WSR 14-17-100 PROPOSED RULES DEPARTMENT OF RETIREMENT SYSTEMS [Filed August 19, 2014, 12:07 p.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 14-14-107.
Title of Rule and Other Identifying Information: Eliminating the contribution rate flexibility for members of Teachers' Retirement System Plan 3, WAC 415-111-220.
Hearing Location(s): Department of Retirement Systems, Conference Room 115, 6835 Capitol Boulevard S.E., Tumwater, WA 98502, on Tuesday, September 23, 2014, at 10:00 a.m.
Date of Intended Adoption: September 23, 2014.
Submit Written Comments to: Jilene Siegel, Department of Retirement Systems, P.O. Box 48380, Olympia, WA 98504-8380, e-mail jilenes@drs.wa.gov, fax (360) 753-5397, by September 22, 2014, 5:00 p.m.
Assistance for Persons with Disabilities: Contact Jilene Siegel by September 19, 2014, TTY (866) 377-8895 or (360) 586-5450.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: Elimination of the annual rate flexibility is necessary to meet plan qualification requirements in the Internal Revenue Code.
Statutory Authority for Adoption: RCW 41.50.050(5).
Rule is not necessitated by federal law, federal or state court decision.
Name of Agency Personnel Responsible for Drafting: Zan Johnston, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7049; and Implementation: Dave Nelsen, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7304.
No small business economic impact statement has been prepared under chapter 19.85 RCW. Not applicable. These rules do not impact small businesses and are not being submitted by the state board of education.
A cost-benefit analysis is not required under RCW 34.05.328. The department of retirement systems is not listed in RCW 34.05.328 as required to prepare a cost-benefit analysis.
August 19, 2014
Jilene Siegel
Rules Coordinator
AMENDATORY SECTION (Amending WSR 06-03-097, filed 1/17/06, effective 2/17/06)
WAC 415-111-220 How do I choose a defined contribution rate?
(1) Contribution rates: If you are a member of the Teachers' Retirement System (TRS) Plan 3, the School Employees' Retirement System (SERS) Plan 3, or the Public Employees' Retirement System (PERS) Plan 3, you are required to contribute from your compensation according to one of the following rate structures:
(2) How do I make the choice? Under WAC 415-111-110, it is your responsibility to complete the correct form for choosing a contribution rate and submitting the form in a timely manner to your employer as directed on the form.
(3) Where do I get the form to make my choice? Your employer must provide the appropriate form to choose a contribution rate if you are enrolling in Plan 3 or transferring from Plan 2 to Plan 3.
(4) When do I have to choose? You must choose a contribution rate within ninety calendar days from your date of hire in an eligible position. However, if you are transferring from Plan 2 to Plan 3, you must choose a contribution rate at the same time you transfer. The ninety-day period does not apply to a member transferring from Plan 2 to Plan 3.
(5) When do contributions begin?
(a) Once you choose a contribution rate, contributions will begin the first day of the pay cycle in which you make the choice.
(b) If the employer advises the department that you should be reported into Plan 3 membership retroactively, the ninety-day period starts from the date it is discovered that you should have been reported. The department will decide which date to use.
(6) What if I work for more than one employer? If you are a Plan 3 member working in eligible positions for more than one employer, you may select a different contribution rate with each employer.
(7) What happens if I do not make a choice? Under RCW 41.34.040, you will be assigned a base rate of 5% (Option A) if:
(a) You are a new employee or changing your employer, and do not choose a contribution rate within the ninety-day election period described in subsection (4) of this section; or
(b) You are transferring from Plan 2 to Plan 3 and do not choose a contribution rate at the time of transfer. Contributions required under subsection (a) or (b) will begin the first day of the pay cycle in which you are assigned to Option A.
(8) Can I change my contribution rate?
(a) If you are a PERS 3 or SERS 3 member, once you choose a contribution rate or are assigned the base rate of 5% (Option A), you cannot change that contribution rate unless you change employers. This rule is required by an IRS decision on the tax qualified status of PERS 2 and 3 and SERS 2 and 3.
(b) Each time you change employers, you must choose a new contribution rate within ninety days or you will be assigned a base rate of 5% (Option A). No contributions will be taken until you choose a rate or until the ninety-day period has elapsed, whichever occurs first.
(c) Each January, through January 2015, TRS Plan 3 members may change their contribution rate option by providing written notification to their employer as described in WAC 415-111-110(1). After January 2015, TRS Plan 3 members may only change their contribution rate option as provided in (b) of this subsection. The termination of TRS rate flexibility after January 2015 is necessary to meet plan qualification requirements in the Internal Revenue Code.
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