WSR 97-05-009
PERMANENT RULES
DEPARTMENT OF
RETIREMENT SYSTEMS
[Filed February 7, 1997, 3:18 p.m.]
Date of Adoption: February 7, 1997.
Purpose: To accommodate recent changes in federal law allowing postponement of election to receive a distribution.
Statutory Authority for Adoption: RCW 41.50.780(1), 41.50.050.
Adopted under notice filed as WSR 97-02-027 on December 23, 1996.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, amended 1, repealed 0; Federal Rules or Standards: New 0, amended 0, repealed 0; or Recently Enacted State Statutes: New 0, amended 0, repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, amended 0, repealed 0.
Number of Sections Adopted on the Agency's own Initiative: New 0, amended 1, repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, amended 0, repealed 0.
Number of Sections Adopted using Negotiated Rule Making: New 0, amended 0, repealed 0; Pilot Rule Making: New 0, amended 0, repealed 0; or Other Alternative Rule Making: New 0, amended 0, repealed 0.
Effective Date of Rule: Thirty-one days after filing.
February 7, 1997
John Charles
Director
AMENDATORY SECTION (Amending WSR 96-16-020, filed 7/29/96, effective
7/29/96)
WAC 415-512-090 Elections regarding distribution. Each participant (or in the event of death, each beneficiary other than an organization, an estate, or a trust) shall elect when his/her payout will begin and the payout period.
(1) Election regarding time of payment. The election regarding the
((time)) date when payment will begin shall be made when a participant
separates from service (or dies having separated from service and having
previously elected when payment will begin).
Once made, the election regarding when payout will begin is irrevocable as to the participant or beneficiary making the election, unless the participant or beneficiary, more than thirty days prior to the elected date payment is to begin, elects to postpone the original date. Only one such postponement is allowed. The election regarding when payment will begin:
(a) By a participant who separates from service other than by reason of death, must be made not later than sixty days after separation from service. Payment may begin on the central payroll date nearest the twenty-fifth day of the month following the month in which an election is filed with the department on forms provided for that purpose, and payment must begin within the time prescribed by WAC 415-512-110;
(b) By a beneficiary, other than an organization, estate or trust, where the participant was not already receiving payments, must be made not later than sixty days after the participant's death. Payment may begin on the central payroll date nearest the twenty-fifth day of the month following the month in which an election is filed with the department on forms provided for that purpose, and payment must begin within the time prescribed by WAC 415-512-110.
(2) Election regarding method of payment. The participant (or
beneficiary) who makes an election regarding the date payment will begin,
may also elect the period over which payments will be made. The payout
period election may be made either at the time he/she elects a beginning
date for payout or at any time not later than sixty days prior to the
date payout is to begin. Once having made this election, the participant
(or beneficiary, other than an organization, estate, or trust) may change
the payout period election not later than ((sixty)) thirty days prior to
the date payout is to begin. Such a beneficiary may also make this
election where the participant was already receiving payments but, as
provided in WAC 415-512-110 (3)(a), must receive distribution at least
as rapidly as it was being distributed to the participant. Such a
beneficiary must make the payout period election not later than sixty
days after the death of the participant and payout will be suspended
following the participant's death until the beneficiary either makes a
payout period election or begins receiving payment as provided in
subsection (4) of this section. Provided, if the participant was
receiving payout in the form of an annuity contract, then the successor's
right shall be limited by the terms of that contract.
(3) How elections are made. A participant or beneficiary makes elections allowed under this section by completing and filing applicable payment request forms with the department.
(4) Consequences in absence of a timely election regarding time of payment. Absent a timely election regarding when payout is to begin, payout will begin on the central payroll date nearest the twenty-fifth day of the month following the month in which the election period ends, and will be made, in a lump sum if the accumulated deferrals as of the end of the election period are less than twenty-five thousand dollars or, if the accumulated deferrals are twenty-five thousand dollars or more, in equal monthly installments over a period of one hundred twenty months or such lesser period:
(a) As may be necessary under the minimum payout requirements of Section 457 (d)(2)(B)(i)(I) of the Internal Revenue Code, requiring amounts to be paid not later than as determined under Section 401 (a)(9)(G) of the Internal Revenue Code; or
(b) As may be necessary under Section 457 (d)(2)(B)(i)(II) of the Internal Revenue Code, requiring amounts not distributed to the participant during his/her life to be distributed at least as rapidly as they were being distributed as of the participant's death.
(5) Effects of certain employment changes. Transfers from the plan are allowed in the circumstances described in WAC 415-512-015(2).
(6) Consequences in absence of a timely election regarding method of payment. In the absence of a timely election regarding the period of time over which payment will be made, payment will be made in the manner described in subsection (4) of this section.
(7) Payment to an organization, estate, or trust. Any amount
payable to an organization, estate, or trust shall be paid in a lump sum
as prescribed in WAC 415-512-110(3).
[Statutory Authority: RCW 41.50.050 and 41.50.780(11). 96-16-020, 415-512-090, filed 7/29/96, effective 7/29/96.]