WSR 20-14-039
[Filed June 25, 2020, 10:18 a.m., effective July 26, 2020]
Effective Date of Rule: Thirty-one days after filing.
Purpose: Calculation of the retirement benefit for members with service in more than one retirement plan, RCW 41.54.030(2) allows members with service in more than one plan to use the base salary earned in one plan as the compensation for calculating the retirement benefit from another plan. This rule describes how the retirement benefit will be calculated when there is a break in employment.
Citation of Rules Affected by this Order: Amending WAC 415-113-065.
Statutory Authority for Adoption: RCW 41.50.050.
Adopted under notice filed as WSR 20-11-083 on May 20, 2020.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at the Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's own Initiative: New 0, Amended 1, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 1, Repealed 0.
Number of Sections Adopted using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.
Date Adopted: June 25, 2020.
Tracy Guerin
AMENDATORY SECTION(Amending WSR 08-02-048, filed 12/27/07, effective 1/27/08)
WAC 415-113-065Can I substitute salary from one system to another?
(1) You can substitute base salary between systems.
(a) If you choose to retire with a multiple system benefit, you may substitute your base salary under one dual member system for your includable compensation in a second dual member system for purposes of computing a retirement allowance from the second system.
(b) Your average final compensation (AFC) will be calculated by reviewing all base salary from all periods of dual member employment and determining your highest consecutive AFC period prior to your retirement or death.
(c) Using the substituted salary, the department will compute your average compensation under each system's own requirements.
((Example 6:
At retirement, Sandy is a member participant in PERS Plan 2 and has prior creditable service in TRS Plan 1. She earned her highest compensation during her PERS Plan 2 service. Sandy's PERS Plan 2 retirement allowance will be based on her PERS Plan 2 average compensation. For purposes of computing her TRS average compensation and retirement allowance, Sandy may substitute her PERS Plan 2 base salary earned over two consecutive fiscal years for her earnable compensation in TRS.
Example 7:
At retirement, Pat is a member participant in TRS Plan 1 and has prior creditable service in PERS Plan 1. He earned his highest compensation during his membership in TRS Plan 1 and received a sick-leave cashout. Pat may substitute his base salary earned while a member in TRS Plan 1 for his PERS Plan 1 compensation earnable. However, because Pat may substitute only his base salary from TRS Plan 1 for his compensation earnable in PERS, his PERS average compensation will not include the cashout payments from his TRS employer.
(b) If you do not have sufficient service credit months in one dual member system to complete an average compensation period under that system, the department will substitute the appropriate number of months of base salary from another system to complete the average compensation period.
Example 8:
Tim has creditable service in TRS Plan 1 and PERS Plan 2. He retires at age sixty-five after accruing twenty-four months of service in PERS Plan 2. Under PERS Plan 2, a member's average compensation period is the member's highest consecutive sixty-month period of compensation. To compute Tim's PERS Plan 2 retirement allowance, the department will substitute his highest consecutive thirty-six service credit months of TRS base salary to complete the PERS sixty-month average compensation period.))
Example: Average final compensation calculation.
Sarah became a member of TRS Plan 2 and earned two years of service credit. After a break in employment, Sarah returned to public service in a PERS Plan 2 position and worked two additional years. Sarah then returned to a TRS Plan 2 position until retiring at the age sixty-five. Sarah's career earnings were as follows:
TRS Plan 2
81-82 School Year - $18,000 per year
82-83 School Year - $20,000 per year
PERS Plan 2
2013 Calendar Year - $48,000 per year
2014 Calendar Year - $50,000 per year
TRS Plan 2
14-15 School Year - $60,000 per year
15-16 School Year - $64,000 per year
16-17 School Year - $68,000 per year
As a dual member, Sarah can substitute the PERS salary when calculating the highest sixty months of earnings to be used in the TRS benefit calculation:
$48,000 + $50,000 + $60,000 + $64,000 + $68,000
$4,833 AFC
60 months
The same calculation will be used for the PERS average final compensation.
(2) TRS Plan 1 adjusted full-time salary is not base salary. A multiple system retiree's adjusted full-time salary under RCW 41.32.345 shall not constitute base salary for purposes of computing the retiree's multiple system benefit.
(3) Includable compensation defined. For purposes of this chapter, "includable compensation" means:
(a) Earnable compensation under TRS Plan 1, 2 or 3 as defined in RCW 41.32.010(10);
(b) Compensation earnable under PERS Plan 1, 2 or 3 as defined in RCW 41.40.010(8);
(c) Compensation earnable under PSERS as defined in RCW 41.37.010(6);
(d) Basic salary under LEOFF Plan 2 as defined in RCW 41.26.030 (13)(b);
(e) Monthly salary under WSPRS Plan 1 or 2 as defined in RCW 43.43.120(23); and
(f) Compensation earnable under SERS Plan 2 or 3 as defined in RCW 41.35.010(6).
(4) Defined terms used. Definitions for the following terms used in this section may be found in the sections listed.
(a) "Average compensation" - WAC 415-113-030.
(b) "Base salary" - RCW 41.54.010(1).
(c) "Dual member system" - WAC 415-113-030.
(d) "Member participant" - WAC 415-113-030.
(e) "Multiple system benefit" - WAC 415-113-030.
(f) "Multiple system retiree" - WAC 415-113-030.