WSR 03-23-054

PROPOSED RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed November 14, 2003, 2:07 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 02-08-063.

Title of Rule: WAC 415-111-220 How do I choose a defined contribution rate?

Purpose: The current WAC provides information about defined contribution rates. The amendment clarifies that TRS members can change their contribution rate choice every January. Amendments also clarify rules regarding changing employers.

Statutory Authority for Adoption: RCW 41.50.050(5).

Statute Being Implemented: RCW 41.34.040.

Summary: Amendment provides clarification.

Reasons Supporting Proposal: The legislature provided authority for members of TRS, PERS, and SERS to change contribution rates every January. To date, the Internal Revenue Service has only provided authority for TRS members to make the changes in January.

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: Please see Purpose, Summary, and Reasons Supporting Proposal above.

Proposal Changes the Following Existing Rules: Please see Purpose, Summary, and Reasons Supporting Proposal above.

No small business economic impact statement has been prepared under chapter 19.85 RCW. This amendment has 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 December 23, 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 December 23, 2003.

Date of Intended Adoption: No sooner than December 24, 2003.

November 13, 2003

Merry A. Kogut

Rules Coordinator

OTS-6800.2


AMENDATORY SECTION(Amending WSR 01-15-038, filed 7/13/01, effective 7/26/01)

WAC 415-111-220   How do I choose a defined contribution rate?   (1) Contribution rates: If you are a member of the Teachers' Retirement System (TRS) Plan 3, the School Employees' Retirement System (SERS) Plan 3, or the Public Employees' Retirement System (PERS) Plan 3, you are required to contribute from your compensation according to one of the following rate structures:

((Option A Contribution Rate
All ages 5.0% fixed
Option B
Up to age 35 5.0%
Age 35 to 44 6.0%
Age 45 and above 7.5%
Option C
Up to age 35 6.0%
Age 35 to 44 7.5%
Age 45 and above 8.5%
Option D
All ages 7.0%
Option E
All ages 10.0%
Option F
All ages 15.0%))

Base Rate Additional Rate Total Contribution Rate
Option A
All ages 5.0% 0.0% 5.0%
Option B
Up to age 35 5.0% 0.0% 5.0%
Age 35 to 44 5.0% 1.0% 6.0%
Age 45 and above 5.0% 2.5% 7.5%
Option C
Up to age 35 5.0% 1.0% 6.0%
Age 35 to 44 5.0% 2.5% 7.5%
Age 45 and above 5.0% 3.5% 8.5%
Option D
All ages 5.0% 2.0% 7.0%
Option E
All ages 5.0% 5.0% 10.0%
Option F
All ages 5.0% 10.0% 15.0%

(2) How do I make the choice? Under WAC 415-111-110, it is your responsibility to complete the correct form for choosing a contribution rate and submitting the form in a timely manner to your employer as directed on the form.

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

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

(5) When do contributions begin?

(a) Once you choose a contribution rate, contributions will begin the first day of the pay cycle in which you make the choice.

(b) If the employer advises the department that you should be reported into Plan 3 membership retroactively, the ninety-day period starts from the date it is discovered that you should have been reported. The department will decide which date to use.

(6) What if I work for more than one employer? If you are a Plan 3 member working in eligible positions for more than one employer, you may select a different contribution rate with each employer.

(7) What happens if I do not make a choice? Under RCW 41.34.040, you will be ((irrevocably)) assigned ((to)) a base rate of 5% (Option A) if:

(a) You are a new employee or changing your employer, and do not choose a contribution rate within the ninety-day election period described in subsection (4) of this section; or

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

(8) Can I change my contribution rate?

(a) Except as provided in (c) of this subsection, once you ((elect)) choose a contribution rate or are ((defaulted into)) assigned the base rate of 5% (Option A), you cannot change your contribution rate unless you change employers.

(b) Each time you change employers, you ((will be allowed the ninety-day period described in subsection (4) of this section to choose a new contribution rate)) must choose a new contribution rate within ninety days or you will be assigned a base rate of 5% (Option A). No contributions will be taken until you choose a rate or until the ninety-day period has elapsed, whichever occurs first.

(c) Each January, TRS Plan 3 members may change their contribution rate option by providing written notification to their employer as described in WAC 415-111-110(1).

[Statutory Authority: RCW 41.34.040, 41.50.050(5). 01-15-038, 415-111-220, filed 7/13/01, effective 7/26/01. Statutory Authority: Chapters 41.32, 41.34, 41.35, 41.50 RCW. 01-01-059, 415-111-220, filed 12/12/00, effective 1/12/01.]

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