Title of Rule and Other Identifying Information: WAC 415-02-030 Definitions and chapter 415-600 WAC, Dependent care assistance salary reduction program overview.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: As of January 1, 2009, the department of retirement systems (DRS) will no longer administer the dependent care assistance program (DCAP). Because the Washington state health care authority will assume the administration of DCAP, certain DRS rules are no longer necessary. DRS will delete the definition of DCAP found in WAC 415-02-030 and will repeal chapter 415-600 WAC, the rules governing the administration of DCAP.

     Reasons Supporting Proposal: As permitted by RCW 34.05.353 (1)(b), the department is amending a rule that adopts statutory language without material change. As permitted by RCW 34.05.353 (2)(c), the department is repealing rules that are no longer necessary because of changed circumstances.

     Statutory Authority for Adoption: RCW 41.05.050(5).

     Statute Being Implemented: RCW 41.04.600 through 41.04.645 and Title 26 I.R.C.

     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: Sarah Monaly, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7291; Implementation and Enforcement: Michelle Hardesty, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7193.

September 22, 2008

Sarah Monaly

Rules Coordinator

OTS-1929.1

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

WAC 415-02-030   Definitions.   This section contains definitions of words and phrases commonly used in the department of retirement systems' rules. It also serves as a directory for finding definitions within the RCWs and WACs.

     (1) Accumulated contributions means the sum of all contributions paid into a member's defined benefit account, including interest.

     (2) Appeal means the proceeding through which a party obtains review of a department action in an adjudicative proceeding conducted under chapter 34.05 RCW (the Administrative Procedure Act) and chapter 415-08 WAC (the department's appeal rules).

     (3) Average final compensation is defined in RCW 41.32.010(30) (TRS); RCW 41.35.010(14) (SERS); RCW 41.40.010(17) (PERS); and RCW 41.37.010(14) (PSERS).

     (4) Average final salary for WSPRS is defined in RCW 43.43.120(15).

     (5) Cafeteria plan means a "qualified" employee benefit program under IRC section 125, such as certain health and welfare plans.

     (6) Calendar month.

     (a) Refers to one of the twelve named months of the year, extending from the first day of the named month through the last day. For example: January 1st through January 31st is a calendar month. February 1st through February 29th is a calendar month in a leap year. March 13th through April 12th is not a calendar month.

     (b) Exception: For the purpose of administering the break in employment required by RCW 41.32.570, 41.32.802, 41.32.862, 41.35.060, 41.37.050 and 41.40.037 for retirees returning to work, one calendar month means thirty consecutive calendar days. For example: Kim's retirement date is August 1. August 31 would be the earliest Kim could return to work and meet the requirement for a one calendar month break in employment.

     (7) Compensation earnable or earnable compensation definitions can be found in RCW 41.32.010(10) and 41.32.345 (TRS); RCW 41.35.010(6) (SERS); RCW 41.37.010(6) (PSERS); and RCW 41.40.010(8) (PERS).

     (8) Contribution rate is:

     (a) For employees: The fraction (percent) of compensation a member contributes to a retirement system each month.

     (b) For employers: The fraction (percent) of payroll a member's employer contributes to a retirement system each month. Contribution rates vary for the different systems and plans.

     (9) Deferred compensation refers to the amount of the participant's compensation, which the participant voluntarily defers from earnings before taxes to a deferred compensation program.

     (10) Defined benefit plan is a pension plan in which a lifetime retirement allowance is available, based on the member's service credit and compensation.

     (11) Defined contribution plan is a plan in which part of members' or participants' earnings are deferred into an investment account in which tax is deferred until funds are withdrawn. The benefit is based on the contribution rate and the amount of return from the investment of the contributions. Members or participants receive the full market rate of return minus expenses. There is no guaranteed rate of return and the value of an account will increase or decrease based upon market fluctuations.

     (12) Department means the department of retirement systems.

     (13) ((Dependent care assistance salary reduction plan (DCAP) is a plan that allows an eligible employee of the state of Washington to set aside a "before tax" portion of his or her gross salary before federal income and Social Security taxes to be used for the reimbursement of dependent care expenses.

     (14))) Director means the director of the department of retirement systems.

     (((15))) (14) Employee means a worker who performs labor or services for a retirement systems employer under the control and direction of the employer as determined under WAC 415-02-110(2). An employee may be eligible to participate as a member of one of the state-administered retirement systems according to eligibility requirements specified under the applicable retirement system.

     (((16))) (15) Employer is defined in RCW 41.26.030(2) (LEOFF), 41.32.010(11) (TRS), 41.34.020(5) (Plan 3), 41.35.010(4) (SERS), 41.37.010(4) (PSERS) and 41.40.010(4) (PERS).

     (((17))) (16) Ex-spouse refers to a person who is a party to a "dissolution order" as defined in RCW 41.50.500(3).

     (((18))) (17) Final average salary for LEOFF is defined in RCW 41.26.030(12).

     (((19))) (18) Gainsharing is the process through which members of certain plans share in the extraordinary investment gains on earnings on retirement assets under chapters 41.31 and 41.31A RCW.

     (((20))) (19) Independent contractor means a contract worker who is not under the direction or control of the employer as determined under WAC 415-02-110 (2) and (3).

     (((21))) (20) IRC means the Federal Internal Revenue Code of 1986, as subsequently amended.

     (((22))) (21) JRF means the judges' retirement fund created by chapter 2.12 RCW.

     (((23))) (22) JRS means the Washington judicial retirement system created by chapter 2.10 RCW.

     (((24))) (23) LEOFF means the Washington law enforcement officers' and fire fighters' retirement system created by chapter 41.26 RCW.

     (((25))) (24) Member means a person who is included in the membership of one of the retirement systems created by chapters 2.10, 2.12, 41.26, 41.32, 41.34, 41.35, 41.37, 41.40, or 43.43 RCW.

     (((26))) (25) Participant means an eligible employee who participates in a deferred compensation or dependent care assistance plan.

     (((27))) (26) Participation agreement means an agreement that an eligible employee signs to become a participant in a deferred compensation or dependent care assistance plan.

     (((28))) (27) Pension plan is a plan that provides a lifelong post retirement payment of benefits to employees.

     (((29))) (28) PERS means the Washington public employee's retirement system created by chapter 41.40 RCW.

     (((30))) (29) Petition means the method by which a party requests a review of an administrative determination prior to an appeal to the director. The department's petitions examiner performs the review under chapter 415-04 WAC.

     (((31))) (30) Plan 1 means the retirement plans in existence prior to the enactment of chapters 293, 294 and 295, Laws of 1977 ex. sess.

     (((32))) (31) Plan 2 means the retirement plans established by chapters 293, 294 and 295, Laws of 1977 ex. sess., chapter 341, Laws of 1998, and chapter 329, Laws of 2001.

     (((33))) (32) Plan 3 means the retirement plans established by chapter 239, Laws of 1995, chapter 341, Laws of 1998, and chapter 247, Laws of 2000.

     (((34))) (33) Portability is the ability to use membership in more than one Washington state retirement system in order to qualify for retirement benefits. See chapters 41.54 RCW and 415-113 WAC.

     (((35))) (34) PSERS means the Washington public safety employees' retirement system created by chapter 41.37 RCW.

     (((36))) (35) Public record is defined in RCW 42.17.020(41).

     (((37))) (36) Restoration is the process of restoring a member's service credit for prior periods.

     (((38))) (37) Retirement system employer - see "employer."

     (((39))) (38) Rollover means a distribution that is paid to or from an eligible retirement plan within the statutory time limit allowed.

     (((40))) (39) Separation date is the date a member ends employment in a position eligible for retirement or disability benefit coverage.

     (((41))) (40) SERS means the Washington school employees' retirement system created by chapter 41.35 RCW.

     (((42))) (41) Split account is the account the department establishes for a member or retiree's ex-spouse.

     (((43))) (42) Surviving spouse refers to a person who was married to the member at the time of the member's death and who is receiving or is eligible to receive a survivor benefit.

     (((44))) (43) Survivor beneficiary means a person designated by the member to receive a monthly benefit allowance after the member dies.

     (((45))) (44) Survivor benefit is a feature of a retirement plan that provides continuing payments to a beneficiary after the death of a member or retiree.

     (((46))) (45) TRS means the Washington state teachers' retirement system created by chapter 41.32 RCW.

     (((47))) (46) The Uniform Services Employment and Reemployment Rights Act of 1994 (USERRA) is the federal law that requires employers to reemploy and preserve job security, pension and welfare benefits for qualified employees who engage in military service.

     (((48))) (47) WSPRS means the Washington state patrol retirement system created by chapter 43.43 RCW.

[Statutory Authority: RCW 41.50.050(5). 06-18-009, § 415-02-030, filed 8/24/06, effective 9/24/06. Statutory Authority: RCW 41.50.050(5), 41.40.010(42), 41.40.037. 04-04-037, § 415-02-030, filed 1/29/04, effective 3/1/04. Statutory Authority: RCW 41.50.050(5). 02-23-037, § 415-02-030, filed 11/13/02, effective 1/1/03; 02-01-120, § 415-02-030, filed 12/19/01, effective 1/19/02. Statutory Authority: RCW 41.50.050. 00-10-016, § 415-02-030, filed 4/21/00, effective 5/22/00; 94-09-039, § 415-02-030, filed 4/19/94, effective 5/20/94; Order 4, § 415-02-030, filed 7/27/77.]

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