WSR 04-04-037

PERMANENT RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed January 29, 2004, 11:31 a.m. , effective March 1, 2004 ]

Date of Adoption: January 28, 2004.

Purpose: To implement chapter 412, Laws of 2003 (SHB 1829), the Department of Retirement Systems (DRS) is amending WAC 415-02-030, 415-108-710, and 415-110-710. At the same time, DRS is reorganizing WAC 415-108-710 and 415-110-710 to add information that explains how DRS treats numerous situations in which a member retires from one system/plan and then returns to work in another system/plan.

Citation of Existing Rules Affected by this Order: Amending WAC 415-02-030, 415-108-710, and 415-110-710.

Statutory Authority for Adoption: RCW 41.50.050(5), 41.40.010(42), 41.40.037.

Adopted under notice filed as WSR 04-01-008 [04-01-050] on December 4 [11], 2003.

Changes Other than Editing from Proposed to Adopted Version: Clarification that for PERS Plan 1, the 1900 hour limit is a lifetime limit, even if you return to work.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 3, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.
Effective Date of Rule: March 1, 2004.

January 28, 2004

John Charles

Director

OTS-6849.1


AMENDATORY SECTION(Amending WSR 02-23-037, filed 11/13/02, effective 1/1/03)

WAC 415-02-030   Definitions.   This section contains a central location for definitions of words and phrases used in the department of retirement system's rules. It also serves as a directory for finding definitions within the RCWs and WACs.

(1) Accumulated contributions means the sum of all contributions paid into a member's defined benefit account, including interest.

(2) Appeal means the proceeding through which a party obtains review of a department action in an adjudicative proceeding conducted under chapter 34.05 RCW (the Administrative Procedure Act) and chapter 415-08 WAC (the department's appeal rules).

(3) Average final compensation - is defined in RCW 41.32.010(30) (TRS); RCW 41.35.010(14) (SERS); RCW 41.40.010(17) (PERS); and RCW 43.43.120(15) (WSPRS).

(4) Cafeteria plan means a "qualified" employee benefit program under section 125 of the Internal Revenue Code, such as certain health and welfare plans.

(5) Calendar month.

(a) Refers to one of the twelve named months of the year, extending from the first day of the named month through the last day. For example: January 1st through January 31st is a calendar month. February 1st through February 29th is a calendar month in a leap year. March 13th through April 12th is not a calendar month.

(b) Exception: For the purpose of administering the break in employment rules interpreting and implementing the retiree return to work statutes (RCW 41.32.570, 41.32.802, 41.32.862, 41.35.060 and 41.40.037), one calendar month means thirty consecutive calendar days. For example: Kim's retirement date is August 1st. August 31 would be the earliest Kim could return to work and meet the requirement for a one calendar month break in employment.

(6) Compensation earnable or earnable compensation definitions can be found in RCW 41.32.010(10) and 41.32.345 (TRS); RCW 41.35.010(6) (SERS); and RCW 41.40.010(8) (PERS).

(7) Contribution rate is:

(a) For employees: The fraction (percent) of compensation a member contributes to a retirement system each month.

(b) For employers: The fraction (percent) of payroll a member's employer contributes to a retirement system each month. Contribution rates vary for the different systems and plans.

(8) Deferred compensation refers to the amount of the participant's compensation which the participant voluntarily defers from earnings before taxes.

(9) Defined benefit plan is a pension plan in which a lifetime retirement benefit is available, based on the member's service credit and compensation.

(10) Defined contribution plan is a plan in which part of members' or participants' earnings are deferred into an investment account in which tax is deferred until funds are withdrawn. The benefit is based on the contribution rate and the amount of return from the investment of the contributions. Members or participants receive the full market rate of return minus expenses. There is no guaranteed rate of return and the value of an account will increase or decrease based upon market fluctuations.

(11) Department means the department of retirement systems.

(12) Dependent care assistance salary reduction plan (DCAP) is a plan that allows an eligible employee of the state of Washington to set aside a "before tax" portion of his or her gross salary before federal income and Social Security taxes to be used for the reimbursement of dependent care expenses.

(13) Director means the director of the department of retirement systems.

(14) Employee means a worker who performs labor or services for a retirement systems employer under the control and direction of the employer as determined under WAC 415-02-110(2). An employee may be eligible to participate as a member of one of the state-administered retirement systems according to eligibility requirements specified under the applicable retirement system.

(15) Employer is defined in RCW 41.26.030(2) (LEOFF), 41.32.010(11) (TRS), 41.34.010(5) (Plan 3), 41.35.010(4) (SERS), and 41.40.010(4) (PERS).

(16) Ex-spouse refers to a person who is a party to a "dissolution order" as defined in RCW 41.50.500(3).

(17) Final average salary is defined in RCW 41.26.030(12) (LEOFF).

(18) Gainsharing is the process through which members of certain plans share in the extraordinary investment gains on earnings on retirement assets under chapters 41.31 and 41.31A RCW.

(19) Independent contractor means a contract worker who is not under the direction or control of the employer as determined under WAC 415-02-110 (2) and (3).

(20) Member means a person who is included in the membership of one of the retirement systems created by chapters 2.10, 2.12, 41.26, 41.32, 41.34, 41.35, 41.40, or 43.43 RCW.

(21) Participant means an eligible employee who participates in a deferred compensation or dependent care assistance plan.

(22) Participation agreement means an agreement that an eligible employee signs to become a participant in a deferred compensation or dependent care assistance plan.

(23) Pension plan is a plan that provides a lifelong post retirement payment of benefits to employees.

(24) Petition means the method by which a party requests a review of an administrative determination prior to an appeal to the director. The department's petitions examiner performs the review under chapter 415-04 WAC.

(25) Plan 1 means the retirement plans in existence prior to the enactment of chapters 293, 294 and 295, Laws of 1977 ex. sess.

(26) Plan 2 means the retirement plans established by chapters 293, 294 and 295, Laws of 1977 ex. sess., chapter 341, Laws of 1998, and chapter 329, Laws of 2001.

(27) Plan 3 means the retirement plans established by chapter 239, Laws of 1995, chapter 341 Laws of 1998, and chapter 247 Laws of 2000.

(28) Pop-up is a term that the department uses to refer to the benefit available to a retiree where the survivor of a retiree receiving a benefit reduced by a survivor option predeceases the retiree. Example: Linda is receiving a retirement benefit reduced by a survivor option for her husband, Joe. Joe dies before Linda. Linda's monthly retirement allowance increases. The department refers to the increase as a "pop-up."

(29) Portability is the ability to use membership in more than one Washington state retirement system in order to qualify for retirement benefits. See chapters 41.54 RCW and 415-113 WAC.

(30) Public record is defined in RCW 42.17.020(36).

(31) Restoration is the process of restoring a member's service credit for prior periods.

(32) Retirement system employer - see "employer."

(33) Rollover means a distribution that is paid to or from an eligible retirement plan within the statutory time limit allowed.

(34) Separation date is the date a member ends employment in a position eligible for retirement or disability benefit coverage.

(35) Split account is the account the department establishes for a member or retiree's ex-spouse.

(36) Surviving spouse refers to a person who was married to the member at the time of the member's death and who is receiving or is eligible to receive a survivor benefit.

(37) Survivor means a person designated by the member to receive a monthly benefit allowance after the member dies.

(38) Survivor benefit is a feature of a retirement plan that provides continuing payments to a beneficiary after the death of a member or retiree.

(39) The Uniform Services Employment and Reemployment Rights Act of 1994 (USERRA) is the federal law that requires employers to reemploy and preserve job security, pension and welfare benefits for qualified employees who engage in military service.

[Statutory Authority: RCW 41.50.050(5). 02-23-037, 415-02-030, filed 11/13/02, effective 1/1/03; 02-01-120, 415-02-030, filed 12/19/01, effective 1/19/02. Statutory Authority: RCW 41.50.050. 00-10-016, 415-02-030, filed 4/21/00, effective 5/22/00; 94-09-039, 415-02-030, filed 4/19/94, effective 5/20/94; Order 4, 415-02-030, filed 7/27/77.]

OTS-6850.3


AMENDATORY SECTION(Amending WSR 02-18-046, filed 8/28/02, effective 9/30/02)

WAC 415-108-710   ((How will returning to work affect my PERS monthly benefit?)) What are the PERS retiree return to work rules?   (((1) You may work for an employer after retirement and continue to receive your retirement allowance if:

(a) You are employed in an ineligible position no sooner than one calendar month after your retirement accrual date;

(b) You are an active member of a higher education retirement plan and are employed no sooner than one calendar month after your retirement benefit accrues;

(c) You are employed as a bona fide independent contractor as defined by WAC 415-02-110;

(d) You are employed as an elected or appointed official directly by the governor under RCW 41.40.150(4) no sooner than one month after your retirement benefit accrues and do not reenter membership;

(e) Your only employment is as an elected official of a city or town and you end your PERS membership under RCW 41.40.023 (3)(b); or

(f) You are employed in an eligible position:

(i) No sooner than one calendar month after your retirement benefit accrues; and

(ii) The time you work does not exceed the "work limit" defined in subsection (2) of this section.

(2) What is the work limit for eligible positions?

(a) Plan 1 retiree working for an employer as defined in RCW 41.40.010 (4)(a): Fifteen hundred hours in a calendar year; or

(b) Plan 2 or 3 retiree working in an eligible position as defined in RCW 41.32.010, 41.35.010, or 41.40.010, or as a fire fighter or law enforcement officer, as defined in RCW 41.26.030: Eight hundred sixty-seven hours in a calendar year.

(c) The Plan 1 limits will be applied to retirees from both a Plan 1 and a Plan 2 or 3 in another pension plan.

(d) The TRS Plan 1 rules will be applied to retirees from both TRS Plan 1 and PERS Plan 1.

(3) What happens if I work more than the work limit?

(a) The department will suspend your retirement allowance effective the day after the day in which you exceed the work limit. All hours worked for all covered employers in eligible positions are considered in determining the work limit.

(b) You have the option to return to membership in PERS if you are otherwise eligible. The option to return to membership is prospective from the first day of the month following the month in which you request to return to membership.

(4) How will the suspension of benefits affect my retirement allowance?

(a) The department will:

(i) Prorate your retirement allowance for the month during which you exceeded the work limit; and

(ii) Suspend all future retirement allowances while you are working until the next calendar year except that it will:

(iii) Adjust for any overpayments made to you for the month(s) in which you exceeded the work limit, as required by RCW 41.50.130.

(b) If you separate from service, your retirement allowance will resume effective the first day of the month following the date of separation.

(5) Can I return to PERS membership?

(a) If you are a PERS retiree, you may choose to return to membership if you are employed by a PERS employer and meet the eligibility criteria. If you return to membership the department will stop your retirement allowance effective from the first of the month during which you return to employment. Membership will be prospective under RCW 41.40.023(12).

(b) If you reenter membership and later choose to retire again, the department will recalculate your retirement allowance under the applicable statutes and regulations.

(c) If you are a retiree from another retirement system that the department administers, and are eligible to enter PERS membership, you may choose to return to membership. The option to return to membership is prospective from the first day of the month following the month in which you request to return to membership.


Example 1:


Kirk is a PERS Plan 2 retiree. He separates from service on August 15th. His accrual date (retirement) is effective September 1st. Kirk returns to work in a PERS Plan 2 eligible position on January 2nd of the following year. On June 1st he realizes that on or about July 8th, he is going to exceed his eight hundred sixty-seven hour limit for the year. On July 5th he notifies his employer in writing that he chooses to reenter PERS Plan 2 membership.

On July 12th, Kirk works his eight hundred sixty-eighth hour. He is no longer eligible for his PERS Plan 2 retirement benefit as of July 12th. The retirement benefit is stopped for the remainder of July. On August 1st, Kirk is returned to membership and resumes making retirement contributions.


Example 2:


Kristal is a PERS Plan 1 retiree. She separated from service on June 20th. Her accrual date (retirement) is effective July 1st. She begins working in a PERS eligible position the following January. By October 1st, Kristal has exceeded the fifteen hundred hour work limit, and her benefit is suspended. Kristal separates from service on November 15th and her benefit is reinstated December 1st. Kristal qualifies to begin another fifteen hundred hour work period on January 1st.


Example 3:


Millie is a PERS Plan 2 retiree. She separated from service on June 20th. Her accrual date (retirement) is effective July 1st. She begins working in a PERS eligible position on February 1st of the following year. By September 1st, Millie has worked eight hundred sixty-seven hours and continues to work. Millie's benefit is suspended from September 2nd until January 1st if she continues to work.


(6) How soon can I return to work as a retiree? If you return to work sooner than one full calendar month after your accrual date under RCW 41.40.037, your retirement allowance will be reduced by 5.5% for every eight hours worked each month, until you separate for one full calendar month. See RCW 41.40.037.


Example 4:


John's last day of work is September 15th. His accrual date is October 1st. If John wants to return to work after he retires, he will need to wait until at least November 1st to avoid receiving the daily percentage reduction in his retirement allowance.


Example 5:


Tony's last day of work is September 15th. His accrual date is October 1st. Tony returns to work for five work days between October 10th and October 17th. His October retirement allowance will be reduced by five and one-half percent for every eight hours worked in October (RCW 41.40.037); this will be reflected in Tony's November benefit. Tony does not return to work. On December 1st, Tony will qualify to return to work under the work limits described in subsection (2) of this section.


Example 6:


Ruth's last day of work is September 15th. Her accrual date is October 1st. She returns to work on October 10th and continues working. Ruth's retirement benefit will be reduced by 5.5% for each eight hours she works. Under RCW 41.40.037, Ruth's benefit reduction will accrue up to one hundred sixty hours per month. If she stops working, Ruth's full retirement benefit will resume after she remains separated for one full calendar month. Any benefit reduction over one hundred percent will be applied to Ruth's allowance in subsequent months.


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

(a) "Accrual date" - RCW 41.40.193, 41.40.680, 41.40.801.

(b) "Eligible position" - RCW 41.40.037(2).

(c) "Employer" - RCW 41.40.010(4).

(d) "Ineligible position" - RCW 41.40.010.

(e) "Law enforcement officer" - RCW 41.26.030.

(f) "Membership" - RCW 41.40.023.

(g) "Report" - WAC 415-108-010.)) (1) How soon can I return to work after I retire?

(a) There is no required waiting period to return to work if:

(i) You go to work for a private employer;

(ii) You are a bona fide independent contractor as defined in WAC 415-02-110;

(iii) Your only employment is as an elected official of a city or town and you end your PERS membership under RCW 41.40.023 (3)(b); or

(iv) You are a PERS Plan 1 retiree elected to office or appointed to office by the governor.

(b) If you return to work sooner than thirty consecutive calendar days from your accrual date (effective retirement date), your monthly retirement allowance will be reduced in accordance with RCW 41.40.037(1) until you separate for at least thirty consecutive calendar days.

(c) If you wait at least thirty consecutive calendar days from your accrual date, you may return to work in any position (eligible, ineligible, temporary, etc.) for any employer whose retirement plan is administered by the department of retirement systems (DRS).

(2) What is the annual hour limit? After you meet the thirty day waiting period described in subsection (1)(c) of this section, there are different annual hour limits that apply to you based on what kind of position you return to, the system from which you retired, and when you retired.

(a) No limit. You may work as many hours as you want without affecting your retirement allowance if you work:

(i) In an ineligible position;

(ii) As a retiree returning as an active member of a higher education retirement plan;

(iii) As a bona fide independent contractor;

(iv) For a private employer;

(v) If you end your PERS membership as an elected official of a city or town under RCW 41.40.023 (3)(b); or

(vi) As a PERS Plan 1 retiree elected to office or appointed to office by the governor.

(b) Fifteen hundred hour limit. You may work up to fifteen hundred hours in an eligible position as defined in RCW 41.32.010(37), 41.35.010(22), or 41.40.010(25), or as a fire fighter or law enforcement officer, as defined in RCW 41.26.030 (3) and (4), in a calendar year subject to the nineteen hundred hour cumulative limit described in subsection (3) of this section before your retirement allowance is suspended if:

(i) You are a PERS Plan 1 retiree who retired prior to August 1, 2003; or

(ii) You are a PERS Plan 1 retiree who retired on or after August 1, 2003, you waited at least ninety consecutive calendar days from your accrual date, and you met the additional conditions described in RCW 41.40.037 (2)(b).

(c) Eight hundred sixty-seven hour limit. You may work up to eight hundred sixty-seven hours in an eligible position as defined in RCW 41.32.010(37), 41.35.010(22), or 41.40.010(25), or as a fire fighter or law enforcement officer, as defined in RCW 41.26.030 (3) and (4), in a calendar year before your retirement allowance is suspended if:

(i) You are a PERS Plan 1 retiree who retired on or after August 1, 2003, and you do not meet the additional conditions described in RCW 41.40.037 (2)(b) or you have exceeded the nineteen hundred hour cumulative limit described in subsection (3) of this section; or

(ii) You are a PERS Plan 2 or 3 retiree and return to work in an eligible position as defined in RCW 41.32.010(37), 41.35.010(22), or 41.40.010(25), or as a fire fighter or law enforcement officer, as defined in RCW 41.26.030 (3) and (4).

(d) If you are retired from PERS and another DRS retirement system, refer to the table below to determine the effect of returning to work:


Dual System Combination Return to Work System Outcome
PERS Plan 1 and LEOFF Plan 2 PERS Your LEOFF Plan 2 benefit would be suspended and you could work up to the PERS Plan 1 limit (subsection (2)(a), (b) and (c) of this section) during the calendar year in an eligible position before your PERS benefit would be suspended.
TRS Your LEOFF Plan 2 benefit would be suspended and you could work up to the PERS Plan 1 limit (subsection (2)(a), (b) and (c) of this section) during the calendar year in an eligible position before your PERS benefit would be suspended.
LEOFF Plan 2 Your LEOFF Plan 2 benefit would be suspended and you would be mandated back into LEOFF Plan 2 membership.
Your PERS benefit would be suspended until you terminate from LEOFF Plan 2.
WSPRS If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in WSPRS and your PERS and LEOFF Plan 2 benefits are suspended.
If you have fifteen or more years of service credit in either system then you may not become a member of WSPRS. Your LEOFF Plan 2 benefit is suspended and you can work up to the PERS Plan 1 limit (subsection (2)(a), (b) and (c) of this section) during the calendar year in an eligible position before your PERS benefit would be suspended.
PERS Plan 1 and TRS Plan 1 PERS If the position is at any educational institution in Washington state, then the TRS Plan 1 limits apply which allow you to work up to fifteen hundred hours during the fiscal year before your PERS and TRS benefits would be suspended. The one exception is if you return to work at a higher education employer and choose to join another retirement system (e.g., TIAA-CREF). In that case, the PERS Plan 1 rules would apply. By definition, the position is ineligible in PERS and therefore you can work unlimited hours without your PERS and TRS benefits being suspended.
If the position is not at an educational institution in Washington state, the TRS Plan 1 limits would apply and you can work unlimited hours without your PERS and TRS benefits being suspended.
TRS The TRS Plan 1 limits would apply and you can work up to fifteen hundred hours during the fiscal year before your PERS and TRS benefits would be suspended.
LEOFF Plan 2 If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in LEOFF Plan 2 and your PERS and TRS benefits are suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in LEOFF Plan 2. The TRS Plan 1 limits would apply and you can work unlimited hours without your PERS and TRS benefits being suspended.
WSPRS If you have less than fifteen years of service credit in either system you are retired from, then you are mandated into membership in WSPRS and your PERS and TRS benefits are suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in WSPRS. The TRS Plan 1 limits would apply and you can work unlimited hours without your PERS and TRS benefits being suspended.
PERS Plan 1 and TRS Plan 2 or 3 PERS You can work up to the PERS Plan 1 limits (subsection (2)(a), (b) and (c) of this section) during the calendar year in an eligible position before your PERS and TRS benefits would be suspended.
TRS You can work up to the PERS Plan 1 limits (subsection (2)(a), (b) and (c) of this section) during the calendar year in an eligible position before your PERS and TRS benefits would be suspended.
LEOFF Plan 2 If you have less than fifteen years of service credit in either system you are retired from, then you are mandated into membership in LEOFF Plan 2 and your PERS and TRS benefits are suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in LEOFF Plan 2 and you can work up to the PERS Plan 1 limits (subsection (2)(a), (b) and (c) of this section) during the calendar year in an eligible position before your PERS and TRS benefits would be suspended.
WSPRS If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in WSPRS and both your PERS and TRS benefits would be suspended.
If you have fifteen or more years of service credit in either system then you may not become a member WSPRS and you can work up to the PERS Plan 1 limits (subsection (2)(a), (b) and (c) of this section) during the calendar year in an eligible position before your PERS and TRS benefits would be suspended.
PERS Plan 1 and WSPRS PERS Your WSPRS benefit would not be suspended and you can work up to the PERS Plan 1 limits (subsection (2)(a), (b) and (c) of this section) during the calendar year in an eligible position before your PERS benefit would be suspended.
TRS Your WSPRS benefit would not be suspended and you can work up to the PERS 1 Plan limits (subsection (2)(a), (b) and (c) of this section) during the calendar year in an eligible position before your PERS benefit would be suspended.
LEOFF Plan 2 If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in LEOFF. Your WSPRS benefit would not be suspended and your PERS benefit would be immediately be suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in LEOFF Plan 2. Your WSPRS benefit would not be suspended and you can work up to the PERS Plan 1 limits (subsection (2)(a), (b) and (c) of this section) during the calendar year in an eligible position before your PERS benefit would be suspended.
WSPRS Your WSPRS benefit would be suspended and you would be mandated back into membership.
Your PERS benefit would be suspended until you terminate from WSPRS.
PERS Plan 2 or 3 and LEOFF Plan 2 SERS Your LEOFF Plan 2 benefit would be suspended and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your PERS benefit would be suspended.
PERS Your LEOFF Plan 2 benefit would be suspended and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your PERS benefit would be suspended.
TRS Your LEOFF Plan 2 benefit would be suspended and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your PERS benefit would be suspended.
LEOFF Your LEOFF Plan 2 benefit would be suspended and you are mandated back into LEOFF Plan 2 membership.
Your PERS benefit would be suspended until you terminate from LEOFF Plan 2.
WSPRS If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in WSPRS and your PERS and LEOFF Plan 2 benefits are suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in WSPRS. Your LEOFF Plan 2 benefit is suspended and you can work up to eight hundred sixty-seven hours during the calendar year before your PERS benefit would be suspended.
PERS Plan 2 or 3 and SERS Plan 2 or 3 SERS You can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS and PERS benefits would be suspended.
PERS You can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS and PERS benefits would be suspended.
TRS You can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS and PERS benefits would be suspended.
LEOFF Plan 2 If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in LEOFF and your SERS and PERS benefits are suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in LEOFF Plan 2 and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS and PERS benefits would be suspended.
WSPRS If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in WSPRS and your SERS and PERS benefits would be suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in WSPRS and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS and PERS benefits would be suspended.
PERS Plan 2 or 3 and TRS Plan 1 SERS You can work up to fifteen hundred hours during the fiscal year in an eligible position before your PERS and TRS benefits would be suspended.
PERS If the position is at any educational institution in Washington state you can work up to fifteen hundred hours during the fiscal year before your PERS and TRS benefits would be suspended.
If the position is not at an educational institution in Washington state, you can work unlimited hours without your PERS and TRS benefits being suspended.
TRS You can work up to fifteen hundred hours during the fiscal year in an eligible position before your PERS and TRS benefits would be suspended.
LEOFF Plan 2 If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in LEOFF and your PERS and TRS benefits are suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in LEOFF Plan 2 and you can work unlimited hours without your PERS and TRS benefits being suspended.
WSPRS If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in WSPRS and your PERS and TRS benefits would be suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in WSPRS and you can work unlimited hours without your PERS and TRS benefits being suspended.
PERS Plan 2 or 3 and TRS Plan 2 or 3 SERS You can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your PERS and TRS benefits would be suspended.
PERS You can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your PERS and TRS benefits would be suspended.
TRS You can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your PERS and TRS benefits would be suspended.
LEOFF Plan 2 If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in LEOFF and your PERS and TRS benefits are suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in LEOFF Plan 2 and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your PERS and TRS benefits would be suspended.
WSPRS If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in WSPRS and your PERS and TRS benefits would be suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in WSPRS and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your PERS and TRS benefits would be suspended.
PERS Plan 2 or 3 and WSPRS SERS Your WSPRS benefit would not be suspended and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your PERS benefit would be suspended.
PERS Your WSPRS benefit would not be suspended and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your PERS benefit would be suspended.
PERS Plan 2 or 3 and WSPRS TRS Your WSPRS benefit would not be suspended and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your PERS benefit would be suspended.
LEOFF Plan 2 If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in LEOFF. Your PERS benefit is suspended but your WSPRS benefit would not be suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in LEOFF Plan 2. You can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your PERS benefit would be suspended. Your WSPRS benefit would not be suspended.
WSPRS Your WSPRS benefit would be suspended and you are mandated back into membership.
Your PERS benefit would be suspended until you terminate from WSPRS.

(3) What is the nineteen hundred hour cumulative hour limit?

(a) This limit is applicable only to PERS Plan 1 retirees. It puts a lifetime limit on the number of hours that can be worked in an eligible position while still receiving a retirement allowance. This limit applies to all retirements in PERS Plan 1. Any hours reported by your employer as worked over eight hundred sixty-seven up to fifteen hundred in a calendar year while receiving a retirement allowance are counted toward the cumulative limit. Hours accumulated toward your lifetime post retirement employment limit from a previous retirement will continue to be counted in your new retirement.

(b) DRS will send out statements annually to any PERS Plan 1 retiree who accumulated any hours toward the nineteen hundred hour cumulative limit in the preceding calendar year. The statement will show the hours you have worked in the calendar year and the total hours you have worked since your retirement date. If there has been no activity in the calendar year, DRS will not issue a statement, even if there is an accumulated total from previous calendar years. See also WAC 415-02-130.

(4) What hours are counted toward the limits?

(a) Counted toward the hour limits: All compensated hours that are worked for any DRS-covered employer in an eligible position, including the use of earned sick leave, vacation days, paid holidays, compensatory time, and cashouts of compensatory time.

(b) Not counted toward the hour limits: Cashouts of unused sick and vacation leave.

(5) What happens if I work over the annual or cumulative hour limit?

(a) DRS will prorate your retirement allowance for the month in which you exceed the applicable hour limit. The suspension of your retirement allowance will be effective the day after the day in which you exceeded the applicable hour limit.

(b) If your retirement allowance is suspended for exceeding the nineteen hundred hour cumulative work limit, all subsequent calendar years will be subject to the eight hundred sixty-seven hour annual limit.

(c) Your retirement allowance will be restarted beginning the next calendar year or the day after you terminate all eligible DRS-covered employment, whichever occurs first.

(d) DRS will recover any overpayments made to you for the month(s) in which you exceeded the work limit and received a retirement allowance. See RCW 41.50.130.

(6) Can I return to PERS membership?

(a) If you are a PERS retiree, you have the option to return to membership if you are employed by a PERS employer and meet eligibility criteria. The option to return to membership is prospective from the first day of the month following the month in which you request to return to membership. See RCW 41.40.023(12).

(b) If you reenter PERS membership and later choose to retire again, DRS will recalculate your retirement allowance under the applicable statutes and regulations. You will be subject to the return to work rules in place at the time of your reretirement. If you are a PERS Plan 1 member you will also be entitled to a new nineteen hundred hour cumulative hour limit. You will be subject to the return to work rules, including the nineteen hundred hour lifetime limit described in subsection (3) of this section, in place at the time of your retirement.

(c) If you are a retiree from another retirement system that DRS administers, you may choose to enter PERS membership if you are eligible. The option to enter membership is prospective from the first day of the month following the month in which you request membership. See RCW 41.40.270 and 41.40.023.

(7) Terms used.

(a) Accrual date - RCW 41.40.193, 41.40.680, 41.40.801.

(b) Acronyms used:

(i) LEOFF: Law enforcement officers' and fire fighters' retirement system.

(ii) PERS: Public employees' retirement system.

(iii) SERS: School employees' retirement system.

(iv) TRS: Teachers' retirement system.

(v) WSPRS: Washington state patrol retirement system.

(c) Calendar day - WAC 415-02-030.

(d) Eligible position - RCW 41.40.010(25); WAC 415-108-680 through 415-108-700.

(e) Ineligible position - RCW 41.40.010(26).

(f) Law enforcement officer - RCW 41.26.030(3).

(g) Membership - RCW 41.40.023.

[Statutory Authority: RCW 41.50.050(5) and chapter 41.40 RCW. 02-18-046, 415-108-710, filed 8/28/02, effective 9/30/02. Statutory Authority: RCW 41.50.050(5), 41.04.270, 41.26.030, 41.32.010, 41.32.025, 41.32.480, 41.32.500, 41.32.570, 41.32.765, 41.32.795, 41.32.802, 41.32.855, 41.32.860, 41.32.862, 41.35.010, 41.35.030, 41.35.060, 41.35.450, 41.35.640, 41.40.010, 41.40.023, 41.40.037, 41.40.150, 41.40.193, 41.40.680, 41.40.750, 41.40.801. 02-02-060, 415-108-710, filed 12/28/01, effective 1/1/02. Statutory Authority: RCW 41.50.050. 95-16-053, 415-108-710, filed 7/25/95, effective 8/25/95.]

OTS-6851.1


AMENDATORY SECTION(Amending WSR 02-02-060, filed 12/28/01, effective 1/1/02)

WAC 415-110-710   ((How will returning to work affect my SERS monthly benefit?)) What are the SERS retiree return to work rules?   (((1) You may work for an employer after retirement and continue to receive your retirement allowance if:

(a) You are employed in an ineligible position no sooner than one calendar month after your retirement accrual date;

(b) You are an active member of a higher education retirement plan and are employed no sooner than one calendar month after your retirement benefit accrues;

(c) You are employed as a bona fide independent contractor as defined by WAC 415-02-110;

(d) You are employed as an elected or appointed official directly by the governor under RCW 41.40.150(4) no sooner than one calendar month after your retirement benefit accrues and do not reenter membership;

(e) Your only employment is as an elected official of a city or town and you end your SERS membership under RCW 41.35.030; or

(f) You are employed in an eligible position:

(i) No sooner than one calendar month after your retirement benefit accrues; and

(ii) The time you work does not exceed the "work limit" defined in subsection (2) of this section.

(2) What is the work limit for eligible positions?

(a) Plan 2 or 3 retiree working in an eligible position as defined in RCW 41.32.010, 41.35.010, or 41.40.010, or as a fire fighter or law enforcement officer, as defined in RCW 41.26.030: Eight hundred sixty-seven hours in a calendar year.

(b) Retirees from both a Plan 1 in another pension plan and SERS Plan 2 or 3: The Plan 1 limits of the other plan will be applied.

(3) What happens if I work more than the work limit?

(a) The department will suspend your retirement allowance effective the day after the day in which you exceed the work limit. All hours worked for all covered employers in eligible positions are considered in determining the work limit.

(b) You have the option to return to membership in SERS if you are otherwise eligible. The option to return to membership is prospective from the first day of the month following the month in which you request to return to membership.

(4) How will the suspension of benefits affect my retirement allowance?

(a) The department will:

(i) Prorate your retirement allowance for the month during which you exceeded the work limit; and

(ii) Suspend all future retirement allowances while working, until the next calendar year except that it will:

(iii) Adjust for any overpayments made to you for the month(s) in which you exceeded the work limit, as required by RCW 41.50.130.

(b) If you separate from service, your retirement allowance will resume effective the first day of the month following the date of separation.

(5) Can I return to SERS membership?

(a) If you are a SERS retiree, you may choose to return to membership if you are employed by a SERS employer and meet the eligibility criteria. If you return to membership the department will stop your monthly retirement allowance effective from the first of the month during which you return to employment. Membership will be prospective under RCW 41.35.060(3).

(b) If you reenter membership and later choose to retire again, the department will recalculate your retirement allowance under the applicable statutes and regulations.

(c) If you are a retiree from another retirement system that the department administers, and are eligible to enter SERS membership, you may choose to return to membership. The option to return to membership is prospective from the first day of the month following the month in which you request to return to membership.


Example 1:


Phil is a SERS Plan 2 retiree. He separates from service on August 15th. His accrual date (retirement) is effective September 1st. Phil returns to work in a SERS Plan 2 eligible position on January 2nd of the following year. On June 1st he realizes that on or about July 8th, he is going to exceed his eight hundred sixty-seven hour limit for the year. On July 5th he notifies his employer in writing that he chooses to reenter SERS Plan 2 membership.

On July 12th, Phil works his eight hundred sixty-eighth hour. He is no longer eligible for his SERS Plan 2 retirement allowance as of July 12th. The retirement benefit is stopped for the remainder of July. On August 1st, Phil is returned to membership and resumes making retirement contributions.


Example 2:


Tami is a SERS Plan 2 retiree. She separated from service on June 20th. Her accrual date (retirement) is effective July 1st. She begins working in a SERS eligible position on February 1st of the following year. By September 1st, Tami has worked eight hundred sixty-seven hours. Tami's benefit is suspended from September 2nd until January 1st if she continues to work.


(6) How soon can I return to work as a retiree? If you return to work sooner than one full calendar month after your accrual date, your retirement allowance will be reduced by 5.5% for every eight hours worked each month, until you separate for one full calendar month. See RCW 41.35.060.


Example 3:


Steve's last day of work is September 15th. His accrual date is October 1st. If Steve wants to return to work after he retires, he will need to wait until at least November 1st to avoid receiving the daily percentage reduction in his retirement allowance.


Example 4:


Tim's last day of work is September 15th. His accrual date is October 1st. Tim returns to work for five eight-hour work days between October 10th and October 17th. His October retirement allowance will be reduced by five and one-half percent for every eight hours worked in October (RCW 41.35.060). Tim does not return to work. On December 1st, he will qualify for his full retirement benefit. Tim will also qualify to return to work under the work limits described in subsection (2) of this section.


Example 5:


Paige's last day of work is September 15th. Her accrual date is October 1st. She returns to work on October 10th and continues working. Paige's retirement benefit will be reduced by 5.5% for each eight hours she works. Paige's benefit reduction will accrue up to one hundred sixty hours per month. If she stops working, her full retirement allowance will resume after she remains separated for one full calendar month. Any benefit reduction over one hundred percent will be applied to Paige's allowance in subsequent months.


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

(a) "Accrual date" - RCW 41.35.450, 41.35.640.

(b) "Eligible position" - RCW 41.35.060(2).

(c) "Employer" - RCW 41.35.010(4).

(d) "Ineligible position" - RCW 41.35.010(23).

(e) "Law enforcement officer" - RCW 41.26.030.

(f) "Member" - RCW 41.35.010(5).)) (1) How soon can I return to work after I retire?

(a) There is no required waiting period to return to work if:

(i) You go to work for a private employer;

(ii) You are a bona fide independent contractor as defined in WAC 415-02-110; or

(iii) Your only employment is as an elected official of a city or town and you end your SERS membership under RCW 41.35.030 (2)(b).

(b) If you return to work sooner than thirty consecutive calendar days from your accrual date (effective retirement date), your monthly retirement allowance will be reduced in accordance with RCW 41.35.060(1) until you separate for at least thirty consecutive calendar days.

(c) If you wait at least thirty consecutive calendar days from your accrual date, you may return to work in any position (eligible, ineligible, temporary, etc.) for any employer whose retirement plan is administered by the department of retirement systems (DRS).

(2) What is the annual hour limit? After you meet the thirty-day waiting period described in subsection (1)(c) of this section, there are different annual hour limits that apply to you based on what kind of position you return to.

(a) No limit. You can work as many hours as you want without affecting your retirement allowance if you work:

(i) In an ineligible position;

(ii) As a retiree returning as an active member of a higher education retirement plan;

(iii) As a bona fide independent contractor;

(iv) For a private employer; or

(v) If you end your SERS membership as an elected official of a city or town under RCW 41.35.030 (2)(b).

(b) Eight hundred sixty-seven-hour limit. You may work up to eight hundred sixty-seven hours in an eligible position as defined in RCW 41.32.010(37), 41.35.010(22), or 41.40.010(25), or as a fire fighter or law enforcement officer, as defined in RCW 41.26.030 (3) and (4), in a calendar year before your retirement allowance is suspended.

(c) If you are retired from SERS and another DRS retirement system, refer to the table below to determine the effect of returning to work:


Dual System Combination Return to Work System Outcome
SERS Plan 2 or 3 and LEOFF Plan 2 SERS Your LEOFF Plan 2 monthly retirement allowance would be suspended and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS monthly retirement allowance would be suspended.
PERS Your LEOFF Plan 2 monthly retirement allowance would be suspended and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before their SERS monthly retirement allowance would be suspended.
TRS Your LEOFF Plan 2 monthly retirement allowance would be suspended and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS monthly retirement allowance would be suspended.
LEOFF Plan 2 Your LEOFF Plan 2 monthly retirement allowance would be suspended and you would be mandated back into LEOFF Plan 2 membership.
Your SERS monthly retirement allowance would be suspended until you terminate from LEOFF Plan 2.
WSPRS If you have less than fifteen years of service credit in either system you are retired from, then you are mandated into membership in WSPRS and your SERS and LEOFF Plan 2 monthly retirement allowances are suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in WSPRS. Your LEOFF Plan 2 monthly retirement allowance is suspended and you can work up to eight hundred sixty-seven hours during the calendar year before your SERS monthly retirement allowance would be suspended.
SERS Plan 2 or 3 and PERS Plan 2 or 3 SERS You can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS and PERS monthly retirement allowances would be suspended.
PERS You can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS and PERS monthly retirement allowances would be suspended.
TRS You can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS and PERS monthly retirement allowances would be suspended.
LEOFF Plan 2 If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in LEOFF and your SERS and PERS monthly retirement allowances are suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in LEOFF Plan 2 and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS and PERS monthly retirement allowances would be suspended.
WSPRS If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in WSPRS and your SERS and PERS monthly retirement allowances would be suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in WSPRS and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS and PERS monthly retirement allowance would be suspended.
SERS Plan 2 or 3 and TRS Plan 1 SERS You can work up to fifteen hundred hours during the fiscal year in an eligible position before your SERS and TRS monthly retirement allowances would be suspended.
PERS If the position is at any educational institution in Washington state you can work up to fifteen hundred hours during the fiscal year before your SERS and TRS monthly retirement allowances would be suspended.
If the position is not at an educational institution in Washington state, you can work unlimited hours without your SERS or TRS monthly retirement allowance being suspended.
TRS You can work up to fifteen hundred hours during the fiscal year in an eligible position before your SERS and TRS monthly retirement allowances would be suspended.
LEOFF Plan 2 If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in LEOFF and your SERS and TRS monthly retirement allowances are suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in LEOFF Plan 2 and you can work unlimited hours without your SERS and TRS monthly retirement allowances being suspended.
WSPRS If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in WSPRS and your SERS and PERS monthly retirement allowances would be suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in WSPRS and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before their SERS and PERS monthly retirement allowance would be suspended.
SERS Plan 2 or 3 and TRS Plan 2 or 3 SERS You can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS and TRS monthly retirement allowances would be suspended.
PERS You can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS and TRS monthly retirement allowances would be suspended.
TRS The retiree can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before their SERS and TRS monthly retirement allowances would be suspended.
LEOFF Plan 2 If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in LEOFF and your SERS and TRS monthly retirement allowances are suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in LEOFF Plan 2 and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS and TRS monthly retirement allowances would be suspended.
WSPRS If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in WSPRS and your SERS and PERS monthly retirement allowances would be suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in WSPRS and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS and PERS monthly retirement allowances would be suspended.
SERS Plan 2 or 3 and WSPRS SERS Your WSPRS monthly retirement allowance would not be suspended and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS monthly retirement allowance would be suspended.
PERS Your WSPRS monthly retirement allowance would not be suspended and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS monthly retirement allowance would be suspended.
TRS Your WSPRS monthly retirement allowance would not be suspended and you can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS monthly retirement allowance would be suspended.
LEOFF Plan 2 If you have less than fifteen years of service credit in either system you retired from, then you are mandated into membership in LEOFF. Your SERS monthly retirement allowance is suspended but your WSPRS monthly retirement allowance would not be suspended.
If you have fifteen or more years of service credit in either system then you may not become a member in LEOFF Plan 2. You can work up to eight hundred sixty-seven hours during the calendar year in an eligible position before your SERS monthly retirement allowance would be suspended.
WSPRS Your WSPRS monthly retirement allowance would be suspended and you are mandated back into membership.
Your SERS monthly retirement allowance would be suspended until you terminate from WSPRS.

(3) What hours are counted toward the limits?

(a) Counted toward the hour limits: All compensated hours that are worked for any DRS-covered employer in an eligible position, including the use of earned sick leave, vacation days, paid holidays, compensatory time, and cashouts of compensatory time.

(b) Not counted toward the hour limits: Cashouts of unused sick and vacation leave.

(4) What happens if I work over the annual hour limit?

(a) DRS will prorate your retirement allowance for the month in which you exceed the limit. The suspension will be effective the day after the day in which you exceeded the hour limit.

(b) Your retirement allowance will be restarted beginning with the next calendar year or the day after you terminate all eligible DRS-covered employment, whichever occurs first.

(c) DRS will recover any overpayments made to you for the month(s) in which you exceeded the hour limit and received a retirement allowance. See RCW 41.50.130.

(5) Can I return to SERS membership?

(a) If you are a SERS retiree, you have the option to return to membership if you are employed by a SERS employer and meet eligibility criteria. The option to return to membership is prospective from the first day of the month following the month in which you request to return to membership. See RCW 41.35.030(3).

(b) If you reenter membership and later choose to retire again, DRS will recalculate your retirement allowance under the applicable statutes and regulations. You will be subject to the return to work rules in place at the time of your reretirement.

(c) If you are a retiree from another retirement system that DRS administers, you may choose to enter SERS membership if you are eligible. The option to return to membership is prospective from the first day of the month following the month in which you request to return to membership. See RCW 41.04.270 and 41.35.030.

(6) Terms used.

(a) Accrual date - RCW 41.35.450, 41.35.640.

(b) Acronyms used:

(i) LEOFF: Law enforcement officers' and fire fighters' retirement system.

(ii) PERS: Public employees' retirement system.

(iii) SERS: School employees' retirement system.

(iv) TRS: Teachers' retirement system.

(v) WSPRS: Washington state patrol retirement system.

(c) Calendar day - WAC 415-02-030.

(d) Eligible position - RCW 41.35.060(2).

(e) Ineligible position - RCW 41.35.010(23).

(f) Law enforcement officer - RCW 41.26.030(3).

(g) Member - RCW 41.35.010(5).

[Statutory Authority: RCW 41.50.050(5), 41.04.270, 41.26.030, 41.32.010, 41.32.025, 41.32.480, 41.32.500, 41.32.570, 41.32.765, 41.32.795, 41.32.802, 41.32.855, 41.32.860, 41.32.862, 41.35.010, 41.35.030, 41.35.060, 41.35.450, 41.35.640, 41.40.010, 41.40.023, 41.40.037, 41.40.150, 41.40.193, 41.40.680, 41.40.750, 41.40.801. 02-02-060, 415-110-710, filed 12/28/01, effective 1/1/02. Statutory Authority: Chapters 41.32, 41.34, 41.35, 41.50 RCW. 01-01-059, 415-110-710, filed 12/12/00, effective 1/12/01.]

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