H-3955              _______________________________________________

                                                   HOUSE BILL NO. 2890

                        _______________________________________________

State of Washington                               51st Legislature                              1990 Regular Session

By Representative Belcher

Read first time 1/24/90 and referred to Committee on Judiciary.

AN ACT Relating to payment of deferred compensation; and adding a new section to chapter 41.04 RCW.

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

NEW SECTION. Sec. 1.  A new section is added to chapter 41.04 RCW to read as follows:

          As provided in this section, proceeds payable under a deferred compensation plan shall be payable to a spouse or ex-spouse to the extent expressly provided for in any court decree of dissolution or legal separation. The state, through the committee for deferred compensation created pursuant to RCW 41.04.260, and any county, municipality, or other political subdivision of the state, acting through the committee for deferred compensation or any other deferred compensation plan administrator, adopting a deferred compensation plan pursuant to the authority granted in RCW 41.04.250 shall comply with a court decree of dissolution or legal separation or any court order or court-approved property settlement agreement incident to any court decree of dissolution or legal separation, that directs the disbursement of a specified portion of the proceeds to a spouse or ex-spouse from the plan at the time the proceeds become distributable pursuant to an election by the plan participant elected consistent with the provisions of 26 U.S.C. Sec. 457(d).  The proceeds shall not be distributed to the spouse or ex-spouse until the proceeds are made available for distribution to the participant under the conditions of 26 U.S.C. Sec. 457(d).

          (2) Nothing in this section shall prohibit a court from ordering a participant spouse to elect to begin receiving proceeds from the plan upon the participant's termination from service.

          (3) The court order must be from a court of competent jurisdiction, be certified, and be personally served upon the administrator for the plan or served in a manner provided by the civil rules of the superior court or applicable statute. Whenever the administrator of the plan makes payments to a spouse or ex- spouse according to the provisions of the court order, the administrator of the plan and the employer shall be immune from civil liability for distribution of the proceeds to the spouse or ex-spouse.  The court order directing the administrator to pay a portion of the proceeds directly to the spouse or ex-spouse must be served upon the administrator at least twenty days before the next disbursement of proceeds to a participant or else the payment of the portion of the proceeds will not commence until the next disbursement of proceeds.  Failure to properly serve the administrator of the plan within the required time period with the court order shall relieve the administrator of any liability for failure to comply with the court order for purposes of the next payment of proceeds.  If the administrator is held liable to a nonparticipant spouse for failing to withhold proceeds as required by a court order, the administrator may recover that amount from the participant spouse by either deducting the amount owed from subsequent payments of proceeds or filing a legal action against the participant.

          (4) A nonparticipant spouse or ex-spouse who wishes to be notified by the administrator of the plan when the participant elects to withdraw all or a portion of the plan's proceeds shall submit a written request to the administrator of the plan.  The request shall be filed by certified or registered mail and shall include the nonparticipant spouse's address and a copy of the dissolution order requiring payment of a portion of the proceeds to the nonparticipant spouse.  After receipt of the request for notice, the administrator of the plan must send notice to the nonparticipant spouse at the last known address, when the participant elects to begin withdrawing benefits.  The nonparticipant spouse is responsible for notifying the administrator of the plan of any change in address.

          (5) All payments to a nonparticipant spouse or ex-spouse shall cease upon the death of the nonparticipant spouse or ex-spouse.  Upon the death of the nonparticipant spouse or ex-spouse, the administrator is authorized and directed to pay to the participant spouse his or her full monthly proceeds.

          (6) A party to a dissolution proceeding may file a motion with the court requesting the court to enter an order restraining an administrator of a plan from paying any proceeds to a participant spouse until further order of the court.  The administrator of the plan shall not pay proceeds to a participant from the time the restraining order is served on the administrator until the court enters a further order disposing of the proceeds.

NEW SECTION. Sec. 2.     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.