WSR 00-04-023

PROPOSED RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed January 24, 2000, 3:28 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 99-11-005.

Title of Rule: Adds new WAC to chapter 415-104 WAC, preretirement death benefit in law enforcement and fire fighters retirement system (LEOFF) Plan 2.

Purpose: Changes to chapter 415-104 WAC to:


Accommodate a recent change in the law that allows LEOFF Plan 2 members to designate a trust as a death benefit beneficiary;
Advise LEOFF Plan 2 members how to fill out forms so that their intended beneficiaries receive the preretirement death benefit.

Statutory Authority for Adoption: RCW 41.50.050.

Statute Being Implemented: RCW 41.26.510.

Summary: The proposed new rule guides LEOFF Plan 2 members through the process of designating a beneficiary for preretirement death benefits.

Reasons Supporting Proposal: To enable LEOFF Plan 2 members to properly complete forms so that their intended beneficiar(ies) will qualify for the preretirement death benefit.

Name of Agency Personnel Responsible for Drafting: Elyette Weinstein, 6835 Capitol Boulevard, Tumwater, (360) 664-7307; Implementation and Enforcement: Leah Wilson, 6835 Capitol Boulevard, Tumwater, (360) 664-7049.

Name of Proponent: Department of Retirement Systems (DRS), governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: The proposed new rule:


Accommodate a recent change in the law that allows LEOFF Plan 2 members to designate a trust as a death benefit beneficiary;
Guides LEOFF Plan 2 members through the process of designating a beneficiary for preretirement death benefits. The rule will enable LEOFF Plan 2 members to properly complete forms so that their intended beneficiar(ies) will qualify for the preretirement death benefit.

Proposal does not change existing rules. New WAC 415-104-450 has been drafted to guide LEOFF Plan 2 members through the process of designating a beneficiary for preretirement death benefits. Proper completion of the forms will enable these members to designate the intended beneficiar(ies) of their LEOFF Plan 2 preretirement death benefit.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The rules apply to public employers and employees participating in the retirement systems administered by DRS. No private business are [is] affected by the rules, therefore, no small business [economic] impact statement is required.

Section 201, chapter 403, Laws of 1995, does not apply to this rule adoption. DRS is not one of the agencies that RCW 34.05.328 applies to. DRS does not opt to voluntarily bring itself within the coverage of that statute.

Hearing Location: Boardroom, 3rd Floor, 6835 Capitol Boulevard, Tumwater, WA, on March 10, 2000, at 3:00 p.m.

Assistance for Persons with Disabilities: Contact Elyette Weinstein by March 10, 2000, 11:00 a.m., TDD (360) 586-5450, or (360) 664-7298.

Submit Written Comments to: Elyette Weinstein, P.O. Box 48380, Olympia, WA 98504-8380, fax (360) 664-3618, by March 9, 2000.

Date of Intended Adoption: March 10, 2000.

January 24, 2000

Elyette M. Weinstein

Rules Coordinator

OTS-3791.1


NEW SECTION
WAC 415-104-450
Designation of beneficiaries -- Death benefit if a member dies before retirement.

(1) As a member, you have the right to designate a beneficiary or beneficiaries to receive a benefit in the event of your death while you are an active member. You may change your beneficiary designation at any time by filing a change of beneficiary form with the department.

(2) Please check the form carefully after you have filled it out to make sure that it is complete, consistent and accurate. The department may return your form if it is inaccurate, inconsistent or incomplete, requiring that you fill out another one.

(3) As a member you may name:

(a) An organization or person, including your unborn or later adopted children. Unborn or later adopted children will not be included unless you specifically designate them as beneficiaries on the form. You must state the date of birth for any living person you name as a beneficiary;

(b) Your estate;

(c) An existing trust. You must send the department a copy of the trust document and the name, address, telephone number of the current trustee, and the tax identification number. If you do not send this information to the department, it will not honor the existence of a trust;

(d) A trust to be established under your last will.

(4) If you want the beneficiary to be entitled to a death benefit only if certain conditions exist, such as the establishment of a trust, you must state this on the beneficiary form that you file with the department.

(5) You may name contingent beneficiaries in addition to primary beneficiaries.


Example:


Facts


Royce, a member, fills out a beneficiary designation form. In section two of the form under "beneficiary designation," he names "Coco" his daughter from his second marriage. He checks the primary beneficiary designation box beside her name.


In addition, in section two, under "trusts or organizations," Royce names "Portia" his daughter from his first marriage. Next to Portia's name he checks the primary beneficiary box. Under the caption "trustee or administrator," he states: "Both."


Royce does not send a trust document to the department.


Result


The department should return this form to the member because it is incomplete and inconsistent. Since both daughters are named as primary beneficiaries the department cannot tell whether the member wanted each to be named as a primary beneficiary, simultaneously taking a percentage of the death benefit. The form does not state whether Portia is a contingent primary beneficiary who is only entitled to a benefit if a trust is in existence.


In addition, since the member did not submit a trust document the department cannot determine whether a trust is even in existence.

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Washington State Code Reviser's Office