[Filed March 31, 1997, 4:43 p.m.]
Date of Adoption: March 31, 1997.
Purpose: To provide rules governing the assessment of expenses for teachers' retirement system plan III members who wish to avail themselves of the self-directed investment options authorized by the Employee Retirement Benefits Board.
Statutory Authority for Adoption: RCW 41.50.088, 41.34.060.
Under RCW 34.05.350 the agency for good cause finds that immediate adoption, amendment, or repeal of a rule is necessary for the preservation of the public health, safety, or general welfare, and that observing the time requirements of notice and opportunity to comment upon adoption of a permanent rule would be contrary to the public interest.
Reasons for this Finding: Teachers' retirement system plan III members have expressed considerable interest at Employee Retirement Benefits Board meetings in being able to self-direct the investment of their TRS III accounts. RCW 41.34.060 requires that individual members pay the expenses associated with self-directed investment. RCW 41.34.060 also requires the board to adopt rules describing how expenses are determined and how those charges will be assessed against members. Adopting these rules as emergency rules effective immediately is necessary in order to allow the board to offer the self-directed options effective April 1, 1997.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, amended 0, repealed 0; Federal Rules or Standards: New 0, amended 0, repealed 0; or Recently Enacted State Statutes: New 2, amended 0, repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, amended 0, repealed 0.
Number of Sections Adopted on the Agency's own Initiative: New 0, amended 0, repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, amended 0, repealed 0.
Number of Sections Adopted using Negotiated Rule Making: New 0, amended 0, repealed 0; Pilot Rule Making: New 0, amended 0, repealed 0; or Other Alternative Rule Making: New 0, amended 0, repealed 0.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: Immediately.
March 31, 1997
John Charles, Chair
Employee Retirement Benefits Board
WAC 415-200-030 Teachers' retirement system plan III external
administrators. The employee retirement benefits board may obtain
external investment management services to assist with the provision of
self-direct investment options. External administrator and investment
management services will be obtained through competitive procurement
processes to ensure teachers' retirement system plan III members receive
quality services and competitive pricing. The department of retirement
systems may select external administrators to assist with the
administration of the defined contribution portion of the teachers'
retirement system plan III established under chapter 41.34 RCW.
WAC 415-200-040 Self-directed investment--Expenses paid by members. RCW 41.34.060 allows members of the teachers' retirement system plan III to elect to self-direct their investments using options approved by the employee retirement benefits board. Members electing to self-direct their investments must pay the expenses caused by the self-directed investment program.
(1) Assessment of member expenses for self-directed investment. Each month, the third-party administrator will allocate self-directed investment expenses to each participating member. The expenses allocated to members shall include:
(a) External third party administrator costs;
(b) External investment manager and consultant costs; and
(c) State investment board investment management operating expenses, in the case of investment options provided through the state investment board.
Each category of expense shall be expressed in terms of basis points. A basis point is equal to one-hundredth of one percent. The administrator will determine the participating member's monthly fee by multiplying the average monthly value of each participating member's self-directed account assets by the basis points for each expense category.
(2) Adoption of expense charge. The expense charges used to
calculate self-directed investment fees for participating members shall
be established in a memorandum of understanding, interagency agreement,
and/or contract. Each expense charge shall be reviewed and approved at
a regularly scheduled meeting of the employee retirement benefits board,
with opportunity for public testimony. No expense charge may be included
in a memorandum of understanding, interagency agreement, and/or contract
until such charge has been approved by the employee retirement benefits
board. No expense charge which has been approved may be changed unless
such change has been approved by the board.