WSR 03-21-096

PROPOSED RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed October 17, 2003, 9:58 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 03-07-062.

Title of Rule: New WAC 415-02-710 What is the $150,000 death benefit?

Purpose: This is a benefit consistent with workers' compensation law, Title 51 RCW, for LEOFF, PERS, SERS, TRS, and WSPRS members who die as a result of injuries sustained in the course of employment. The benefit may be nontaxable under applicable federal law. The 2003 legislature implemented the benefit for members of PERS, SERS, and TRS. Members of LEOFF and WSPRS were already covered, but the Department of Retirement Systems (DRS) had not yet explained the benefits and process in WAC.

Statutory Authority for Adoption: RCW 41.50.050(5).

Statute Being Implemented: RCW 41.04.017, 41.26.048, 41.32.053, 41.35.115, 41.40.0932, 43.43.285.

Summary: See Purpose above.

Reasons Supporting Proposal: Implement and interpret statutes.

Name of Agency Personnel Responsible for Drafting: Merry A. Kogut, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7291; Implementation and Enforcement: Dave Nelsen, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7069.

Name of Proponent: Department of Retirement Systems, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: See Purpose above.

Proposal does not change existing rules.

No small business economic impact statement has been prepared under chapter 19.85 RCW. These amendments have no effect on businesses.

RCW 34.05.328 does not apply to this rule adoption. The Department of Retirement Systems is not one of the named departments in RCW 34.05.328.

Hearing Location: Department of Retirement Systems, 6835 Capitol Boulevard, Conference Room 115, Tumwater, WA, on November 25, 2003, at 9:00 a.m.

Assistance for Persons with Disabilities: Contact the rules coordinator by seven days before the hearing, if possible, phone (360) 664-7291, TTY (360) 586-5450, e-mail merryk@drs.wa.gov.

Submit Written Comments to: Identify WAC Numbers, Merry A. Kogut, Rules Coordinator, Department of Retirement Systems, P.O. Box 48380, Olympia, WA 98504-8380, e-mail Merryk@drs.wa.gov, fax (360) 753-3166, by 5:00 p.m. on November 25, 2003.

Date of Intended Adoption: No sooner than November 26, 2003.

October 9, 2003

Merry A. Kogut

Rules Coordinator

OTS-6715.1


NEW SECTION
WAC 415-02-710   What is the $150,000 death benefit?   (1) What is the $150,000 death benefit? This is a benefit consistent with workers' compensation law, Title 51 RCW, for LEOFF, PERS, SERS, TRS, and WSPRS members who die as a result of injuries sustained in the course of employment. The benefit may be nontaxable under applicable federal law.

(2) Who is covered? Deceased members of LEOFF, PERS, SERS, TRS, and WSPRS. If the deceased was a member of another plan, please contact the department.

(3) Who will determine eligibility for the benefit? The Washington state department of labor and industries (L&I) will determine eligibility consistent with Title 51 RCW and applicable retirement statutes in chapter 41.26 RCW (LEOFF), chapter 41.40 RCW (PERS), chapter 41.35 RCW (SERS), chapter 41.32 RCW (TRS), or chapter 43.43 RCW (WSPRS).

(4) Who will receive the $150,000 death benefit?

(a) LEOFF Plan 2, PERS, SERS, TRS, and WSPRS Plan 2: The person(s) the member designated as his or her beneficiary(ies) for his or her retirement plan will receive the benefit unless the member designated a different beneficiary(ies) for the $150,000 death benefit. If the member did not designate a beneficiary for either the plan or death benefit, then the member's death benefit shall be paid to the member's surviving spouse as if in fact the spouse had been nominated by written designation, or if there is no surviving spouse, then to the member's estate.

(b) LEOFF Plan 1 and WSPRS Plan 1: In these plans, the member's surviving spouse is automatically the beneficiary for the member's retirement plan. The member may designate a different person(s) for the $150,000 death benefit. If the member did not designate a beneficiary for either the plan or death benefit, then the member's death benefit shall be paid to the member's surviving spouse as if in fact the spouse had been nominated by written designation, or if there is no surviving spouse, then to the member's estate.

(5) How do I apply for the benefit? To apply:

(a) Obtain an application from the department of retirement systems (DRS).

(b) Submit a correctly completed application to DRS. DRS will submit the application to L&I.

(6) How will I receive the benefit? L&I will notify you and DRS of approval or disapproval of eligibility. DRS will either send you the lump sum payment or send it directly to your bank, depending on your preference.

(7) How will DRS treat the $150,000 payment for tax purposes?

(a) DRS will treat the payment as nontaxable.

(b) DRS does not guarantee that payments should or should not be designated as exempt from federal income tax.

(c) DRS does not guarantee that it was correct in withholding or not withholding taxes from the death benefit payment.

(d) DRS does not:

(i) Represent or guarantee that any particular federal or state income, payroll, personal property or other tax consequence will occur because of its nontaxable determination; or

(ii) Assume any liability for your compliance with the Internal Revenue Code.

(e) You should consult with your own tax advisor regarding all questions of federal or state income, payroll, personal property or other tax consequences regarding any payments you receive from the department.

(8) Terms used:

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

(b) PERS - Public employees' retirement system.

(c) SERS - School employees' retirement system.

(d) TRS - Teachers' retirement system.

(e) WSPRS - Washington state patrol retirement system.

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