AN ACT Relating to the assignment of retirement benefits; amending RCW 41.50.500, 41.50.550, 41.50.580, 41.50.590, 41.50.600, 41.40.380, 2.10.180, 2.12.090, 41.26.180, 41.32.590, and 41.40.380; reenacting and amending 43.43.310; adding new sections to chapter 41.50 RCW; creating a new section; providing an effective date; and declaring an emergency.

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

Sec. 1. Section 1, chapter 326, Laws of 1987 and RCW 41.50.500 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout RCW 41.50.500 through 41.50.650 ((~~and~~)), 26.09.138, and sections 3, 4, 8, 9, 10, and 18 of this act.

(1) "Benefits" means periodic retirement payments or a withdrawal of accumulated contributions.

(2) ((~~"Disposable benefits" means that part of the benefits of an individual remaining after the deduction from those benefits of any amount required by law to be withheld.~~

~~(3)~~)) "Dissolution order" means any judgment, decree, or order of spousal maintenance, property division, or court-approved property settlement incident to a decree of divorce, dissolution, or legal separation issued by the superior court of the state of Washington or a judgment, decree, or other order of spousal support issued by a court of competent jurisdiction in another state or country, that has been registered or otherwise made enforceable in this state.

((~~(4)~~)) (3) "Mandatory benefits assignment order" means an order issued to the department of retirement systems pursuant to RCW 41.50.570 to withhold and deliver benefits payable to an obligor under chapter 2.10, 2.12, 41.26, 41.32, 41.40, or 43.43 RCW.

((~~(5)~~)) (4) "Obligee" means an ex spouse or spouse to whom a duty of spousal maintenance or property division obligation is owed.

((~~(6)~~)) (5) "Obligor" means the spouse or ex spouse owing a duty of spousal maintenance or a property division obligation.

((~~(7)~~)) (6) "Periodic retirement payments" means periodic payments of retirement allowances, including but not limited to service retirement allowances, disability retirement allowances, and survivors' allowances. The term does not include a withdrawal of accumulated contributions.

((~~(8)~~)) (7) "Property division obligation" means any outstanding court-ordered property division or court-approved property settlement obligation incident to a decree of divorce, dissolution, or legal separation.

((~~(9)~~)) (8) "Withdrawal of accumulated contributions" means a lump sum payment to a retirement system member of all or a part of the member's accumulated contributions, including accrued interest, at the request of the member((~~. The term does not include~~)) or any lump sum amount paid upon the death of the member.

Sec. 2. Section 6, chapter 326, Laws of 1987 and RCW 41.50.550 are each amended to read as follows:

(1) An obligee who wishes to be notified by the department of retirement systems if the obligor seeks a withdrawal of accumulated contributions shall submit such a request to the department in writing on a form supplied by the department. The request shall be filed by certified or registered mail and shall include the obligee's address and a copy of the dissolution order requiring the spousal maintenance or property division obligation owed.

(2) The department shall thereafter promptly send notice to the obligee at the address provided in subsection (1) of this section when the obligor applies for a withdrawal of accumulated contributions. The department shall not process the obligor's request for a withdrawal of accumulated contributions sooner than seventy-five days after sending the notice to the obligee.

(3) The department ((~~may~~)) shall pay directly to an obligee ((~~who has not obtained a mandatory benefits assignment order~~)) all or part of the accumulated contributions ((~~withdrawn by an obligor if, and only~~)) if the dissolution order filed with the department pursuant to subsection (1) of this section includes a provision that states in substantially the following form:

"At such time as .......... (the obligor) requests a withdrawal of accumulated contributions as defined in RCW 41.50.500, the department of retirement systems shall pay to .......... (the obligee) .......... dollars from such accumulated contributions or ..... percentage of such accumulated contributions (whichever is provided by the court)."

NEW SECTION. Sec. 3. A new section is added to chapter 41.50 RCW to read as follows:

(1) Nothing in this chapter regarding mandatory assignment of benefits to enforce a spousal maintenance obligation or a property division obligation shall abridge the right of an obligee to direct payments of retirement benefits pursuant to a court-ordered property division or court-approved property settlement under RCW 2.10.180, 2.12.090, 41.26.180, 41.32.590, 41.40.380, or 43.43.310. The mandatory assignment of benefits remedy is an alternative remedy to enforce a court-ordered property division or court-approved property settlement if the decree fails to provide for direct payments to the obligee.

(2) The department shall pay directly to an obligee the amount of periodic retirement payments specified in the dissolution order if the dissolution order filed with the department pursuant to subsection (1) of this section includes a provision that states in substantially the following form:

"At such time as .......... (the obligor) receives periodic retirement payments as defined in RCW 41.50.500, the department of retirement systems shall pay to .......... (the obligee) ..... dollars from such payments or ..... percentage of the periodic retirement payments payable at the time of retirement calculated as if the member had elected a single life option or its equivalent (whichever is provided by the court)."

NEW SECTION. Sec. 4. A new section is added to chapter 41.50 RCW to read as follows:

A party to a dissolution proceeding may file a motion with the court requesting the court to enter an order restraining the department from paying any benefits to a member until further order of the court. The department shall not pay benefits to a member from the time a restraining order is served on the department until the court enters a further order disposing of the benefits.

Sec. 5. Section 9, chapter 326, Laws of 1987 and RCW 41.50.580 are each amended to read as follows:

(1) (a) The mandatory benefits assignment order in RCW 41.50.570 directed at periodic retirement benefits shall include:

(i) The maximum amount of current spousal maintenance or property division obligation, if any, to be withheld from the obligor's periodic retirement benefits each month;

(ii) The total amount of the arrearage judgments previously entered by the court, if any, together with interest, if any; and

(iii) The maximum amount to be withheld from the obligor's periodic retirement payments each month to satisfy the arrearage judgments specified in (a)(ii) of this subsection.

(b) With respect to such a mandatory benefits assignment order, the total amount to be withheld from the obligor's periodic retirement payments each month shall not exceed ((~~fifty percent of the disposable benefits of the obligor or~~)) the maximum amount allowed by ((~~15 U.S.C. Sec. 1673, whichever is less~~)) RCW 6.27.150.

((~~(c) Except as otherwise required by federal law, fifty percent of the disposable benefits of the obligor are exempt, and may be disbursed by the department to the obligor.~~))

(2)(a) A mandatory benefits assignment order in RCW 41.50.570 directed at a withdrawal of accumulated contributions shall include:

(i) The property division interest, if any, of the obligee in the obligor's accumulated contributions, established by the dissolution order, which interest shall be stated as either a dollar amount or a percentage amount in the mandatory benefits assignment order;

(ii) The total amount of the arrearage judgments for spousal maintenance payments or property division payments entered by the court, if any, together with interest((~~, if any~~)); and

(iii) The amount to be withheld from the obligor's withdrawal of accumulated contributions to satisfy the property division interest and the arrearage judgments specified in (a) (i) and (ii) of this subsection;

(b) With respect to such a mandatory benefits assignment order, the total amount to be withheld from the obligor's withdrawal of accumulated contributions may be up to one hundred percent of the ((~~disposable~~)) benefits of the obligor.

(3) If an obligor is subject to two or more mandatory benefits assignment orders on account of different obligees and if the ((~~nonexempt portion of the~~)) obligor's benefits ((is)) are not sufficient to respond fully to all the mandatory benefits assignment orders, the department shall apportion the obligor's ((~~nonexempt disposable~~)) benefits among the various obligees in equal shares to the extent permitted by ((~~federal~~)) Washington law.

Sec. 6. Section 10, chapter 326, Laws of 1987 and RCW 41.50.590 are each amended to read as follows:

The mandatory benefits assignment order shall be substantially in the following form:

@lb IN THE SUPERIOR COURT OF THE STATE OF

WASHINGTON IN AND FOR THE COUNTY OF

!sc.,020

!tn3 !ix!w×,!tl!ss1!ix

!ix!sc ,002Obligee!tj1!tlNo.!w×!tl

!ix!sc ,006vs.

!tl!ss1!tlMANDATORY

!ix!w×,!tl!ss1!tlBENEFITS!sc ,1ASSIGNMENT

!ix!sc ,002Obligor!tj1!tlORDER

!ix!w×,!tl

!ixThe!sc ,1Department!sc ,1of!sc ,1Retirement!sc ,1Systems

!ixof!sc ,1the!sc ,1State!sc ,1of!sc ,1Washington

!ixTHE STATE OF WASHINGTON TO:!SC ,2The Department of Retirement Systems

!ixAND TO:!sc ,2!W×

Obligor

@la The above-named obligee claims that the above-named obligor is more than fifteen days past due in spousal maintenance or property division obligation payments and that the total amount of such past due payments is equal to or greater than one hundred dollars or that the obligor has requested a withdrawal of accumulated contributions from the department of retirement systems. The amount of the accrued past due spousal maintenance or property division obligation debt as of this date is .......... dollars. If the obligor is receiving periodic retirement payments from the department, the amount to be withheld from the obligor's benefits to satisfy such accrued spousal maintenance or property division obligation is .......... dollars per month and the amount to be withheld from the obligor's benefits to satisfy current and continuing spousal maintenance or property division obligation is .......... per month. If the obligor has requested a withdrawal of accumulated contributions from the department, the amount to be withheld from the obligor's benefits to satisfy such accrued spousal maintenance or property division obligation is .......... dollars and the amount to be withheld from the obligor's benefits to satisfy the obligee's property division interest in the obligor's accumulated contributions is ... percent of the ((~~disposable~~)) benefits or is .......... dollars.

You are hereby commanded to answer this order by filling in the attached form according to the instructions, and you must mail or deliver the original of the answer to the court, one copy to the obligee or obligee's attorney, and one copy to the obligor within twenty days after service of this benefits assignment order upon you.

(1) If you are currently paying periodic retirement payments to the obligor, then you shall do as follows:

(a) Withhold from the obligor's retirement payments each month the lesser of:

(i) The sum of the specified arrearage payment amount plus the specified current spousal maintenance or property division obligation amount; or

(ii) ((~~Fifty percent of the disposable benefits of the obligor or~~)) The maximum amount allowed by ((~~federal~~)) Washington law((~~, whichever is less~~)).

(b) The total amount withheld above is subject to the mandatory benefits assignment order((~~, and all other sums may be disbursed to the obligor~~)).

You shall continue to withhold the ordered amounts from ((~~nonexempt~~)) benefits of the obligor until notified by a court order that the mandatory benefits assignment order has been modified or terminated. You shall promptly notify the court if and when the obligor is no longer receiving periodic retirement payments from the department of retirement systems.

You shall deliver the withheld benefits to the clerk of the court that issued this mandatory benefits assignment order each month, but the first delivery shall occur no sooner than twenty days after your receipt of this mandatory benefits assignment order.

(2) If you are not currently paying periodic retirement payments to the obligor but the obligor has requested a withdrawal of accumulated contributions, then you shall do as follows:

(a) Withhold from the obligor's benefits the sum of the specified arrearage payment amount plus the specified property division interest amount, up to one hundred percent of the ((~~disposable~~)) benefits of the obligor.

(b) The total amount withheld above is subject to the mandatory benefits assignment order((~~, and all other sums may be disbursed to the obligor~~)).

You shall mail a copy of this order and a copy of your answer to the obligor at the mailing address in the department's files as soon as is reasonably possible. This mandatory benefits assignment order has priority over any assignment or order of execution, garnishment, attachment, levy, or similar legal process authorized by Washington law, except for a wage assignment order for child support under chapter 26.18 RCW or order to withhold or deliver under chapter 74.20A RCW.

@lb NOTICE TO OBLIGOR: YOU HAVE A RIGHT TO REQUEST A HEARING IN THE SUPERIOR COURT THAT ISSUED THIS MANDATORY BENEFITS ASSIGNMENT ORDER, TO REQUEST THAT THE COURT QUASH, MODIFY, OR TERMINATE THE MANDATORY BENEFITS ASSIGNMENT ORDER.

DATED THIS ... day of ... , 19 ... .

!tp1,1!ix!w×!tl!w×

!ixObligee,!tlJudge/Court!sc ,1Commissioner

!ixor!sc ,1obligee's!sc ,1attorney@la

!ix

Sec. 7. Section 11, chapter 326, Laws of 1987 and RCW 41.50.600 are each amended to read as follows:

(1) The director or the director's designee shall answer an order by sworn affidavit within twenty days after the date of service. The answer shall state whether the obligor receives periodic payments from the department of retirement systems, whether the obligor has requested a withdrawal of accumulated contributions from the department, whether the department will honor the mandatory benefits assignment order and if not, the reasons why, and whether there are other current court or administrative orders on file with the department directing the department to withhold all or a portion of the obligor's benefits.

(2) (a) If any periodic retirement payments are currently payable to the obligor, the funds subject to the mandatory benefits assignment order shall be withheld from the next periodic retirement payment due twenty days or more after receipt of the mandatory benefits assignment order. The withheld amount shall be delivered to the clerk of the court that issued the mandatory benefits assignment order each month, but the first delivery shall occur no sooner than twenty days after receipt of the mandatory benefits assignment order.

(b) The department shall continue to withhold the ordered amount from ((~~nonexempt~~)) benefits of the obligor until notified by the court that the mandatory benefits assignment order has been modified or terminated. If the department is initially unable to comply, or able to comply only partially, with the withholding obligation, the court's order shall be interpreted to require the department to comply to the greatest extent possible at the earliest possible date. The department shall notify the court of changes in withholding amounts and the reason for the change. When the obligor is no longer eligible to receive funds from one or more public retirement systems the department shall promptly notify the court.

(3)(a) If no periodic retirement payments are currently payable to the obligor but the obligor has requested a withdrawal of accumulated contributions, the funds subject to the mandatory benefits assignment order shall be withheld from the withdrawal payment. The withheld amount shall be delivered to the clerk of the court that issued the mandatory benefits assignment order.

(b) If the department is unable to comply fully with the withholding obligation, the court's order shall be interpreted to require the department to comply to the greatest extent possible.

(4) The department may deduct a processing fee from the remainder of the obligor's funds after withholding under the mandatory benefits assignment order, unless the remainder is exempt under RCW 41.50.580. The processing fee may not exceed (a) twenty-five dollars for the first disbursement made by the department to the superior court clerk; and (b) six dollars for each subsequent disbursement to the clerk.

(5) A court order for spousal maintenance or a property division obligation governed by RCW 41.50.500 through 41.50.650 and sections 3, 4, 8, 9, 10, and 18 of this act, or RCW 26.09.138 shall have priority over any other assignment or order of execution, garnishment, attachment, levy, or similar legal process authorized under Washington law, except for a mandatory wage assignment for child support under chapter 26.18 RCW, or an order to withhold and deliver under chapter 74.20A RCW.

(6) If the department, without good cause, fails to withhold funds as required by a mandatory benefits assignment order issued under RCW 41.50.570, the department may be held liable to the obligee for any amounts wrongfully disbursed to the obligor in violation of the mandatory benefits assignment order. However, the department shall under no circumstances be held liable for failing to withhold funds from a withdrawal of accumulated contributions unless the mandatory benefits assignment order was properly served on the department at least thirty days before the department made the withdrawal payment to the obligor. If the department is held liable to an obligee for failing to withhold funds as required by a mandatory benefits assignment order, the department may recover such amounts paid to an obligee by thereafter either withholding such amounts from the available nonexempt benefits of the obligor or filing a legal action against the obligor.

(7) If the department complies with a court order pursuant to RCW 41.50.500 through 41.50.650 and sections 3, 4, 8, 9, 10, and 18 of this act, neither the department, its officers, its employees, nor any of the retirement systems listed in RCW 41.50.030 may be liable to the obligor for wrongful withholding.

(8) The department may combine amounts withheld from various obligors into a single payment to the superior court clerk, if the payment includes a listing of the amounts attributable to each obligor and other information as required by the clerk.

(9) The department shall mail to the obligor at the obligor's last known mailing address appearing in the department's files copies of the mandatory benefits assignment order and the department's answer within twenty days after receiving the mandatory benefits assignment order.

NEW SECTION. Sec. 8. A new section is added to chapter 41.50 RCW to read as follows:

(1) A dissolution order requiring the department to divide any retirement benefits, whether the benefits are in the form of periodic payments or in the form of withdrawal of contributions shall:

(a) If the interest to be awarded to the nonemployee spouse or ex-spouse is known at the time of entry of the order or decree, state the interest as either a dollar amount or a percentage amount of the withdrawal of accumulated contributions of the periodic retirement payments payable at the time of retirement calculated as if the member had elected a single life option or its equivalent;

(b) If the percentage amount of the property division interest of the obligee is not known at the time of entry of the decree or order, state the obligee's interest as a fraction in which the numerator is the community property interest as set forth in the decree or order and the denominator is the total number of years or months in which the employee has service credit in the retirement system at the time of termination of service or retirement.

(2) If a dissolution order does not state the obligee's interest or provide sufficient information so that the department can calculate the interest, the department shall have no obligation to pay directly to the obligee.

NEW SECTION. Sec. 9. A new section is added to chapter 41.50 RCW to read as follows:

An obligee seeking a determination by the department of whether a proposed or final dissolution order will be honored by the department shall supply the order to the department of retirement systems for review. The department shall notify the obligee or the obligee's attorney within thirty days as to whether the decree or order complies with section 8 of this act. The department's determination is not subject to a judicial review under chapter 34.05 RCW.

NEW SECTION. Sec. 10. A new section is added to chapter 41.50 RCW to read as follows:

The department may impose a reasonable fee, not to exceed the actual administrative costs, for the direct payment of retirement benefits to an obligee for payments pursuant to a dissolution order providing for a property division obligation. The department shall deduct the fee from the gross retirement benefits.

Sec. 11. Section 39, chapter 274, Laws of 1947 as last amended by section 20, chapter 107, Laws of 1988 and RCW 41.40.380 are each amended to read as follows:

(1) Subject to subsections (2) and (3) of this section, the right of a person to a pension, an annuity, or retirement allowance, any optional benefit, any other right accrued or accruing to any person under the provisions of this chapter, the various funds created by this chapter, and all moneys and investments and income thereof, are hereby exempt from any state, county, municipal, or other local tax, and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or other process of law whatsoever, and shall be unassignable.

(2) This section shall not be deemed to prohibit a beneficiary of a retirement allowance from authorizing deductions therefrom for payment of premiums due on any group insurance policy or plan issued for the benefit of a group comprised of public employees of the state of Washington or its political subdivisions and which has been approved for deduction in accordance with rules and regulations that may be promulgated by the state health care authority and/or the department of retirement systems, and this section shall not be deemed to prohibit a beneficiary of a retirement allowance from authorizing deductions therefrom for payment of dues and other membership fees to any retirement association or organization the membership of which is composed of retired public employees, if a total of three hundred or more of such retired employees have authorized such deduction for payment to the same retirement association or organization.

(3) Subsection (1) of this section shall not prohibit the department of retirement systems from complying with (a) a wage assignment order for child support issued pursuant to chapter 26.18 RCW, (b) an order to withhold and deliver issued pursuant to chapter 74.20A RCW, (c) a mandatory benefits assignment order issued pursuant to chapter 41.50 RCW, ((or)) (d) a court order directing the department of retirement systems to pay benefits directly to an obligee under a dissolution order as provided in chapter 41.50 RCW, (e) a court order to enforce a property settlement entered in a dissolution proceeding, or (f) any administrative or court order expressly authorized by federal law.

Sec. 12. Section 18, chapter 267, Laws of 1971 ex. sess. as last amended by section 17, chapter 326, Laws of 1987 and RCW 2.10.180 are each amended to read as follows:

(1) Except as provided in subsections (2), (3), ((~~and~~)) (4), and (5) of this section, the right of a person to a retirement allowance, disability allowance, or death benefit, the retirement, disability or death allowance itself, any optional benefit, any other right accrued or accruing to any person under the provisions of this chapter, and the moneys in the fund created under this chapter, are hereby exempt from any state, county, municipal, or other local tax and shall not be subject to execution, garnishment, or any other process of law whatsoever.

(2) Benefits under this chapter shall be payable to a spouse or ex-spouse to the extent expressly provided for in any court decree of dissolution or legal separation or in any court order or court-approved property settlement incident to any court decree of dissolution or legal separation. The order providing for direct payment must include a provision that states in substantially the following form:

"At such time as !sc.,8 (the obligor) receives retirement payments as defined in chapter 41.50 RCW, the department of retirement systems shall pay to !sc.,8 (the obligee) !sc.,4 dollars from the periodic retirement payments or ... percentage of the periodic retirement payments payable at the time of retirement calculated as if the member had elected a single life option or its equivalent (whichever is provided by the courts)."

(3) Subsection (1) of this section shall not be deemed to prohibit a beneficiary of a retirement allowance from authorizing deductions therefrom for payment of premiums due on any group insurance policy or plan issued for the benefit of a group comprised of public employees of the state of Washington.

((~~(3)~~)) (4) Deductions made in the past from retirement benefits are hereby expressly recognized, ratified, and affirmed. Future deductions may only be made in accordance with this section.

((~~(4)~~)) (5) Subsection (1) of this section shall not prohibit the department of retirement systems from complying with (a) a wage assignment order for child support issued pursuant to chapter 26.18 RCW, (b) an order to withhold and deliver issued pursuant to chapter 74.20A RCW, (c) a mandatory benefits assignment order issued pursuant to chapter 41.50 RCW, ((or)) (d) a court order directing the department of retirement systems to pay benefits directly to an obligee under a dissolution order as provided in chapter 41.50 RCW, (e) a court order to enforce a property settlement entered in a dissolution proceeding, or (f) any administrative or court order expressly authorized by federal law.

Sec. 13. Section 32, chapter 52, Laws of 1982 1st ex. sess. as amended by section 18, chapter 326, Laws of 1987 and RCW 2.12.090 are each amended to read as follows:

(1) Except as provided in subsections (2), (3), ((~~and~~)) (4), and (5) of this section, the right of any person to a retirement allowance or optional retirement allowance under the provisions of this chapter and all moneys and investments and income thereof are exempt from any state, county, municipal, or other local tax and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or the insolvency laws, or other processes of law whatsoever and shall be unassignable except as herein specifically provided.

"At such time as !sc.,8 (the obligor) receives retirement payments as defined in chapter 41.50 RCW, the department of retirement systems shall pay to !sc.,8 (the obligee) !sc.,4 dollars from the periodic retirement payments or ... percentage of the periodic retirement payments calculated as if the member had elected a single life option or its equivalent (whichever is provided by the courts)."

((~~(3)~~)) (4) Subsection (1) of this section shall not be deemed to prohibit a beneficiary of a retirement allowance from authorizing deductions therefrom for payment of premiums due on any group insurance policy or plan issued for the benefit of a group comprised of public employees of the state of Washington.

((~~(4)~~)) (5) Deductions made in the past from retirement benefits are hereby expressly recognized, ratified, and affirmed. Future deductions may only be made in accordance with this section.

Sec. 14. Section 23, chapter 209, Laws of 1969 ex. sess. as last amended by section 22, chapter 326, Laws of 1987 and RCW 41.26.180 are each amended to read as follows:

(1) Subject to subsections (2) ((~~and~~)), (3), and (4) of this section, the right of a person to a retirement allowance, disability allowance, or death benefit, to the return of accumulated contributions, the retirement, disability or death allowance itself, any optional benefit, any other right accrued or accruing to any person under the provisions of this chapter, and the moneys in the fund created under this chapter, are hereby exempt from any state, county, municipal, or other local tax and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or any other process of law whatsoever, and shall be unassignable.

(3) On the written request of any person eligible to receive benefits under this section, the department of retirement systems may deduct from such payments the premiums for life, health, or other insurance. The request on behalf of any child or children shall be made by the legal guardian of such child or children. The department of retirement systems may provide for such persons one or more plans of group insurance, through contracts with regularly constituted insurance carriers or health care service contractors.

((~~(3)~~)) (4) Subsection (1) of this section shall not prohibit the department of retirement systems from complying with (a) a wage assignment order for child support issued pursuant to chapter 26.18 RCW, (b) an order to withhold and deliver issued pursuant to chapter 74.20A RCW, (c) a mandatory benefits assignment order issued pursuant to chapter 41.50 RCW, ((or)) (d) a court order directing the department of retirement systems to pay benefits directly to an obligee under a dissolution order as provided in chapter 41.50 RCW, (e) a court order to enforce a property settlement entered in a dissolution proceeding, or (f) any administrative or court order expressly authorized by federal law.

Sec. 15. Section 59, chapter 80, Laws of 1947 as last amended by section 23, chapter 326, Laws of 1987 and RCW 41.32.590 are each amended to read as follows:

(1) Subject to subsections (2) ((~~and~~)), (3), and (4) of this section, the right of a person to a pension, an annuity, a retirement allowance, or disability allowance, to the return of contributions, any optional benefit or death benefit, any other right accrued or accruing to any person under the provisions of this chapter and the moneys in the various funds created by this chapter shall be unassignable, and are hereby exempt from any state, county, municipal or other local tax, and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or other process of law whatsoever.

(3) This section shall not be deemed to prohibit a beneficiary of a retirement allowance who is eligible:

(a) Under RCW 41.05.080 from authorizing monthly deductions therefrom for payment of premiums due on any group insurance policy or plan issued for the benefit of a group comprised of public employees of the state of Washington or its political subdivisions;

(b) Under a group health care benefit plan approved pursuant to RCW 28A.58.420 ((~~or 41.05.025~~)) from authorizing monthly deductions therefrom, of the amount or amounts of subscription payments, premiums, or contributions to any person, firm, or corporation furnishing or providing medical, surgical, and hospital care or other health care insurance; or

(c) Under the Washington state teachers' retirement system from authorizing monthly deductions therefrom for payment of dues and other membership fees to any retirement association composed of retired teachers and/or public employees pursuant to a written agreement between the director and the retirement association.

Deductions under (a) and (b) of this subsection shall be made in accordance with rules and regulations that may be promulgated by the director of retirement systems.

Sec. 16. Section 39, chapter 274, Laws of 1947 as last amended by section 20, chapter 107, Laws of 1988 and RCW 41.40.380 are each amended to read as follows:

(1) Subject to subsections (2) ((~~and~~)), (3), and (4) of this section, the right of a person to a pension, an annuity, or retirement allowance, any optional benefit, any other right accrued or accruing to any person under the provisions of this chapter, the various funds created by this chapter, and all moneys and investments and income thereof, are hereby exempt from any state, county, municipal, or other local tax, and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or other process of law whatsoever, and shall be unassignable.

(3) This section shall not be deemed to prohibit a beneficiary of a retirement allowance from authorizing deductions therefrom for payment of premiums due on any group insurance policy or plan issued for the benefit of a group comprised of public employees of the state of Washington or its political subdivisions and which has been approved for deduction in accordance with rules and regulations that may be promulgated by the state health care authority and/or the department of retirement systems, and this section shall not be deemed to prohibit a beneficiary of a retirement allowance from authorizing deductions therefrom for payment of dues and other membership fees to any retirement association or organization the membership of which is composed of retired public employees, if a total of three hundred or more of such retired employees have authorized such deduction for payment to the same retirement association or organization.

Sec. 17. Section 43.43.310, chapter 8, Laws of 1965 as last amended by section 1, chapter 63, Laws of 1987 and by section 25, chapter 326, Laws of 1987 and RCW 43.43.310 are each reenacted and amended to read as follows:

(1) Except as provided in subsections (2) ((~~and~~)), (3), and (4) of this section, the right of any person to a retirement allowance or optional retirement allowance under the provisions hereof and all moneys and investments and income thereof are exempt from any state, county, municipal, or other local tax and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or the insolvency laws, or other processes of law whatsoever and shall be unassignable except as herein specifically provided.

NEW SECTION. Sec. 18. A new section is added to chapter 41.50 RCW to read as follows:

Whenever the department of retirement systems makes payments to a spouse or ex-spouse to the extent expressly provided for in any court decree of dissolution or legal separation or in any court order or court-approved property settlement agreement incident to any court decree of dissolution or legal separation, it shall be a sufficient answer to any claim of a beneficiary against the department for the department to show that the payments were made pursuant to a court decree.

NEW SECTION. Sec. 19. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 20. 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 shall take effect July 1, 1989.

NEW SECTION. Sec. 21. The Code Reviser shall correct all references to RCW 41.40.500 through 41.50.660 to include sections 3, 4, 8, 9, 10, and 18 of this act.