WSR 05-23-062

PERMANENT RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed November 14, 2005, 12:40 p.m. , effective December 15, 2005 ]


Purpose: To clarify the benefit options for retirees and the distribution of any remaining contributions upon their death. Washington State Patrol retirement system, law enforcement officers' and fire fighters' retirement system, public employees' retirement system, school employees' retirement system and the teachers' retirement system rules are included.

Citation of Existing Rules Affected by this Order: Repealing WAC 415-110-326 and 415-112-727; and amending WAC 415-02-380, 415-103-225, 415-104-215, and 415-108-326.

Statutory Authority for Adoption: For WAC 415-02-380, 415-110-326 and 415-112-727 is RCW 41.50.050(5); for WAC 415-103-225 is RCW 41.50.050(5), 43.43.271; for WAC 415-104-215 is RCW 41.50.050(5), 41.26.460; for WAC 415-108-326 is RCW 41.50.050(5), 41.40.188, 41.40.660, 41.40.845; for WAC 415-110-610 is RCW 41.50.050(5), 41.35.220; for WAC 415-112-504 is RCW 41.50.050(5), 41.32.530; and for WAC 415-112-505 is RCW 41.50.050(5), 41.32.785, 41.32.851.

Other Authority: For WAC 415-103-225 is RCW 43.43.271; for WAC 415-104-215 is RCW 41.26.460; for WAC 415-108-326 is RCW 41.40.188, 41.40.660, 41.40.845; for WAC 415-110-610 is RCW 41.35.220; for WAC 415-112-504 is RCW 41.32.530, 41.32.550; and for WAC 415-112-505 is RCW 41.32.790, 41.32.785, 41.32.851.

Adopted under notice filed as WSR 05-20-061 on October 3, 2005.

Changes Other than Editing from Proposed to Adopted Version: Amended to reflect that it is not necessary to provide a certified marriage certificate, a copy of a certified marriage certificate will suffice.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 3, Amended 4, Repealed 2.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 3, Amended 4, Repealed 2.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 3, Amended 4, Repealed 2.

Date Adopted: November 9, 2005.

S. J. Matheson

Director

OTS-8289.2


AMENDATORY SECTION(Amending WSR 03-12-014, filed 5/27/03, effective 7/1/03)

WAC 415-02-380   ((Survivor options factors.)) How will my retirement allowance be affected if I choose a benefit option with a survivor feature?   This section applies to LEOFF Plan 1 and 2; PERS Plan 1, 2, and 3; SERS Plan 2 and 3; TRS Plan 1, 2, and 3; and WSPRS Plan 2. For information about WSPRS Plan 1, see RCW 43.43.278 and WAC 415-103-215.

(1) What is a survivor feature? Some benefit options include a survivor feature, which provides a monthly allowance for your survivor beneficiary after your death.

(2) What is a "((surviving)) survivor beneficiary"? ((A surviving beneficiary is a person you designate who will receive benefit payments for the duration of his or her life, beginning at your death.

(2) Will selecting a surviving beneficiary affect my retirement benefits? Yes. Retirees who select a surviving beneficiary retirement option receive smaller benefit payments than those retirees who do not select this option.

(3) Does it matter if I am married? Yes. If you are married, you must provide your spouse's written consent to the option you select (except in LEOFF Plan 1). If you are married, and you and your spouse do not give written consent to an option, the department will pay you a joint and fifty percent survivor benefit and record your spouse as the beneficiary. For details, please review:

LEOFF Plan 1: RCW 41.26.162 WAC 415-104-202
LEOFF Plan 2: RCW 41.26.460(2) WAC 415-104-211 and 415-104-215
PERS Plan 1: RCW 41.40.188(2) WAC 415-108-324 and 415-108-326
PERS Plan 2: RCW 41.40.660(2) WAC 415-108-324 and 415-108-326
PERS Plan 3: RCW 41.40.845(2) WAC 415-108-324 and 415-108-326
SERS Plans 2/3: RCW 41.35.220(2) WAC 415-110-324 and 415-110-326
TRS Plan 1: RCW 41.32.530(2) WAC 415-112-710 to 415-112-727
TRS Plan 2: RCW 41.32.785(2) WAC 415-112-710 to 415-112-727
TRS Plan 3: RCW 41.32.851(2) WAC 415-112-710 to 415-112-727
WSPRS Plan 2: RCW 43.43.271(2) WAC 415-103-225

(4) Why does the surviving beneficiary's age matter? The surviving beneficiary's age is used in determining the amount of the payments. The younger the surviving beneficiary, the longer he or she is expected to receive payments. The monthly benefit must be reduced accordingly.

(5) What are the survivor options? The survivor options are described in detail within each plan. For details, please see the list in subsection (3) of this section.

To summarize:

Option 2 - Joint and 100 percent survivorship

Option 3 - Joint and 50 percent survivorship

Option 4 - Joint and 66.67 percent survivorship

(6))) The person you name at the time of retirement to receive a monthly allowance after your death is referred to as your "survivor beneficiary."

(3) What benefit options include a survivor feature? Benefit options are described in detail for each system and plan in the following state law and regulations:

LEOFF Plan 1: RCW 41.26.164 WAC 415-104-202
LEOFF Plan 2: RCW 41.26.460 WAC 415-104-215
PERS Plan 1: RCW 41.40.188 WAC 415-108-326
PERS Plan 2: RCW 41.40.660 WAC 415-108-326
PERS Plan 3: RCW 41.40.845 WAC 415-108-326
SERS Plans 2/3: RCW 41.35.220 WAC 415-110-326
TRS Plan 1: RCW 41.32.530 WAC 415-112-492
TRS Plan 2: RCW 41.32.785 WAC 415-112-493
TRS Plan 3: RCW 41.32.851 WAC 415-112-493
WSPRS Plan 2: RCW 43.43.271 WAC 415-103-225

(4) Will selecting a benefit option with a survivor feature affect my monthly retirement allowance? Yes. Your monthly retirement allowance will be actuarially reduced to offset the cost of the survivor feature.

(5) Does my survivor beneficiary's age affect how much my monthly retirement allowance will be reduced? Yes. Your survivor beneficiary's age is used in determining the amount of your monthly retirement allowance and the allowance of your survivor. The younger the survivor beneficiary, the longer he or she is expected to receive an allowance. Your monthly allowance will be reduced accordingly.

Examples

(a) Example (a):

Kendra, a PERS Plan 2 member, chooses Option 3 (joint and 50 percent survivorship) at retirement. She names her nephew, Steve, as her ((surviving)) survivor beneficiary. This means ((that Steve would receive half of Kendra's benefit amount after Kendra's death)), if Kendra dies before Steve, Steve will receive a monthly allowance equal to half the amount Kendra was receiving. Steve is 30 years younger than Kendra. ((PERS would use)) The department will calculate the adjustment to Kendra's monthly retirement allowance by using the survivor option factor table ("member older") ((to calculate the adjustment)) in subsection (6) of this section. With a 30-year age difference (member's age minus beneficiary's age), the value corresponding to PERS Plan 2 and Option 3 is 0.753. This value, 0.753, is multiplied against the amount Kendra would have received under Option 1 (no survivor feature). Kendra's monthly retirement ((benefits)) allowance will be reduced to about 75% of her Option 1 level.

(b) Example (b):

Mark, a LEOFF Plan 2 member, chooses Option 2 (joint and 100 percent survivorship) at retirement. He names his wife, Susan, as his ((surviving)) survivor beneficiary. This means ((Susan would receive the same benefit amount Mark had received prior to his death)), if Mark dies before Susan, Susan will receive a monthly allowance equal to the amount Mark was receiving. Mark is five years younger than Susan. ((LEOFF would use)) The department will calculate the adjustment to Mark's monthly retirement allowance by using the survivor option factor((s)) table ("member younger") ((to calculate the adjustment for the age difference)) in subsection (9) of this section. With a 5-year age difference (member's age minus beneficiary's age), the value corresponding to LEOFF Plan 2 and Option 2 is 0.894. This value, 0.894, will be multiplied against the amount Mark would have received under Option 1 (no survivor feature). Mark's monthly retirement ((benefits)) allowance will be reduced to about 89 percent of his Option 1 level.

(((7))) (6) Table - Member older (PERS and SERS)

Survivor option factor table: Member older than beneficiary

Age difference: Member's age minus beneficiary's age

Age Difference PERS 1

Opt. 2

100%

PERS 1

Opt. 3

50%

PERS 1

Opt. 4

66 2/3%

PERS 2/3

Opt. 2

100%

PERS 2/3

Opt. 3

50%

PERS 2/3

Opt. 4

66 2/3%

SERS 2/3

Opt. 2

100%

SERS 2/3

Opt. 3

50%

SERS 2/3

Opt. 4

66 2/3%

0 .870 .930 .909 .791 .883 .850 .799 .888 .857
1 .862 .926 .904 .778 .875 .840 .773 .872 .836
2 .857 .923 .900 .767 .868 .832 .760 .864 .826
3 .844 .915 .890 .758 .863 .825 .748 .856 .816
4 .840 .913 .887 .751 .858 .819 .741 .851 .811
5 .836 .910 .884 .743 .853 .813 .734 .846 .805
6 .831 .908 .881 .736 .848 .807 .726 .841 .799
7 .818 .900 .871 .728 .843 .801 .719 .836 .793
8 .814 .897 .867 .721 .838 .795 .712 .832 .787
9 .809 .895 .864 .713 .833 .789 .705 .827 .782
10 .805 .892 .861 .706 .828 .783 .698 .822 .776
11 .802 .890 .858 .699 .823 .777 .692 .818 .771
12 .787 .881 .847 .693 .818 .772 .685 .813 .766
13 .784 .879 .845 .686 .814 .766 .679 .809 .760
14 .780 .876 .842 .680 .809 .761 .673 .805 .755
15 .777 .874 .839 .673 .805 .756 .667 .800 .750
16 .773 .872 .836 .667 .801 .751 .662 .796 .746
17 .770 .870 .834 .662 .796 .746 .656 .792 .741
18 .767 .868 .832 .656 .792 .741 .651 .789 .737
19 .764 .866 .829 .651 .788 .736 .646 .785 .732
20 .762 .865 .827 .645 .785 .732 .641 .781 .728
21 .759 .863 .825 .640 .781 .728 .637 .778 .724
22 .756 .861 .823 .636 .777 .724 .632 .775 .720
23 .754 .860 .821 .631 .774 .720 .628 .771 .717
24 .752 .858 .820 .627 .771 .716 .624 .768 .713
25 .750 .857 .818 .622 .767 .712 .620 .765 .710
26 .748 .856 .817 .618 .764 .709 .616 .762 .707
27 .746 .855 .815 .615 .761 .705 .613 .760 .703
28 .744 .853 .814 .611 .758 .702 .609 .757 .700
29 .743 .852 .812 .607 .756 .699 .606 .755 .697
30 .741 .851 .811 .604 .753 .696 .603 .752 .695
31 .740 .850 .810 .601 .751 .693 .600 .750 .692
32 .738 .849 .809 .598 .748 .690 .597 .748 .690
33 .737 .849 .808 .595 .746 .688 .594 .745 .687
34 .736 .848 .807 .592 .744 .685 .592 .743 .685
35 .735 .847 .806 .589 .742 .683 .589 .741 .683
36 .734 .846 .805 .587 .740 .680 .587 .740 .680
37 .733 .846 .804 .584 .738 .678 .585 .738 .678
38 .732 .845 .804 .582 .736 .676 .582 .736 .677
39 .731 .844 .803 .580 .734 .674 .580 .734 .675
40 .730 .844 .802 .578 .732 .672 .578 .733 .673

(((8))) (7) Table - Member younger (PERS and SERS)

Survivor option factor((s)) table: Member younger than beneficiary

Age difference: Member's age minus beneficiary's age

Age Difference PERS 1

Opt. 2

100%

PERS 1

Opt. 3

50%

PERS 1

Opt. 4

66 2/3%

PERS 2/3

Opt. 2

100%

PERS 2/3

Opt. 3

50%

PERS 2/3

Opt. 4

66 2/3%

SERS 2/3

Opt. 2

100%

SERS 2/3

Opt. 3

50%

SERS 2/3

Opt. 4

66 2/3%

-20 .958 .978 .971 .939 .969 .959 .949 .974 .965
-19 .955 .977 .970 .935 .967 .956 .946 .972 .963
-18 .952 .976 .968 .931 .964 .953 .942 .970 .961
-17 .949 .974 .966 .927 .962 .950 .938 .968 .958
-16 .947 .973 .964 .922 .959 .947 .934 .966 .955
-15 .944 .971 .962 .917 .957 .943 .930 .964 .952
-14 .940 .969 .959 .912 .954 .940 .926 .961 .949
-13 .937 .968 .957 .907 .951 .936 .921 .959 .946
-12 .934 .966 .955 .902 .948 .932 .917 .956 .943
-11 .930 .964 .953 .896 .945 .928 .912 .954 .939
-10 .927 .962 .950 .890 .942 .924 .907 .951 .936
-9 .923 .960 .948 .884 .938 .919 .901 .948 .932
-8 .920 .958 .945 .878 .935 .915 .896 .945 .928
-7 .916 .956 .942 .871 .931 .910 .890 .942 .924
-6 .912 .954 .940 .865 .927 .905 .885 .939 .920
-5 .908 .952 .937 .858 .924 .901 .879 .935 .916
-4 .901 .948 .931 .848 .918 .893 .873 .932 .911
-3 .896 .945 .928 .840 .913 .887 .863 .927 .905
-2 .889 .941 .923 .826 .905 .877 .853 .920 .897
-1 .879 .935 .916 .805 .892 .861 .834 .909 .883
0 .870 .930 .909 .791 .883 .850 .799 .888 .857

(((9))) (8) Table - Member older (LEOFF Plan 2 and WSPRS Plan 2)

Survivor option factor((s)) table: Member older than beneficiary

Age difference: Member's age minus beneficiary's age

Age Difference LEOFF 2

Option 2

100%

LEOFF 2

Option 3

50%

LEOFF 2

Option 4

66 2/3%

WSP 2

Option 2

100%

WSP 2

Option 3

50%

WSP 2

Option 4

66 2/3%

0 0.870 0.930 0.909 0.870 0.930 0.909
1 0.865 0.927 0.905 0.865 0.927 0.905
2 0.860 0.924 0.902 0.860 0.924 0.902
3 0.855 0.922 0.898 0.855 0.922 0.898
4 0.850 0.919 0.894 0.850 0.919 0.894
5 0.845 0.916 0.891 0.845 0.916 0.891
6 0.840 0.913 0.887 0.840 0.913 0.887
7 0.835 0.910 0.883 0.835 0.910 0.883
8 0.830 0.907 0.880 0.830 0.907 0.880
9 0.825 0.904 0.876 0.825 0.904 0.876
10 0.821 0.902 0.873 0.821 0.902 0.873
11 0.816 0.899 0.870 0.816 0.899 0.870
12 0.812 0.896 0.866 0.812 0.896 0.866
13 0.808 0.894 0.863 0.808 0.894 0.863
14 0.803 0.891 0.860 0.803 0.891 0.860
15 0.799 0.888 0.857 0.799 0.888 0.857
16 0.795 0.886 0.854 0.795 0.886 0.854
17 0.792 0.884 0.851 0.792 0.884 0.851
18 0.788 0.881 0.848 0.788 0.881 0.848
19 0.784 0.879 0.845 0.784 0.879 0.845
20 0.781 0.877 0.842 0.781 0.877 0.842
21 0.777 0.875 0.840 0.777 0.875 0.840
22 0.774 0.873 0.837 0.774 0.873 0.837
23 0.771 0.871 0.835 0.771 0.871 0.835
24 0.768 0.869 0.832 0.768 0.869 0.832
25 0.765 0.867 0.830 0.765 0.867 0.830
26 0.763 0.865 0.828 0.763 0.865 0.828
27 0.760 0.864 0.826 0.760 0.864 0.826
28 0.757 0.862 0.824 0.757 0.862 0.824
29 0.755 0.860 0.822 0.755 0.860 0.822
30 0.753 0.859 0.820 0.753 0.859 0.820
31 0.750 0.857 0.818 0.750 0.857 0.818
32 0.748 0.856 0.817 0.748 0.856 0.817
33 0.746 0.855 0.815 0.746 0.855 0.815
34 0.744 0.853 0.814 0.744 0.853 0.814
35 0.742 0.852 0.812 0.742 0.852 0.812
36 0.741 0.851 0.811 0.741 0.851 0.811
37 0.739 0.850 0.809 0.739 0.850 0.809
38 0.737 0.849 0.808 0.737 0.849 0.808
39 0.736 0.848 0.807 0.736 0.848 0.807
40 0.734 0.847 0.806 0.734 0.847 0.806

(((10))) (9) Table - Member younger (LEOFF Plan 2 and WSPRS Plan 2)

Survivor option factor((s)) table: Member younger than beneficiary

Age difference: Member's age minus beneficiary's age

Age Difference LEOFF 2

Option 2

100%

LEOFF 2

Option 3

50%

LEOFF 2

Option 4

66 2/3%

WSP 2

Option 2

100%

WSP 2

Option 3

50%

WSP 2

Option 4

66 2/3%

-20 0.953 0.976 0.968 0.953 0.976 0.968
-19 0.950 0.974 0.966 0.950 0.974 0.966
-18 0.947 0.973 0.964 0.947 0.973 0.964
-17 0.944 0.971 0.962 0.944 0.971 0.962
-16 0.940 0.969 0.959 0.940 0.969 0.959
-15 0.937 0.967 0.957 0.937 0.967 0.957
-14 0.933 0.965 0.954 0.933 0.965 0.954
-13 0.929 0.963 0.952 0.929 0.963 0.952
-12 0.925 0.961 0.949 0.925 0.961 0.949
-11 0.921 0.959 0.946 0.921 0.959 0.946
-10 0.917 0.957 0.943 0.917 0.957 0.943
-9 0.913 0.954 0.940 0.913 0.954 0.940
-8 0.908 0.952 0.937 0.908 0.952 0.937
-7 0.904 0.949 0.934 0.904 0.949 0.934
-6 0.899 0.947 0.930 0.899 0.947 0.930
-5 0.894 0.944 0.927 0.894 0.944 0.927
-4 0.890 0.942 0.924 0.890 0.942 0.924
-3 0.885 0.939 0.920 0.885 0.939 0.920
-2 0.880 0.936 0.916 0.880 0.936 0.916
-1 0.875 0.933 0.913 0.875 0.933 0.913
0 0.870 0.930 0.909 0.870 0.930 0.909

(((11))) (10) Table - Member younger (TRS)

Survivor option factor((s)) table: Member younger than beneficiary

Age difference: Member's age minus beneficiary's age

Age Difference TRS 1

Option 2

100%

TRS 1

Option 3

50%

TRS 1

Option 4

66 2/3%

TRS 2/3

Option 2

100%

TRS 2/3

Option 3

50%

TRS 2/3

Option 4

66 2/3%

-20 0.968 0.984 0.979 0.952 0.975 0.967
-19 0.966 0.983 0.977 0.949 0.974 0.965
-18 0.964 0.982 0.976 0.945 0.972 0.963
-17 0.962 0.981 0.974 0.942 0.970 0.960
-16 0.960 0.979 0.973 0.938 0.968 0.958
-15 0.957 0.978 0.971 0.934 0.966 0.955
-14 0.955 0.977 0.969 0.929 0.963 0.952
-13 0.952 0.976 0.968 0.925 0.961 0.949
-12 0.950 0.974 0.966 0.921 0.959 0.946
-11 0.947 0.973 0.964 0.916 0.956 0.942
-10 0.944 0.971 0.962 0.911 0.953 0.939
-9 0.942 0.970 0.960 0.906 0.951 0.935
-8 0.939 0.968 0.958 0.900 0.948 0.931
-7 0.936 0.967 0.956 0.895 0.945 0.927
-6 0.933 0.965 0.954 0.889 0.941 0.923
-5 0.927 0.962 0.950 0.884 0.938 0.919
-4 0.923 0.960 0.947 0.877 0.934 0.914
-3 0.918 0.957 0.944 0.865 0.928 0.906
-2 0.913 0.955 0.941 0.855 0.922 0.899
-1 0.907 0.951 0.936 0.839 0.912 0.887
0 0.898 0.946 0.930 0.815 0.898 0.869

(((12))) (11) Table - Member older (TRS)

Survivor option factor((s)) table: Member older than beneficiary

Age difference: Member's age minus beneficiary's age

Age Difference TRS 1

Option 2

100%

TRS 1

Option 3

50%

TRS 1

Option 4

66 2/3%

TRS 2/3

Option 2

100%

TRS 2/3

Option 3

50%

TRS 2/3

Option 4

66 2/3%

0 0.898 0.946 0.930 0.815 0.898 0.869
1 0.892 0.943 0.925 0.801 0.889 0.858
2 0.888 0.941 0.922 0.790 0.883 0.849
3 0.877 0.935 0.915 0.781 0.877 0.842
4 0.873 0.932 0.912 0.772 0.871 0.835
5 0.869 0.930 0.909 0.765 0.867 0.830
6 0.858 0.924 0.901 0.758 0.862 0.824
7 0.855 0.922 0.898 0.751 0.858 0.819
8 0.851 0.920 0.896 0.744 0.853 0.813
9 0.848 0.918 0.893 0.737 0.849 0.808
10 0.845 0.916 0.891 0.730 0.844 0.802
11 0.842 0.914 0.889 0.724 0.840 0.797
12 0.839 0.912 0.887 0.717 0.835 0.792
13 0.836 0.911 0.884 0.711 0.831 0.787
14 0.824 0.904 0.875 0.705 0.827 0.782
15 0.821 0.902 0.873 0.699 0.823 0.777
16 0.819 0.900 0.871 0.694 0.819 0.773
17 0.816 0.899 0.869 0.688 0.815 0.768
18 0.814 0.897 0.868 0.683 0.812 0.764
19 0.812 0.896 0.866 0.678 0.808 0.760
20 0.809 0.895 0.864 0.673 0.805 0.755
21 0.807 0.893 0.863 0.668 0.801 0.751
22 0.805 0.892 0.861 0.664 0.798 0.748
23 0.803 0.891 0.860 0.660 0.795 0.744
24 0.802 0.890 0.858 0.655 0.792 0.740
25 0.800 0.889 0.857 0.651 0.789 0.737
26 0.798 0.888 0.856 0.648 0.786 0.734
27 0.797 0.887 0.855 0.644 0.783 0.731
28 0.796 0.886 0.854 0.640 0.781 0.728
29 0.794 0.885 0.853 0.637 0.778 0.725
30 0.793 0.885 0.852 0.634 0.776 0.722
31 0.792 0.884 0.851 0.631 0.774 0.719
32 0.791 0.883 0.850 0.628 0.771 0.717
33 0.790 0.882 0.849 0.625 0.769 0.714
34 0.789 0.882 0.848 0.622 0.767 0.712
35 0.788 0.881 0.848 0.620 0.765 0.710
36 0.787 0.881 0.847 0.617 0.763 0.708
37 0.786 0.880 0.846 0.615 0.762 0.706
38 0.785 0.880 0.846 0.613 0.760 0.704
39 0.785 0.879 0.845 0.611 0.758 0.702
40 0.784 0.879 0.845 0.609 0.757 0.700

(((13))) (12) Table - Member younger (LEOFF Plan 1)

Survivor option factor((s)) table: Member younger than beneficiary

Age difference: Member's age minus beneficiary's age


Age Difference Option 2 100% Option 3 50% Option 4

66 2/3 %

-20 0.958 0.978 0.971
-19 0.955 0.977 0.969
-18 0.952 0.975 0.967
-17 0.949 0.974 0.965
-16 0.946 0.972 0.963
-15 0.942 0.970 0.961
-14 0.939 0.969 0.959
-13 0.935 0.967 0.956
-12 0.932 0.965 0.953
-11 0.928 0.963 0.951
-10 0.924 0.960 0.948
-9 0.920 0.958 0.945
-8 0.916 0.956 0.942
-7 0.911 0.954 0.939
-6 0.907 0.951 0.936
-5 0.902 0.949 0.933
-4 0.898 0.946 0.929
-3 0.893 0.943 0.926
-2 0.888 0.941 0.922
-1 0.883 0.938 0.919

(((14))) (13) Table - Member older (LEOFF Plan 1)

Survivor option factor((s)) table: Member older than beneficiary

Age difference: Member's age minus beneficiary's age


Age Difference Option 2 100% Option 3 50% Option 4

66 2/3%

0 0.878 0.935 0.915
1 0.873 0.932 0.912
2 0.868 0.930 0.908
3 0.864 0.927 0.905
4 0.859 0.924 0.901
5 0.854 0.921 0.898
6 0.849 0.918 0.894
7 0.844 0.915 0.890
8 0.839 0.913 0.887
9 0.835 0.910 0.883
10 0.830 0.907 0.880
11 0.826 0.905 0.877
12 0.821 0.902 0.873
13 0.817 0.899 0.870
14 0.813 0.897 0.867
15 0.809 0.894 0.864
16 0.805 0.892 0.861
17 0.801 0.889 0.858
18 0.797 0.887 0.855
19 0.793 0.885 0.852
20 0.790 0.882 0.849
21 0.786 0.880 0.847
22 0.783 0.878 0.844
23 0.780 0.876 0.841
24 0.777 0.874 0.839
25 0.774 0.872 0.837
26 0.771 0.871 0.834
27 0.768 0.869 0.832
28 0.765 0.867 0.830
29 0.763 0.865 0.828
30 0.760 0.864 0.826
31 0.758 0.862 0.824
32 0.756 0.861 0.823
33 0.753 0.859 0.821
34 0.751 0.858 0.819
35 0.749 0.857 0.818
36 0.747 0.855 0.816
37 0.745 0.854 0.815
38 0.744 0.853 0.813
39 0.742 0.852 0.812
40 0.740 0.851 0.810

[Statutory Authority: RCW 41.50.050(5), 41.26.162, 41.26.164, chapter 41.45 RCW. 03-12-014, 415-02-380, filed 5/27/03, effective 7/1/03. Statutory Authority: RCW 41.50.050(5) and chapter 41.45 RCW. 03-02-087, 415-02-380, filed 12/31/02, effective 2/1/03; 02-18-048, 415-02-380, filed 8/28/02, effective 9/1/02.]

OTS-8290.3


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

WAC 415-103-225   What are ((the)) my WSPRS Plan 2 retirement benefit options?   ((This section only applies to members commissioned on or after January 1, 2003 (WSPRS Plan 2). RCW 43.43.271 enables the department to provide retiring WSPRS Plan 2 members with an irrevocable choice of four retirement benefit options for receipt of their retirement benefit. The retiring member must choose an option when applying for service retirement:

(1) Option One: Benefit option without survivor features (standard allowance). The department will pay a monthly retirement allowance based solely on the single life of the retiree, as provided by RCW 43.43.260 (Benefits). When the retiree dies, all benefits end. Any remaining balance of the retiree's accumulated contributions will be paid to:

(a) The person(s), trust, organization, or retiree's estate specified by the retiree on the appropriate department designated form, duly executed and properly on file with the department on or before the retiree's death; or

(b) To the retiree's legal representative, if no person or entity designated in (a) of this subsection is living or in existence at the time of the retiree's death.

(2) Benefit options with a survivor feature.

(a) At retirement, a member may select a survivor option in lieu of the standard allowance. With a survivor option, the retiree's monthly benefit payment is actuarially reduced from the standard allowance to offset the cost of the survivor features. The retiree designates a person to receive a monthly benefit payment after the retiree dies. The designated person or "survivor beneficiary" will receive this monthly allowance for the remainder of his or her life. If the retiree and survivor beneficiary both die before the retiree's accumulated contributions have been exhausted, all monthly payments end. Any remaining balance of the retiree's accumulated contributions will be paid to:

(i) The person(s), trust, organization, or retiree's estate specified by the retiree on the appropriate department designated form, duly executed and properly on file with the department on or before the retiree's death; or

(ii) To the retiree's legal representative, if no person or entity designated in (a)(i) of this subsection is living or in existence at the time of the retiree's death.

(b) Option Two (joint and whole allowance). When the retiree dies, the department pays the survivor beneficiary a monthly benefit equal to the gross monthly allowance then payable to the retiree.

(c) Option Three (joint and one-half allowance). When the retiree dies, the department pays the survivor beneficiary a monthly benefit equal to one-half of the amount of the retiree's gross monthly retirement allowance then payable to the retiree.

(d) Option Four (joint and two-thirds allowance). When the retiree dies, the department pays the survivor beneficiary a monthly benefit equal to two-thirds of the retiree's gross monthly retirement allowance then payable to the retiree.

(3) Pop-up provision.

(a) This subsection only applies to retiring members who select a benefit option with a survivor feature (Option Two, Three, or Four).

(b) If the survivor beneficiary dies before the retiree, the retiree's monthly retirement allowance increases, effective the first day of the following month, to:

(i) The amount that the retiree would have received had the retiree chosen Option One; plus

(ii) Any cost-of-living adjustments (COLA) the retiree received prior to the survivor beneficiary's death based on the original selection.

(c) If a retiree whose benefit increases under this section dies, all benefit payments end. Any remaining balance of the retiree's accumulated contributions will be paid to:

(i) The person(s), trust, organization, or retiree's estate specified by the retiree on the appropriate department designated form, duly executed and properly on file with the department on or before the retiree's death; or

(ii) To the retiree's legal representative, if no person or entity designated in (c)(i) of this subsection is living or in existence at the time of the retiree's death.

(4) Postretirement benefit options.

(a) Postretirement marriage option. A retiree who chose the standard allowance (Option One) at the time of retirement, and then marries has a one time only option to choose a survivor option. The retiree may choose a survivor option that names his or her new spouse as the survivor beneficiary, provided:

(i) The retiree's monthly benefit is not subject to a property settlement agreement from a court decree of dissolution or legal separation;

(ii) The retiree makes the choice during the one year window, on or after the date of the first anniversary and before the second anniversary of the postretirement marriage;

(iii) The retiree provides the department with a copy of a marriage certificate as proof of the postretirement marriage and proof of the birthdate of the new spouse; and

(iv) The retiree properly and timely completes and files the correct forms with the department.

(b) Postretirement survivor change. A retiree who chose a nonspouse as a survivor beneficiary at the time of retirement may remove that survivor designation one time only. The retiree may have the benefit adjusted to a standard allowance provided the retiree properly and timely completes and files the correct forms with the department.

(c) The change selected under (a) or (b) of this subsection will begin the first of the month following receipt of properly completed and filed paperwork with the department. The change becomes irrevocable on the date that the completed paperwork is received by the department.

(5) For more information, see chapter 415-02 WAC starting with WAC 415-02-300 for the tables, schedules, and factors the department uses for calculating retirement allowances.

(6) Terms used in this section:

"Pop-up" - see WAC 415-02-030.)) This section applies to WSPRS Plan 2 members. Upon retirement for service under RCW 43.43.250, you must choose to have your monthly retirement allowance paid to you by one of the options described in this section.

(1) Which option will pay my beneficiary a monthly allowance after my death? Options described in subsection (2)(b) through (d) of this section include a survivor feature. The person you name at the time of retirement to receive a monthly allowance after your death is referred to as your "survivor beneficiary." Upon your death your survivor beneficiary will be entitled to receive a monthly allowance for the duration of his or her life. Your monthly retirement allowance will be actuarially reduced to offset the cost of the survivor feature. The factors used to determine the amount of the reduction are in WAC 415-02-380.

(2) What are my benefit options?

(a) Option one: Standard allowance (no survivor option). The department will pay you a monthly retirement allowance throughout your life. Your monthly allowance will cease upon your death.

(b) Option two: Joint and whole allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to the gross monthly retirement allowance you were receiving.

(c) Option three: Joint and one-half allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to one-half of the gross monthly retirement allowance you were receiving.

(d) Option four: Joint and two-thirds allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to two-thirds (66.667 percent) of the gross monthly retirement allowance you were receiving.

(3) Do I need my spouse's consent on the option I choose? If you are married, you must submit your spouse's notarized signature indicating consent to the retirement option you select. If you do not provide spousal consent, the department will pay you a monthly retirement allowance based on option three (joint and one-half allowance) and record your spouse as the survivor beneficiary as required by RCW 43.43.271(2). If your survivor beneficiary has been designated by a dissolution order according to subsection (4) of this section, which was filed with the department at least thirty days before your retirement date, spousal consent is not required.

(4) Can a dissolution order require that a former spouse be designated as a survivor beneficiary? Yes. A dissolution order may require that a former spouse be designated as a survivor beneficiary. The department is required to pay survivor benefits to a former spouse pursuant to a dissolution order that complies with RCW 41.50.790.

(5) What happens if I choose a benefit option with a survivor feature and my survivor beneficiary dies before I do? Your monthly retirement allowance will increase, provided you submit proof of your survivor beneficiary's death to the department. The increase will begin accruing the first day of the month following the death. Your increased monthly allowance will be:

(a) The amount you would have received had you chosen the standard allowance option at the time of retirement; plus

(b) Any cost-of-living adjustments (COLAs) you received prior to your survivor beneficiary's death, based on your original option selection.

Example:

John retires from WSPRS in 2008. John chooses a benefit option with a survivor feature and names Beatrice, his daughter, as his survivor beneficiary. As a result, John's monthly allowance is reduced from $2,000 (standard allowance) to $1,750. Beatrice dies in 2013. John's monthly allowance will increase to $2,191.05, which equals the amount he would have received had he chosen the standard allowance option, plus the COLAs he has received (based on his prior monthly allowance).


Year Standard Allowance Survivor Option plus COLAs COLA incr.

(3% max)

$ Increase
2008 2,000.00 1,750.00 0.00
2009 1,750.00 .02 35.00
2010 1,785.00 .03 53.55
2011 1,838.55 .025 45.96
2012 1,884.51 .03 56.54
2013 2,000.00 1,941.05
Total COLA's 191.05
Original Monthly Allowance + Total COLA's = New Monthly Allowance
$2000 + $191.05 = $2,191.05*

* In the future, John's COLA will be based on his increased monthly allowance.



(6) May I change my benefit option after retirement? Your choice of a benefit option is irrevocable with the following three exceptions:

(a) Return to membership. If you retire and then return to membership, you may choose a different retirement option upon your subsequent retirement.

(b) Postretirement marriage option. If you select the standard allowance option at the time of retirement and marry after retirement, you may select a benefit option with a survivor feature and name your current spouse as survivor, provided that:

(i) Your benefit is not subject to a property division obligation pursuant to a dissolution order. See WAC 415-02-500;

(ii) The selection is made during a one-year window, on or after the date of the first anniversary and before the second anniversary of your postretirement marriage;

(iii) You provide a copy of your certified marriage certificate to the department;

(iv) You provide proof of your current spouse's birth date; and

(v) You exercise this option one time only.

(c) Removal of a nonspouse survivor option. If you select a benefit option with a survivor feature and name a nonspouse as survivor beneficiary at the time of retirement, you may remove that survivor beneficiary designation and have your benefit adjusted to a standard allowance. You may exercise this option one time only.

(7) Who will receive the balance of my accumulated contributions, if any, after my death?

(a) If you do not have a survivor beneficiary at the time of your death, and you die before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid:

(i) To the person or entity (i.e., trust, organization, or estate) you have nominated by written designation, executed and filed with the department.

(ii) If you have not designated a beneficiary, or if your designated beneficiary is no longer living or in existence, then to your surviving spouse.

(iii) If not paid according to (a)(i) or (ii) of this subsection, then to your estate.

(b) If you have a survivor beneficiary at the time of your death, and your survivor beneficiary dies before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid:

(i) To the person or entity (i.e., trust, organization, or estate) your survivor beneficiary has nominated by written designation, executed and filed with the department.

(ii) If your survivor beneficiary has not designated a beneficiary, or if the designated beneficiary is no longer living or in existence, then to your survivor beneficiary's spouse.

(iii) If not paid according to (b)(i) or (ii) of this subsection, then to your survivor beneficiary's estate.

(8) For more information, see RCW 43.43.271.

[Statutory Authority: RCW 41.50.050(5), 43.43.260, [43.43.]271, [43.43.]280(1), [43.43.]295. 02-23-037, 415-103-225, filed 11/13/02, effective 1/1/03.]

OTS-8291.3


AMENDATORY SECTION(Amending WSR 03-12-014, filed 5/27/03, effective 7/1/03)

WAC 415-104-215   What are my retirement benefit options -- LEOFF Plan 2((.))?   ((RCW 41.26.460 enables the department to provide retiring LEOFF Plan 2 members with four retirement benefit options. The member must choose an option when applying for service or disability retirement.

(1) Option One: Benefit option without survivor features (standard allowance). The department pays the retiree a monthly retirement allowance actuarially based solely on the single life of the member, in accordance with RCW 41.26.430 (service) or 41.26.470 (disability). When the retiree dies, all benefits cease. Any remaining balance of the retiree's accumulated contributions will be paid to:

(a) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or

(b) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or

(c) The member's estate; or

(d) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.

(2) Benefit options with a survivor feature.

(a) A retiring member is allowed to select from several retirement options which create an actuarially equivalent benefit that includes a survivor feature. The survivor feature entitles the survivor to receive a monthly allowance after the retiree dies. If the member chooses one of the survivor options, the monthly benefit the member will receive is actuarially reduced to offset the cost of the survivor feature. After the retiree dies, the department pays the survivor an allowance for the duration of his or her life. If the retiree and the survivor both die before the retiree's accumulated contributions are exhausted, any remaining balance of the retiree's accumulated contributions will be paid to:

(i) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or

(ii) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or

(iii) The member's estate; or

(iv) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.

(b) Option Two (joint and whole allowance). When the retiree dies, the department pays the survivor a monthly retirement allowance equal to the gross monthly allowance received by the retiree.

(c) Option Three (joint and one-half allowance). When the retiree dies, the department pays the survivor one-half of the amount of the retiree's gross monthly retirement allowance.

(d) Option Four (joint and two-thirds allowance).

(i) Option Four is available to members retiring on or after January 1, 1996.

(ii) When the retiree dies, the department pays the survivor two-thirds (66.667%) of the retiree's gross monthly retirement allowance.

(3) If a member retires on or after June 6, 1996, the department is required to pay an ex-spouse survivor benefits pursuant to a marital dissolution order that complies with RCW 41.50.790.

(4) Benefit increases when survivor predeceases retiree (pop-up provision).

(a) This subsection applies to members retiring on or after January 1, 1996, who select a benefit option with a survivor feature (Option Two, Three, or Four).

(b) If the survivor dies before the retiree, the retiree's monthly retirement allowance increases, effective the first day of the following month, to:

(i) The amount that would have been received had the retiree chosen Option One; plus

(ii) Any cost-of-living adjustments the retiree received prior to the survivor's death based on the original option selection.

(c) Pop-up recalculation example:


Plan Two:

Agnes retires in 1996 (Year 0). She would like Beatrice, her daughter, to receive a monthly allowance after Agnes dies. Therefore, Agnes selects a retirement benefit option with a survivor feature. As a result her monthly allowance is reduced from $2,000 (standard allowance) to $1,750. Unfortunately, Beatrice dies in January 2001 (Year 5). Under the "pop-up" provision, Agnes' monthly benefit will increase to $2,191.05, the amount she would have received had she chosen Option One (standard allowance) plus her accumulated COLA's:


Year Option One (Standard Allow.) Survivor Option (2,3,4) plus COLAs COLA incr.

(3% max)

$ Increase
0 (1996) 2,000.00 1,750.00 (inelig.) 0.00
1 (1997) 1,750.00 .02 35.00
2 (1998) 1,785.00 .03 53.55
3 (1999) 1,838.55 .025 45.96
4 (2000) 1,884.51 .03 56.54
5 (2001) 2,000.00 1,941.05
Total COLA's 191.05
Original Option One Benefit Amount + Total COLA's = New Benefit Amount
$2000 + $191.05 = $2,191.05*

* In the future (i.e., Year 5), Agnes' COLA will be based on the increased benefit amount ($2,191.05).


(d) If the survivor dies and the retiree's benefit increases under this section, and thereafter the retiree also dies before all employee contributions are exhausted, any remaining balance of the retiree's accumulated contributions will be paid to:

(i) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or

(ii) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or

(iii) The member's estate; or

(iv) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.

(5) Any retiree who retired before January 1, 1996, and who elected to receive a benefit option with a survivor feature under subsection (2) of this section is entitled to receive a retirement allowance adjustment if the retiree meets the following conditions:

(a) The retiree's designated beneficiary predeceases or has predeceased the retiree; and

(b) The retiree provides the department proper proof of the designated beneficiary's death.

The retiree is not required to apply for the increased benefit provided in this subsection. The adjusted retirement allowance will be effective on July 1, 1998, or the first day of the month following the date of death of the designated beneficiary, whichever comes last. The adjustment is computed as described in RCW 41.26.460 (3)(c) for Plan 2 retirees.

(6) Postretirement benefit options.

(a) Postretirement marriage option. Members who select the standard allowance (Option One) at the time of retirement and marry after retirement may subsequently select a survivor option with their new spouse as survivor beneficiary, provided that:

(i) The retiree's monthly benefit is not subject to a property settlement agreement from a court decree of dissolution or legal separation;

(ii) The selection is made either:

(A) During a one year window, on or after the date of the first anniversary and before the second anniversary of the postretirement marriage; or

(B) Before June 1, 2002, if the postretirement marriage occurred before June 1, 2001;

(iii) The retiree provides a marriage certificate as proof of the postretirement marriage and provides proof of the birthdate of the new spouse; and

(iv) A member may exercise this option one time only.

(b) Removal of a nonspouse survivor option. Members who selected a nonspouse as survivor beneficiary at the time of retirement may remove that survivor designation and have the benefit adjusted to a standard allowance. A member may exercise this option one time only.

(c) Selection (a) or (b) of this subsection will become effective the first of the month following the department's receipt of the required paperwork.

(7) Survivor. For the purposes of this provision, "survivor" means a person nominated by the member to receive a monthly benefit allowance after the member dies. A member nominates the survivor at the time of retirement by filing a completed and notarized form provided by the department.)) If you retire for service under RCW 41.26.430 or nonduty disability under RCW 41.26.470, or if you choose to receive a monthly allowance for duty disability under RCW 41.26.470, you must choose to have your monthly retirement allowance paid to you by one of the options described in this section.

(1) Which option will pay my beneficiary a monthly allowance after my death? Options described in subsection (2)(b) through (d) of this section include a survivor feature. The person you name at the time of retirement to receive a monthly allowance after your death is referred to as your "survivor beneficiary." Upon your death your survivor beneficiary will be entitled to receive a monthly allowance for the duration of his or her life. Your monthly retirement allowance will be actuarially reduced to offset the cost of the survivor feature. The factors used to determine the amount of the reduction are in WAC 415-02-380.

(2) What are my benefit options?

(a) Option one: Standard allowance (no survivor feature). The department will pay you a monthly retirement allowance throughout your lifetime. Your monthly allowance will cease upon your death.

(b) Option two: Joint and whole allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to the gross monthly retirement allowance you were receiving.

(c) Option three: Joint and one-half allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to one-half of the gross monthly retirement allowance you were receiving.

(d) Option four: Joint and two-thirds allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to two-thirds (66.667%) of the gross monthly retirement allowance you were receiving.

(3) Do I need my spouse's consent on the option I choose? If you are married, you must provide your spouse's notarized signature indicating consent to the retirement option you select. If you do not provide spousal consent, the department will pay you a monthly retirement allowance based on option three (joint and one-half allowance) and record your spouse as the survivor beneficiary as required by RCW 41.26.460(2). If your survivor beneficiary has been designated by a dissolution order according to subsection (4) of this section, which was filed with the department at least thirty days before your retirement date, spousal consent is not required.

(4) Can a dissolution order require that a former spouse be designated as a survivor beneficiary? Yes. A dissolution order may require that a former spouse be designated as a survivor beneficiary. The department is required to pay survivor benefits to a former spouse pursuant to a dissolution order that complies with RCW 41.50.790.

(5) What happens if I choose a benefit option with a survivor feature and my survivor beneficiary dies before I do? Your monthly retirement allowance will increase, provided you submit proof of your survivor beneficiary's death to the department. The increase will begin accruing the first day of the month following the death.

(a) Members who retire on or after January 1, 1996. Your increased monthly allowance will be:

(i) The amount you would have received had you chosen the standard allowance option at the time of retirement; plus

(ii) Any cost-of-living adjustments (COLAs) you received prior to your survivor beneficiary's death based on your original option selection.

Example:

Agnes retires in 1996. She chooses a benefit option with a survivor feature and names Beatrice, her daughter, as her survivor beneficiary. As a result, Agnes' monthly allowance is reduced from $2,000 (standard allowance) to $1,750. Beatrice dies in January 2001. Agnes' monthly allowance will increase to $2,191.05, which equals the amount she would have received had she chosen the standard allowance option, plus the COLAs she has received (based on her prior monthly allowance).


Year Standard Allowance Survivor Option plus COLAs COLA incr.

(3% max)

$ Increase
1996 2,000.00 1,750.00 0.00
1997 1,750.00 .02 35.00
1998 1,785.00 .03 53.55
1999 1,838.55 .025 45.96
2000 1,884.51 .03 56.54
2001 2,000.00 1,941.05
Total COLA's 191.05
Original Option One Monthly Allowance + Total COLA's = New Monthly Allowance
$2000 + $191.05 = $2,191.05*

* In the future, Agnes' COLA will be based on her increased monthly allowance.



(b) Members who retired before January 1, 1996. Your monthly retirement allowance will be adjusted according to the provisions of RCW 41.26.460(3).

(6) May I change my benefit option after retirement? Your choice of a benefit option is irrevocable with the following three exceptions:

(a) Return to membership. If you retire and then return to membership, you may choose a different retirement option upon your subsequent retirement.

(b) Postretirement marriage option. If you select the standard allowance option at the time of retirement and marry after retirement, you may select a benefit option with a survivor feature and name your current spouse as survivor beneficiary, provided that:

(i) Your benefit is not subject to a property division obligation pursuant to a dissolution order. See WAC 415-02-500;

(ii) The selection is made during a one-year window, on or after the date of the first anniversary and before the second anniversary of your postretirement marriage;

(iii) You provide a copy of your certified marriage certificate to the department;

(iv) You provide proof of your current spouse's birth date; and

(v) You exercise this option one time only.

(c) Removal of a nonspouse survivor option. If you select a benefit option with a survivor feature and name a nonspouse as survivor beneficiary at the time of retirement, you may remove that survivor beneficiary designation and have your benefit adjusted to a standard allowance. You may exercise this option one time only.

(7) Who will receive the balance of my accumulated contributions, if any, after my death?

(a) If you do not have a survivor beneficiary at the time of your death, and you die before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid:

(i) To the person or entity (i.e., trust, organization, or estate) you have nominated by written designation, executed and filed with the department.

(ii) If you have not designated a beneficiary, or if the designated beneficiary is no longer living or in existence, then to your surviving spouse.

(iii) If not paid according to (a)(i) or (ii) of this subsection, then to your estate.

(b) If you have a survivor beneficiary at the time of your death, and your survivor beneficiary dies before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid:

(i) To the person or entity (i.e., trust, organization, or estate) your survivor beneficiary has nominated by written designation, executed and filed with the department.

(ii) If your survivor beneficiary has not designated a beneficiary, or if the designated beneficiary is no longer living or in existence, then to your survivor beneficiary's spouse.

(iii) If not paid according to (b)(i) or (ii) of this subsection, then to your survivor beneficiary's estate.

(8) For more information, see RCW 41.26.460.

[Statutory Authority: RCW 41.50.050(5) and 41.26.460. 03-12-014, 415-104-215, filed 5/27/03, effective 7/1/03. Statutory Authority: RCW 41.50.050(5), 41.26.460, 41.32.530, 41.32.785, 41.32.851, 41.35.220, 41.40.188, 41.40.660, 41.40.845. 01-10-045, 415-104-215, filed 4/26/01, effective 6/1/01. Statutory Authority: RCW 41.50.050. 99-16-075, 415-104-215, filed 8/3/99, effective 9/3/99. Statutory Authority: RCW 2.10.146, 41.26.460, 41.32.530, 41.50.050, 41.32.785, 41.40.188 and 41.40.660. 96-01-047, 415-104-215, filed 12/14/95, effective 1/14/96. Statutory Authority: RCW 34.05.050 and 1990 c 249. 91-03-014, 415-104-215, filed 1/7/91, effective 2/7/91.]

OTS-8292.4


AMENDATORY SECTION(Amending WSR 01-10-045, filed 4/26/01, effective 6/1/01)

WAC 415-108-326   What are my retirement benefit options((.))?   ((RCW 41.40.188 (Plan 1), RCW 41.40.660 (Plan 2), and RCW 41.40.845 (Plan 3) enable the department to provide retiring members with four retirement benefit options for receipt of the defined benefit portion of their retirement benefits. In addition, retiring Plan 1 members may select the COLA (cost-of-living adjustment) option. The retiring member must choose an option(s) when applying for service or disability retirement:

(1) Option One: Benefit option without survivor features (standard allowance). The department will pay a monthly retirement allowance based solely on the single life of the member, as provided by RCW 41.40.185, 41.40.190, 41.40.230, 41.40.235, 41.40.250, 41.40.670, 41.40.820, or 41.40.825. When the retiree dies all benefits cease. Any remaining balance of the retiree's accumulated contributions will be paid to:

(a) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or

(b) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or

(c) The member's estate; or

(d) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.

(2) Benefit options with a survivor feature.

(a) A retiring member is allowed to select from several retirement options which create an actuarially equivalent benefit that includes a survivor feature. The survivor feature entitles the survivor to receive a monthly allowance after the retiree dies. If the member chooses one of the survivor options, the monthly benefit the member will receive is actuarially reduced to offset the cost of the survivor feature. After the retiree dies, the department pays the survivor an allowance for the duration of his or her life. If the retiree and the survivor both die before the retiree's accumulated contributions are exhausted, all benefits cease. Any remaining balance of the retiree's accumulated contributions will be paid to:

(i) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or

(ii) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or

(iii) The member's estate; or

(iv) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.

(b) Option Two (joint and whole allowance). When the retiree dies, the department pays the survivor an allowance equal to the gross monthly allowance received by the retiree.

(c) Option Three (joint and one-half allowance). When the retiree dies, the department pays the survivor an allowance equal to one-half of the retiree's gross monthly retirement allowance.

(d) Option Four (joint and two-thirds allowance).

(i) Option Four is available to members retiring on or after January 1, 1996.

(ii) When the retiree dies, the department pays the survivor an allowance equal to two-thirds (66.667%) of the retiree's gross monthly retirement allowance.

(3) If a member retires on or after June 6, 1996, the department is required to pay an ex-spouse survivor benefits pursuant to a marital dissolution order that complies with RCW 41.50.790.

(4) Supplemental COLA option for Plan 1 members. Retiring Plan 1 members may select an annual cost-of-living adjustment (COLA) option, in addition to their choice of retirement benefit options listed in subsections (1) and (2) of this section. Retiring members who choose this supplemental option will have their monthly retirement allowance actuarially reduced to offset the cost of annual adjustment.

(5) Benefit increases when survivor predeceases retiree (pop-up provision).

(a) This subsection applies to members retiring on or after January 1, 1996, who select a benefit option with a survivor feature (Option Two, Three, or Four).

(b) If the survivor dies before the retiree, the retiree's monthly retirement allowance increases, effective the first day of the following month, to:

(i) The amount that would have been received had the retiree chosen Option One; plus

(ii) Any cost-of-living adjustments the retiree received prior to the survivor's death based on the original option selection.

(c) Pop-up recalculation examples.

Plan One:

Lucinda retires from PERS Plan 1 in 1996 (Year 0). She would like Garth, her husband, to receive a monthly allowance when she dies. Therefore, Lucinda chooses one of the benefit options with a survivor feature. As a result, her monthly allowance is actuarially reduced from $2,000 (standard allowance) to $1,750. Unfortunately, Garth dies in January 2001 (Year 5). Under the "pop-up" provision, Lucinda's monthly benefit will increase to $2,000, the amount she would have received had she chosen the Option One (standard allowance) plus any COLA's Lucinda had received based on her prior benefit allowance:


Original Option 1 Benefit Amount + Total COLA's = New Benefit Amt.
$2,000.00 + 0 (None accrued) = $2,000.00*

Plan Two:

Agnes retires from PERS Plan 2 in 1996 (Year 0). Agnes would like Beatrice, her daughter, to receive a monthly allowance after Agnes dies. Therefore, Agnes selects a retirement benefit option with a survivor feature. As a result, her monthly allowance is reduced from $2,000 (standard allowance) to $1,750. Unfortunately, Beatrice dies in 2001 (Year 5). Under the "pop-up" provision, Agnes' monthly benefit will increase to $2,191.05, the amount she would have received had she chosen Option One (standard allowance) plus her accumulated COLA's:


Year Option One

(Standard Allow.)

Survivor Option

(2,3,4) plus COLAs

COLA incr.

(3% max)

$ Increase

0 (1996)

2,000.00

1,750.00

(ineligible)

0.00
1 (1997) 1,750.00 .02 35.00
2 (1998) 1,785.00 .03 53.55
3 (1999) 1,838.55 .025 45.96
4 (2000) 1,884.51 .03 56.54
5 (2001) 2,000.00 1,941.05
Total COLA's 191.05
Original Option One Benefit Amount

$2000

+ Total COLA's

+ $191.05

= New Benefit Amount

= $2,191.05*

*In the future (i.e. Year 4), COLAs will be based on the increased benefit amount.

(d) If the survivor dies and the retiree's benefit increases under this section, and thereafter the retiree also dies before all employee contributions are exhausted, all benefits cease. Any remaining balance will be paid to:

(i) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or

(ii) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or

(iii) The member's estate; or

(iv) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.

(6) Any retiree who retired before January 1, 1996, and who elected to receive a benefit option with a survivor feature under subsection (2) of this section is entitled to receive a retirement allowance adjustment if the retiree meets the following conditions:

(a) The retiree's designated beneficiary predeceases or has predeceased the retiree; and

(b) The retiree provides to the department proper proof of the designated beneficiary's death. The retiree is not required to apply for the increased benefit provided by this subsection.

The adjusted retirement allowance will be effective on July 1, 1998, or the first of the month following the date of death of the designated beneficiary, whichever comes last. The adjustment is computed as described in RCW 41.40.188 (3)(c) for Plan 1 retirees or RCW 41.40.660 (3)(c) for Plan 2 retirees.

(7) Survivor. For the purposes of this provision, "survivor" means a person nominated by the member to receive a monthly benefit allowance after the member dies. A member nominates the survivor at the time of retirement by filing a completed and notarized form provided by the department.

(8) Postretirement benefit options.

(a) Postretirement marriage option. Members who select the standard allowance (Option One) at the time of retirement and marry after retirement may subsequently select a survivor option with their new spouse as survivor beneficiary, provided that:

(i) The retiree's monthly benefit is not subject to a property settlement agreement from a court decree of dissolution or legal separation;

(ii) The selection is made either:

(A) During a one year window, on or after the date of the first anniversary and before the second anniversary of the postretirement marriage; or

(B) Before June 1, 2002, if the postretirement marriage occurred before June 1, 2001;

(iii) The retiree provides a marriage certificate as proof of the postretirement marriage and provides proof of the birth date of the new spouse; and

(iv) A member may exercise this option one time only.

(b) Removal of a nonspouse survivor option. Members who selected a nonspouse as survivor beneficiary at the time of retirement may remove that survivor designation and have the benefit adjusted to a standard allowance. A member may exercise this option one time only.

(c) Selection (a) or (b) of this subsection will become effective the first of the month following the department's receipt of the required paperwork.)) Upon retirement for service under RCW 41.40.180, 41.40.630, or 41.40.820, or for disability under RCW 41.40.210, 41.40.230, 41.40.670, or 41.40.825, you must choose to have the defined benefit portion of your retirement allowance paid to you by one of the options described in this section. If you are a Plan 1 member, you may also select an optional supplemental cost of living adjustment (COLA).

(1) Which option will pay my beneficiary a monthly allowance after my death? Options described in subsection (2)(b) through (d) of this section include a survivor feature. The person you name at the time of retirement to receive a monthly allowance after your death is referred to as your "survivor beneficiary." Upon your death your survivor beneficiary will be entitled to receive a monthly allowance for the duration of his or her life. Your monthly retirement allowance will be actuarially reduced to offset the cost of the survivor feature. The factors used to determine the amount of the reduction are in WAC 415-02-380.

(2) What are my benefit options?

(a) Option one: Standard allowance (no survivor feature). The department will pay you a monthly retirement allowance throughout your lifetime. Your monthly allowance will cease upon your death.

(b) Option two: Joint and whole allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to the gross monthly retirement allowance you were receiving.

(c) Option three: Joint and one-half allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to one-half of the gross monthly retirement allowance you were receiving.

(d) Option four: Joint and two-thirds allowance (available to members retiring on or after January 1, 1996). The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to two-thirds (66.667%) of the gross monthly retirement allowance you were receiving.

(3) Do I need my spouse's consent on the option I choose? If you are married, you must provide your spouse's notarized signature indicating consent to the retirement option you select. If you do not provide spousal consent, the department will pay you a monthly retirement allowance based on option three (joint and one-half allowance) and record your spouse as the survivor beneficiary as required by RCW 41.40.188, 41.40.660 and 41.40.845. If your survivor beneficiary has been designated by a dissolution order according to subsection (4) of this section, which was filed with the department at least thirty days before your retirement date, spousal consent is not required.

(4) Can a dissolution order require that a former spouse be designated as a survivor beneficiary? Yes. A dissolution order may require that a former spouse be designated as a survivor beneficiary. The department is required to pay survivor benefits to a former spouse pursuant to a dissolution order that complies with RCW 41.50.790.

(5) What is the supplemental COLA option for Plan 1 members? If you are a Plan 1 member, in addition to choosing a retirement benefit option described in subsection (2) of this section, you may choose to receive a supplemental annual COLA. If you select this option, your monthly retirement allowance will be actuarially reduced to offset the cost of this benefit.

(6) What happens if I choose a benefit option with a survivor feature and my survivor beneficiary dies before I do? Your monthly retirement allowance will increase, provided you submit proof of your survivor beneficiary's death to the department. The increase will begin accruing the first day of the month following the death.

(a) Members who retired on or after January 1, 1996. Your increased benefit will be:

(i) The amount you would have received had you chosen the standard allowance option at the time of retirement; plus

(ii) Any COLAs you received prior to your survivor beneficiary's death, based on your original option selection.

Example:

Agnes retires from PERS Plan 2 in 1996. She chooses a benefit option with a survivor feature and names Beatrice, her daughter, as her survivor beneficiary. As a result, Agnes' monthly allowance is reduced from $2,000 (standard allowance) to $1,750. Beatrice dies in 2001. Agnes' monthly allowance will increase to $2,191.05, which equals the amount she would have received had she chosen the standard allowance option, plus the COLAs she has received (based on her prior monthly allowance).


Year Standard Allowance Survivor Option plus COLAs COLA incr.

(3% max)

$ Increase
1996 2,000.00 1,750.00 0.00
1997 1,750.00 .02 35.00
1998 1,785.00 .03 53.55
1999 1,838.55 .025 45.96
2000 1,884.51 .03 56.54
2001 2,000.00 1,941.05
Total COLA's 191.05
Original Monthly Allowance + Total COLA's = New Monthly Allowance
$2000 + $191.05 = $2,191.05*

* In the future, Agnes' COLA will be based on her increased monthly allowance.


(b) Members who retire before January 1, 1996. Your monthly retirement allowance will be adjusted according to the provisions of RCW 41.40.188(3) (Plan 1) or RCW 41.40.660(3) (Plan 2).

(7) May I change my benefit option after retirement? Your choice of a benefit option is irrevocable with the following three exceptions:

(a) Return to membership. If you retire and then return to membership for at least two years of uninterrupted service, you may choose a different retirement option upon your subsequent retirement. See RCW 41.40.037.

(b) Postretirement marriage option. If you select the standard allowance option at the time of retirement and marry after retirement, you may select a benefit option with a survivor feature and name your current spouse as survivor beneficiary, provided that:

(i) Your benefit is not subject to a property division obligation pursuant to a dissolution order. See WAC 415-02-500;

(ii) The selection is made during a one-year window, on or after the date of the first anniversary and before the second anniversary of your postretirement marriage;

(iii) You provide a copy of your certified marriage certificate to the department;

(iv) You provide proof of your current spouse's birth date; and

(v) You exercise this option one time only.

(c) Removal of a nonspouse survivor option. If you select a benefit option with a survivor feature and name a nonspouse as survivor beneficiary at the time of retirement, you may remove that survivor beneficiary designation and have your benefit adjusted to a standard allowance. You may exercise this option one time only.

(8) Who will receive the balance of my accumulated contributions, if any, after my death?

(a) Plan 1 and 2 members:

(i) If you do not have a survivor beneficiary at the time of your death, and you die before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid:

(A) To the person or entity (i.e., trust, organization, or estate) you have nominated by written designation, executed and filed with the department.

(B) If you have not designated a beneficiary, or if your designated beneficiary is no longer living or in existence, then to your surviving spouse.

(C) If not paid according to (a)(i)(A) or (B) of this subsection, then to your estate.

(ii) If you have a survivor beneficiary at the time of your death, and your survivor beneficiary dies before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid:

(A) To the person or entity (i.e., trust, organization, or estate) your survivor beneficiary has nominated by written designation, executed and filed with the department.

(B) If your survivor beneficiary has not designated a beneficiary, or if the designated beneficiary is no longer living or in existence, then to your survivor beneficiary's spouse.

(C) If not paid according to (a)(ii)(A) or (B) of this subsection, then to your survivor beneficiary's estate.

(b) Plan 3 members: The defined benefit stops upon your death or upon the death of your survivor beneficiary, if applicable. As a Plan 3 member, you do not contribute to the defined benefit portion of your retirement allowance. The defined contribution portion of your benefit will be distributed according to WAC 415-111-310.

(9) For more information, see RCW 41.40.188 (Plan 1), RCW 41.40.660 (Plan 2) and RCW 41.40.845 (Plan 3).

[Statutory Authority: RCW 41.50.050(5), 41.26.460, 41.32.530, 41.32.785, 41.32.851, 41.35.220, 41.40.188, 41.40.660, 41.40.845. 01-10-045, 415-108-326, filed 4/26/01, effective 6/1/01. Statutory Authority: RCW 41.50.050. 99-14-008, 415-108-326, filed 6/24/99, effective 7/25/99. Statutory Authority: RCW 2.10.146, 41.26.460, 41.32.530, 41.50.050, 41.32.785, 41.40.188 and 41.40.660. 96-01-047, 415-108-326, filed 12/14/95, effective 1/14/96. Statutory Authority: RCW 34.05.050 and 1990 c 249. 91-03-015, 415-108-326, filed 1/7/91, effective 2/7/91.]

OTS-8376.2


NEW SECTION
WAC 415-110-610   What are my retirement benefit options?   Upon retirement for service under RCW 41.35.420 or 41.35.680, or for disability under RCW 41.35.440 or 41.35.690, you must choose to have the defined benefit portion of your retirement allowance paid to you by one of the options described in this section.

(1) Which option will pay my beneficiary a monthly allowance after my death? Options described in subsection (2)(b) through (d) of this section include a survivor feature. The person you name at the time of retirement to receive a monthly allowance after your death is referred to as your "survivor beneficiary." Upon your death your survivor beneficiary will be entitled to receive a monthly allowance for the duration of his or her life. Your monthly retirement allowance will be actuarially reduced to offset the cost of the survivor feature. The factors used to determine the amount of the reduction are in WAC 415-02-380.

(2) What are my benefit options?

(a) Option one: Standard allowance (no survivor feature). The department will pay you a monthly retirement allowance throughout your lifetime. Your monthly retirement allowance will cease upon your death.

(b) Option two: Joint and whole allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to the gross monthly retirement allowance you were receiving.

(c) Option three: Joint and one-half allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to one-half of the gross monthly retirement allowance you were receiving.

(d) Option four: Joint and two-thirds allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to two-thirds (66.667%) of the gross monthly retirement allowance you were receiving.

(3) Do I need my spouse's consent on the option I choose? If you are married, you must provide your spouse's notarized signature indicating consent to the retirement option you select. If you do not provide spousal consent, the department will pay you a monthly retirement allowance based on option three (joint and one-half allowance) and record your spouse as the survivor beneficiary as required by RCW 41.35.220. If your survivor beneficiary has been designated by a dissolution order according to subsection (4) of this section, which was filed with the department at least thirty days before your retirement date, spousal consent is not required.

(4) Can a dissolution order require that a former spouse be designated as a survivor beneficiary? Yes. A dissolution order may require that a former spouse be designated as a survivor beneficiary. The department is required to pay survivor benefits to a former spouse pursuant to a dissolution order that complies with RCW 41.50.790.

(5) What happens if I choose a benefit option with a survivor feature and my survivor beneficiary dies before I do? Your monthly retirement allowance will increase, provided you submit proof of your survivor beneficiary's death to the department. The increase will begin accruing the first day of the month following the death. Your increased monthly allowance will be:

(a) The amount you would have received had you chosen the standard allowance option at the time of retirement; plus

(b) Any cost-of-living adjustments (COLAs) you received prior to your survivor beneficiary's death, based on your original option selection.

Example:

Agnes retires from SERS Plan 2 in 2006. Agnes chooses a benefit option with a survivor feature and names Beatrice, her daughter, as her survivor beneficiary. As a result, Agnes' monthly allowance is reduced from $2,000 (standard allowance) to $1,750. Beatrice dies in 2011. Agnes' monthly allowance will increase to $2,191.05, which equals the amount she would have received had she chosen the standard allowance option, plus the COLAs she has received (based on her prior monthly allowance).


Year Standard Allowance Survivor Option plus COLAs COLA incr.

(3% max)

$ Increase
2006 2,000.00 1,750.00 0.00
2007 1,750.00 .02 35.00
2008 1,785.00 .03 53.55
2009 1,838.55 .025 45.96
2010 1,884.51 .03 56.54
2011 2,000.00 1,941.05
Total COLA's 191.05
Original Option One Monthly Allowance + Total COLA's = New Monthly Allowance
$2000 + $191.05 = $2,191.05*

* In the future, Agnes' COLAs will be based on her increased monthly allowance.



(6) May I change my benefit option after retirement? Your choice of a benefit option is irrevocable with the following three exceptions:

(a) Return to membership. If you retire and then return to membership for at least two years of uninterrupted service, you may choose a different retirement option upon your subsequent retirement. See RCW 41.35.060.

(b) Postretirement marriage option. If you select the standard allowance option at the time of retirement and marry after retirement, you may select a benefit option with a survivor feature and name your current spouse as survivor beneficiary, provided that:

(i) Your benefit is not subject to a property division obligation pursuant to a dissolution order. See WAC 415-01-500;

(ii) The selection is made during a one-year window, on or after the date of the first anniversary and before the second anniversary of your postretirement marriage;

(iii) You provide a copy of your certified marriage certificate to the department;

(iv) You provide proof of your current spouse's birth date; and

(v) You exercise this option one time only.

(c) Removal of a nonspouse survivor option. If you select a benefit option with a survivor feature and name a nonspouse as survivor beneficiary at the time of retirement, you may remove that survivor beneficiary designation and have your benefit adjusted to a standard allowance. You may exercise this option one time only.

(7) Who will receive the balance of my accumulated contributions, if any, after my death?

(a) Plan 2 members:

(i) If you do not have a survivor beneficiary at the time of your death, and you die before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid:

(A) To the person or entity (i.e., trust, organization, or estate) you have nominated by written designation, executed and filed with the department.

(B) If you have not designated a beneficiary, or if your designated beneficiary is no longer living or in existence, then to your surviving spouse.

(C) If not paid according to (a)(i)(A) or (B) of this subsection, then to your estate.

(ii) If you have a survivor beneficiary at the time of your death, and your survivor beneficiary dies before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid:

(A) To the person or entity (i.e., trust, organization, or estate) your survivor beneficiary has nominated by written designation, executed and filed with the department.

(B) If your survivor beneficiary has not designated a beneficiary, or if the designated beneficiary is no longer living or in existence, then to your survivor beneficiary's spouse.

(C) If not paid according to (a)(ii)(A) or (B) of this subsection, then to your survivor beneficiary's estate.

(b) Plan 3 members: The defined benefit stops upon your death or upon the death of your survivor beneficiary, if applicable. As a Plan 3 member, you do not contribute to the defined benefit portion of your retirement allowance. The defined contribution portion of your benefit will be distributed according to WAC 415-111-310.

(8) For more information, see RCW 41.35.220.

[]

OTS-8293.3


REPEALER

     The following section of the Washington Administrative Code is repealed:
WAC 415-110-326 Retirement benefit options.

OTS-8294.4


NEW SECTION
WAC 415-112-504   What are the benefit options for Plan 1 members?   Upon retirement from Plan 1 for service under RCW 41.32.480 or disability under RCW 41.32.550 (1)(c), you must choose to have your retirement allowance paid to you by one of the options described in this section. You may also select an optional supplemental cost-of-living (COLA) adjustment.

(1) May I withdraw any of my contributions? You may withdraw some or all of your accumulated contributions as follows:

(a) If you retire according to the provisions of RCW 41.32.498, you may withdraw some or all of your accumulated contributions at the time of retirement. Your monthly retirement allowance will be actuarially reduced according to the amount you withdraw.

(b) If you terminate service due to a disability under the conditions of RCW 41.32.550 (1)(a), you may withdraw all your accumulated contributions in a lump sum payment. You will receive no monthly retirement allowance.

(2) Which option will pay my beneficiary a monthly allowance after my death? Options described in subsection (3)(c) through (e) of this section include a survivor feature. The person you name at the time of retirement to receive a monthly allowance after your death is referred to as your "survivor beneficiary." Upon your death your survivor beneficiary will be entitled to receive a monthly allowance for the duration of his or her life. Your monthly retirement allowance will be actuarially reduced to offset the cost of the survivor feature. The factors used to determine the amount of the reduction are in WAC 415-02-380.

(3) What are my benefit options?

(a) Maximum benefit allowance (no survivor feature). The department will pay you the maximum benefit allowed by statute. Under this option you will receive a monthly retirement allowance throughout your lifetime. Your monthly allowance will cease upon your death, and any remaining balance of accumulated contributions will be:

(i) Retained by the retirement fund if you retired for service under RCW 41.32.497 or 41.32.498; or

(ii) Paid according to subsection (9) of this section if you retired because of disability and were receiving a monthly retirement allowance under RCW 41.32.550 (1)(c).

(b) Option one: Standard allowance for service retirement (no survivor feature). The department will pay you a monthly retirement allowance throughout your lifetime. Your monthly allowance will cease upon your death, and any remaining balance of accumulated contributions will be paid according to subsection (9) of this section.

(i) This benefit option has a lower monthly allowance than the maximum benefit allowance in (a) of this subsection because, with this option, any remaining accumulated contributions will be paid to your beneficiaries upon your death.

(ii) If you are retiring because of disability under RCW 41.32.550 (1)(c), you will not benefit from this option because your beneficiaries will receive any remaining accumulated contributions under the maximum benefit allowance in (a) of this subsection.

(c) Option two: Joint and whole allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to the gross monthly retirement allowance you were receiving.

(d) Option three: Joint and one-half allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to one-half of the gross monthly retirement allowance you were receiving.

(e) Option four: Joint and two-thirds allowance (available to members retiring on or after January 1, 1996). The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to two-thirds (66.667%) of the gross monthly retirement allowance you were receiving.

(4) Do I need my spouse's consent on the option I choose? If you are married, you must provide your spouse's notarized signature indicating consent to the retirement option you select. If you do not provide spousal consent, the department will pay you a monthly retirement allowance based on option three (joint and one-half allowance) and record your spouse as the survivor beneficiary as required by RCW 41.32.530(2). If your survivor beneficiary has been designated by a dissolution order according to subsection (5) of this section, which was filed with the department at least thirty days before your retirement date, spousal consent is not required.

(5) Can a dissolution order require that a former spouse be designated as a survivor beneficiary? Yes. A dissolution order may require that a former spouse be designated as a survivor beneficiary. The department is required to pay survivor benefits to a former spouse pursuant to a dissolution order that complies with RCW 41.50.790.

(6) What is the supplemental COLA option? In addition to choosing a retirement benefit option described in subsection (3) of this section, you may choose a supplemental annual COLA. If you select this option, your monthly retirement allowance will be actuarially reduced to offset the cost of this benefit.

(7) What happens if I choose a benefit option with a survivor feature and my survivor beneficiary dies before I do? Your monthly retirement allowance will increase, provided you submit proof of your survivor beneficiary's death to the department. The increase will begin accruing the first day of the month following the death.

(a) Members who retire on or after January 1, 1996: Your increased monthly allowance will be:

(i) The amount you would have received had you chosen the maximum benefit at the time of retirement;

(ii) Minus any reduction in the maximum allowance resulting from a withdrawal of contributions;

(iii) Plus any COLAs you received prior to your survivor beneficiary's death, based on your original option selection.

Example:

Lucinda retires from TRS Plan 1 in 1996. Lucinda withdraws some of her contributions, which actuarially reduces her maximum monthly allowance from $2,000 to $1,963.86. She chooses a benefit option with a survivor feature, and names Garth, her husband, as her survivor beneficiary. As a result, Lucinda's monthly allowance is further reduced from $1,963.86 to $1,846.03. Garth dies in January 2001. Lucinda's monthly allowance will increase to $1,963.86, the amount she would have received had she chosen the maximum benefit option (after reduction for her withdrawals). The total amount of the COLAs she received (based on her prior monthly allowance) will be added to the $1,963.86.

(b) Members who retired before January 1, 1996: Your monthly retirement allowance will be adjusted according to the provisions of RCW 41.32.530(3).

(8) May I change my benefit option after retirement? Your choice of a benefit option is irrevocable with the following three exceptions:

(a) Return to membership. If you retire and then return to membership, you may choose a different retirement option upon your subsequent retirement. See RCW 41.32.044.

(b) Postretirement marriage option. If you select the maximum benefit option or the standard allowance option at the time of retirement and marry after retirement, you may select a benefit option with a survivor feature and name your current spouse as survivor beneficiary, provided that:

(i) Your benefit is not subject to a property division obligation pursuant to a dissolution order. See WAC 415-02-500;

(ii) The selection is made during a one-year window, on or after the date of the first anniversary and before the second anniversary of your postretirement marriage;

(iii) You provide a copy of your certified marriage certificate to the department;

(iv) You provide proof of your current spouse's birth date; and

(v) You exercise this option one time only.

(c) Removal of a nonspouse survivor option. If you select a benefit option with a survivor feature and name a nonspouse as survivor beneficiary at the time of retirement, you may remove that survivor beneficiary designation and have your benefit adjusted to a standard allowance. You may exercise this option one time only.

(9) Who will receive the balance of my accumulated contributions, if any, after my death?

(a) If you do not have a survivor beneficiary at the time of your death, and you die before the total of the annuity payments paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid according to this subsection.

(i) Except as provided in (a)(ii) of this subsection, any remaining balance will be paid to the person or entity (i.e., trust, organization, or estate) you have nominated by written designation, executed and filed with the department.

(ii) If you retired for service and chose the maximum benefit option, any remaining balance will be retained by the retirement fund.

(b) If you have a survivor beneficiary at the time of your death, and your survivor beneficiary dies before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid to the person or entity (i.e., trust, organization, or estate) your survivor beneficiary has nominated by written designation, executed and filed with the department.

(10) For more information, see RCW 41.32.530 and 41.32.550.

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NEW SECTION
WAC 415-112-505   What are the benefit options for Plan 2 and 3 members?   Upon retirement for service under RCW 41.32.765 or 41.32.875, or disability under RCW 415-112-790 or 415-112-880, you must choose to have the defined benefit portion of your retirement allowance paid to you by one of the options described in this section.

(1) Which option will pay my beneficiary a monthly allowance after my death? Options described in subsection (2)(c) through (e) of this section include a survivor feature. The person you name at the time of retirement to receive a monthly allowance after your death is referred to as your "survivor beneficiary." Upon your death your survivor beneficiary will be entitled to receive a monthly allowance for the duration of his or her life. Your monthly retirement allowance will be actuarially reduced to offset the cost of the survivor feature. The factors used to determine the amount of the reduction are in WAC 415-02-380.

(2) What are my benefit options?

(a) Option one: Standard allowance for service retirement (no survivor feature). The department will pay you a monthly retirement allowance throughout your lifetime. Your monthly allowance will cease upon your death.

(b) Option two: Joint and whole allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to the gross monthly retirement allowance you were receiving.

(c) Option three: Joint and one-half allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to one-half of the gross monthly retirement allowance you were receiving.

(d) Option four: Joint and two-thirds allowance (available to members retiring on or after January 1, 1996). The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to two-thirds (66.667%) of the gross monthly retirement allowance you were receiving.

(3) Do I need my spouse's consent on the option I choose? If you are married, you must submit your spouse's notarized signature indicating consent to the retirement option you selected. If you do not provide spousal consent, the department will pay you a monthly retirement allowance based on option three (joint and one-half allowance) and record your spouse as the survivor beneficiary as required by RCW 41.32.785(2) and 41.32.851(2). If your survivor beneficiary has been designated by a dissolution order under RCW 41.50.790, which was filed with the department at least thirty days before your retirement date, spousal consent is not required.

(4) Can a dissolution order require that a former spouse be designated as a survivor beneficiary? Yes. A dissolution order may require that a former spouse be designated as a survivor beneficiary. The department is required to pay survivor benefits to a former spouse pursuant to a dissolution order that complies with RCW 41.50.790.

(5) What happens if I choose a benefit option with a survivor feature and my survivor beneficiary dies before I do? Your monthly retirement allowance will increase, provided you submit proof of your survivor beneficiary's death to the department. The increase will begin accruing the first day of the month following the death.

(a) Members who retire on or after January 1, 1996: Your increased monthly allowance will be:

(i) The amount you would have received had you chosen the standard allowance option; plus

(ii) Any cost-of-living adjustments (COLAs) you received prior to your survivor beneficiary's death, based on your original option selection.

Example:

Agnes retires from TRS Plan 2 in 1996. She chooses a benefit option with a survivor feature and names Beatrice, her daughter, as her survivor beneficiary. As a result, Agnes' monthly allowance is reduced from $2,000 (standard allowance) to $1,750. Beatrice dies in 2001. Agnes' monthly allowance will increase to $2,191.05, which equals the amount she would have received had she chosen the standard allowance option, plus the COLAs she has received (based on her prior monthly allowance).


Year Standard Allowance Survivor Option plus COLAs COLA incr.

(3% max)

$ Increase
1996 2,000.00 1,750.00 0.00
1997 1,750.00 .02 35.00
1998 1,785.00 .03 53.55
1999 1,838.55 .025 45.96
2000 1,884.51 .03 56.54
2001 2,000.00 1,941.05
Total COLA's 191.05
Original Monthly Allowance + Total COLA's = New Monthly Allowance
$2000 + $191.05 = $2,191.05*

* In the future, Agnes' COLA will be based on her increased monthly allowance.


(b) Members who retired before January 1, 1996: Your monthly retirement allowance will be adjusted according to the provisions of RCW 41.32.785(3).

(6) May I change my benefit option after retirement? Your choice of a benefit option is irrevocable with the following three exceptions:

(a) Return to membership. If you retire and then return to membership, you may choose a different retirement option upon your subsequent retirement. See RCW 41.32.044.

(b) Postretirement marriage option. If you select the standard allowance option at the time of retirement and marry after retirement, you may select a benefit option with a survivor feature and name your current spouse as survivor beneficiary, provided that:

(i) Your benefit is not subject to a property division obligation pursuant to a dissolution order. See WAC 415-02-500;

(ii) The selection is made during a one-year window, on or after the date of the first anniversary and before the second anniversary of your postretirement marriage;

(iii) You provide a copy of your certified marriage certificate to the department;

(iv) You provide proof of your current spouse's birth date; and

(v) You exercise this option one time only.

(c) Removal of a nonspouse survivor option. If you select a benefit option with a survivor feature and name a nonspouse as survivor beneficiary at the time of retirement, you may remove that survivor beneficiary designation and have your benefit adjusted to a standard allowance. You may exercise this option one time only.

(7) Who will receive the balance of my accumulated contributions, if any, after my death?

(a) Plan 2:

(i) If you do not have a survivor beneficiary at the time of your death, and you die before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid:

(A) To the person or entity (i.e., trust, organization, or estate) you have nominated by written designation, executed and filed with the department.

(B) If you have not designated a beneficiary, or if your designated beneficiary is no longer living, then to your surviving spouse.

(C) If not paid according to (a)(i)(A) or (B) of this subsection, then to your estate.

(ii) If you have a survivor beneficiary at the time of your death, and your survivor beneficiary dies before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid:

(A) To the person or entity (i.e., trust, organization, or estate) your survivor beneficiary has nominated by written designation, executed and filed with the department.

(B) If your survivor beneficiary has not designated a beneficiary, or if the designated beneficiary is no longer living, then to your survivor beneficiary's spouse.

(C) If not paid according to (a)(ii)(A) or (B) of this subsection, then to your survivor beneficiary's estate.

(b) Plan 3: The defined benefit stops upon your death or upon the death of your survivor beneficiary, if applicable. As a Plan 3 member, you do not contribute to the defined benefit portion of your retirement allowance. The defined contribution portion of your benefit will be distributed according to WAC 415-111-310.

(8) For more information, see RCW 41.32.785 and 41.32.790 (Plan 2) and RCW 41.32.851 (Plan 3).

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REPEALER

     The following section of the Washington Administrative Code is repealed:
WAC 415-112-727 Retirement benefit options.