BILL REQ. #:  S-2061.1 

READ FIRST TIME 02/26/09.   

     AN ACT Relating to a Washington state patrol retirement system deferred retirement option plan; adding a new section to chapter 43.43 RCW; providing an effective date; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   A new section is added to chapter 43.43 RCW, to be codified between RCW 43.43.120 and 43.43.320, to read as follows:
     (1) The Washington state patrol retirement system deferred retirement option plan is created, as an alternative form of accrual under the retirement system. Effective January 1, 2010, in lieu of retiring under RCW 43.43.250 and accepting a retirement allowance under RCW 43.43.260, and either RCW 43.43.270 or 43.43.271, as applicable, an active member of the Washington state patrol retirement system is eligible to participate in the Washington state patrol retirement system deferred retirement option plan if the member: (a) Is not on disability status; (b) has at least twenty-seven years of service credit, calculated as the sum of service credit recognized under RCW 43.43.230, 43.43.233, 43.43.235, and 43.43.260; and (c) is eligible to receive a retirement allowance.
     (2) A member of the Washington state patrol retirement system who is eligible to do so may begin participation in the deferred retirement option plan on the first day of a month. A member who elects to participate in the Washington state patrol retirement system deferred retirement option plan shall: (a) Irrevocably elect a form of monthly retirement allowance from the Washington state patrol retirement system; (b) continue employment with the Washington state patrol; (c) agree to the calculation of a deferred retirement option plan benefit under this section in lieu of service credit or salary increase adjustments that would increase the member's average final compensation during the member's remaining period of service; and (d) identify a date certain that is (i) the last day of a month, (ii) not more than five years from the date that the member elects to begin participation in the Washington state patrol retirement system deferred retirement option plan, (iii) when the member's employment with the Washington state patrol terminates, (iv) when the member's participation in the Washington state patrol retirement system deferred retirement option plan ends, and (v) the date after which the member begins receiving the member's retirement allowance. The member may designate, or change the member's designation of, a beneficiary who shall receive the balance of the accruals to the member's deferred retirement option plan account created under subsection (3) of this section, in the event that the member dies during the member's participation in the deferred option retirement plan option. The member shall make such a designation in writing to, and in the manner prescribed by, the department of retirement systems. If someone other than the member's spouse or state registered domestic partner is designated as the sole primary beneficiary, then the member must also file with the department of retirement systems a written statement from the member's spouse or state registered domestic partner consenting to the beneficiary designation.
     (3) When a member elects to participate in the Washington state patrol retirement system deferred retirement option plan, a deferred retirement option plan account is created for the individual member in the fund of the retirement system. While the member is participating in the Washington state patrol retirement system deferred retirement option plan, an amount equal to seventy-five percent of the monthly retirement allowance that would have been payable had the member retired and begun receiving a retirement allowance according to the member's election made under subsection (2)(a) of this section, adjusted for cost-of-living increases according to subsection (5)(c) of this section, shall be credited to the member's deferred retirement option plan account. The member's deferred retirement option plan account shall be credited on an annual basis with interest at a fixed rate of six and one-half percent per year.
     (4)(a) The member forfeits the accruals under the deferred retirement option plan if the member terminates participation in the Washington state patrol retirement system deferred retirement option plan before the date identified by the member pursuant to subsection (2)(d) of this section for any reason other than the member's death. If a member forfeits the amounts credited to the member's deferred retirement option plan account under this subsection (4)(a), then the member begins receiving the member's retirement allowance according to the election made pursuant to subsection (2)(a) of this section. The member's service credit in the Washington state patrol retirement system is not adjusted for the period of the member's participation in the deferred retirement option plan, nor are salary increase adjustments made to the member's retirement allowance for the period during which the member participated in the deferred retirement option plan.
     (b) A member who, during the member's participation in the deferred retirement option plan, is placed on disability status in accordance with RCW 43.43.040(1)(a), and receives compensation in accordance with RCW 43.43.040(2), is (i) deemed to have terminated participation in the deferred retirement option plan on the last day of the month that coincides with, or next follows, the date of the member's placement on disability status; and (ii) not entitled to the accruals under the deferred retirement option plan, and instead receives the disability benefit in accordance with RCW 43.43.040.
     (c) A member shall be reinstated in the Washington state patrol retirement system deferred retirement option plan, and the accrual balance previously established shall be reinstated, on the first day of the month that coincides with or next follows the date that the member resumes active duty employment with the Washington state patrol, if the member (i) received disability benefits under RCW 43.43.040; (ii) was deemed to have terminated participation in the deferred retirement option plan; (iii) returns to active duty employment with the Washington state patrol; and (iv) resumes active membership in the retirement system.
     (d) Any member, who is placed on disability status during the member's participation in the deferred retirement option plan, whose deferred retirement option plan account is not reinstated according to (c) of this subsection, shall not receive a monthly retirement allowance from the Washington state patrol retirement system.
     (5) While a member is participating in the Washington state patrol retirement system deferred retirement option plan, (a) the member and employer contributions to the Washington state patrol retirement system shall continue to be paid to the retirement system at the rate computed for the current active members under RCW 41.45.0631; (b) the member shall not earn any additional service credit under the Washington state patrol retirement system or receive any salary increase adjustments to the member's retirement allowance calculation; (c) the member's accrual under the deferred retirement option plan shall be credited with retirement allowance cost-of-living increases from the Washington state patrol retirement system, up to a maximum of three percent per year.
     (6) At the earlier of the date of the member's death or the date identified by the member pursuant to subsection (2)(d) of this section, and subject to subsection (4) of this section, the balance of the member's deferred retirement option plan account shall be distributed pursuant to this subsection, and in accordance with federal law.
     (a) The member may elect to receive the accrual balance in the member's deferred retirement option plan account in (i) a lump sum payment; or (ii) a direct rollover in accordance with federal law.
     (b) If the member dies during the member's participation in the deferred retirement option plan, then the balance of the accruals in the member's deferred retirement option plan account shall be distributed to the member's designated beneficiary as a lump sum or a direct rollover in accordance with federal law, or if there is no designated beneficiary or the designated beneficiary predeceases the member, then to the estate of the member as a lump sum. Distribution of the member's deferred retirement option plan account balance under this subsection (6)(b) is in addition to any death benefits payable under any other statute. A member who receives a distribution pursuant to this subsection shall not earn any additional service credit under the Washington state patrol retirement system or receive any salary increase adjustments to the member's retirement allowance calculation, even if the member is subsequently reemployed by the Washington state patrol.

NEW SECTION.  Sec. 2   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2009.