WSR 09-09-044

PERMANENT RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed April 9, 2009, 8:51 a.m. , effective May 10, 2009 ]


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

Purpose: The purpose of this rule-making order is to adopt changes to WAC 415-501-494 How will the account be distributed if my beneficiary is a minor? Currently, a guardianship must be established prior to the distribution of a deferred compensation program (DCP) account to a minor beneficiary, regardless of the value of the account. The department is changing its rule to allow for the nomination of a custodian to receive DCP funds on behalf of a minor under the Uniform Transfers to Minors Act. If a custodian is not nominated and the account value is less than $5,000, an adult family member may receive the funds or a custodianship may be established on the minor's behalf. If a custodian is not nominated and the account value is $5,000 or more, a guardianship must be established on the minor's behalf prior to distribution.

Citation of Existing Rules Affected by this Order: Amending WAC 415-501-494.

Statutory Authority for Adoption: RCW 41.50.050(5).

Other Authority: RCW 41.50.770, 41.50.780.

Adopted under notice filed as WSR 09-05-027 on February 10, 2009.

Changes Other than Editing from Proposed to Adopted Version: The text being adopted has minor changes from the text proposed in filing WSR 09-01-149. The department clarified the use of "custodian" by changing, or removing, reference from "designated" to "nominated." The meaning of the rule is not changing.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 1, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 1, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 1, Repealed 0.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: April 9, 2009.

Steve Hill

Director

OTS-2176.2


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) Nominated UTMA custodian. If your beneficiary is a minor at the time of your death, and if you have nominated 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 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 nominated UTMA custodian. If, at the time of your death, your beneficiary is a minor and you did not nominate 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.]

Washington State Code Reviser's Office