allowance and record the member's spouse as the survivor, in compliance with RCW 41.26.460(2).

(2) Spousal consent is not needed to enforce a marital dissolution order requiring the department to pay an ex-spouse 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 filed with the department constitutes spousal consent.

[Statutory Authority: RCW 41.50.050. 99-16-075, 415-104-211, filed 8/3/99, effective 9/3/99. Statutory Authority: RCW 2.10.146, 41.26.460, 41.32.530, 41.50.050, 41.32.785, 41.40.188 and 41.40.660. 96-01-047, 415-104-211, filed 12/14/95, effective 1/14/96. Statutory Authority: RCW 34.05.050 and 1990 c 249. 91-03-014, 415-104-211, filed 1/7/91, effective 2/7/91.]

OTS-6095.1


AMENDATORY SECTION(Amending WSR 01-10-045, filed 4/26/01, effective 6/1/01)

WAC 415-104-215   Retirement benefit options -- LEOFF Plan 2.   RCW 41.26.460 enables the department to provide retiring LEOFF Plan 2 members with four retirement benefit options. The member must choose an option when applying for service or disability retirement.

(1) Option One: Benefit option without survivor features (standard allowance). The department pays the retiree a monthly retirement allowance actuarially based solely on the single life of the member, in accordance with RCW 41.26.430 (service) or 41.26.470 (disability). When the retiree dies, all benefits cease. Any remaining balance of the retiree's accumulated contributions will be paid to:

(a) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or

(b) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or

(c) The member's estate; or

(d) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.

(2) Benefit options with a survivor feature.

(a) 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, any remaining balance of the retiree's accumulated contributions will be paid to:

(i) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or

(ii) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or

(iii) The member's estate; or

(iv) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.

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

(c) Option Three (joint and one-half allowance). When the retiree dies, the department pays the survivor one-half of the amount of the retiree's gross monthly retirement allowance.

(d) Option Four (joint and two-thirds allowance).

(i) Option Four is available to members retiring on or after January 1, 1996.

(ii) When the retiree dies, the department pays the survivor 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 ex-spouse 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 subsection applies to members retiring on or after January 1, 1996, who select a benefit option with a survivor feature (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 example:


Plan Two:

Agnes retires in 1996 (Year 0). She 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 January 2001 (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 COLA's:


Year Option One (Standard Allow.) Survivor Option (2,3,4) plus COLAs COLA incr.

(3% max)

$ Increase
0 (1996) 2,000.00 1,750.00 (inelig.) 0.00
1 (1997) 1,750.00 .02 35.00
2 (1998) 1,785.00 .03 53.55
3 (1999) 1,838.55 .025 45.96
4 (2000) 1,884.51 .03 56.54
5 (2001) 2,000.00 1,941.05
Total COLA's 191.05
Original Option One Benefit Amount + Total COLA's = New Benefit Amount
$2000 + $191.05 = $2,191.05*

* In the future (i.e., Year 5), Agnes' COLA will be based on the increased benefit amount ($2,191.05).


(d) If the survivor dies and the retiree's benefit increases under this section, and thereafter the retiree also dies before all employee contributions are exhausted, any remaining balance of the retiree's accumulated contributions will be paid to:

(i) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or

(ii) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or

(iii) The member's estate; or

(iv) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.

(5) Any retiree who retired before January 1, 1996, and who elected to receive a benefit option with a survivor feature 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 the department proper proof of the designated beneficiary's death.

The retiree is not required to apply for the increased benefit provided in this subsection. The adjusted retirement allowance will be effective on July 1, 1998, or the first day of the month following the date of death of the designated beneficiary, whichever comes last. The adjustment is computed as described in RCW 41.26.460 (3)(c) for Plan 2 retirees.

(6) Postretirement benefit options.

(a) Postretirement marriage option. Members who select the standard allowance (Option One) at the time of retirement and marry after retirement may subsequently select a survivor option with their new spouse as survivor beneficiary, provided that:

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

(ii) The selection is made either:

(A) During a one year window, on or after the date of the first anniversary and before the second anniversary of the postretirement marriage; or

(B) Before June 1, 2002, if the postretirement marriage occurred before June 1, 2001;

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

(iv) A member may exercise this option one time only.

(b) Removal of a nonspouse survivor option. Members who selected a nonspouse as survivor beneficiary at the time of retirement may remove that survivor designation and have the benefit adjusted to a standard allowance. A member may exercise this option one time only.

(c) Selection (a) or (b) of this subsection will become effective the first of the month following the department's receipt of the required paperwork.

(7) 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.

[Statutory Authority: RCW 41.50.050(5), 41.26.460, 41.32.530, 41.32.785, 41.32.851, 41.35.220, 41.40.188, 41.40.660, 41.40.845. 01-10-045, 415-104-215, filed 4/26/01, effective 6/1/01. Statutory Authority: RCW 41.50.050. 99-16-075, 415-104-215, filed 8/3/99, effective 9/3/99. Statutory Authority: RCW 2.10.146, 41.26.460, 41.32.530, 41.50.050, 41.32.785, 41.40.188 and 41.40.660. 96-01-047, 415-104-215, filed 12/14/95, effective 1/14/96. Statutory Authority: RCW 34.05.050 and 1990 c 249. 91-03-014, 415-104-215, filed 1/7/91, effective 2/7/91.]

OTS-6018.1


REPEALER

     The following section of the Washington Administrative Code is repealed:
WAC 415-111-450 How does a court-ordered division of property affect my Plan 3 account?

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