Preproposal statement of inquiry was filed as WSR 05-22-062.
Title of Rule and Other Identifying Information: WAC 415-501-485 How do I obtain a distribution?
Hearing Location(s): Department of Retirement Systems, 6835 Capitol Boulevard, Conference Room 115, Tumwater, WA, on January 25, 2006, at 1:30 p.m.
Date of Intended Adoption: January 26, 2006.
Submit Written Comments to: Leslie L. Saeger, Rules Coordinator, Department of Retirement Systems, P.O. Box 48380, Olympia, WA 98504-8380, e-mail firstname.lastname@example.org, fax (360) 753-3166, by 5:00 p.m., January 25, 2006.
Assistance for Persons with Disabilities: Contact Leslie Saeger, Rules Coordinator, by January 17, 2006, TDD (360) 664-7291, TTY (360) 586-5450, phone (360) 664-7291.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: This rule action amends WAC 415-501-485 to more accurately reflect the IRS code, and eliminate changes for misinterpretation.
Statutory Authority for Adoption: RCW 41.50.780(10).
Statute Being Implemented: RCW 41.50.770 and 41.50.780.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Department of Retirement Systems, governmental.
Name of Agency Personnel Responsible for Drafting: Leslie Saeger, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7291; Implementation and Enforcement: Dave Nelsen, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7291.
No small business economic impact statement has been prepared under chapter 19.85 RCW. These rules have no affect on businesses.
A cost-benefit analysis is not required under RCW 34.05.328. The Department of Retirement Systems is not one of the named departments in RCW 34.05.328.
December 16, 2005
AMENDATORY SECTION(Amending WSR 04-22-053, filed 10/29/04, effective 11/29/04)
WAC 415-501-485 How do I obtain a distribution? Distribution from the plan is governed by Internal Revenue Code Sections 401 (a)(9) and 457(d); the treasury regulations interpreting these sections; and these rules to the extent they are not inconsistent with the Internal Revenue Code. The options for distribution are set forth in the DCP Distribution Booklet. The booklet will be mailed to you when your employer notifies the department of your termination of employment.
(1) Date of distribution. You may choose the date on which to begin distribution from your deferred compensation account, subject to the requirements in (a) through (c) of this subsection. The department must receive a properly completed distribution form from you at least thirty days prior to the date distribution is to begin.
(a) Earliest date. You may not begin distribution prior to your termination of employment, with the following exceptions:
(i) A distribution for an unforeseeable emergency under WAC 415-501-510;
(ii) A voluntary in-service distribution under subsection (4) of this section; or
(iii) A distribution from funds that were rolled into the deferred compensation account.
(b) Latest date. You must begin distribution on or before April 1st of the calendar year following the latter of:
(i) The calendar year in which you reach age seventy and one-half; or
(ii) The calendar year in which you retire.
(c) If you do not make a timely choice of distribution date, the department will begin distribution according to the minimum distribution requirements in IRC Section 401 (a)(9).
(2) Method of distribution. You must choose a distribution method (amount and frequency) from the payment options outlined in the DCP Distribution Booklet. Payment options include a lump sum payment, periodic payments, or an annuity purchase.
(a) Periodic payments must be at least fifty dollars per month (if paid monthly) or six hundred dollars per year.
(b) Beginning at age seventy and one-half or when you terminate employment, whichever comes later, payment must be in an amount to satisfy minimum distribution requirements in IRC Section 401 (a)(9).
(3) Voluntary in-service distribution. You may choose to withdraw the total amount payable to you under the plan while you are employed if the following three requirements are met:
The total amount payable to you)) Your entire
account value does not exceed five thousand dollars;
(b) You have not previously received an in-service distribution; and
(c) Your deferrals have been suspended during the preceding two-year period ending on the date of the in-service distribution.
(4) Unforeseeable emergencies. See WAC 415-501-510.
(5) Rehire. If you terminate and then return to employment for an eligible employer, you may reenroll in the plan. The department will stop your distribution, if applicable, and void any choices of distribution date and method made prior to reenrollment.
[Statutory Authority: RCW 41.50.050(5), 41.50.780(10), and 41.50.770. 04-22-053, § 415-501-485, filed 10/29/04, effective 11/29/04. Statutory Authority: RCW 41.50.050(5), 41.50.030(2), 41.50.088(2), 41.50.770, and 41.50.780, 26 U.S.C. (Internal Revenue Code) and related tax regulations. 02-01-121, § 415-501-485, filed 12/19/01, effective 1/1/02. Statutory Authority: RCW 41.50.770, [41.50.]780 and 41.50.050. 00-11-104, amended and recodified as § 415-501-485, filed 5/18/00, effective 6/18/00. Statutory Authority: RCW 41.50.050 and 41.50.780(11). 96-16-020, § 415-512-085, filed 7/29/96, effective 7/29/96.]