WSR 05-19-074

PROPOSED RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed September 19, 2005, 1:31 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 05-16-053.

Title of Rule and Other Identifying Information: New WAC 415-501-472 Who determines DCP's investment options? and amending WAC 415-501-475 May I choose how I want my deferred compensation invested?

Hearing Location(s): Department of Retirement Systems, 6835 Capitol Boulevard, Conference Room 115, Tumwater, WA, on October 26, 2005, at 10:00 a.m.

Date of Intended Adoption: October 27, 2005.

Submit Written Comments to: Leslie L. Saeger, Rules Coordinator, Department of Retirement Systems, P.O. Box 48380, Olympia, WA 98504-8380, e-mail leslies@drs.wa.gov, fax (360) 753-3166, by 5:00 p.m. on October 26, 2005.

Assistance for Persons with Disabilities: Contact Leslie Saeger, Rules Coordinator, by October 18, 2005, TDD (360) 664-7291, TTY (360) 586-5450, phone (360) 664-7291.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: This WAC change is to clarify that the department has the right to limit the number of times a deferred compensation plan (DCP) participant changes investment options, and to impose other restrictions if necessary to protect the performance results of the DCP program. The department separated WAC 415-501-475 into two WACs for clarity.

Statutory Authority for Adoption: RCW 41.50.050(5) and 41.50.780(10).

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

Name of Proponent: Department of Retirement Systems, governmental.

Name of Agency Personnel Responsible for Drafting: Leslie Saeger, 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) 664-7291.

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

A cost-benefit analysis is not required under RCW 34.05.328. The Department of Retirement Systems is not one of the named departments in RCW 34.05.328.

September 16, 2005

Leslie Saeger

Rules Coordinator

OTS-8274.1


NEW SECTION
WAC 415-501-472   Who determines DCP's investment options?   (1) The state investment board, in consultation with the employee retirement benefits board, makes certain investment options available to plan participants. The investment board may:

(a) Open, change, or close investment options according to its investment policy; or

(b) Change investment managers for any investment option.

(2) If the state investment board closes or substantially changes an investment option, the state investment board may transfer the funds invested in that option to another option that, in the board's judgment, most closely represents the investment characteristics of the option being closed or changed.

[]


AMENDATORY SECTION(Amending WSR 04-22-053, filed 10/29/04, effective 11/29/04)

WAC 415-501-475   May I choose how I want my deferred compensation invested?   (1) ((The state investment board, in consultation with the employee retirement benefits board, makes certain investment options available to plan participants. The investment board may:

(a) Open, change, or close investment options according to its investment policy; or

(b) Change investment managers for any investment option.

(2))) You must designate on your participation agreement the investment option(s) in which you wish to have your deferrals invested.

(((3) Changes in investment options.

(a))) (2) In general, you may change the investment ((options at any time)) of your accumulated deferrals, the investment of your future deferrals, or both, through the methods established by the department. ((You may change the investment of your accumulated deferrals; the investment of your future deferrals; or both.

(b))) However, if necessary to protect the performance results of the DCP program, the department has the right to:

(a) Limit the number of times you change investment options;

(b) Limit the frequency of the changes;

(c) Limit the manner of making changes; or

(d) Impose other restrictions.

In addition, changes must be consistent with any restrictions on trading imposed by the investment options involved.

(3) Beneficiaries receiving a distribution may change investment options ((through the methods established by the department.

(c) If the state investment board closes or substantially changes an investment option, the state investment board may transfer the funds invested in that option to another option that, in the board's judgment, most closely represents the investment characteristics of the option being closed or changed)) according to the provisions of subsection (2) of this section.

[Statutory Authority: RCW 41.50.050(5), 41.50.780(10), and 41.50.770. 04-22-053, 415-501-475, filed 10/29/04, effective 11/29/04. Statutory Authority: RCW 41.50.770, [41.50.]780 and 41.50.050. 00-11-104, amended and recodified as 415-501-475, filed 5/18/00, effective 6/18/00. Statutory Authority: RCW 41.50.050. 98-20-047, 415-512-075, filed 9/30/98, effective 10/31/98. Statutory Authority: RCW 41.50.050 and 41.50.780(11). 96-16-020, 415-512-075, filed 7/29/96, effective 7/29/96.]

Washington State Code Reviser's Office