WSR 04-04-041

PERMANENT RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed January 29, 2004, 11:41 a.m. , effective March 1, 2004 ]

     Date of Adoption: January 28, 2004.

     Purpose: Implements the "SERS substitutes" legislation, chapter 157, Laws of 2003 (SB 5094). Amends WAC 415-108-680 Am I eligible for membership?, 415-110-010 Definitions, 415-110-680 Am I eligible for membership?, 415-110-728 If I work in both a SERS position and TRS position during the same school year, which system will I be in?, and 415-110-910 Conversion of service from PERS to SERS; and adds new WAC 415-110-685 Am I eligible for membership and service credit as a classified substitute?

     Citation of Existing Rules Affected by this Order: Amending WAC 415-108-680, 415-110-010, 415-110-680, 415-110-728, and 415-110-910.

     Statutory Authority for Adoption: RCW 41.50.050(5), 41.35.010, 41.35.030, 41.35.033.

      Adopted under notice filed as WSR 04-01-154 on December 22, 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     Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 1, Amended 5, Repealed 0.

     Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0;      Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.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-6846.5


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

WAC 415-110-010   Definitions.   All definitions in RCW 41.35.010 and WAC 415-02-030 apply to terms used in this chapter. Other terms relevant to the administration of chapter 41.35 RCW are defined in this chapter.

     (1) Annual leave means leave provided by an employer for the purpose of taking regularly scheduled work time off with pay. Annual leave does not include leave for illness, personal business if in addition to and different than vacation leave, or other paid time off from work. However, if an employer authorizes only one type of leave to provide paid leave for vacation and illness as well as any other excused absence from work, such leave will be considered annual leave for purposes of RCW 41.50.150.

     (2) Normally as used in the definition of eligible position under RCW 41.35.010 means a position is eligible if it is expected to require at least five months of seventy or more hours of compensated service each month during each of two consecutive years. Once a position is determined to be eligible, it will continue to be eligible if it requires at least five months of seventy or more hours of compensated service during at least one year in any two-year period.

     (3) Project position means a position, established by an employer, that has a specific goal and end date.

     (4) Report means an employer's reporting of an employee's hours of service, compensation and contributions to the department on the monthly transmittal report.

     (5) Reportable compensation means compensation earnable as that term is defined in RCW 41.35.010(6).

     (6) System acronyms used in this chapter are defined as follows:

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

     (b) "SERS" means the school employees' retirement system.     (c) "TRS" means the teachers' retirement system.

     (7) Year means any twelve consecutive month period established and applied consistently by an employer to evaluate the eligibility of a specific position. The term may include, but is not limited to, a school year, calendar year, or fiscal year.


Example: An employer has used the twelve consecutive month period from September 1 to August 31 to evaluate the eligibility of positions. When the employer hires a new employee to fill an existing position, the employer must continue to use the September 1 through August 31 period to define a year for the position.
Example: If the same employer in the above example hires a person to work in a project position beginning in November, the employer will use the twelve-month period beginning in November to evaluate the eligibility of the new position. The employer must consistently apply this twelve-month period to evaluate the eligibility of this position.
     (8) School year for Plan 2 and 3 members means the twelve-month period from September 1 of one year to August 31 of the following year.

     (9) Substitute employee includes any classified employee who is employed as a substitute for an absent employee or working in an ineligible position.

[Statutory Authority: RCW 41.50.050(5) and chapter 41.35 RCW. 02-18-046, § 415-110-010, filed 8/28/02, effective 9/30/02. Statutory Authority: Chapters 41.32, 41.34, 41.35, 41.50 RCW. 01-01-059, § 415-110-010, filed 12/12/00, effective 1/12/01.]


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

WAC 415-110-680   Am I eligible for membership?   (1) You are eligible for membership if you are employed in an eligible position. Your position is eligible under RCW 41.35.010 if the position, as defined by your employer, normally requires at least five months of seventy or more hours of compensated service per month during each year. If you are a PERS Plan 1 member working in a SERS substitute position, the SERS substitute laws do not apply. If you are a Plan 2 or 3 member, hours worked as a SERS substitute are not counted when determining eligibility for membership.

     (2) If you leave an eligible position to serve in a project position, you may retain eligibility.

     (a) Project positions may use a twelve-month period other than a school year to evaluate eligibility. The employer must consistently apply this twelve-month period to evaluate the eligibility of this position.

     (b) If you are a member and you leave employment in an eligible position to serve in a project position, the project position is eligible if:

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

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

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

     (a) "Eligible position" - RCW 41.35.010.

     (b) "Employer" - RCW 41.35.010.

     (c) "Member" - RCW 41.35.010.

     (d) "Membership" - RCW 41.35.030.

     (e) "Normally" - WAC 415-110-010.

     (f) "Project position" - WAC 415-110-010.

     (g) "Year" - WAC 415-110-010.

[Statutory Authority: RCW 41.50.050(5) and chapter 41.35 RCW. 02-18-046, § 415-110-680, filed 8/28/02, effective 9/30/02. Statutory Authority: Chapters 41.32, 41.34, 41.35, 41.50 RCW. 01-01-059, § 415-110-680, filed 12/12/00, effective 1/12/01.]


NEW SECTION
WAC 415-110-685   Am I eligible for membership and service credit as a classified substitute?   (1) You may establish or reestablish membership by purchasing service credit in SERS as a classified substitute if you meet eligibility criteria.

     (a) SERS Plan 2.

     You may apply to the department for membership in Plan 2 if you work at least seventy hours for five or more months during a school year and:

     (i) Were previously a member of SERS Plan 2 and withdrew; or

     (ii) Are or were a member of PERS Plan 2.

     (b) SERS Plan 3.

     You may apply to the department for membership in Plan 3 if you work at least seventy hours for five or more months during a school year and:

     (i) You have never been a member of SERS Plan 2;

     (ii) You have never been a member of PERS Plan 2; or

     (iii) You were a member of PERS Plan 2 who transferred to PERS Plan 3.

     (2) As an established member you may purchase any amount of service credit as a classified substitute.

     SERS Plan 2 or 3.

     (a) You must purchase all of the service you rendered during the school year.

     (b) You do not have a minimum amount of service you must have worked.

     (3) To apply, you must submit your application to the department at the end of the school year.

     To apply for membership and service credit as a classified substitute, you must submit the correct application form (Plan 2 or Plan 3) and your employer's quarterly reports to the department, if applicable, no earlier than August 31 of the school year for which you are applying for service credit.

     (4) You must make payments within six months of the end of the school year to avoid recovery interest charges.

     (a) You have six months following the end of the school year in which the service was provided to purchase the service credit by paying the appropriate member contributions in full to avoid interest charges.

     (b) After the six-month period, recovery interest shall be charged prospectively (March 1 forward) on the contributions due.

     (i) SERS Plan 2 members: Interest is charged on both employer and member contributions.

     (ii) SERS Plan 3 members: Interest is charged on employer contributions only.

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

     (a) "Classified employee" - RCW 41.35.010(37).

     (b) "Member" - RCW 41.35.010(5).

     (c) "Service" - RCW 41.35.010(7).

     (d) "Substitute employee" - RCW 41.35.010(38).

[]


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

WAC 415-110-728   If I work in both a SERS position and TRS position during the same school year, which system will I be in?   (1) If you work in both a SERS and TRS position during the same year, your membership status and the nature of your positions will determine the system your employer will report you in. You will be reported in either SERS or TRS according to the following table:

((Former TRS Plan 1 Members 1/

((Type of

Employment 2/

 Type of Employer(s) System You Will Be Reported In
A substitute or less than full-time teaching position and a SERS-eligible position Same SERS employer SERS - for both positions.
Separate SERS employers SERS - for SERS position only. Your substitute part-time position is not reported unless you qualify for and elect to establish TRS membership under RCW 41.32.240.


If you elect to establish TRS membership, your employers will report you in TRS for both positions. Any previously reported service credit and compensation in SERS will be transferred to TRS.
A full-time teaching position and an eligible SERS position Same employer TRS - for both positions.
Separate SERS employers TRS - for both positions.

TRS Plan 1 Members

Type of

Employment 2/

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

TRS Plan 2 or 3 Members

Type of

Employment 2/

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

SERS Members

Type of

Employment 2/

 Type of Employer(s) System You Will Be Reported In
An eligible SERS position and an ineligible TRS or substitute position Same employer SERS - for both positions.
Separate SERS employers SERS - for the SERS position only, unless you qualify for and elect to establish membership in TRS at the end of the school year under WAC 415-112-125(1).


If you elect to establish TRS membership, your employers will report you in TRS for both positions. Any previously reported service credit and compensation in SERS will be transferred to TRS.

Neither TRS Nor SERS Member

Type of

Employment 2/

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



Former TRS Plan 1 Members 1/

Type of

Employment 2/

 Type of Employer(s) System You Will Be Reported In
A SERS-eligible position and a full-time teaching position Same SERS employer TRS regular reporting for both positions.
Separate SERS employers TRS regular reporting for both positions.
A SERS-eligible position and a less than full-time teaching position Same SERS employer SERS regular reporting for both positions.
Separate SERS employers SERS regular reporting for SERS position.

TRS substitute reporting for TRS position. If the service qualifies you to reestablish membership under RCW 41.32.240 and you choose to purchase the service, then any previously reported SERS service for that same fiscal year will be transferred to TRS.
A SERS substitute or ineligible position and a full-time teaching position Same SERS employer TRS regular reporting for both positions.
Separate SERS employers TRS regular reporting for TRS position.
SERS substitute reporting for SERS position. If you choose to purchase the service, it will be billed in TRS.
A SERS substitute or ineligible position and a less than full-time teaching position Same SERS employer TRS regular reporting if combined, the position would qualify as a full-time teaching position. Otherwise report all of the time as TRS substitute reporting.
Separate SERS employers SERS substitute reporting for SERS position.
TRS substitute reporting for TRS position. If the TRS service qualifies you to reestablish membership and you choose to purchase the service credit, then any time for that same fiscal year must be purchased as TRS service credit. If the SERS service qualifies you for membership and you choose to purchase only the SERS service, it will be billed in SERS.

TRS Plan 1 Members

Type of

Employment 2/

 Type of Employer(s) System You Will Be Reported In
A SERS-eligible position and a full-time teaching position Same employer TRS regular reporting for both positions.
Separate SERS employers TRS regular reporting for both positions.
A SERS-eligible position and a less than full-time teaching position Same employer TRS regular reporting for both positions.
Separate SERS employers TRS regular reporting for both positions.
A SERS substitute or ineligible position and a full-time teaching position Same employer TRS regular reporting for both positions.
Separate SERS employers TRS regular reporting for TRS position.
SERS substitute reporting for SERS position. If you purchase the SERS service, it will be billed into TRS.
A SERS substitute or ineligible position and less than full-time teaching position Same employer TRS regular reporting for both positions.
Separate SERS employers TRS regular reporting for TRS position.
SERS substitute reporting for SERS position. If you purchase the SERS service, it will be billed into TRS.

TRS Plan 2 or 3 Members

Type of

Employment 2/

 Type of Employer(s) System You Will Be Reported In
A SERS-eligible position and a TRS-eligible position Same employer TRS regular reporting for both positions.
Separate SERS employers TRS regular reporting for both positions.
A SERS-eligible position and a TRS-ineligible or substitute position Same employer SERS regular reporting for both positions.
Separate SERS employers SERS regular reporting for SERS position.
TRS substitute reporting for TRS position. If you choose to purchase the service, then any previously reported SERS service for that same school year will be transferred to TRS.
A SERS-ineligible or substitute position and a TRS-eligible position Same employer TRS regular reporting for both positions.
Separate SERS employers TRS regular reporting for TRS position.
SERS substitute reporting for the SERS position. If the SERS service qualifies for membership, then it would be billed into TRS.
A SERS-ineligible or substitute position and a TRS-ineligible or substitute position Same employer TRS regular reporting if combined, the position would qualify as an eligible teaching position. Otherwise report all of the time as TRS substitute reporting.
Separate SERS employers TRS substitute reporting for TRS position. If you choose to purchase the service credit, then any time for that same fiscal year must be purchased as TRS service credit.
SERS substitute reporting for SERS position. If the SERS service qualifies you for membership and you choose to purchase only the SERS service, it will be billed in SERS.

SERS Members

Type of

Employment 2/

 Type of Employer(s) System You Will Be Reported In
A SERS-eligible position and a TRS-eligible position Same employer TRS regular reporting for both positions.
Separate SERS employers TRS regular reporting for both positions.
A SERS-eligible position and a TRS-ineligible or substitute position Same employer SERS regular reporting for both positions.
Separate SERS employers SERS regular reporting for SERS position.
TRS substitute reporting for TRS position. If the service qualifies you to establish membership and you choose to purchase the service, then any previously reported SERS service for that same school year will be transferred to TRS.
A SERS-ineligible or substitute position and a TRS-eligible position Same employer TRS regular reporting for both positions.
Separate SERS employers TRS regular reporting for TRS position.
SERS substitute reporting for the SERS position. If you purchase the SERS service, it would be billed into TRS.
A SERS-ineligible or substitute position and a TRS-ineligible or substitute position Same employer TRS regular reporting if combined, the position would qualify as an eligible teaching position. Otherwise report all of the time as TRS substitute reporting.
Separate SERS employers TRS substitute reporting for TRS position. If the TRS service qualifies you to establish membership and you choose to purchase the service credit, then any time for that same fiscal year must be purchased as TRS service credit.
SERS substitute reporting for SERS position. If you choose to purchase only the SERS service, it will be billed in SERS.

Neither TRS Nor SERS Member

Type of

Employment 2/

 Type of Employer(s) System You Will Be Reported In
A SERS-eligible position and a TRS-eligible position Same employer TRS regular reporting for both positions.
Separate SERS employers TRS regular reporting for both positions.
A SERS-eligible position and a TRS-ineligible or substitute position Same employer SERS regular reporting for both positions.
Separate SERS employers SERS regular reporting for SERS position.
TRS substitute reporting for TRS position. If the service qualifies you to establish membership and you choose to purchase the service, then any previously reported SERS service for that same school year will be transferred to TRS.
A SERS-ineligible or substitute position and a TRS-eligible position Same employer TRS regular reporting for both positions.
Separate SERS employers TRS regular reporting for TRS position.
SERS substitute reporting for the SERS position. If the SERS service qualifies for membership, and you choose to purchase the service, then it would be billed into TRS.
A SERS-ineligible or substitute position and a TRS-ineligible or substitute position Same employer TRS regular reporting if combined, the position would qualify as an eligible teaching position. Otherwise report all of the time as TRS substitute reporting.
Separate SERS employers TRS substitute reporting for TRS position. If the TRS service qualifies you to establish membership and you choose to purchase the service credit, then any time for that same school year must be purchased as TRS service credit.
SERS substitute reporting for SERS position. If the SERS service qualifies you for membership and you choose to purchase only the SERS service, it will be billed in SERS.


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

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

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

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

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

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

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

     (f) "Report" - WAC 415-110-010.

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

[Statutory Authority: RCW 41.50.050(5) and chapter 41.35 RCW. 02-18-046, § 415-110-728, filed 8/28/02, effective 9/30/02. Statutory Authority: Chapters 41.32, 41.34, 41.35, 41.50 RCW. 01-01-059, § 415-110-728, filed 12/12/00, effective 1/12/01.]


AMENDATORY SECTION(Amending WSR 02-03-120, filed 1/23/02, effective 3/1/02)

WAC 415-110-910   Conversion of service from PERS to SERS.   (1) You will be converted from the public employees' retirement system (PERS) to the school employees' retirement system (SERS) if:

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

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

     (c) You are a participating member in PERS and move to a SERS employer in an eligible position after September 1, 2000;

     (d) You were or are a participating member of PERS Plan 2 and establish membership in SERS through the substitute process. (See WAC 415-110-680.)

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

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

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

     (((e))) (f) You retired out of PERS Plan 2 and:

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

     (ii) Separated from your PERS position; and

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

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

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


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

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

[Statutory Authority: RCW 41.50.050(5), 41.35.005-[41.35.]030, 41.40.070. 02-03-120, § 415-110-910, filed 1/23/02, effective 3/1/02. Statutory Authority: Chapters 41.32, 41.34, 41.35, 41.50 RCW. 01-01-059, § 415-110-910, filed 12/12/00, effective 1/12/01.]

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