WSR 08-11-102

PERMANENT RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed May 20, 2008, 11:15 a.m. , effective June 20, 2008 ]


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

Purpose: The purpose of this rule-making order is to implement SHB 1266, passed by the 2007 legislature. This bill amends under what circumstances a beneficiary of a member of the law enforcement officers' and fire fighters' retirement system (LEOFF), public employees' retirement system (PERS), public safety employees' retirement system (PSERS), school employees' retirement system (SERS), teachers' retirement system (TRS), or the Washington state patrol retirement system (WSPRS) may receive a $150,000 death benefit. Previously, while beneficiaries of LEOFF, PERS, PSERS, SERS, TRS, and WSPRS could receive the benefit if a member died as a result of injuries sustained during the course of employment, only beneficiaries of a member of LEOFF Plan 2 could receive the benefit if the member died as a result of an occupational disease or infection that arose naturally and proximately out of employment. Now, beneficiaries of LEOFF Plan 1, PERS, PSERS, SERS, TRS, and WSPRS may also receive this benefit if the member dies as a result of an occupational disease or infection that arose naturally and proximately out of employment. The department of retirement systems rules need updating to accurately reflect these changes.

Citation of Existing Rules Affected by this Order: Amending WAC 415-02-710.

Statutory Authority for Adoption: RCW 41.50.050(5).

Other Authority: RCW 41.04.017, 41.26.048, 41.32.053, 41.35.115, 41.40.0931, 41.40.0932, 43.43.285.

Adopted under notice filed as WSR 08-08-021 on March 20, 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Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 1, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 1, Repealed 0.

Date Adopted: May 20, 2008.

Sandra J. Matheson

Director

OTS-1403.1


AMENDATORY SECTION(Amending WSR 06-18-009, filed 8/24/06, effective 9/24/06)

WAC 415-02-710   What is the $150,000 death benefit?   (1) What is the $150,000 death benefit? This is a benefit consistent with workers' compensation law, Title 51 RCW((, for LEOFF, PERS, PSERS, SERS, TRS, and WSPRS beneficiaries where the member dies as a result of injuries3 sustained in the course of employment)). The benefit may be nontaxable under applicable federal law. It is payable to LEOFF, PERS, PSERS, SERS, TRS, and WSPRS beneficiaries if the member died as a result of:

(a) An injury sustained in the course of employment; or

(b) An occupational disease or infection that arose naturally and proximately out of employment.

(2) Who is covered? Deceased members of LEOFF, PERS, PSERS, SERS, TRS, and WSPRS. If the deceased was a member of another plan, please contact the department.

(3) Who will determine eligibility for the benefit? The Washington state department of labor and industries (L&I) will determine eligibility consistent with Title 51 RCW and applicable retirement statutes in chapter 41.26 RCW (LEOFF), chapter 41.40 RCW (PERS), chapter 41.37 RCW (PSERS), chapter 41.35 RCW (SERS), chapter 41.32 RCW (TRS), or chapter 43.43 RCW (WSPRS).

(4) Who will receive the $150,000 death benefit?

(a) LEOFF Plan 2, PERS, PSERS, SERS, TRS, and WSPRS Plan 2: The person(s) the member designated as his or her beneficiary(ies) for his or her retirement plan will receive the benefit unless the member designated a different beneficiary(ies) for the $150,000 death benefit. If the member did not designate a beneficiary for either the plan or death benefit, then the member's death benefit shall be paid to the member's surviving spouse as if in fact the spouse had been nominated by written designation, or if there is no surviving spouse, then to the member's estate.

(b) LEOFF Plan 1 and WSPRS Plan 1: In these plans, the member's surviving spouse is automatically the beneficiary for the member's retirement plan. The member may designate a different person(s) for the $150,000 death benefit. If the member did not designate a beneficiary for either the plan or death benefit, then the member's death benefit shall be paid to the member's surviving spouse as if in fact the spouse had been nominated by written designation, or if there is no surviving spouse, then to the member's estate.

(5) How do I apply for the benefit? To apply:

(a) Obtain an application from the department.

(b) Submit a correctly completed application to the department. The department will submit the application to L&I.

(6) How will I receive the benefit? L&I will notify you and the department of approval or disapproval of eligibility. If you are approved, you may choose to have the department send the ((sump)) lump sum payment directly to you or to your bank.

(7) How will DRS treat the $150,000 payment for tax purposes?

(a) The department will treat the payment as nontaxable.

(b) The department does not guarantee that payments should or should not be designated as exempt from federal income tax.

(c) The department does not guarantee that it was correct in withholding or not withholding taxes from the death benefit payment.

(d) The department does not:

(i) Represent or guarantee that any particular federal or state income, payroll, personal property or other tax consequence will occur because of its nontaxable determination; or

(ii) Assume any liability for your compliance with the Internal Revenue Code.

(e) You should consult with your own tax advisor regarding all questions of federal or state income, payroll, personal property or other tax consequences regarding any payments you receive from the department.


((Footnote to section:

3 A LEOFF Plan 2 beneficiary is entitled to the $150,000 death benefit if the member dies as a result of injuries sustained in the course of employment, or if the member dies from an occupational disease or infection that arises naturally and proximately out of employment under LEOFF Plan 2. See RCW 41.26.048.))

[Statutory Authority: RCW 41.50.050(5), 41.04.017, 41.26.048, 41.32.053, 41.35.115, 41.40.0931, 41.40.0932, 43.43.285. 06-18-009, 415-02-710, filed 8/24/06, effective 9/24/06. Statutory Authority: RCW 41.50.050(5), 41.04.017, 41.26.048, 41.32.053, 41.35.115, 41.40.0932, 43.43.285. 03-24-050, 415-02-710, filed 11/26/03, effective 1/1/04.]

Washington State Code Reviser's Office