[Filed February 3, 2021, 9:12 a.m.]
Preproposal statement of inquiry was filed as WSR 20-23-119.
Title of Rule and Other Identifying Information: WAC 415-501-485 How do I obtain a distribution?
Hearing Location(s): On March 9, 2021, at 2:00 p.m. The hearing will be conducted by telephone conference only, 360-407-3830 or 855-682-0796 (toll free), conference ID 1360562.
Date of Intended Adoption: March 10, 2021.
Submit Written Comments to: Jilene Siegel, Department of Retirement Systems (DRS), P.O. Box 48380, Olympia, WA 98504-8380, email firstname.lastname@example.org, by March 8, 2021.
Assistance for Persons with Disabilities: Contact Jilene Siegel, phone 360-664-7291, TTY 711, email email@example.com, by March 4, 2021.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: To clarify distribution rules for deferred compensation program (DCP) customers who return to covered employment.
Reasons Supporting Proposal: This clarification describes whether a distribution from a member's DCP account will be paid or suspended upon the member's return to employment with an employer that participates in the DCP program.
Statutory Authority for Adoption: RCW 41.50.050
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: DRS, governmental.
Name of Agency Personnel Responsible for Implementation: Seth Miller, DRS, P.O. Box 48380, Olympia, WA 98504-8380, 360-664-7304.
A school district fiscal impact statement is not required under RCW 28A.305.135
A cost-benefit analysis is not required under RCW 34.05.328
. RCW 34.05.328
(5)(a)(i) does not apply to this proposed rule and is not voluntarily made applicable by the agency.
This rule proposal, or portions of the proposal, is exempt from requirements of the Regulatory Fairness Act because the proposal:
Is exempt under RCW 19.85.025
(3) as the rules relate only to internal governmental operations that are not subject to violation by a nongovernment party.
February 3, 2021
AMENDATORY SECTION(Amending WSR 20-17-006, filed 8/5/20, effective 9/5/20)
WAC 415-501-485How do I obtain a distribution?
Distribution from the plan is governed by Internal Revenue Code Sections 401 (a)(9) and 457(d); the treasury regulations interpreting these sections; and these rules to the extent they are not inconsistent with the Internal Revenue Code. The options for distribution are available from the department's designated record keeper.
(1) Date of distribution. You may choose the date on which to begin distribution from your deferred compensation account, subject to the requirements in (a) through (c) of this subsection.
(a) Earliest date. You may not begin distribution prior to your termination of employment, with the following exceptions:
(i) A distribution for an unforeseeable emergency under WAC 415-501-510;
(ii) A voluntary in-service distribution under subsection (4) of this section;
(iii) A distribution from funds that were rolled into the deferred compensation account (may be subject to tax penalties); or
(iv) An in-service distribution in any calendar year in which you will reach age seventy and one-half or more.
(b) Latest date. You must begin distribution on or before April 1st of the calendar year following the latter of:
(i) The calendar year in which you reach age seventy-two; or
(ii) The calendar year in which you retire.
(c) If you do not choose a distribution date, the department will begin distribution according to the minimum distribution requirements in IRC Section 401 (a)(9).
(2) Method of distribution. Payment options include a lump sum payment, partial lump sum payment, ((periodic))installment payments, or an annuity purchase.
Beginning at age seventy-two or when you terminate employment, whichever comes later, payment must be in an amount to satisfy minimum distribution requirements in IRC Section 401 (a)(9).
(3) Voluntary in-service distribution at any age. You may choose to withdraw the total amount payable to you under the plan while you are employed if the following three requirements are met:
(a) Your entire account value does not exceed five thousand dollars;
(b) You have not previously received an in-service distribution; and
(c) You have made no deferrals during the two-year period ending on the date of the in-service distribution.
(4) Unforeseeable emergencies. See WAC 415-501-510.
(5) Rehire. If you ((begin to receive distributions))submit an immediate lump sum or partial distribution request and the request is received in good order prior to being rehired, your distribution will be processed even if you become rehired with a DCP employer. If you are receiving installment payments or have requested to receive installment payments and then return to employment with a DCP employer, ((distributions))your payments from your DCP account will cease. You may request a distribution when you are again eligible consistent with these rules.