PERMANENT RULES
RETIREMENT SYSTEMS
Effective Date of Rule: Thirty-one days after filing.
Purpose: To correct technical errors and rewrite rules for clarity.
Citation of Existing Rules Affected by this Order: Amending WAC 415-108-443, 415-108-470, and 415-108-800.
Statutory Authority for Adoption: RCW 41.40.020 and 41.50.050(5).
Adopted under notice filed as WSR 06-01-049 on December 16, 2005.
Changes Other than Editing from Proposed to Adopted Version: The term "compensation earnable" has been changed to "reportable compensation" in WAC 415-108-443 and 415-108-470. The term "reportable compensation," as defined in WAC 415-108-010(7) means, "compensation earnable as that term is defined in RCW 41.40.010(8)." This change in terminology does not change the affect of the rules.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 3, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 3, Repealed 0.
Date Adopted: January 26, 2006.
Sandra J. Matheson
Director
OTS-8519.3
AMENDATORY SECTION(Amending WSR 03-06-042, filed 2/27/03,
effective 4/1/03)
WAC 415-108-443
PERS reportable compensation table.
The
following table ((will help you determine)) indicates whether
certain types of payments are reportable compensation under
PERS Plan((s)) 1, 2, or 3((. Be sure to read the referenced
rule to ensure that you have correctly identified the payment
in question. The department determines reportable
compensation based upon the nature of the payment, not the
name applied to it. See WAC 415-108-445)) and provides a
cross-reference to the specific WAC.
| Type of Payment | PERS 1 Reportable Compensation? |
PERS 2 or 3 Reportable Compensation? |
||
| Annual Leave Cash Outs | Yes - WAC 415-108-456 | No - WAC 415-108-456 | ||
| Assault Pay (State Emp.) | Yes - WAC 415-108-468 | Yes - WAC 415-108-468 | ||
| Base Rate | Yes - WAC 415-108-451 | Yes - WAC 415-108-451 | ||
| Car Allowances | No - WAC 415-108-4851 | No - WAC 415-108-4851 | ||
| Cafeteria Plans | Yes - WAC 415-108-455 | Yes - WAC 415-108-455 | ||
| Deferred Wages | Yes - WAC 415-108-459 | Yes - WAC 415-108-459 | ||
| Disability Payments | No - WAC 415-108-477 | No - WAC 415-108-477 | ||
| Disability: Salary lost while on disability leave | Yes - WAC 415-108-468 | Yes - WAC 415-108-468 | ||
| RCW 41.40.038 | RCW 41.40.038 | |||
| Employer Provided Vehicle | No - WAC 415-108-4802 | No - WAC 415-108-480 | ||
| Employer taxes/contributions | No - WAC 415-108-459 | No - WAC 415-108-459 | ||
| Fringe Benefits, including insurance | No - WAC 415-108-475 | No - WAC 415-108-475 | ||
| Illegal Payments | No - WAC 415-108-482 | No - WAC 415-108-482 | ||
| Legislative Leave | Yes - WAC 415-108-464 | Yes - WAC 415-108-464 | ||
| Longevity/Education Attainment Pay | Yes - WAC 415-108-451 | Yes - WAC 415-108-451 | ||
| Nonmoney Maintenance | Yes - WAC 415-108-4703 | No - WAC 415-108-470 | ||
| Optional Payments | No - WAC 415-108-483 | No - WAC 415-108-483 | ||
| Payments in Lieu of Excluded Items | No - WAC 415-108-463 | No - WAC 415-108-463 | ||
| Performance Bonuses | Yes - WAC 415-108-453 | Yes - WAC 415-108-453 | ||
2A portion of the value of an employer provided vehicle
may be reportable compensation in Plan 1 only. See WAC 415-108-480.
3A portion of the value of nonmoney maintenance provided
may be reportable compensation in Plan 1 only. See WAC 415-108-470.
| Type of Payment | PERS 1 Reportable Compensation? |
PERS 2 or 3 Reportable Compensation? |
||
| Retroactive Salary Increase | Yes - WAC 415-108-457 | Yes - WAC 415-108-457 | ||
| Reimbursements | No - WAC 415-108-484 | No - WAC 415-108-484 | ||
| Reinstatement Payments | Yes - WAC 415-108-467 | Yes - WAC 415-108-467 | ||
| Retirement or Termination Bonuses | No - WAC 415-108-487 | No - WAC 415-108-487 | ||
| Severance Pay - Earned Over Time | Yes - WAC 415-108-458 | No - WAC 415-108-458 | ||
| Severance Pay - Not Earned Over Time | No - WAC 415-108-488 | No - WAC 415-108-488 | ||
| Shared Leave - State Emp. | Yes - WAC 415-108-468 | Yes - WAC 415-108-468 | ||
| Shared Leave - Local Government Employees | No - WAC 415-108-468 | No - WAC 415-108-468 | ||
| Sick Leave Cash Outs - State Employees | No - WAC 415-108-456 | No - WAC 415-108-456 | ||
| Sick Leave Cash Out - Local Government Employees | Yes - WAC 415-108-456 | No - WAC 415-108-456 | ||
| Standby Pay | Yes - WAC 415-108-469 | Yes - WAC 415-108-469 | ||
| Time Off with Pay | Yes - WAC 415-108-456 | Yes - WAC 415-108-456 | ||
| WAC 415-108-465 | WAC 415-108-465 | |||
| Union Leave4 | Yes - WAC 415-108-466 | Yes - WAC 415-108-466 | ||
| Workers' Compensation | No - WAC 415-108-479 | No - WAC 415-108-479 | ||
[Statutory Authority: RCW 41.50.050(5) and chapter 41.40 RCW. 03-06-042, § 415-108-443, filed 2/27/03, effective 4/1/03. Statutory Authority: RCW 41.50.050(5), 41.40.010(8), chapter 41.40 RCW. 02-03-120, § 415-108-443, filed 1/23/02, effective 3/1/02. Statutory Authority: RCW 41.50.050. 98-09-059, § 415-108-443, filed 4/17/98, effective 5/18/98.]
(1) ((PERS Plan I members.
(a) If your employer provides you with materials in lieu
of reimbursement for your business expenses, the value of the
materials is not compensation earnable.
(i) The value of employer-provided materials is not
compensation earnable if you use the materials solely in
connection with your employer's business.
(ii) "Materials" includes, but is not limited to, living
quarters, food, board, equipment, clothing, laundry,
transportation, fuel, and utilities.
Example:An employer provides an employee with uniforms
which the employee must wear in performing
services for his employer. Because the uniforms
are to be used solely in connection with the
employer's business, they do not qualify as
nonmoney maintenance compensation. Therefore,
the value of the uniforms is not compensation
earnable.
(b) The department presumes that your employer provides
you materials solely in lieu of reimbursement for business
expenses. Unless you or your employer can show by
corroborating evidence that your employer provided you
materials in whole or in part as payment for your personal
expenses, as opposed to business expenses, the value of the
materials is not compensation earnable.
(c) If your employer provides you with materials for your
personal use, the value of that use is nonmoney maintenance
compensation and is included in your earnable compensation.
(i) "Nonmoney maintenance compensation" means the fair
market value of any form of materials other than cash legally
furnished by your employer to you or your dependents for
personal use.
(ii) Nonmoney maintenance does not include any form of
payment other than cash that is excludable from taxation under
provisions of the Internal Revenue Code. This applies
regardless of whether you or your employer reported the
compensation to the Internal Revenue Service as taxable
income.
(d) Your use of employer-provided materials will qualify
as nonmoney maintenance compensation if your employer
substantiates that they were provided to you as payment for
personal services. In order for employer-provided materials
to qualify as nonmoney maintenance compensation, your employer
must:
(i) Establish and regularly update a written schedule
reflecting the monthly fair market value of each item of
employer-provided materials claimed as nonmoney maintenance
compensation. Typically, the fair market value would be the
cost of the item if it were acquired in a purchase or lease
transaction;
(ii) Report the fair market value of employer-provided
materials as nonmoney maintenance compensation to the
department as compensation earnable. If you pay any amount to
your employer in order to own or use the materials, your
employer must report as compensation earnable the amount by
which the fair market value of the materials exceeds the
amount of your payment;
(iii) Substantiate by adequate records or by other
sufficient corroborating evidence the following:
(A) That the fair market value of each item of nonmoney
maintenance compensation as reported to the department is
accurate;
(B) That each item of nonmoney maintenance compensation
is provided to you for your personal use as payment for your
services to the employer; and
(C) That each item of nonmoney maintenance compensation
is includable in your taxable income for federal income tax
purposes.
Example:An employer leases an apartment for $700.00 per
month. The employer charges an employee $300.00
per month to use the apartment for temporary
living quarters. Because the employee uses the
apartment for personal, rather than business,
purposes, the amount by which the lease value
exceeds the employee's payment is nonmoney
maintenance compensation. The employer must
report $400.00 per month to the department as
compensation earnable for the employee.
(e) How to corroborate that your use of employer-provided
materials qualifies as nonmoney maintenance compensation. In
addition to the records required under (d) of this subsection,
you may provide the department with any oral or written
evidence which you or your employer believe corroborates that
your use of employer-provided materials qualifies as
compensation earnable. However, oral evidence alone has
considerably less value than written evidence. Written
evidence prepared at or near the time your employer provides
you with the item of compensation is generally much stronger
than oral evidence or written evidence created years later.
(2) PERS Plan II members. If you are a PERS Plan II
member, you are not entitled to count the value of any
nonmoney maintenance compensation you receive from your
employer as compensation earnable.)) Nonmoney maintenance
compensation, as defined in this section:
(a) Is reportable compensation to the extent authorized by this section, for Plan 1 members; and
(b) Is not reportable compensation for Plan 2 and 3 members.
(2) Nonmoney maintenance compensation is compensation legally provided to you in a form other than money. For example, nonmoney maintenance compensation may include the provision of materials such as living quarters, food, board, equipment, clothing, laundry, transportation, fuel, and utilities. To be considered nonmoney maintenance compensation, the materials must be provided for your personal use and/or the personal use of your dependents, not for a business use. The materials are not nonmoney maintenance compensation if:
(a) You use them solely in connection with your employer's business; or
(b) They are provided in lieu of reimbursement for your business expenses.
(3) To prove that the provision of materials constitutes nonmoney maintenance compensation:
(a) Your employer must substantiate by adequate records or other sufficient corroborating evidence that the materials were provided to you for your personal use as payment for your services to the employer.
(b) Your employer must substantiate that the fair market value of the materials provided is includable in your taxable income for federal income tax purposes.
(c) You may provide corroborating evidence to the department. Written documentation prepared at or near the time the materials were provided is generally preferred.
(d) In the absence of clear proof, the department will presume that employer-provided materials were not nonmoney maintenance compensation.
(4) Your employer must report nonmoney maintenance compensation to the department. The amount reported as compensation is the fair market value of materials legally provided by your employer. To substantiate the value of nonmoney maintenance compensation:
(a) Your employer must establish and regularly update a written schedule reflecting the monthly fair market value of the materials provided. Typically, the fair market value would be the cost of the item if it were acquired in a purchase or lease transaction. Your employer must be able to substantiate the accuracy of this schedule with adequate records.
(b) If you pay any amount to your employer in order to own or use the materials, your employer must report the amount by which the fair market value exceeds the amount of your payment.
Example:
Your employer leases an apartment for $700.00
per month and charges you $300.00 per month to
use the apartment for temporary living quarters.
Because you use the apartment for personal,
rather than business purposes, the amount by
which the lease value exceeds your payment is
nonmoney maintenance compensation. $400.00 per
month is reportable compensation.
[Statutory Authority: RCW 41.50.050. 95-22-006, § 415-108-470, filed 10/18/95, effective 11/18/95. Statutory Authority: RCW 41.40.010(8) and 41.40.020. 87-17-061 (Order DRS 87-08), § 415-108-470, filed 8/19/87.]
OTS-8281.2
AMENDATORY SECTION(Amending WSR 02-02-060, filed 12/28/01,
effective 1/1/02)
WAC 415-108-800
When ((does a member of the public
employees' retirement system (PERS))) do I enter retirement
status?
As a member of PERS, you enter((s)) retirement status
when ((he or she)) you:
(1) ((Has)) Have separated from service as defined in RCW 41.40.010(((41))) (42);
(2) ((Has)) Have no written or oral agreement to return
to employment ((prior to entering "retiree status")); and
(3) ((Has)) Have applied for retirement, the accrual date
has been determined under RCW 41.40.193, 41.40.680, or
41.40.801, and ((the)) your benefit begins to accrue.
| Example: | Sally is eligible for retirement on July 1st. She submits an application on June 1st with a July 1st retirement date. Her last day of employment is June 30th and she does not have an agreement to return to work. |
| Sally's retirement date (accrual date) is July 1st and the benefit begins to accrue. The first retirement payment will be paid at the end of July. Sally entered "retiree status" effective July 1st. |
[Statutory Authority: RCW 41.50.050(5), 41.04.270, 41.26.030, 41.32.010, 41.32.025, 41.32.480, 41.32.500, 41.32.570, 41.32.765, 41.32.795, 41.32.802, 41.32.855, 41.32.860, 41.32.862, 41.35.010, 41.35.030, 41.35.060, 41.35.450, 41.35.640, 41.40.010, 41.40.023, 41.40.037, 41.40.150, 41.40.193, 41.40.680, 41.40.750, 41.40.801. 02-02-060, § 415-108-800, filed 12/28/01, effective 1/1/02.]