Title of Rule and Other Identifying Information: The department of retirement systems needs to amend rules in TITLE 415 WAC in order to correct typographical errors and incorrect references to repealed statutes and rules. The substance and meaning of these rules are not changing.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules:

     The following rules need amending:

•	WAC 415-02-010 currently references incorrect statutes; the proposed change will correct the reference.
•	WAC 415-02-310 currently contains an incomplete retirement system name; the proposed change will correct the name.
•	WAC 415-02-350 currently references an incomplete consumer price index region; the proposed change will correct the reference.
•	WAC 415-02-360 currently references an incorrect rule subsection and a repealed rule; the proposed changes will correct the references.
•	WAC 415-112-544 currently references a nonexistent rule; the proposed change will correct the reference.
•	WAC 415-113-055 currently references an incorrect rule; the proposed change will correct the reference.
•	WAC 415-113-057 currently references an incorrect rule; the proposed change will correct the reference.

     Reasons Supporting Proposal: To ensure compliance with Executive Order 06-02 and as permitted by RCW 34.05.353 (1)(c), the department is updating rules found to have typographical errors and incorrect statutory and rule references. The rule changes will not affect the content or meaning of the rules and are only aimed at correcting technical errors.

     Statutory Authority for Adoption: RCW 41.05.050(5) [41.50.050(5)].

     Statute Being Implemented: For WAC 415-02-010 is RCW 41.50.050; for WAC 415-02-310 is RCW 41.50.050 and chapter 41.45 RCW; for WAC 415-02-350 is RCW 41.50.050(5); for WAC 415-02-360 is RCW 41.50.050(5) and chapter 41.45 RCW; for WAC 415-112-544 is RCW 41.50.050(5), 41.32.800, 41.32.860, 41.32.802, 41.32.862; and for WAC 415-113-055 and 415-113-056 is RCW 41.50.050(5) and chapter 41.54 RCW.

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

     Name of Proponent: Department of retirement systems, governmental.

     Name of Agency Personnel Responsible for Drafting: Sarah Monaly, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7291; Implementation and Enforcement: Michelle Hardesty, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7193.

July 17, 2008

Sarah Monaly

Rules Coordinator

OTS-1773.1

AMENDATORY SECTION(Amending WSR 00-10-016, filed 4/21/00, effective 5/22/00)

WAC 415-02-010   Identification.   The department of retirement systems is a department of state government created by chapter 105, Laws of 1975-'76 2nd ex. sess.

     (1) The chief executive officer of the department of retirement systems is the director of retirement systems.

     (2) Members of the public may obtain information, make submittals or requests, or obtain copies of agency decisions by addressing their requests or submittals to the director of the Department of Retirement Systems at P.O. Box 48380, Olympia, Washington, 98504. Upon receipt of such a request or submittal, the director shall forward the same to the proper officer or employee of the department of retirement systems for an appropriate response.

     (3) Members of the public who wish to inspect and/or copy public records maintained by the agency pursuant to chapter ((42.17)) 42.56 RCW shall do so in accordance with the methods and procedures established in chapter 415-06 WAC.

[Statutory Authority: RCW 41.50.050. 00-10-016, § 415-02-010, filed 4/21/00, effective 5/22/00; Order 4, § 415-02-010, filed 7/27/77.]

     (1) Present value: The department uses a rounding method to determine your age when calculating what your future lifetime monthly benefit is worth in present-day dollars. If the number of months in your age is under six months, the department will round down. If the number is six months or more, the department will round up. See WAC 415-02-340 for more information about the present value calculations.

     Example 1:

     At the time that the department is calculating Sharon's age in making a present value calculation, Sharon is 55 years, 5 months and 26 days old. The department will round down and use 55 as Sharon's age.

     Example 2:

     At the time that the department is calculating Donna's age in making a present value calculation, Donna is 54 years and 7 months old. The department will round up and use 55 as Donna's age.

     (2) Early retirement: The department uses the difference between your "fully eligible retirement date" and your actual retirement date in calculating any actuarial reductions to your benefits. See WAC 415-02-320 for more information about early retirement.

     (a) Step 1: Determine the fully eligible retirement date.

     (i) The department first calculates the date on which you would have been fully eligible to retire.

     (ii) All plans (except for LEOFF Plan 1, TRS Plan 1, WSPRS Plans 1 and 2, JRF and JRS): You can retire the first day of the month following your meeting the age requirement for retirement if you are otherwise eligible.

Example:

Jake was born on May 12, 1934. On May 12, 1999, Jake reaches age 65 and has met the age requirement for retirement. Provided that he is otherwise eligible, Jake's retirement date is June 1, 1999.

     (iii) LEOFF Plan 1, TRS Plan 1, WSPRS Plans 1 and 2, JRF, and JRS: If a retirement date other than the first of the month is allowed, you can retire on the day you meet the age requirement, or the following day (depending on the plan).

Example:

If Jake is a member of this type of plan, he could retire May 12th or 13th, 1999 (his birthday or the day after his birthday).

     (b) Step 2: Determine the difference. The department next calculates the difference between your fully eligible retirement date and your actual retirement date by subtracting the actual retirement year and month from the fully eligible retirement year and month. (Days are not used in the calculation.)

     (i) Example:

Fully eligible date:	06/01/99
Minus actual retirement date:	08/01/95
Difference:	3 years, 10 months

     (ii) Example:

Fully eligible date:	05/25/99
Minus actual retirement date:	08/01/95
Difference:	3 years, 9 months

     (c) Step 3: Determine the early retirement factor. The department uses the difference calculated in step 2 to determine the early retirement factor (ERF) used to calculate your benefit as described in WAC 415-02-320.

     (3) Optional COLA Factor for PERS Plan 1 and TRS Plan 1. The department uses the rounding method described in the "present value" subsection in this section to calculate your age when determining the optional COLA factor. See WAC 415-02-360 for a description of the optional COLA factor calculation.

     (4) Calculating age to use in determining the survivor option factor. At retirement, if you select a survivor option, the department must calculate the difference between your age and your beneficiary's age. See WAC 415-02-380 for more information about survivor options.

     (a) Step 1: The department calculates your age and your beneficiary's age at the time of your retirement.

     (b) Step 2: The department rounds the ages, using the same method described in the "present value" subsection in this section.

     (c) Step 3: The department subtracts your beneficiary's age from your age.

     Example:

Member's age:	60
Minus beneficiary's age:	49
	11

     Result: The department will use the survivor option factor for a beneficiary who is 11 years younger than the member.

     Example:

Member's age:	65
Minus beneficiary's age:	67
	-2

     Result: The department will use the survivor option factor for a beneficiary who is two years older than the member.

     (5) Terms used

     (a) JRF - Judicial retirement fund.

     (b) JRS - Judicial retirement system.

     (c) LEOFF - Law enforcement officers' and fire fighters' retirement system.

     (d) PERS - Public employees' retirement system.

     (e) SERS - School employees' retirement system.

     (f) TRS - Teachers' retirement system.

     (g) WSPRS - Washington state patrol retirement system.

[Statutory Authority: RCW 41.50.050(5) and chapter 41.45 RCW. 03-06-044, § 415-02-310, filed 2/27/03, effective 4/1/03.]

OTS-1774.1

AMENDATORY SECTION(Amending WSR 08-01-079, filed 12/17/07, effective 1/17/08)

WAC 415-02-350   What are cost-of-living adjustments (COLA) and how are they calculated?   (1) What is a cost-of-living adjustment (COLA)? The value of a retiree's, beneficiary's, or ex-spouse's monthly allowance may change in the years after retirement because of inflation or other factors. A COLA automatically adjusts benefits based on the cost of living changes.

     (2) What retirement plans include COLAs? With one exception, all retirement plans administered by the department provide one or more of the types of COLAs listed in subsection (3) of this section. The judges retirement fund (chapter 2.12 RCW) does not provide a COLA.

RETIREMENT SYSTEM	PLAN	COLA TYPE	STATUTE
JUDICIAL		Base	RCW 2.10.170
LEOFF	Plan 1	Base	RCW 41.26.240
LEOFF	Plan 2	Base	RCW 41.26.440
PSERS		Base	RCW 41.37.160
PERS	Plan 1	Uniform	RCW 41.40.197
PERS	Plan 1	Optional Auto	RCW 41.40.188 (1)(c)
PERS	Plan 2	Base	RCW 41.40.640
PERS	Plan 3	Base	RCW 41.40.840
SERS	Plans 2 and 3	Base	RCW 41.35.210
TRS	Plan 1	Uniform	RCW 41.32.489
TRS	Plan 1	Optional Auto	RCW 41.32.530 (1)(d)
TRS	Plan 2	Base	RCW 41.32.770
TRS	Plan 3	Base	RCW 41.32.845
WSPRS	Plans 1 and 2	Base	RCW 43.43.260

     (3) What are the types of COLAs?

     (a) Auto COLA

     The auto COLA, if offered under your plan, is an option you may select at retirement. If you choose this option, your monthly retirement allowance will be actuarially reduced at retirement, and you will receive an automatic adjustment in your monthly retirement allowance each year for the rest of your life. The auto COLA has no age requirement and is limited to a maximum of three percent of your monthly allowance.

     (b) Base COLA

     The base COLA is applied in July (April for LEOFF Plan 1) of each year and adjusts the benefit based on the change in the Consumer Price Index for the Seattle-Tacoma-Bremerton, Washington area. Base COLAs are limited to a maximum of three percent of the monthly allowance for all affected plans except LEOFF Plan 1. During a calendar year, the base COLA is payable to:

     (i) Retirees who have been retired for at least one year by July 1st of each year (April 1st for LEOFF Plan 1); and

     (ii) Beneficiaries or eligible ex-spouses who receive benefit payments from an account that, by July 1st, has paid a monthly benefit for at least one year (April 1st for LEOFF Plan 1).

     (c) Uniform COLA

     The uniform COLA is an annual adjustment to the benefit, based on years of service. The annual adjustment for the uniform COLA is independent from any other COLA. During a calendar year, it is payable to:

     (i) Retirees who, by July 1st, have received a retirement benefit for at least one year and who, by December 31st, will have reached age sixty-six or older;

     (ii) Beneficiaries and eligible ex-spouses who receive benefit payments from an account that, by July 1st, has paid a monthly benefit for at least one year and who, by December 31st, will have reached age sixty-six or older; and

     (iii) Retirees, beneficiaries, or eligible ex-spouses of any age whose retirement benefit is calculated under the minimum formula.

     (4) Who is responsible for determining the amount of the COLA? The office of the state actuary (OSA) bases the percentages of the COLAs on the Consumer Price Index. The Index is based on wages earned by urban wage earners and clerical workers in the Seattle-Tacoma-Bremerton, Washington area. OSA provides this information to the department annually.

[Statutory Authority: RCW 41.50.050(5). 08-01-079, § 415-02-350, filed 12/17/07, effective 1/17/08. Statutory Authority: RCW 41.50.050(5), 2.10.170, 41.26.240, 41.26.440, 41.37.160, 41.40.197, 41.40.188 (1)(c), 41.40.640, 41.40.840, 41.35.210, 41.32.489, 41.32.530 (1)(d), 41.32.770, 41.32.845, 43.43.260. 06-18-009, § 415-02-350, filed 8/24/06, effective 9/24/06. Statutory Authority: RCW 41.50.050(5) and chapter 41.45 RCW. 03-06-044, § 415-02-350, filed 2/27/03, effective 4/1/03.]

     For more information, see:

     PERS Plan 1: RCW 41.40.188 (1)(e); WAC 415-108-326(((4)))

     TRS Plan 1: RCW 41.32.530 (1)(d); WAC ((415-112-727(4))) 415-112-504

     (2) By opting to receive a lower dollar amount at the beginning of your retirement, you will receive a progressively higher amount as the payments continue.

     (3) Examples

     (a) Example (a):

     Ernie, a TRS Plan 1 member, retires at age 55 with 30 years of service and chooses the COLA option. TRS Plan 1 provides two percent (.02) of average final compensation (AFC) per year of service. At the time he retires, Ernie's AFC is $4,295.33. As shown in the "Plan 1 Optional COLA" table below, Ernie would receive 0.7408 of his normal retirement benefit as the starting amount of the COLA-protected benefit. TRS would calculate the benefit as follows: 30.00 (years of service credit) x .02 x $4,295.33 (AFC) = $2,577.20 (monthly benefit without the COLA option). TRS would then multiply $2,577.20 x .7408 = $1,909.19 (the COLA-protected starting benefit Ernie would receive).

     (b) Example (b):

     Tina is a PERS Plan 1 member with 30 years of service credit at age 52 and eight months. Because she has reached 30 years of service, there is no reduction for an early retirement. However, Tina chooses the optional COLA. Tina would receive .7388 of her normal retirement benefit as the starting amount of the COLA-protected benefit. Her normal retirement benefit is $2,295.00; her COLA-reduced benefit will be $1,695.55.

     (4) Table - The optional cost-of-living adjustment (COLA) table is based on the 1995-2000 actuarial experience study.

     Use these factors to convert from standard option monthly benefit payments without a COLA to the same option with a COLA.

Plan 1 Optional COLA

Age	PERS 1 Factor	TRS 1 Factor		Age	PERS 1 Factor	TRS 1 Factor
20	0.6586	0.6554		61	0.7778	0.7662
21	0.6600	0.6566		62	0.7825	0.7708
22	0.6615	0.6580		63	0.7873	0.7754
23	0.6630	0.6593		64	0.7922	0.7801
24	0.6645	0.6607		65	0.7972	0.7849
25	0.6661	0.6622		66	0.8022	0.7897
26	0.6678	0.6638		67	0.8073	0.7946
27	0.6696	0.6654		68	0.8124	0.7996
28	0.6714	0.6670		69	0.8176	0.8046
29	0.6732	0.6687		70	0.8229	0.8097
30	0.6752	0.6705		71	0.8282	0.8149
31	0.6772	0.6723		72	0.8335	0.8201
32	0.6793	0.6742		73	0.8389	0.8253
33	0.6814	0.6762		74	0.8443	0.8306
34	0.6836	0.6783		75	0.8497	0.8359
35	0.6859	0.6804		76	0.8551	0.8413
36	0.6883	0.6826		77	0.8605	0.8467
37	0.6908	0.6849		78	0.8659	0.8521
38	0.6933	0.6872		79	0.8713	0.8575
39	0.6960	0.6896		80	0.8766	0.8628
40	0.6987	0.6921		81	0.8819	0.8682
41	0.7015	0.6947		82	0.8871	0.8735
42	0.7044	0.6974		83	0.8922	0.8788
43	0.7074	0.7002		84	0.8971	0.8840
44	0.7105	0.7031		85	0.9020	0.8891
45	0.7137	0.7060		86	0.9066	0.8941
46	0.7170	0.7091		87	0.9111	0.8989
47	0.7204	0.7122		88	0.9153	0.9036
48	0.7238	0.7154		89	0.9192	0.9080
49	0.7274	0.7188		90	0.9230	0.9123
50	0.7311	0.7222		91	0.9264	0.9162
51	0.7349	0.7256		92	0.9296	0.9200
52	0.7388	0.7293		93	0.9326	0.9234
53	0.7427	0.7331		94	0.9353	0.9266
54	0.7468	0.7369		95	0.9378	0.9296
55	0.7510	0.7408		96	0.9401	0.9323
56	0.7552	0.7448		97	0.9423	0.9348
57	0.7595	0.7489		98	0.9444	0.9372
58	0.7640	0.7531		99	0.9464	0.9394
59	0.7685	0.7574
60	0.7731	0.7618

[Statutory Authority: RCW 41.50.050(5) and chapter 41.45 RCW. 02-18-048, § 415-02-360, filed 8/28/02, effective 9/1/02.]

OTS-1775.1

AMENDATORY SECTION(Amending WSR 05-12-043, filed 5/25/05, effective 6/25/05)

WAC 415-112-544   How does the department calculate the retirement allowance of a TRS Plan 2 or Plan 3 member who retires, reenters TRS membership, and then retires again?   This rule establishes a method to actuarially recompute your defined benefit retirement allowance if you are a Plan 2 or Plan 3 member who retires, reenters TRS membership causing your retirement allowance to stop, and then retires again.

     (1) If you previously retired before age sixty-five, the department will:

     (a) Recompute your retirement allowance pursuant to RCW 41.32.760 (Plan 2) or 41.32.840 (Plan 3) using:

     (i) Your total years of career service, including service earned prior to your initial retirement and service earned after reentering membership; and

     (ii) Any increase in your average final compensation resulting from your reentry into membership; and

     (b) Actuarially reduce your retirement allowance:

     (i) Based on the present value of the retirement allowance payments you received during your initial retirement;

     (ii) To reflect the difference in the number of years between your current age and the attainment of age sixty-five, if applicable; and

     (iii) To offset the cost of your benefit option if it includes a survivor feature. See WAC ((415-112-493)) 415-112-505.

     (2) If you previously retired at or after age sixty-five, the department will recompute your retirement allowance pursuant to RCW 41.32.760 (Plan 2) or 41.32.840 (Plan 3) and include any additional service credit you earned and any increase in your average final compensation resulting from your reentry into membership. The department will actuarially reduce your retirement allowance to offset the cost of your benefit option if it includes a survivor feature. See WAC ((415-112-493)) 415-112-505.

     (3) Under no circumstances will you receive a retirement allowance creditable to a month during which you earned service credit.

[Statutory Authority: RCW 41.50.050(5), 41.32.800, 41.32.860, 41.32.802, 41.32.862. 05-12-043, § 415-112-544, filed 5/25/05, effective 6/25/05.]

OTS-1776.1

AMENDATORY SECTION(Amending WSR 02-18-046, filed 8/28/02, effective 9/30/02)

WAC 415-113-055   Am I eligible for a multiple system benefit?   To be eligible for a multiple system benefit, you must meet the criteria listed in this section.

     (1) You may retire for service or disability. You may retire with a multiple system benefit if you retire from all systems for service. You may also retire with a disability retirement from your current system, other than a benefit provided by RCW 41.40.220 or WSPRS, and a service retirement from your prior system.

     (2) You must retire from all systems. You may only retire with a multiple system benefit if you retire from all dual member systems that you participate in.

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

     (a) "Accumulated contributions" - WAC ((415-113-030)) 415-02-030.

     (b) "Dual member system" - WAC 415-113-030.

     (c) "Multiple system benefit" - WAC 415-113-030.

[Statutory Authority: RCW 41.50.050(5) and chapter 41.54 RCW. 02-18-046, § 415-113-055, filed 8/28/02, effective 9/30/02. Statutory Authority: RCW 41.50.050. 96-20-004, § 415-113-055, filed 9/19/96, effective 10/20/96; 95-03-001, § 415-113-055, filed 1/4/95, effective 2/4/95.]

     (1) Waiver of benefits. If you decide not to receive a multiple system benefit, you waive the right to:

     (a) Substitute your base salary between retirement systems for purposes of calculating a retirement allowance; or

     (b) Combining your service from each system for purposes of determining retirement eligibility.

     (2) You are not required to retire with a multiple system benefit even if you repaid contributions as a dual member. If you repaid previously withdrawn contributions from a prior dual member system under RCW 41.54.020, you may still elect to retire from one or more systems without receiving a multiple system benefit.

     (3) If you decline a multiple system benefit, you may withdraw your contributions. If you elect to retire without receiving a multiple system benefit, you may withdraw your accumulated contributions from a system in lieu of receiving a retirement allowance, provided that withdrawal is otherwise permissible under the systems' provisions.

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

     (a) "Accumulated contributions" - WAC ((415-113-030)) 415-02-030.

     (b) "Base salary" - RCW 41.54.010(1).

     (c) "Dual member" - RCW 41.54.010(4), WAC 415-113-030.

     (d) "Dual member system" - WAC 415-113-030.

     (e) "Multiple system benefit" - WAC 415-113-030.

[Statutory Authority: RCW 41.50.050(5) and chapter 41.54 RCW. 02-18-046, § 415-113-057, filed 8/28/02, effective 9/30/02. Statutory Authority: RCW 41.50.050. 95-03-001, § 415-113-057, filed 1/4/95, effective 2/4/95.]

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