Preproposal statement of inquiry was filed as WSR 10-07-152.
Title of Rule and Other Identifying Information: WAC 415-02-360 What is the optional cost-of-living adjustment (COLA) for PERS Plan 1 and TRS Plan 1? and new section WAC 415-02-390 Total allocation portfolio (TAP) annuity factors.
Hearing Location(s): Department of Retirement Systems
6835 Capitol Boulevard, Conference Room 115, Tumwater, WA, on July 29, 2010, at 1:30 p.m.
Date of Intended Adoption: July 29, 2010.
Submit Written Comments to: Ken Goolsby, Rules Coordinator, Department of Retirement Systems, P.O. Box 48380, Olympia, WA 98504-8380, e-mail email@example.com, fax (360) 753-5397, by 5:00 p.m. on July 29, 2010.
Assistance for Persons with Disabilities: Contact Ken Goolsby, rules coordinator by May 20, 2010, 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 administrative rules with new administrative factors provided by the state actuary.
Reasons Supporting Proposal: The office of the state actuary (OSA) has provided the department with new actuarial projections. The department must amend its rules to update administrative factors for the law enforcement officers' and firefighters' retirement system (LEOFF), public employees' retirement system (PERS), public safety employees' retirement system (PSERS), school employees' retirement system (SERS), teachers' retirement system (TRS), Washington state patrol retirement system (WSPRS), and judicial retirement system (JRS).
Statutory Authority for Adoption: RCW 41.50.050(5).
Statute Being Implemented: Chapter 41.45 RCW for WAC 415-02-360.
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: Ken Goolsby, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7291; Implementation and Enforcement: Cathy Cale, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7305.
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. The department of retirement systems is not one of the named departments in RCW 34.05.328.
June 23, 2010
PERS Plan 1: RCW 41.40.188 (1)((
(e)))(c); WAC 415-108-326
TRS Plan 1: RCW 41.32.530 (1)(d); WAC 415-112-504
(2) By opting to receive a lower dollar amount at the
beginning of your retirement, you will receive a progressively
higher amount as the payments continue.))
(3))) (2) Examples
Ernie, a TRS Plan 1 member, retires at age 55 with 30 years of service and chooses the COLA option. TRS Plan 1 provides two percent (.02) of average final compensation (AFC) per year of service. At the time he retires, Ernie's AFC is $4,295.33. As shown in the "Plan 1 Optional COLA" table below, Ernie would receive 0.7408 of his normal retirement benefit as the starting amount of the COLA-protected benefit. TRS would calculate the benefit as follows: 30.00 (years of service credit) x .02 x $4,295.33 (AFC) = $2,577.20 (monthly benefit without the COLA option). TRS would then multiply $2,577.20 x .7408 = $1,909.19 (the COLA-protected starting benefit Ernie would receive).
(b) Example (b):
Tina is a PERS Plan 1 member with 30 years of service credit at age 52 and eight months. Because she has reached 30 years of service, there is no reduction for an early retirement. However, Tina chooses the optional COLA. Tina would receive .7388 of her normal retirement benefit as the starting amount of the COLA-protected benefit. Her normal retirement benefit is $2,295.00; her COLA-reduced benefit will be $1,695.55.)) Ernie is a member of TRS plan 1. He retires at age 55 with 30 years of service and chooses the Single Life Option (no survivor beneficiary). His average final compensation (AFC) is $4,295.33 per month.
(i) If he does not choose the optional auto COLA, his monthly benefit will be $2,577.20 (2% x 30 x $4,295.33).
(ii) If he does choose the optional auto COLA, his intial monthly benefit will be reduced to $1,909.19, based on the factor in the table in subsection (3) (0.7396 x $2,577.20). This monthly amount may increase each year with changes in the CPI.
Regardless whether or not Ernie chooses the optional auto COLA, he will begin to receive the uniform COLA at age 66, consistent with all statutory requirements.
(b) Tina is a member of PERS plan 1. She retires with 30 years of service credit at age 52 and 8 months. Because she has 30 years of service, there is no reduction for an early retirement. Tina chooses the Single Life Option (no survivor beneficiary). Her average final compensation (AFC) is $3,825.00 per month.
(i) If she does not choose the optional auto COLA, her monthly benefit will be $2,295.00 (2% x 30 x $3,825.00).
(ii) If she does choose the optional auto COLA, her initial monthly benefit will be reduced to $1,692.56, based on the factor in the table in subsection (3) (0.7375 x $2,295.00). This monthly amount may increase each year with changes in the CPI.
Regardless whether or not Tina chooses the optional auto COLA, she will begin to receive the uniform COLA at age 66, consistent with all statutory requirements.
(4))) (3) Table (( - The optional cost-of-living
adjustment (COLA) table is based on the 1995-2000 actuarial
Use these factors to convert ((
from standard option))
monthly benefit payments (any retirement option) without (( a))
the optional auto COLA to the same retirement option with
(( a)) the optional auto COLA. The following factors are
effective September 1, 2010.
|Age||PERS 1||TRS 1||Age||PERS 1||TRS 1|
[Statutory Authority: RCW 41.50.050(5) and chapter 41.45 RCW. 08-20-068, § 415-02-360, filed 9/25/08, effective 10/26/08; 02-18-048, § 415-02-360, filed 8/28/02, effective 9/1/02.]
Reviser's note: The spelling error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.
Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.
Reviser's note: RCW 34.05.395 requires the use of underlining and deletion marks to indicate amendments to existing rules. The rule published above varies from its predecessor in certain respects not indicated by the use of these markings.
WAC 415-02-390 Total allocation portfolio (TAP) annuity factors. If you are a Plan 3 member of the Public Employees' Retirement System (PERS), School Employees' Retirement System (SERS) or Teachers' Retirement System (TRS) and you have funds in the Washington State Investment Board (WSIB) Investment Program, you may use those funds to purchase a life annuity that is administered by the state of Washington when you become eligible to withdraw funds from your Plan 3 account. See WAC 415-111-320 for more information about purchasing a TAP annuity.
(1) How is the monthly TAP Annuity payment determined?
Your single life annuity payment amount is based on the
original purchase price and the annuity factor for your age at
the time of purchase.
Factors - The following factors are effective September 1, 2010.
|Age||PERS Plan 3||SERS Plan 3||TRS Plan 3|