Preproposal statement of inquiry was filed as WSR 05-07-040.
Title of Rule and Other Identifying Information: WAC 415-501-494 How will the account be distributed if my beneficiary is a minor?
Hearing Location(s): Department of Retirement Systems (DRS), 6835 Capitol Boulevard, Conference Room 115, Tumwater, WA, on March 24, 2009, at 4:00 p.m.
Date of Intended Adoption: March 25, 2009.
Submit Written Comments to: Sarah White, Rules Coordinator, Department of Retirement Systems, P.O. Box 48380, Olympia, WA 98504-8380, e-mail email@example.com, fax (360) 753-3166, by 5:00 p.m. on March 24, 2009.
Assistance for Persons with Disabilities: Contact Sarah White, rules coordinator, by March 17, 2009, 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: The purpose of this proposal is to update the department's rule concerning distribution of deferred compensation program (DCP) accounts to minors. Currently, a guardianship must be established prior to the distribution of a DCP account to a minor beneficiary, regardless of the value of the account. The department is proposing changes to allow distribution based on the value of the account. For accounts with a value of less than $5,000, distribution will be made to a custodian on behalf of the minor in accordance with the Uniform Transfers to Minors Act. For accounts with a value of $5,000 or greater, the department will require proof of guardianship.
Reasons Supporting Proposal: DRS is amending this rule to assist DCP participants and their beneficiaries, and to provide a distribution process that recognizes the costs associated with establishing a guardianship balanced with the value of the account to be distributed.
Statutory Authority for Adoption: RCW 41.50.050(5).
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: Sarah White, 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.
No small business economic impact statement has been prepared under chapter 19.85 RCW. These rules have no effect on businesses.
A cost-benefit analysis is not required under RCW 34.05.328. DRS is not one of the named departments in RCW 34.05.328.
February 10, 2009
AMENDATORY SECTION(Amending WSR 04-22-053, filed 10/29/04, effective 11/29/04)
WAC 415-501-494 How will the account be distributed if my beneficiary is a minor? ((
(1) The department will
distribute deferred compensation funds on behalf of a minor
beneficiary only upon proof that the minor has either a
court-appointed guardian or a custodian designated in
compliance with RCW 11.114.030.
(2) If the department does not receive the proof in subsection (1) of this section, or if the guardian or custodian is unable or unwilling to serve, the department will request a court of competent jurisdiction to establish a guardianship under chapters 11.88 and 11.92 RCW. The department will make this request no sooner than one hundred eighty days after notification of your death, regardless of the amount at issue.
(3) After a guardianship or custodianship has been established, either by prior designation or by court order, the department will transfer the deferred compensation funds to the named guardian or custodian.
(4) If you have more than one minor beneficiary, a separate custodianship must be established for each minor. Each minor's interest must be determined in accordance with the governing instrument and applicable law. Only one person may be the custodian for each minor.
(5) Disbursement of funds to the guardian or custodian on behalf of the minor discharges the department from further liability.
(6) The guardian or custodian may choose a deferred compensation distribution date and method on behalf of the minor, consistent with the requirements of this chapter.)) If you die before your entire account has been distributed and if one or more of your beneficiaries is a minor child, the department will distribute your deferred compensation funds to the minor according to the following:
(1) UTMA custodian. If your beneficiary is a minor at the time of your death, and if you have designated a custodian to receive funds on behalf of your minor beneficiary pursuant to RCW 11.114.030 of the Uniform Transfers to Minors Act (UTMA), the department will distribute your funds to the designated custodian regardless of the amount to be distributed. If you have more than one minor beneficiary, a separate custodianship must be established for each minor.
(2) No UTMA custodian. If, at the time of your death, your beneficiary is a minor and you did not designate a custodian to receive the funds on behalf of your minor beneficiary, then your funds will be distributed according to the following:
(a) If your beneficiary is an emancipated minor and your DCP account balance is less than five thousand dollars, the department will distribute the funds directly to the minor.
(b) If your beneficiary is an unemancipated minor and your DCP account balance is less than five thousand dollars, the department will distribute the funds to an adult member of the minor's family or to a court-appointed custodian who submits a claim on behalf of the minor beneficiary. If no adult family member or court-appointed custodian submits a claim within one hundred eighty days of your death, the department will directly petition the court for the appointment of a custodian under the UTMA. After a custodian is appointed, the department will distribute the funds to the custodian.
(c) If your beneficiary is a minor and your DCP account balance is five thousand dollars or greater, the department will distribute the funds only to a court-appointed guardian.
(i) Upon satisfactory proof of guardianship, the department will distribute the funds to the guardian of the minor.
(ii) If the department does not receive satisfactory proof of guardianship within one hundred eighty days of your death, the department will petition the court for the appointment of a guardian under chapters 11.88 and 11.92 RCW. After a guardian is appointed, the department will distribute the funds to the guardian pursuant to the terms of the guardianship order.
(3) Distribution consistent with this rule releases the department from further liability with regard to your DCP account.
(4) The person receiving the distribution pursuant to this rule must choose a distribution date and method on behalf of the minor, consistent with the requirements of this chapter.
(5) Terms used. For purposes of this rule, the following terms are defined as:
(a) An "adult" is any person who has attained the age of twenty-one years.
(b) A "member of the minor's family" means a parent, stepparent, spouse, grandparent, brother, sister, uncle, or aunt of the minor, whether in whole or half blood or by adoption.
[Statutory Authority: RCW 41.50.050(5), 41.50.780(10), and 41.50.770. 04-22-053, § 415-501-494, 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, § 415-501-494, filed 12/19/01, effective 1/1/02.]