WSR 02-02-060

PERMANENT RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed December 28, 2001, 10:17 a.m. , effective January 1, 2002 ]

Date of Adoption: December 26, 2001.

Purpose: Implement ESSB 5937 (2001), an act relating to postretirement employment, and HB 1213 (2001) (PERS and SERS technical corrections).

Citation of Existing Rules Affected by this Order: Repealing WAC 415-112-540 and 415-112-545; and amending WAC 415-108-710, 415-110-710, and 415-112-515.

Statutory Authority for Adoption: RCW 41.50.050(5).

Other Authority: RCW 41.04.270, 41.26.030, 41.32.010, 41.32.025, 41.32.480, 41.32.500, 41.32.570, 41.32.765, 41.32.795, 41.32.802, 41.32.855, 41.32.860, 41.32.862, 41.35.010, 41.35.030, 41.35.060, 41.35.450, 41.35.640, 41.40.010, 41.40.023, 41.40.037, 41.40.150, 41.40.193, 41.40.680, 41.40.750, 41.40.801.

Adopted under notice filed as WSR 01-22-101 on November 7, 2001.

Changes Other than Editing from Proposed to Adopted Version: Changes Set 1:

WAC 415-108-710 (2)(c), after "3" inserted "in another pension plan."

WAC 415-110-710 (2)(b), the sentence now reads, "Retirees from both a Plan 1 in another pension plan and SERS Plan 2 or 3: The Plan 1 limits of the other plan will be applied."

WAC 415-112-541 (1)(c), after "3" inserted "in another pension plan."


Changes Set 2:

WAC 415-112-541(1), changed the word "fiscal" to "school;" struck "(July 1st through June 30th)" and inserted "as defined in WAC 415-112-0161" in its place.

WAC 415-112-515(3), struck "RCW 41.32.500" and replaced it with "WAC 415-112-520."


Changes Set 3:

WAC 415-108-710 (1)(e), the Department of Retirement Systems (DRS) has struck all language between RCW 41.40.023 (3)(b) and the semicolon at the end of subsection (e).

WAC 415-110-710 (1)(e) (DRS-initiated change), DRS has struck all language between "membership" and the semicolon at the end of subsection (e). DRS has inserted "under RCW 41.35.030" after "membership."


Changes Set 4:

WAC 415-108-710 (1)(b), in between "plan" and the semicolon, DRS has inserted "and are employed no sooner than one calendar month after your retirement benefit accrues."

WAC 415-110-710 (1)(b), after "plan" insert "and are employed."

WAC 415-108-710 (1)(d) and 415-110-710 (1)(d), after "RCW 41.40.150(4) DRS has inserted "no sooner than one calendar month after your retirement benefit accrues."

WAC 415-108-710 (3)(b) and WAC 415-110-710 (3)(b), strike "date" and substitute "beginning of the month in which."


Changes Set 5:

WAC 415-108-710 (1)(a) and 415-110-710 (1)(a), struck "benefit accrues" and replaced with "accrual date."

WAC 415-108-710 (c) and (d), rearranged the sentences to be more clear.

WAC 415-108-710 (3)(b) and 415-110-710 (3)(b), struck half of sentence starting with "beginning of the month..." and replaced with "first day of the month following the month in which you request to return to membership" to accurately reflect practice.

WAC 415-108-710 (4)(a)(ii) and 415-110-710 (4)(a)(ii), changed "allowance" to "allowances" for grammatical reasons.

WAC 415-108-710 (5)(c) and 415-110-710 (5)(c), struck last sentence (beginning with "membership") and replaced with "The option to return to membership is prospective from the first day of the month following the month in which you request to return to membership" to accurately reflect practice.

WAC 415-108-710(6), renumbered examples from "1, 2, and 3" to "4, 5, and 6." In example (5), after "(RCW 41.40.037)", inserted "; this will be reflected in Tony's November benefit" to explain how and when the reduction will be reflected in Tony's retirement allowance. The last sentence is changed to: "On December 1st, Tony will qualify to return...."

WAC 415-110-710(6), changed examples "1, 2, and 3" to "3, 4, and 5."

WAC 415-112-541(1), at the end of the sentence, added "under WAC 415-112-520 to clarify source of authority for the statement.

WAC 415-112-541 (c) and (d), rearranged sentence order for clarity.

WAC 415-112-542(b), after "suspended" deleted "once you pass eight hundred sixty-seven hours" and substituted "effective the day after the day in which you exceed the work limit," to pinpoint the time and reflect business practice.

WAC 415-112-542(c), after "calendar year" changed to "or the first day of the month following your..." to clarify and accurately reflect business practice.

The changes were made because: Some changes were made in response to comments that DRS received from the public, some from staff, and some as the proposed rules were reviewed while preparing this CES.


SUMMARY OF COMMENTS RECEIVED THE DEPARTMENT CONSIDERED ALL THE COMMENTS. THE ACTIONS TAKEN IN RESPONSE TO THE COMMENTS, OR THE REASONS NO ACTIONS WERE TAKEN, FOLLOW.
In WAC 415-112-541 (1)(c) did DRS mean to say one can retire in TRS Plan 1 and also in TRS Plan 2 or 3? DRS agreed that this TRS rule was unclear. DRS changed the TRS rule, and made similar changes in the PERS and SERS rules. See Changes Set 1, above. These changes were read into the record at the rules hearing, and provided to the audience in hard copy.
RCW 41.32.570 refers to "school year," but WAC 415-112-541 refers to "fiscal year." The department concurs. See Changes Set 2, above.
In TRS, the listed implementing statutes have nothing to do with WAC 415-112-515, which is being amended. Substantive changes, including making the WAC apply to all TRS plans instead of just TRS Plan 1, and having the WAC apply to "employment" instead of "public school employment," are being made without explanation or justification. This makes accrual date more confusing for TRS Plan 1 members. RCW 41.32.500 does not contain any accrual date criteria.

Change from "public school employment" to "employment as defined in RCW 41.32.010(48), which states, "Separation from service or employment" occurs when a person has terminated all employment with an employer."

DRS is "legislating" by rule making.

DRS is attempting to give WAC 415-112-515 "standing" (sic) over WAC 415-112-520.

DRS' main reason for amending WAC 415-112-515 was its desire to put SERS and PERS practice into WAC, and have all three WACs (including TRS) be the same or similar to one another. While working on the PERS and SERS versions, DRS believed some language changes to the original TRS WAC were necessary to make the TRS WAC, and the new SERS and PERS WACs, more clear and consistent with one another.

A secondary reason for amending this WAC was to put TRS practices into WAC; in practice, the same rules have been applied for TRS Plans 2 and 3 as apply to TRS Plan 1. The legislature wants state agencies to convert policies into rules. RCW 34.05.230(1).

DRS did not intend to make any changes that would affect any plan members in any way, nor does it believe it has done so. WAC 415-112-515 is not a WAC on accrual, as the comments suggest. Rather, this is a WAC that spells out the three conditions that must be met before a member enters retirement status. WAC 415-112-515 and 415-112-520 cover two entirely different topics. WAC 415-112-515 describes the conditions a member must meet to change his or her status to "retired." WAC 415-112-520 provides the accrual date that must be determined under WAC 415-112-515 when a member retires.

WAC 415-112-515 embodies the interpretation of a number of statutes. Some of these include, but are not limited to, RCW 41.32.010 (31) and (48), 41.32.025, 41.32.480, 41.32.500, 41.32.765, 41.32.795, and 41.32.855. (These statutes will be added to the final rule-making order as cited statutory authority). Washington cases consistently have held that a state agency may adopt appropriate rules to fill in the gaps in legislation if such rules are necessary to effectuate a general statutory scheme. See, e.g. Armstrong v. State, 91 Wn. App. 530 (1998). Here, the statutes refer to retirement status, but an interpretive WAC is needed to explain just when a person enters retirement status.

DRS has made no change in practice by changing its language from "terminated all public school employment" to "separated from service or employment as defined in RCW 41.32.010(48) (which states, ""Separation from service or employment" occurs when a person has terminated all employment with an employer.") "Public school employers" are employers for TRS members. TRS has never considered a member to be separated if he or she has a written agreement to return to work, because a written agreement to return to work means that the employment relationship has not been severed. The employment status of the individual is more accurately characterized as an approved leave of absence rather than a "separation" as required by law if there is an agreement to return to work. This analysis applies to all systems and plans because they all require a "separation" even if they use slightly different language.

DRS agrees that the citation to RCW 41.32.500 was erroneous. The citation will be changed to WAC 415-112-520. See Changes Set 2, above. DRS disagrees that RCW 41.32.270 applies to accrual dates.

Washington state agencies have three types of functions: Executive, judicial, and legislative. Rule making is the way an agency exercises its legislative powers, within the parameters of authority granted to the agency by the state legislature. DRS believes that the rule proposal under discussion is an appropriate use of its rule-making authority.

In PERS, the rules regarding returning to work after a one-month break need to be clarified. It is especially unclear why the rules would apply to ineligible positions. RCW 41.40.037 refers to entering employment with an employer. It does not distinguish between "eligible" and "ineligible" positions. Therefore, this rule must apply to all types of positions. DRS believes that the rule is clear and that no explanation is needed.
In PERS, the rules regarding elected officials are confusing. More explanation is needed. DRS concurs. The confusion arose from having unnecessary language in this subsection. See Changes Set 3, above.
In PERS, the material about the accrual date is unclear, although one of the examples is clear and helpful. WAC 415-108-710 does not apply to accrual dates, other than using the accrual date as a date which must be passed by one month before a retiree can work for an employer after retirement and still receive his or her retirement allowance. Section (7) refers the reader to the statutes which describe accrual date for each of the PERS plans. DRS could write a new WAC on accrual dates, but agencies are discouraged from writing WACs that are duplicative of state statutes. Because such a WAC would be duplicative of clear explanations in the statutes, DRS believes that further explanation is unnecessary and contrary to state goals of keeping the number of WACs to a minimum.
Several technical changes DRS had made in an earlier draft were inadvertently left out of the WACs in several places. These changes have been made. See Changes Set 4, above.
In completing additional review, DRS found and made a number of additional technical and grammatical changes. These changes have been made. See Changes Set 5, above.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 5, Amended 2, Repealed 2.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 2, Amended 0, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 5, Amended 3, Repealed 2.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.

Other Findings Required by Other Provisions of Law as Precondition to Adoption or Effectiveness of Rule: ESSB 5937 went into effect July 1, 2001, but DRS was unable to implement the automation of systems until January 1, 2002. Rule making was complicated and DRS was not able to complete them earlier. DRS requires that the rules become effective congruently with the implementation of the automated systems.
Effective Date of Rule: January 1, 2002.

December 26, 2001

John Charles

Director

OTS-3564.11


AMENDATORY SECTION(Amending WSR 95-16-053, filed 7/25/95, effective 8/25/95)

WAC 415-108-710   ((If I work for an employer after I retire, will my retirement benefit be affected?)) How will returning to work affect my PERS monthly benefit?    (((1) If you reenter membership after retiring, the department will suspend payment of your benefit.

(2) You may work for an employer in some circumstances without reentering membership. You may enter employment with an employer after retirement without having to reenter membership if:

(a) You are employed in an ineligible position; or

(b) You are employed in an eligible position on a temporary basis for five months or less in a calendar year.

(i) If you enter compensated employment in an eligible position during a month, that month is counted as a month of employment in the calendar year regardless of the number of hours you worked in the month.

(ii) If you are employed in an eligible position for any five months during a calendar year, the department will count your employment as five months of employment, regardless of whether or not the months are consecutive or your employment is with one or more employers.

(3) You are required to reenter membership if you become reemployed in an eligible position on a temporary basis for more than five months in a calendar year. If you become reemployed in an eligible position on a temporary basis for more than five months in a calendar year you will reenter membership in the retirement system beginning with the sixth month of your employment. Effective at the beginning of the sixth month of your employment:

(a) Your employer will report you to the department; and

(b) The department will suspend your retirement allowance.

(4) You are required to reenter membership if you become permanently reemployed in an eligible position. If you become reemployed in an eligible position on a permanent basis you will immediately become a member. Effective from the date of your reemployment in a permanent eligible position:

(a) Your employer will report you to the department; and

(b) The department will suspend your retirement allowance.

(5) Meaning of employment on a temporary or permanent basis.

(a) "Employed on a temporary basis" under subsection (2) of this section means your employer expects your employment to last for five months or less and not be on a recurring basis.

(b) "Employed on a permanent basis" under subsection (3) of this section means either:

(i) Your employer expects you to continue in your position for more than five months in any calendar year; or

(ii) Your employer expects you to continue in the same position for more than one year on a recurring basis and your employment is for five months or less during each year.

(6) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed.

(a) "Eligible position" - RCW 41.40.010.

(b) "Employer" - RCW 41.40.010.

(c) "Ineligible position" - RCW 41.40.010.

(d) "Membership" - RCW 41.40.023.

(e) "Report" - WAC 415-108-0104.)) (1) You may work for an employer after retirement and continue to receive your retirement allowance if:

(a) You are employed in an ineligible position no sooner than one calendar month after your retirement accrual date;

(b) You are an active member of a higher education retirement plan and are employed no sooner than one calendar month after your retirement benefit accrues;

(c) You are employed as a bona fide independent contractor as defined by WAC 415-02-110;

(d) You are employed as an elected or appointed official directly by the governor under RCW 41.40.150(4) no sooner than one month after your retirement benefit accrues and do not reenter membership;

(e) Your only employment is as an elected official of a city or town and you end your PERS membership under RCW 41.40.023 (3)(b); or

(f) You are employed in an eligible position:

(i) No sooner than one calendar month after your retirement benefit accrues; and

(ii) The time you work does not exceed the "work limit" defined in subsection (2) of this section.

(2) What is the work limit for eligible positions?

(a) Plan 1 retiree working for an employer as defined in RCW 41.40.010 (4)(a): Fifteen hundred hours in a calendar year; or

(b) Plan 2 or 3 retiree working in an eligible position as defined in RCW 41.32.010, 41.35.010, or 41.40.010, or as a fire fighter or law enforcement officer, as defined in RCW 41.26.030: Eight hundred sixty-seven hours in a calendar year.

(c) The Plan 1 limits will be applied to retirees from both a Plan 1 and a Plan 2 or 3 in another pension plan.

(d) The TRS Plan 1 rules will be applied to retirees from both TRS Plan 1 and PERS Plan 1.

(3) What happens if I work more than the work limit?

(a) The department will suspend your retirement allowance effective the day after the day in which you exceed the work limit. All hours worked for all covered employers in eligible positions are considered in determining the work limit.

(b) You have the option to return to membership in PERS if you are otherwise eligible. The option to return to membership is prospective from the first day of the month following the month in which you request to return to membership.

(4) How will the suspension of benefits affect my retirement allowance?

(a) The department will:

(i) Prorate your retirement allowance for the month during which you exceeded the work limit; and

(ii) Suspend all future retirement allowances while you are working until the next calendar year except that it will:

(iii) Adjust for any overpayments made to you for the month(s) in which you exceeded the work limit, as required by RCW 41.50.130.

(b) If you separate from service, your retirement allowance will resume effective the first day of the month following the date of separation.

(5) Can I return to PERS membership?

(a) If you are a PERS retiree, you may choose to return to membership if you are employed by a PERS employer and meet the eligibility criteria. If you return to membership the department will stop your retirement allowance effective from the first of the month during which you return to employment. Membership will be prospective under RCW 41.40.023(12).

(b) If you reenter membership and later choose to retire again, the department will recalculate your retirement allowance under the applicable statutes and regulations.

(c) If you are a retiree from another retirement system that the department administers, and are eligible to enter PERS membership, you may choose to return to membership. The option to return to membership is prospective from the first day of the month following the month in which you request to return to membership.


Example 1:


Kirk is a PERS Plan 2 retiree. He separates from service on August 15th. His accrual date (retirement) is effective September 1st. Kirk returns to work in a PERS Plan 2 eligible position on January 2nd of the following year. On June 1st he realizes that on or about July 8th, he is going to exceed his eight hundred sixty-seven hour limit for the year. On July 5th he notifies his employer in writing that he chooses to reenter PERS Plan 2 membership.

On July 12th, Kirk works his eight hundred sixty-eighth hour. He is no longer eligible for his PERS Plan 2 retirement benefit as of July 12th. The retirement benefit is stopped for the remainder of July. On August 1st, Kirk is returned to membership and resumes making retirement contributions.


Example 2:


Kristal is a PERS Plan 1 retiree. She separated from service on June 20th. Her accrual date (retirement) is effective July 1st. She begins working in a PERS eligible position the following January. By October 1st, Kristal has exceeded the fifteen hundred hour work limit, and her benefit is suspended. Kristal separates from service on November 15th and her benefit is reinstated December 1st. Kristal qualifies to begin another fifteen hundred hour work period on January 1st.


Example 3:


Millie is a PERS Plan 2 retiree. She separated from service on June 20th. Her accrual date (retirement) is effective July 1st. She begins working in a PERS eligible position on February 1st of the following year. By September 1st, Millie has worked eight hundred sixty-seven hours and continues to work. Millie's benefit is suspended from September 2nd until January 1st if she continues to work.


(6) How soon can I return to work as a retiree? If you return to work sooner than one full calendar month after your accrual date under RCW 41.40.037, your retirement allowance will be reduced by 5.5% for every eight hours worked each month, until you separate for one full calendar month. See RCW 41.40.037.


Example 4:


John's last day of work is September 15th. His accrual date is October 1st. If John wants to return to work after he retires, he will need to wait until at least November 1st to avoid receiving the daily percentage reduction in his retirement allowance.


Example 5:


Tony's last day of work is September 15th. His accrual date is October 1st. Tony returns to work for five work days between October 10th and October 17th. His October retirement allowance will be reduced by five and one-half percent for every eight hours worked in October (RCW 41.40.037); this will be reflected in Tony's November benefit. Tony does not return to work. On December 1st, Tony will qualify to return to work under the work limits described in subsection (2) of this section.


Example 6:


Ruth's last day of work is September 15th. Her accrual date is October 1st. She returns to work on October 10th and continues working. Ruth's retirement benefit will be reduced by 5.5% for each eight hours she works. Under RCW 41.40.037, Ruth's benefit reduction will accrue up to one hundred sixty hours per month. If she stops working, Ruth's full retirement benefit will resume after she remains separated for one full calendar month. Any benefit reduction over one hundred percent will be applied to Ruth's allowance in subsequent months.


(7) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed:

(a) "Accrual date" - RCW 41.40.193, 41.40.680, 41.40.801.

(b) "Eligible position" - RCW 41.40.037(2).

(c) "Employer" - RCW 41.40.010(4).

(d) "Ineligible position" - RCW 41.40.010.

(e) "Law enforcement officer" - RCW 41.26.030.

(f) "Membership" - RCW 41.40.023.

(g) "Report" - WAC 415-108-0104.

[Statutory Authority: RCW 41.50.050. 95-16-053, 415-108-710, filed 7/25/95, effective 8/25/95.]


NEW SECTION
WAC 415-108-800   When does a member of the public employees' retirement system (PERS) enter retirement status?   A member of PERS enters retirement status when he or she:

(1) Has separated from service as defined in RCW 41.40.010(41);

(2) Has no written agreement to return to employment prior to entering "retiree status"; and

(3) Has applied for retirement, the accrual date has been determined under RCW 41.40.193, 41.40.680, or 41.40.801, and the benefit begins to accrue.

Example: Sally is eligible for retirement on July 1st. She submits an application on June 1st with a July 1st retirement date. Her last day of employment is June 30th and she does not have an agreement to return to work.
Sally's retirement date (accrual date) is July 1st and the benefit begins to accrue. The first retirement payment will be paid at the end of July. Sally entered "retiree status" effective July 1st.

[]

OTS-5057.8


AMENDATORY SECTION(Amending WSR 01-01-059, filed 12/12/00, effective 1/12/01)

WAC 415-110-710   ((If I work for an employer after I retire, will my retirement benefit be affected?)) How will returning to work affect my SERS monthly benefit?   (((1) If you reenter membership after retiring, the department will suspend payment of your benefit.

(2) You may work for an employer in some circumstances without reentering membership. You may enter employment with an employer after retirement without having to reenter membership if:

(a) You are employed in an ineligible position; or

(b) You are employed in an eligible position on a temporary basis for five months or less in a calendar year.

(i) If you enter compensated employment in an eligible position during a month, that month is counted as a month of employment in the calendar year regardless of the number of hours you worked in the month.

(ii) If you are employed in an eligible position for any five months during a calendar year, the department will count your employment as five months of employment, regardless of whether or not the months are consecutive or your employment is with one or more employers.

(3) You are required to reenter membership if you become reemployed in an eligible position on a temporary basis for more than five months in a calendar year. If you become reemployed in an eligible position on a temporary basis for more than five months in a calendar year, you will reenter membership in the retirement system beginning with the sixth month of your employment. Effective at the beginning of the sixth month of your employment:

(a) Your employer will report you to the department; and

(b) The department will suspend your retirement allowance.

(4) You are required to reenter membership if you become permanently reemployed in an eligible position. If you become reemployed in an eligible position on a permanent basis, you will immediately become a member. Effective from the date of your reemployment in a permanent eligible position:

(a) Your employer will report you to the department; and

(b) The department will suspend your retirement allowance.

(5) Meaning of employment on a temporary or permanent basis.

(a) "Employed on a temporary basis" under subsection (2) of this section means your employer expects your employment to last for five months or less and not be on a recurring basis.

(b) "Employed on a permanent basis" under subsection (3) of this section means either:

(i) Your employer expects you to continue in your position for more than five months in any calendar year; or

(ii) Your employer expects you to continue in the same position for more than one year on a recurring basis and your employment is for five months or less during each year.

(6) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed.

(a) "Eligible position" - RCW 41.35.010.

(b) "Employer" - RCW 41.35.010.

(c) "Ineligible position" - RCW 41.35.010.

(d) "Membership" - RCW 41.35.030.

(e) "Report" - WAC 415-110-0104.)) (1) You may work for an employer after retirement and continue to receive your retirement allowance if:

(a) You are employed in an ineligible position no sooner than one calendar month after your retirement accrual date;

(b) You are an active member of a higher education retirement plan and are employed no sooner than one calendar month after your retirement benefit accrues;

(c) You are employed as a bona fide independent contractor as defined by WAC 415-02-110;

(d) You are employed as an elected or appointed official directly by the governor under RCW 41.40.150(4) no sooner than one calendar month after your retirement benefit accrues and do not reenter membership;

(e) Your only employment is as an elected official of a city or town and you end your SERS membership under RCW 41.35.030; or

(f) You are employed in an eligible position:

(i) No sooner than one calendar month after your retirement benefit accrues; and

(ii) The time you work does not exceed the "work limit" defined in subsection (2) of this section.

(2) What is the work limit for eligible positions?

(a) Plan 2 or 3 retiree working in an eligible position as defined in RCW 41.32.010, 41.35.010, or 41.40.010, or as a fire fighter or law enforcement officer, as defined in RCW 41.26.030: Eight hundred sixty-seven hours in a calendar year.

(b) Retirees from both a Plan 1 in another pension plan and SERS Plan 2 or 3: The Plan 1 limits of the other plan will be applied.

(3) What happens if I work more than the work limit?

(a) The department will suspend your retirement allowance effective the day after the day in which you exceed the work limit. All hours worked for all covered employers in eligible positions are considered in determining the work limit.

(b) You have the option to return to membership in SERS if you are otherwise eligible. The option to return to membership is prospective from the first day of the month following the month in which you request to return to membership.

(4) How will the suspension of benefits affect my retirement allowance?

(a) The department will:

(i) Prorate your retirement allowance for the month during which you exceeded the work limit; and

(ii) Suspend all future retirement allowances while working, until the next calendar year except that it will:

(iii) Adjust for any overpayments made to you for the month(s) in which you exceeded the work limit, as required by RCW 41.50.130.

(b) If you separate from service, your retirement allowance will resume effective the first day of the month following the date of separation.

(5) Can I return to SERS membership?

(a) If you are a SERS retiree, you may choose to return to membership if you are employed by a SERS employer and meet the eligibility criteria. If you return to membership the department will stop your monthly retirement allowance effective from the first of the month during which you return to employment. Membership will be prospective under RCW 41.35.060(3).

(b) If you reenter membership and later choose to retire again, the department will recalculate your retirement allowance under the applicable statutes and regulations.

(c) If you are a retiree from another retirement system that the department administers, and are eligible to enter SERS membership, you may choose to return to membership. The option to return to membership is prospective from the first day of the month in which you request to return to membership.


Example 1:


Phil is a SERS Plan 2 retiree. He separates from service on August 15th. His accrual date (retirement) is effective September 1st. Phil returns to work in a SERS Plan 2 eligible position on January 2nd of the following year. On June 1st he realizes that on or about July 8th, he is going to exceed his eight hundred sixty-seven hour limit for the year. On July 5th he notifies his employer in writing that he chooses to reenter SERS Plan 2 membership.

On July 12th, Phil works his eight hundred sixty-eighth hour. He is no longer eligible for his SERS Plan 2 retirement allowance as of July 12th. The retirement benefit is stopped for the remainder of July. On August 1st, Phil is returned to membership and resumes making retirement contributions.


Example 2:


Tami is a SERS Plan 2 retiree. She separated from service on June 20th. Her accrual date (retirement) is effective July 1st. She begins working in a SERS eligible position on February 1st of the following year. By September 1st, Tami has worked eight hundred sixty-seven hours. Tami's benefit is suspended from September 2nd until January 1st if she continues to work.


(6) How soon can I return to work as a retiree? If you return to work sooner than one full calendar month after your accrual date, your retirement allowance will be reduced by 5.5% for every eight hours worked each month, until you separate for one full calendar month. See RCW 41.35.060.


Example 3:


Steve's last day of work is September 15th. His accrual date is October 1st. If Steve wants to return to work after he retires, he will need to wait until at least November 1st to avoid receiving the daily percentage reduction in his retirement allowance.


Example 4:


Tim's last day of work is September 15th. His accrual date is October 1st. Tim returns to work for five eight-hour work days between October 10th and October 17th. His October retirement allowance will be reduced by five and one-half percent for every eight hours worked in October (RCW 41.35.060). Tim does not return to work. On December 1st, he will qualify for his full retirement benefit. Tim will also qualify to return to work under the work limits described in subsection (2) of this section.


Example 5:


Paige's last day of work is September 15th. Her accrual date is October 1st. She returns to work on October 10th and continues working. Paige's retirement benefit will be reduced by 5.5% for each eight hours she works. Paige's benefit reduction will accrue up to one hundred sixty hours per month. If she stops working, her full retirement allowance will resume after she remains separated for one full calendar month. Any benefit reduction over one hundred percent will be applied to Paige's allowance in subsequent months.


(7) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed:

(a) "Accrual date" - RCW 41.35.450, 41.35.640.

(b) "Eligible position" - RCW 41.35.060(2).

(c) "Employer" - RCW 41.35.010(4).

(d) "Ineligible position" - RCW 41.35.010(23).

(e) "Law enforcement officer" - RCW 41.26.030.

(f) "Member" - RCW 41.35.010(5).

[Statutory Authority: Chapters 41.32, 41.34, 41.35, 41.50 RCW. 01-01-059, 415-110-710, filed 12/12/00, effective 1/12/01.]


NEW SECTION
WAC 415-110-800   When does a member of the school employees' retirement system (SERS) enter retirement status?   A member of the SERS enters retirement status when he or she:

(1) Has separated from service as defined in RCW 41.35.010(36);

(2) Has no written agreement to return to public employment prior to entering "retiree status"; and

(3) Has applied for retirement, the accrual date has been determined under RCW 41.35.450 or 41.35.640, and the benefit begins to accrue.


Example: Doug is eligible for retirement on July 1st. He submits an application on June 1st with a July 1st retirement date. His last day of employment is June 30th and he does not have an agreement to return to work.
Doug's retirement date (accrual date) is July 1st, and the benefit begins to accrue. The first retirement payment will be paid at the end of July. Doug entered "retiree status" effective July 1st.

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OTS-5253.3


AMENDATORY SECTION(Amending 99-14-008, filed 6/24/99, effective 7/25/99)

WAC 415-112-515   When does a member of the ((teacher's)) teachers' retirement system ((Plan 1)) (TRS) enter((s)) retirement status((.))?   A member of ((the teacher's retirement system Plan 1)) TRS enters retirement status when he or she:

(1) Has ((terminated all public school employment in the state of Washington)) separated from service or employment as defined in RCW 41.32.010(48);

(2) Has no written agreement to return to ((public school)) employment; and

(3) Has ((made application)) applied for retirement, the accrual date has been determined under WAC 415-112-520, RCW 41.32.795, or 41.32.855, and the benefit begins to accrue.


Example: ((A member who)) Judy is eligible for retirement on July 1st. She submits an application on June 1st with a July 1st retirement date. ((They terminate all)) Her last day of employment ((on)) is June 30th and ((do)) she does not have an agreement to return to work.
((Their benefit will begin to accrue on July 1st and they will receive their first retirement allowance payment at the end of July. The member is a "retiree" beginning July 1st because that is when the benefit begins to accrue.)) Judy's retirement date (accrual date) is July 1st and the benefit begins to accrue. The first retirement payment will be paid at the end of July. Judy entered "retiree status" effective July 1st.

[Statutory Authority: RCW 41.50.050. 99-14-008, 415-112-515, filed 6/24/99, effective 7/25/99. Statutory Authority: RCW 41.50.050 and 41.32.570. 91-21-084, 415-112-515, filed 10/18/91, effective 11/18/91.]

OTS-5254.2


NEW SECTION
WAC 415-112-525   How soon can I return to work as a retiree?   (1) If you return to work sooner than one full calendar month after your accrual date, your retirement allowance will be reduced by 5.5% for every seven hours worked during the month until you separate from all employment for one full calendar month. See RCW 41.32.570 (TRS Plan 1), 41.32.802 (TRS Plan 2), or 41.32.862 (TRS Plan 3).


Example 1:


Dave's last day of work is September 15th. He has no agreement to return to work. His accrual date is October 1st. If Dave wants to return to work after he retires, he will need to wait until at least November 1st to avoid receiving the daily percentage reduction in his retirement allowance.


Example 2:


Brian's last day of work is September 15th. He has no agreement to return to work. His accrual date is October 1st. Brian subsequently is asked to work for five seven-hour work days between October 10th and October 17th. On November 1st, Brian's retirement allowance will be reduced by five and one-half percent for every seven hours worked during October. (RCW 41.32.570.) On December 1st, he will qualify for his full retirement benefit. Brian will also qualify to return to work under the work limits described in WAC 415-112-540(2).


Example 3:


Joe's last day of work is September 15th. He has no agreement to return to work. His accrual date is October 1st. Joe then returns to work on October 10th and continues working. Joe's retirement benefit will be reduced by 5.5% for each seven hours he works. Joe's benefit reduction will accrue up to one hundred forty hours per month. If he stops working, his full retirement benefit will resume after he remains separated for one full calendar month. Any benefit reduction over one hundred percent will be applied to Joe's allowance in subsequent months.

(2) If you have a written agreement to return to work before your accrual date, and in fact return to work, you have not entered retirement status. See WAC 415-112-515. In this case, you are not a retiree, and the 5.5% reduction in subsection (1) of this section does not apply.

Example 4:


Teri's last day of work is September 15th. Her accrual date would ordinarily be on October 1st. However, on September 18th, Teri signed an agreement to work for one day in October. Teri signed the agreement prior to her accrual date. Under WAC 415-112-515 she is not a retiree, and not eligible for her retirement benefits. In addition, the 5.5% reduction does not apply. Teri's accrual date will now be November 1st, as long as she did not have any other agreements to work.


Defined terms used. Definitions for the following terms used in this section may be found in the sections listed:

(a) "Accrual date" - WAC 415-112-520; RCW 41.32.795, 41.32.855.

(b) "Eligible position" - RCW 41.40.010, 41.32.010 (37)(a), 41.35.010(22).

(c) "Employer" - RCW 41.32.010(11).

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OTS-5213.6


NEW SECTION
WAC 415-112-541   How will returning to work affect my TRS Plan 1 monthly pension?   This section implements RCW 41.32.570, which limits employment for TRS Plan 1 retirees with public educational institutions to fifteen hundred hours regardless of the nature of service.

(1) You may return to any type of service with a public education institution for up to fifteen hundred hours per school year as defined in WAC 415-112-0161 without affecting your TRS Plan 1 monthly pension under RCW 41.32.570, provided you have been retired from service for one full calendar month (see WAC 415-112-520 and 415-112-525 for more information).

(a) Your employer must notify the department when you return to work. Your employer must report hours and compensation.

(b) If you are a TRS Plan 1 retiree and you work more than fifteen hundred hours during a fiscal year, the department will suspend your monthly pension. The pension is suspended until the first of the next fiscal year or termination of your employment, whichever comes first.

(c) The TRS Plan 1 limits will be applied to retirees from both TRS Plan 1 and a Plan 2 or 3 in another pension plan.

(d) The TRS Plan 1 limits will be applied to retirees from both TRS Plan 1 and PERS Plan 1.

(e) If you are a TRS Plan 1 retiree working for a public education institution as a bona fide independent contractor as determined under WAC 415-02-110, you are not considered an employee of the institution and are not subject to the work limitations.

(2) If the department suspends your benefit because of your reemployment, the department will reinstate the original amount of your pension, less deductions to recover any overpayment, effective the day following your termination of employment, or at the beginning of the next fiscal year, whichever comes first.

(3) You must repay any monthly pension payment that you receive in excess of the amounts allowed under this section.

(4) You may choose to return to membership if you are employed by a public education institution and are otherwise eligible. Membership will be prospective from the month in which you opt into membership.

(5) Defined terms used. Definitions for the following term used in this section may be found in the section listed.

Public educational institution: WAC 415-112-0157.

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NEW SECTION
WAC 415-112-542   How will returning to work affect my TRS Plan 2 or Plan 3 monthly retirement allowance?   This section implements RCW 41.32.802 and 41.32.862, which limit employment for TRS Plan 2 or Plan 3 retirees employed in an eligible position to eight hundred sixty-seven hours per calendar year.

(1) You may return to any eligible position for up to eight hundred sixty-seven hours per calendar year without affecting your monthly retirement allowance.

(a) Your employer must notify the department when you return to work and report hours and compensation.

(b) Your monthly retirement benefit is suspended effective the day after the day in which you exceed the work limit, unless you are also a member of any Plan 1, in which case the Plan 1 limits will apply.

(c) Your monthly retirement benefit is reinstated at the beginning of the next calendar year or the first day of the month following your termination from employment whichever comes first.

(d) You may choose to return to membership if you are employed by a public school and are otherwise eligible. Membership will be prospective from the month in which you opt into membership.

(e) If you are a TRS Plan 2 or Plan 3 retiree working as a bona fide independent contractor as determined under WAC 415-02-110, you are not considered an employee and are not subject to the work limitations.

(f) If you are working as an on-call substitute teacher you are working in an ineligible position and not subject to the work limitations of RCW 41.32.802 and 41.32.862.

(2) You must repay any monthly pension payment that you receive in excess of the amounts allowed under this section.

(3) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed.

(a) Eligible position: RCW 41.32.570 (2)(b).

(b) Substitute teacher: RCW 41.32.010(36).

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REPEALER

     The following sections of the Washington Administrative Code are repealed:
WAC 415-112-540 How will returning to work affect my TRS Plan 1 monthly pension?
WAC 415-112-545 How can I qualify for an additional three hundred fifteen hours of service without having my TRS Plan 1 monthly pension reduced?

Washington State Code Reviser's Office