Bobby J. Woolley
4007 Southwest 325th Street
Federal Way, Washington 98023
Dear Mr. Woolley:
Pursuant to RCW 34.05.330(3), I have reviewed your appeal of the Department of Retirement System's (Department) decision to deny your petition to initiate rule-making proceedings for amendment of WAC 415-112-015(3). This subsection defines "contract period" for Teachers' Retirement System (TRS) Plan 1 members as the period from July 1 to June 30 of the following year.
I appreciate your observation that the current language in the rule is now inconsistent with an amendment to the governing statute that was made in 2003. That amendment allows teachers working for school districts operating on an extended school year, rather than fiscal year, to use the extended school year in defining the applicable earnable compensation. Because the statute specifically allows use of the extended school year for calculating earnable compensation, the statutory definition governs the issue rather than the out-of-date WAC.
I also agree that the Department's denial letter did not fully explain the reasoning against adoption of your suggested amendment, as compared to simply asserting that there was a better way to address your underlying concern. Nonetheless, I believe the Department considered your proposal carefully and developed an alternative course of action, due to the unintended and adverse consequences your suggestion would create.
Your suggested solution was to amend the WAC definition to require the Department to accept as the contract period the actual contract period specified in each TRS member's employment contract. The Department acknowledged the conflict between the statute and rule and intends to resolve the conflict in a rule-making process, but denied further consideration of your proposed remedy. I also am denying your appeal of the Department's decision for two reasons:
(1) Creating a definition that is based on each teacher's contract could pose a significant administrative burden on the Department, which would have to examine each individual member's contract, rather than relying on the statutory distinction between fiscal year and extended school year on a school district-by-school district basis. This could be necessary because each school district could, potentially, "tailor make" contracts for some teachers. The Department does not have the staff to perform that review, and it would not be an efficient use of the pension contributions of members or their employers.
(2) The current law refers to a fiscal year and an extended school year. The third option of a tailor-made contract period by member is not specifically authorized nor required by the statues governing TRS Plan 1. The Department does not have the authority to create options not contemplated by the Legislature. Even if the legal effect was not to create a third option, it could be confusing for TRS Plan 1 members, who might think there was a third option.
Although I am denying your petition to have the Department initiate a rule-making process to consider your specific solution, I want to thank you for identifying the problem in the first place. I am asking the Department, by a copy of this letter, to pursue as quickly as possible a rule-making process to remove the conflict by eliminating the definition of "contract period" in WAC 415-112-015(3) and by relying solely on the statute. This will get the issue on the table for public discussion, at which time you can offer your input. In any event, because the statute specifically allows use of the extended school year for calculating earnable compensation, this statutory definition governs the issue rather than the out-of-date WAC.
While I have denied your petition, I must commend you for your efforts in making sure that the regulations adopted by the Department are consistent with the underlying statutes. I encourage you to participate in the upcoming rule-making process and to continue to offer suggestions to the Department for its consideration.