WSR 08-10-025

PERMANENT RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed April 25, 2008, 4:54 p.m. , effective May 26, 2008 ]


Effective Date of Rule: Thirty-one days after filing.

Purpose: The department needs to update rules in TITLE 415 WAC that contain technical errors, including references to repealed and nonexistent rules, and outdated meeting information. The substance and the meaning of the rules are not changing.

Citation of Existing Rules Affected by this Order: Amending WAC 415-02-550, 415-112-015, 415-112-505, and 415-200-020.

Statutory Authority for Adoption: RCW 41.50.050(5).

Other Authority: For WAC 415-02-550 is RCW 41.50.500, 41.50.670, 41.50.710, and 41.50.790; for WAC 415-112-015 is RCW 41.32.010 and chapter 41.32 RCW; for WAC 415-112-505 is RCW 41.32.785, 41.32.851, and 41.32.790; and for WAC 415-200-020 is RCW 41.50.086.

Adopted under notice filed as WSR 08-05-028 on February 12, 2008.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 4, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 4, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 4, Repealed 0.

Date Adopted: April 25, 2008.

Sandra J. Matheson

Director

OTS-1334.1


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

WAC 415-02-550   What happens to my defined contributions if I transfer to Plan 3 after the department of retirement systems accepts my property division dissolution order?   (1) Who may use this section? You may use this section if you were a member of PERS Plan 2, SERS Plan 2, or TRS Plan 2 and first obtained a property division dissolution order using the language in RCW 41.50.670(2) and WAC 415-02-510 or 415-02-520, and then transfer to Plan 3.1

(2) What happens if the property division dissolution order (using the language in RCW 41.50.670(2) and WAC 415-02-510) did not split my account? Refer to WAC ((415-03-530 [WAC 415-03-530])) 415-02-530 for information about your defined benefit account and about your and your ex-spouse's defined contribution accounts after you transfer to Plan 3.

(3) What happens if the property dissolution order used the language in WAC 415-02-520 and did split my account?

(a) Your ex-spouse's account will remain in Plan 2. Your ex-spouse is ineligible to transfer to Plan 3.

(b) The balance of your accumulated contributions remaining in your Plan 2 account after it was split will be transferred to your Plan 3 defined contributions account. (Refer to chapter 415-111 WAC for information about your defined contribution account.)

(4) How will gainsharing be applied to my account? Gainsharing is not applied to Plan 2 member accounts. If gainsharing is applied after you have transferred to Plan 3, only you will receive the gainsharing amount.

(5) Terms used:

(a) Dissolution order - RCW 41.50.500.

(b) Ex-spouse - WAC 415-02-030.

(c) Gainsharing - Chapter 41.31 RCW (Plan 1); chapter 41.31A RCW (Plan 3); WAC 415-02-030; 415-111-440.

(d) PERS - Public employees' retirement system.

(e) Plan 3 retirement systems - WAC 415-111-100.

(f) SERS - School employees' retirement system.

(g) Split accounts - WAC 415-02-030.

(h) TRS - Teachers' retirement system.


Footnote to section:

1 The section does not apply to retirees, because retirees cannot transfer to Plan 3.

[Statutory Authority: RCW 41.50.050(5), 41.50.500, [41.50.]670-[41.50.]710, [41.50.]790 and 2002 c 158. 03-12-014, 415-02-550, filed 5/27/03, effective 7/1/03.]

OTS-1335.1


AMENDATORY SECTION(Amending WSR 05-12-042, filed 5/25/05, effective 6/25/05)

WAC 415-112-015   Definitions.   All definitions in RCW 41.32.010 and WAC 415-02-030 apply to terms used in this chapter. Other terms relevant to the administration of chapter 41.32 RCW are defined in this chapter.

(1) Accrual date means the first date from which a member's or beneficiary's benefit is calculated. See WAC 415-112-520, RCW 41.32.795 and 41.32.855.

(2) Annual leave means leave provided by an employer for the purpose of taking regularly scheduled work time off with pay. Annual leave does not usually include leave for illness, personal business if in addition to and different than vacation leave, or other paid time off from work. However, if an employer authorizes only one type of leave, covering paid leave for vacation, illness, and any other excused absence from work, such leave will be considered annual leave for purposes of RCW 41.50.150.

(3) Dual member means a person who:

(a) Is or becomes a member of a retirement system, as defined in RCW 41.50.030 or 41.54.010(6), on or after July 1, 1988;

(b) Has been a member of one or more other systems; and

(c) Has never been retired for service from a retirement system and is not receiving a disability retirement or disability leave benefit from any retirement system listed in RCW 41.50.030 or 41.54.010(6). See WAC 415-113-041.

(4) Ineligible position means a position that does not meet the requirements of an eligible position as stated in RCW 41.32.010(37).

(5) Pension benefit means that portion of a retiree's monthly retirement allowance that is funded by the state of Washington and the retiree's former employer or employers.

(6) Public educational institution means a school district, the state school for the deaf, the state school for the blind, educational service districts, institutions of higher education, or community or technical colleges.

(7)(a) Public school as defined in RCW 41.32.010 includes school districts, educational service districts, the state school for the deaf, and the state school for the blind but does not include the office of the superintendent of public instruction.

(b) As applied to TRS employers other than those listed in (a) of this subsection, "public school" means an institution, fifty percent or more of whose employees are "qualified to teach," whose primary function is to educate students. See subsection (8) of this section.

(8) Qualified to teach as used under RCW 41.32.010(29) means:

(a) Having a valid certificate issued by the office of the superintendent of public instruction pursuant to WAC ((180-79A-140)) 181-79A-140;

(b) Having a valid permit to teach issued by a lawful authority of this state pursuant to WAC ((180-79A-128)) 181-79A-128; or

(c) Being employed under a contract to teach with an institution of higher education as defined in RCW 28B.10.016.

(9) Service in an administrative or supervisory capacity as used under RCW 41.32.010 and in this chapter:

(a) Means:

(i) Service in a managerial role relating to the administration of a public school; or

(ii) Service involving the exercise of direction over employees of the public school.

(b) Includes, but is not limited to, service as: Principal, assistant principal, superintendent, assistant superintendent, personnel manager and business manager.

(10) Spousal consent requires written evidence that the married member's spouse consents to the retirement option selected by the member. The spouse's notarized signature on the retirement application, duly executed and filed with the department, constitutes "written evidence."

(11) System acronyms used in this chapter are defined as follows:

"PERS" means the public employees' retirement system.

"SERS" means the school employees' retirement system.

"TRS" means the teachers' retirement system.

[Statutory Authority: RCW 41.50.050(5), 41.32.010 and chapter 41.32 RCW. 05-12-042, 415-112-015, filed 5/25/05, effective 6/25/05. Statutory Authority: RCW 41.50.050(5). 04-21-080, 415-112-015, filed 10/20/04, effective 11/20/04. Statutory Authority: RCW 41.50.050(5) and chapter 41.32 RCW. 02-18-046, 415-112-015, filed 8/28/02, effective 9/30/02. Statutory Authority: RCW 41.50.050. 95-16-053, 415-112-015, filed 7/25/95, effective 8/25/95. Statutory Authority: RCW 41.50.050 and Bowles v. Retirement Systems, 121 Wn.2d 52 (1993). 94-11-009, 415-112-015, filed 5/5/94, effective 6/5/94. Statutory Authority: RCW 41.32.345 and 41.50.050. 93-20-021, 415-112-015, filed 9/24/93, effective 10/25/93.]

OTS-1336.1


AMENDATORY SECTION(Amending WSR 05-23-062, filed 11/14/05, effective 12/15/05)

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))) and (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 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 COLAs 191.05
Original Monthly Allowance + Total COLAs = 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).

[Statutory Authority: RCW 41.50.050(5), 41.32.785, 41.32.851, 41.32.790. 05-23-062, 415-112-505, filed 11/14/05, effective 12/15/05.]

OTS-1337.2


AMENDATORY SECTION(Amending WSR 96-23-025, filed 11/13/96, effective 12/14/96)

WAC 415-200-020   Regular board meetings.   The regular meetings of the employee retirement benefits board are held ((on the fourth Tuesday of each month beginning)) quarterly at ((9:00 a.m. at)) the offices of the State Investment Board, ((2424 Heritage Court S.W.)) 2100 Evergreen Park Drive Southwest, Olympia, Washington ((98504-0916)).

[Statutory Authority: RCW 41.50.086 and 41.50.050. 96-23-025, 415-200-020, filed 11/13/96, effective 12/14/96.]

Washington State Code Reviser's Office