PERMANENT RULES
RETIREMENT SYSTEMS
Date of Adoption: April 26, 2001.
Purpose: SHB 2604, passed in the 2000 legislative session, requires that a retired member who retired without designating a survivor beneficiary shall have the opportunity to designate their spouse from a postretirement marriage as a survivor during a one-year period beginning one year after the date of the postretirement marriage. A member who entered into a postretirement marriage prior to the effective date of the rules adopted pursuant to this subsection and satisfies certain conditions shall have one year to designate their spouse as a survivor beneficiary following the adoption of the rules. A retired member who elected to receive a reduced retirement allowance under this section and designated a nonspouse as survivor beneficiary shall have the opportunity to remove the survivor designation and have their future benefit adjusted. WAC are also being changed to assure that any remaining balance of accumulated contributions (Plans 1 and 2) go to the member's beneficiaries or estate, rather than to the retirement fund. In addition, DRS is making some minor housekeeping changes.
Citation of Existing Rules Affected by this Order: Amending WAC 415-104-215, 415-108-326, 415-110-326, and 415-112-727.
Statutory Authority for Adoption: RCW 41.50.050(5).
Other Authority: RCW 41.26.460, 41.32.530, 41.32.785, 41.32.851, 41.35.220, 41.40.188, 41.40.660, 41.40.845.
Adopted under notice filed as WSR 01-07-079 on March 21, 2001.
Changes Other than Editing from Proposed to Adopted Version: Reason for adoption: SHB 2604, passed in the 2000 legislative session, requires that a retired member who retired without designating a survivor beneficiary shall have the opportunity to designate their spouse from a postretirement marriage as a survivor during a one-year period beginning one year after the date of the postretirement marriage. A member who entered into a postretirement marriage prior to the effective date of the rules adopted pursuant to this subsection and satisfies certain conditions shall have one year to designate their spouse as a survivor beneficiary following the adoption of the rules. A retired member who elected to receive a reduced retirement allowance under this section and designated a nonspouse as survivor beneficiary shall have the opportunity to remove the survivor designation and have their future benefit adjusted. WAC are also being changed to assure that any remaining balance of accumulated contributions go to the member's beneficiaries or estate, rather than to the retirement fund. In addition, DRS is making some minor housekeeping changes.
The text of the adopted rule varies from the text of the proposed rule. The changes (other than editing changes) follow:
| WAC Number and Section | Change | Reason |
| 415-104-215(2) | Renumbered. | Error in the proposed rule. |
| 415-104-215(2) | "tie" changed to "time." | Typo |
| 415-104-215 (4)(d) | "retire's" changed to "retiree's." | Typo |
| 415-108-326 introductory paragraph | Changed "RCW 41.40.660 (Plan 3)" to "RCW 41.40.845 (Plan 3)." | Corrected error. |
| 415-108-326 (1)(d) | Deleted phrase, "The member must designate a beneficiary at the time of retirement by filing a completed and notarized form provided by the department." | Redundant vis-a-vis WAC 415-108-326 (1)(a) and we meant to delete this sentence in the proposed rule. |
| 415-108-326(2) | Renumbered. | Error in the proposed rule. |
| 415-108-326 (5)(d) | Deleted "the remaining balance is retained by
the retirement fund." Added "all benefits
cease. Any remaining balance will be paid
to: (i) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or (ii) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or (iii) The member's estate; or (iv) If there is neither such designated person or person still living at the time of death nor a surviving spouse, then to the retiree's legal representative. |
This change was inadvertently left out of the proposed rule. The change is consistent with similar changes throughout all four WACs being amended. |
| 415-110-326(2) | Renumbered. | Error in the proposed rule. |
| 415-110-326 (5)(d) | Identical to change in WAC 415-108-326 (5)(d), above. | Identical to change in WAC 415-108-326 (5)(d), above. |
| 415-112-727(2) | Renumbered. | Error in the proposed rule. |
| 415-112-727 (5)(e) | After the word, "exhausted," added "All benefits cease." Changed the next word from "any" to "Any." | Inadvertent error in the proposed rule. Makes text consistent with all other rules being amended. |
| SUMMARY OF COMMENTS RECEIVED | THE DEPARTMENT CONSIDERED ALL THE COMMENTS. THE ACTIONS TAKEN IN RESPONSE TO THE COMMENTS, OR THE REASONS NO ACTIONS WERE TAKEN, FOLLOW. |
| None | Not Applicable |
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 4, 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 4, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 4, 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: June 1, 2001.
April 26, 2001
Maureen Westgard
for John Charles
Director
OTS-4603.5
AMENDATORY SECTION(Amending WSR 99-16-075, filed 8/3/99,
effective 9/3/99)
WAC 415-104-215
Retirement benefit options.
RCW 41.26.460
enables the department to provide retiring LEOFF Plan 2 members
with four retirement benefit options. The member must choose an
option when applying for service or disability retirement.
(1) Option One: Benefit option without survivor features (standard allowance). The department pays the retiree a monthly retirement allowance actuarially based solely on the single life of the member, in accordance with RCW 41.26.430 (service) or 41.26.470 (disability). When the retiree dies, all benefits cease. Any remaining balance of the retiree's accumulated contributions will be paid to:
(((a) The retiree's designated beneficiary; or if none, to
(b) The retiree's surviving spouse; or if none, to
(c) The retiree's legal representative.
The member must designate a beneficiary at the time of retirement by filing a completed and notarized form provided by the department.)) (a) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or
(b) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or
(c) The member's estate; or
(d) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.
(2) Benefit options with a survivor feature.
(a) A retiring member is allowed to select from several
retirement options which create an actuarially equivalent benefit
that includes a survivor feature. The survivor feature entitles
the survivor to receive a monthly allowance after the retiree
dies. If the member chooses one of the survivor options, the
monthly benefit the member will receive is actuarially reduced to
offset the cost of the survivor feature. After the retiree dies,
the department pays the survivor an allowance for the duration of
his or her life. If the retiree and the survivor both die before
the retiree's accumulated contributions are exhausted, ((the))
any remaining balance ((is retained in the retirement fund)) of
the retiree's accumulated contributions will be paid to:
(i) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or
(ii) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or
(iii) The member's estate; or
(iv) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.
(((a))) (b) Option Two (joint and whole allowance). When
the retiree dies, the department pays the survivor a monthly
retirement allowance equal to the gross monthly allowance
received by the retiree.
(((b))) (c) Option Three (joint and one-half allowance). When the retiree dies, the department pays the survivor one-half
of the amount of the retiree's gross monthly retirement
allowance.
(((c))) (d) Option Four (joint and two-thirds allowance).
(i) ((This subsection applies)) Option Four is available to
members retiring on or after January 1, 1996.
(ii) When the retiree dies, the department pays the survivor two-thirds (66.667%) of the retiree's gross monthly retirement allowance.
(3) If a member retires on or after June 6, 1996, the department is required to pay an ex-spouse survivor benefits pursuant to a marital dissolution order that complies with RCW 41.50.790.
(4) Benefit increases when survivor predeceases retiree (pop-up provision).
(a) This ((section)) subsection applies to members retiring
on or after January 1, 1996, who select a benefit option with a
survivor feature (Option Two, Three, or Four).
(b) If the survivor dies before the retiree, the retiree's monthly retirement allowance increases, effective the first day of the following month, to:
(i) The amount that would have been received had the retiree chosen Option One; plus
(ii) Any cost-of-living adjustments the retiree received prior to the survivor's death based on the original option selection.
(c) Pop-up recalculation example:
Plan Two:
Agnes retires in 1996 (Year 0). She would like Beatrice, her daughter, to receive a monthly allowance after Agnes dies. Therefore, Agnes selects a retirement benefit option with a survivor feature. As a result her monthly allowance is reduced from $2,000 (standard allowance) to $1,750. Unfortunately, Beatrice dies in January 2001 (Year 5). Under the "pop-up" provision, Agnes' monthly benefit will increase to $2,191.05, the amount she would have received had she chosen Option One (standard allowance) plus her accumulated COLA's:
| Year | Option One
(Standard Allow.) |
Survivor Option (2,3,4) plus COLAs | COLA incr. (3% max) |
$ Increase | |
| 0 (1996) | 2,000.00 | 1,750.00 | (inelig.) | 0.00 | |
| 1 (1997) | 1,750.00 | .02 | 35.00 | ||
| 2 (1998) | 1,785.00 | .03 | 53.55 | ||
| 3 (1999) | 1,838.55 | .025 | 45.96 | ||
| 4 (2000) | 1,884.51 | .03 | 56.54 | ||
| 5 (2001) | 2,000.00 | 1,941.05 | |||
| Total COLA's | 191.05 | ||||
| Original Option One Benefit Amount | + Total COLA's | = New Benefit Amount | |||
| $2000 | + $191.05 | = $2,191.05* | |||
(d) If the survivor dies and the retiree's benefit increases
under this section, and thereafter the retiree also dies before
all employee contributions are exhausted, ((the)) any remaining
balance ((is retained by the retirement fund)) of the retiree's
accumulated contributions will be paid to:
(i) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or
(ii) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or
(iii) The member's estate; or
(iv) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.
(5) Any retiree who retired before January 1, 1996, and who
elected to receive a ((reduced retirement allowance)) benefit
option with a survivor feature under subsection (2) of this
section is entitled to receive a retirement allowance adjustment
if the retiree meets the following conditions:
(a) The retiree's designated beneficiary predeceases or has predeceased the retiree; and
(b) The retiree provides the department proper proof of the designated beneficiary's death.
The retiree is not required to apply for the increased benefit provided in this subsection. The adjusted retirement allowance will be effective on July 1, 1998, or the first day of the month following the date of death of the designated beneficiary, whichever comes last. The adjustment is computed as described in RCW 41.26.460 (3)(c) for Plan 2 retirees.
(6) Postretirement benefit options.
(a) Postretirement marriage option. Members who select the standard allowance (Option One) at the time of retirement and marry after retirement may subsequently select a survivor option with their new spouse as survivor beneficiary, provided that:
(i) The retiree's monthly benefit is not subject to a property settlement agreement from a court decree of dissolution or legal separation;
(ii) The selection is made either:
(A) During a one year window, on or after the date of the first anniversary and before the second anniversary of the postretirement marriage; or
(B) Before June 1, 2002, if the postretirement marriage occurred before June 1, 2001;
(iii) The retiree provides a marriage certificate as proof of the postretirement marriage and provides proof of the birthdate of the new spouse; and
(iv) A member may exercise this option one time only.
(b) Removal of a nonspouse survivor option. Members who selected a nonspouse as survivor beneficiary at the time of retirement may remove that survivor designation and have the benefit adjusted to a standard allowance. A member may exercise this option one time only.
(c) Selection (a) or (b) of this subsection will become effective the first of the month following the department's receipt of the required paperwork.
(7) Survivor. For the purposes of this provision, "survivor" means a person nominated by the member to receive a monthly benefit allowance after the member dies. A member nominates the survivor at the time of retirement by filing a completed and notarized form provided by the department.
[Statutory Authority: RCW 41.50.050. 99-16-075, 415-104-215, filed 8/3/99, effective 9/3/99. Statutory Authority: RCW 2.10.146, 41.26.460, 41.32.530, 41.50.050, 41.32.785, 41.40.188 and 41.40.660. 96-01-047, 415-104-215, filed 12/14/95, effective 1/14/96. Statutory Authority: RCW 34.05.050 and 1990 c 249. 91-03-014, 415-104-215, filed 1/7/91, effective 2/7/91.]
OTS-4604.5
AMENDATORY SECTION(Amending WSR 99-14-008, filed 6/24/99,
effective 7/25/99)
WAC 415-108-326
Retirement benefit options.
RCW 41.40.188
(Plan 1) ((and)), RCW 41.40.660 (Plan 2), and RCW 41.40.845 (Plan
3) enable the department to provide retiring members with four
retirement benefit options for receipt of the defined benefit
portion of their retirement benefits. In addition, retiring Plan
1 members may select the COLA (cost-of-living adjustment) option.
The retiring member must choose an option(s) when applying for
service or disability retirement:
(1) Option One: Benefit option without survivor features
(standard allowance). The department will pay a monthly
retirement allowance based solely on the single life of the
member, as provided by RCW 41.40.185, 41.40.190, 41.40.230,
41.40.235, 41.40.250, ((41.40.660, or)) 41.40.670, 41.40.820, or
41.40.825. When the retiree dies all benefits cease. Any
remaining balance of the retiree's accumulated contributions will
be paid to:
(((a) The retiree's designated beneficiary; or if none, to
(b) The retiree's surviving spouse; or if none, to
(c) The retiree's legal representative.)) (a) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or
(b) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or
(c) The member's estate; or
(d) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.
((The member must designate a beneficiary at the time of
retirement by filing a completed and notarized form provided by
the department.))
(2) Benefit options with a survivor feature.
(a) A retiring member is allowed to select from several
retirement options which create an actuarially equivalent benefit
that includes a survivor feature. The survivor feature entitles
the survivor to receive a monthly allowance after the retiree
dies. If the member chooses one of the survivor options, the
monthly benefit the member will receive is actuarially reduced to
offset the cost of the survivor feature. After the retiree dies,
the department pays the survivor an allowance for the duration of
his or her life. If the retiree and the survivor both die before
the retiree's accumulated contributions are exhausted, ((the
remaining balance is retained in the retirement fund)) all
benefits cease. Any remaining balance of the retiree's
accumulated contributions will be paid to:
(i) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or
(ii) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or
(iii) The member's estate; or
(iv) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.
(((a))) (b) Option Two (joint and whole allowance). When
the retiree dies, the department pays the survivor an allowance
equal to the gross monthly allowance received by the retiree.
(((b))) (c) Option Three (joint and one-half allowance). When the retiree dies, the department pays the survivor an
allowance equal to one-half of the retiree's gross monthly
retirement allowance.
(((c))) (d) Option Four (joint and two-thirds allowance).
(i) ((This subsection applies)) Option Four is available to
members retiring on or after January 1, 1996.
(ii) When the retiree dies, the department pays the survivor an allowance equal to two-thirds (66.667%) of the retiree's gross monthly retirement allowance.
(3) If a member retires on or after June 6, 1996, the department is required to pay an ex-spouse survivor benefits pursuant to a marital dissolution order that complies with RCW 41.50.790.
(4) Supplemental COLA option for Plan 1 members. Retiring Plan 1 members may select an annual cost-of-living adjustment (COLA) option, in addition to their choice of retirement benefit options listed in subsections (1) and (2) of this section. Retiring members who choose this supplemental option will have their monthly retirement allowance actuarially reduced to offset the cost of annual adjustment.
(5) Benefit increases when survivor predeceases retiree (pop-up provision).
(a) This ((section)) subsection applies to members retiring
on or after January 1, 1996, who select a benefit option with a
survivor feature (Option Two, Three, or Four).
(b) If the survivor dies before the retiree, the retiree's monthly retirement allowance increases, effective the first day of the following month, to:
(i) The amount that would have been received had the retiree chosen Option One; plus
(ii) Any cost-of-living adjustments the retiree received prior to the survivor's death based on the original option selection.
(c) Pop-up recalculation examples.
Plan One:
Lucinda retires from PERS Plan 1 in 1996 (Year 0). She would like Garth, her husband, to receive a monthly allowance when she dies. Therefore, Lucinda chooses one of the benefit options with a survivor feature. As a result, her monthly allowance is actuarially reduced from $2,000 (standard allowance) to $1,750. Unfortunately, Garth dies in January 2001 (Year 5). Under the "pop-up" provision, Lucinda's monthly benefit will increase to $2,000, the amount she would have received had she chosen the Option One (standard allowance) plus any COLA's Lucinda had received based on her prior benefit allowance:
| Original Option 1 Benefit Amount | + | Total COLA's | = | New Benefit Amt. |
| $2,000.00 | + | 0 (None accrued) | = | $2,000.00* |
Agnes retires from PERS Plan 2 in 1996 (Year 0). Agnes would like Beatrice, her daughter, to receive a monthly allowance after Agnes dies. Therefore, Agnes selects a retirement benefit option with a survivor feature. As a result, her monthly allowance is reduced from $2,000 (standard allowance) to $1,750. Unfortunately, Beatrice dies in 2001 (Year 5). Under the "pop-up" provision, Agnes' monthly benefit will increase to $2,191.05, the amount she would have received had she chosen Option One (standard allowance) plus her accumulated COLA's:
| Year | Option One (Standard Allow.) |
Survivor Option (2,3,4) plus COLAs |
COLA incr. (3% max) |
$ Increase | |||||||
0 (1996) |
2,000.00 |
1,750.00 |
(ineligible) |
0.00 |
|||||||
| 1 (1997) | 1,750.00 | .02 | 35.00 | ||||||||
| 2 (1998) | 1,785.00 | .03 | 53.55 | ||||||||
| 3 (1999) | 1,838.55 | .025 | 45.96 | ||||||||
| 4 (2000) | 1,884.51 | .03 | 56.54 | ||||||||
| 5 (2001) | 2,000.00 | 1,941.05 |
|||||||||
| Total COLA's | 191.05 |
||||||||||
| Original Option One Benefit Amount $2000 |
+ Total COLA's + $191.05 |
= New Benefit Amount = $2,191.05* |
|||||||||
| *In the future (i.e. Year 4), COLAs will be based on the increased benefit amount. | |||||||||||
(i) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or
(ii) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or
(iii) The member's estate; or
(iv) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.
(6) Any retiree who retired before January 1, 1996, and who
elected to receive a ((reduced retirement allowance)) benefit
option with a survivor feature under subsection (2) of this
section is entitled to receive a retirement allowance adjustment
if the retiree meets the following conditions:
(a) The retiree's designated beneficiary predeceases or has predeceased the retiree; and
(b) The retiree provides to the department proper proof of the designated beneficiary's death. The retiree is not required to apply for the increased benefit provided by this subsection.
The adjusted retirement allowance will be effective on July 1, 1998, or the first of the month following the date of death of the designated beneficiary, whichever comes last. The adjustment is computed as described in RCW 41.40.188 (3)(c) for Plan 1 retirees or RCW 41.40.660 (3)(c) for Plan 2 retirees.
(7) Survivor. For the purposes of this provision, "survivor" means a person nominated by the member to receive a monthly benefit allowance after the member dies. A member nominates the survivor at the time of retirement by filing a completed and notarized form provided by the department.
(8) Postretirement benefit options.
(a) Postretirement marriage option. Members who select the standard allowance (Option One) at the time of retirement and marry after retirement may subsequently select a survivor option with their new spouse as survivor beneficiary, provided that:
(i) The retiree's monthly benefit is not subject to a property settlement agreement from a court decree of dissolution or legal separation;
(ii) The selection is made either:
(A) During a one year window, on or after the date of the first anniversary and before the second anniversary of the postretirement marriage; or
(B) Before June 1, 2002, if the postretirement marriage occurred before June 1, 2001;
(iii) The retiree provides a marriage certificate as proof of the postretirement marriage and provides proof of the birth date of the new spouse; and
(iv) A member may exercise this option one time only.
(b) Removal of a nonspouse survivor option. Members who selected a nonspouse as survivor beneficiary at the time of retirement may remove that survivor designation and have the benefit adjusted to a standard allowance. A member may exercise this option one time only.
(c) Selection (a) or (b) of this subsection will become effective the first of the month following the department's receipt of the required paperwork.
[Statutory Authority: RCW 41.50.050. 99-14-008, 415-108-326, filed 6/24/99, effective 7/25/99. Statutory Authority: RCW 2.10.146, 41.26.460, 41.32.530, 41.50.050, 41.32.785, 41.40.188 and 41.40.660. 96-01-047, 415-108-326, filed 12/14/95, effective 1/14/96. Statutory Authority: RCW 34.05.050 and 1990 c 249. 91-03-015, 415-108-326, filed 1/7/91, effective 2/7/91.]
OTS-4625.5
AMENDATORY SECTION(Amending WSR 01-01-059, filed 12/12/00,
effective 1/12/01)
WAC 415-110-326
Retirement benefit options.
RCW 41.35.220
enables the department to provide retiring members with four
retirement benefit options. The retiring member must choose an
option(((s))) when applying for service or disability retirement:
(1) Option One: Benefit option without survivor features
(standard allowance). The department will pay a monthly
retirement allowance based solely on the single life of the
member, as provided by RCW ((41.35.220)) 41.35.420, 41.35.440,
41.35.680, or 41.35.690. When the retiree dies all benefits
cease. Any remaining balance of the retiree's accumulated
contributions will be paid to:
(a) ((The retiree's designated beneficiary; or if none, to
(b) The retiree's surviving spouse; or if none, to
(c) The retiree's legal representative.
The member must designate a beneficiary at the time of retirement by filing a completed and notarized form provided by the department.)) Such person or persons, trust, or organization as the member shall have nominated by written designation duly executed and filed with the department; or
(b) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or
(c) The member's estate; or
(d) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.
(2) Benefit options with a survivor feature.
(a) A retiring member is allowed to select from several
retirement options which create an actuarially equivalent benefit
that includes a survivor feature. The survivor feature entitles
the survivor to receive a monthly allowance after the retiree
dies. If the member chooses one of the survivor options, the
monthly benefit the member will receive is actuarially reduced to
offset the cost of the survivor feature. After the retiree dies,
the department pays the survivor an allowance for the duration of
his or her life. If the retiree and the survivor both die before
the retiree's accumulated contributions are exhausted, ((the))
all benefits cease. Any remaining balance ((is retained in the
retirement fund)) will be paid to:
(i) Such person or persons, trust, or organization as the member shall have nominated by written designation duly executed and filed with the department; or
(ii) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or
(iii) The member's estate; or
(iv) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.
((Once retired with a survivor option, the retiree may only
change the survivor option upon returning to eligible employment
for two consecutive years.
(a))) (b) Option Two (joint and whole allowance). When the retiree dies, the department pays the survivor an allowance equal to the gross monthly allowance received by the retiree.
(((b))) (c) Option Three (joint and one-half allowance). When the retiree dies, the department pays the survivor an
allowance equal to one-half of the retiree's gross monthly
retirement allowance.
(((c))) (d) Option Four (joint and two-thirds allowance).
(((i) This subsection applies to members retiring on or
after January 1, 1996.
(ii))) When the retiree dies, the department pays the survivor an allowance equal to two-thirds (66.667%) of the retiree's gross monthly retirement allowance.
(3) ((If a member retires on or after June 6, 1996,)) The
department is required to pay an ex-spouse survivor benefits
pursuant to a marital dissolution order that complies with RCW 41.50.790.
(4) Benefit increases when survivor predeceases retiree (pop-up provision).
(a) This ((section)) subsection applies to retiring members
((retiring on or after January 1, 1996,)) who select a benefit
option with a survivor feature (Option Two, Three, or Four).
(b) If the survivor dies before the retiree, the retiree's monthly retirement allowance increases, effective the first day of the following month, to:
(i) The amount that would have been received had the retiree chosen Option One; plus
(ii) Any cost-of-living adjustments the retiree received prior to the survivor's death based on the original option selection.
(c) Pop-up recalculation examples.
Plan two:
Agnes retires from SERS Plan 2 in 2006 (Year 0). Agnes
would like Beatrice, her daughter, to receive a monthly allowance
after Agnes dies. Therefore, Agnes selects a retirement benefit
option with a survivor feature. As a result, her monthly
allowance is reduced from $2,000 (standard allowance) to $1,750.
Unfortunately, Beatrice dies in 2011 (Year 5). Under the
"pop-up" provision, Agnes' monthly benefit will increase to
$2,191.05, the amount she would have received had she chosen
option one (standard allowance) plus her accumulated COLAs:
| Year | Option One (Standard Allow.) | Survivor Option (2, 3, 4) plus COLAs | COLA incr. (3% max) | $ Increase | |||
| 0 (2006) | 2,000.00 | 1,750.00 | (ineligible) | 0.00 | |||
| 1 (2007) | 1,750.00 | .02 | 35.00 | ||||
| 2 (2008) | 1,785.00 | .03 | 53.55 | ||||
| 3 (2009) | 1,838.55 | .025 | 45.96 | ||||
| 4 (2010) | 1,884.51 | .03 | 56.54 | ||||
| 5 (2011) | 2,000.00 | 1,941.05 | - | - | |||
| Total COLAs | 191.05 | ||||||
| Original Option One Benefit Amount $2000 |
+ Total COLAs + $191.05 | = New Benefit Amount = $2,191.05* | |||||
| * In the future (i.e. Year 4), COLAs will be based on the increased benefit amount. |
(i) Such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or
(ii) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or
(iii) The member's estate; or
(iv) If there is neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.
(5) ((Any retiree who retired before January 1, 1996, and
who elected to receive a reduced retirement allowance under
subsection (2) of this section is entitled to receive a
retirement allowance adjustment if the retiree meets the
following conditions:
(a) The retiree's designated beneficiary predeceases or has predeceased the retiree; and
(b) The retiree provides to the department proper proof of the designated beneficiary's death. The retiree is not required to apply for the increased benefit provided by this subsection.
The adjusted retirement allowance will be effective on July 1, 1998, or the first of the month following the date of death of the designated beneficiary, whichever comes last. The adjustment is computed as described in RCW 41.35.220 (3)(c) for Plan 2 retirees.
(6))) Survivor. For the purposes of this provision, "survivor" means a person nominated by the member to receive a monthly benefit allowance after the member dies. A member nominates the survivor at the time of retirement by filing a completed and notarized form provided by the department.
(6) Postretirement benefit options.
(a) Postretirement marriage option. Members who select the standard allowance (Option One) at the time of retirement and marry after retirement may subsequently select a survivor option with their new spouse as survivor beneficiary, provided that:
(i) The retiree's monthly benefit is not subject to a property settlement agreement from a court decree of dissolution or legal separation;
(ii) The selection is made either:
(A) During a one year window, on or after the date of the first anniversary and before the second anniversary of the postretirement marriage; or
(B) Before June 1, 2002, if the postretirement marriage occurred before June 1, 2001;
(iii) The retiree provides a marriage certificate as proof of the postretirement marriage and provides proof of the birthdate of the new spouse; and
(iv) A member may exercise this option one time only.
(b) Removal of a nonspouse survivor option. Members who selected a nonspouse as survivor beneficiary at the time of retirement may remove that survivor designation and have the benefit adjusted to a standard allowance. A member may exercise this option one time only.
(c) Selection (a) or (b) of this subsection will become effective the first of the month following the department's receipt of the required paperwork.
[Statutory Authority: Chapters 41.32, 41.34, 41.35, 41.50 RCW. 01-01-059, 415-110-326, filed 12/12/00, effective 1/12/01.]
OTS-4626.5
AMENDATORY SECTION(Amending WSR 01-01-059, filed 12/12/00,
effective 1/12/01)
WAC 415-112-727
Retirement benefit options.
RCW 41.32.530
(Plan 1), RCW 41.32.785 (Plan 2) and RCW 41.32.851 (Plan 3)
enable the department to provide retiring members with four
retirement benefit options for receipt of the defined benefit
portion of their retirement benefits. In addition, retiring Plan
1 members may select the COLA (cost-of-living adjustment) option.
The retiring member must choose an option(s) when applying for
service or disability retirement.
(1) Option One: Benefit options without survivor feature (standard allowance).
(a) Maximum benefit allowance. Plan 1 retirees may elect to
receive the maximum benefit possible which is based on a single
life annuity. The maximum benefit allowance does not include a
survivor allowance or beneficiary payment. When the retiree
dies, all benefits cease. Any remaining balance in employee
contributions is retained by the retirement ((system)) fund.
(b) Option One (standard allowance). The department pays a
monthly retirement allowance based on a reduced single life
annuity of the member, as provided in RCW 41.32.480 (Plan 1 - Service), RCW 41.32.550 (Plan 1 - Disability), RCW 41.32.765
(Plan 2 - Service), RCW 41.32.790 (Plan 2 - Disability), RCW 41.32.875 (Plan 3 - Service), or RCW 41.32.880 (Plan 3 - Disability). ((Except for Plan 3,)) When the retiree dies, all
benefits cease. Any remaining balance of the member's
accumulated contributions will be paid to:
(((i) The retiree's designated beneficiary; or if none, to
(ii) The retiree's surviving spouse; or if none, to
(iii) The retiree's legal representative.
A member selecting Option One must designate a beneficiary at the time of retirement by filing a completed and notarized form provided by the department.)) (i) Such person or persons, trust, or organization as the member shall have nominated by written designation duly executed and filed with the department; or
(ii) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or
(iii) The member's estate; or
(iv) If there is neither such designated person nor persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.
(2) Benefit options with a survivor feature.
(a) A retiring member is allowed to select from several
retirement options which create an actuarially equivalent benefit
that includes a survivor feature. The survivor feature entitles
the survivor to receive a monthly allowance after the retiree
dies. If the member chooses one of the survivor options, the
monthly benefit the member will receive is actuarially reduced to
offset the cost of the survivor feature. After the retiree dies,
the department pays the survivor an allowance for the duration of
his or her life. If the retiree and the survivor both die before
the retiree's accumulated contributions are exhausted, ((the))
all benefits cease. Any remaining balance ((is retained in the
retirement fund)) will be paid to:
(i) Such person or persons, trust, or organization as the member shall have nominated by written designation duly executed and filed with the department; or
(ii) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or
(iii) The member's estate; or
(iv) If there is neither such designated person nor persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.
(((a))) (b) Option Two (joint and whole allowance). When
the retiree dies, the department pays the survivor a retirement
allowance equal to the gross monthly allowance received by the
retiree.
(((b))) (c) Option Three (joint and one-half allowance). When the retiree dies, the department pays the survivor an
allowance equal to one-half of the retiree's gross monthly
retirement allowance.
(((c))) (d) Option Four (joint and two-thirds allowance).
(i) ((This subsection applies)) Option Four is available to
members retiring on or after January 1, 1996.
(ii) When the retiree dies, the department pays the survivor an allowance equal to two-thirds (66.667%) of the retiree's gross monthly retirement benefit allowance.
(3) If a member retires on or after June 6, 1996, the department is required to pay an ex-spouse survivor benefits pursuant to a marital dissolution order that complies with RCW 41.50.790.
(4) Supplemental COLA option for Plan 1 members. Retiring Plan 1 members may select an annual cost-of-living adjustment (COLA) option in addition to their choice of retirement benefit options listed above in subsections (1) and (2) of this section. Retiring members who choose this supplemental option will have their monthly retirement allowance actuarially reduced to offset the cost of annual adjustment.
(5) Benefit increases when survivor predeceases retiree (pop-up provision).
(a) This ((section)) subsection applies to members retiring
on or after January 1, 1996, who select Option Two, Three, or
Four.
(b) Plan 1 members. If the survivor dies before the retiree, the retiree's monthly retirement allowance increases, effective the first day of the following month, to:
(i) The amount that would have been received had the retiree
chosen the maximum benefit((, minus));
(ii) Minus any reduction in the maximum allowance resulting
from a withdrawal of contributions((, plus));
(iii) Plus any cost-of-living adjustments the retiree received prior to the survivor's death based on the original option selection.
(c) Plan 2 and Plan 3 members. If the survivor dies before the retiree, the retiree's monthly retirement allowance increases, effective the first day of the following month, to:
(i) The amount that would have been received had the retiree chosen the standard allowance; plus
(ii) Any cost-of-living adjustments the retiree received prior to the survivor's death based on the original option selection.
(d) Pop-up recalculation example.
Plan One:
Lucinda retires from TRS Plan 1 in 1996 (Year 0) with $55,000 in accumulated contributions. As a TRS 1 member she is allowed to withdraw some or all of her contributions when she retires. She decides to withdraw $5,000 so she and Garth, her husband, can take a cruise. This will actuarially reduce Lucinda's maximum benefit from $2,000 per month to $1,963.86. Lucinda would also like her husband Garth to receive a monthly allowance after she dies. Therefore, Lucinda chooses one of the benefit options with a survivor feature. As a result, her monthly allowance is further actuarially reduced from $1,963.86 to $1,846.03. Unfortunately, Garth dies in January 2001 (Year 5). Under the "pop-up" provision, Lucinda's monthly benefit will increase to $1,963.86, the amount she would have received had she chosen the maximum benefit (after reduction for her withdrawals). If Lucinda selected the COLA option or if she has otherwise become eligible for a COLA, the accumulated COLAs (based on the prior benefit allowance) will be added to the $1,963.86*.
Plan Two:
Agnes retires from TRS Plan 2 in 1996 (Year 0). She would like Beatrice, her daughter, to receive a monthly allowance after Agnes dies. Therefore, Agnes selects a retirement benefit option with a survivor feature. As a result her monthly allowance is reduced from $2,000 (standard allowance) to $1,750. Unfortunately, Beatrice dies in January 2001 (Year 5). Under the "pop-up" provision, Agnes' monthly benefit will increase to the amount she would have received had she chosen Option One (standard allowance) plus her accumulated COLA's:
| Year | Option One (Standard Allowance) |
Survivor Option (2,3,4) plus COLAs |
COLA incr. (3% max) |
$ Increase | ||||||
| 0 (1996) | 2,000.00 | 1,750.00 | (inelig.) | 0.00 | ||||||
| 1 (1997) | 1,750.00 | .02 | 35.00 | |||||||
| 2 (1998) | 1,785.00 | .03 | 53.55 | |||||||
| 3 (1999) | 1,838.55 | .025 | 45.96 | |||||||
| 4 (2000) | 1,884.51 | .03 | 56.54 | |||||||
| 5 (2001) | 2,000.00 | 1,941.05 | -- | -- | ||||||
| Total COLA's | 191.05 | |||||||||
| Original Option One Benefit Amount $2000 |
+ Total COLA's + $191.05 |
= New Benefit Amount = $2,191.05* |
||||||||
(e) If the survivor dies and the retiree's benefit increases
under this ((section)) subsection, and thereafter the retiree
also dies before all accumulated contributions are exhausted,
((the)) all benefits cease. Any remaining balance ((is retained
by the retirement fund)) of the member's accumulated
contributions will be paid to:
(i) Such person or persons, trust, or organization as the member shall have nominated by written designation duly executed and filed with the department; or
(ii) If there is no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or
(iii) The member's estate; or
(iv) If there is neither such designated person nor persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.
(6) Any retiree who retired before January 1, 1996, and who elected to receive a reduced retirement allowance under subsection (2) of this section is entitled to receive a retirement allowance adjustment if the retiree meets the following conditions:
(a) The retiree's designated beneficiary predeceases or has predeceased the retiree; and
(b) The retiree provides the department proper proof of the designated beneficiary's death. The retiree is not required to apply for the increased benefit provided in this subsection.
The adjusted retirement allowance will be effective on July 1, 1998, or the first day of the month following the date of death of the designated beneficiary, whichever comes last. The adjustment is computed as described in RCW 41.32.530 (3)(c) for Plan 1 retirees or RCW 41.32.785 (3)(c) for Plan 2 retirees.
(7) Survivor. For the purposes of this provision, "survivor" means a person nominated by the member to receive a monthly benefit allowance after the member dies. A member nominates the survivor at the time of retirement by filing a completed and notarized form provided by the department.
(8) Postretirement benefit options.
(a) Postretirement marriage option. Members who select the maximum option (Plan 1 only) or the standard allowance (Option One) at the time of retirement and marry after retirement may subsequently select a survivor option with their new spouse as survivor beneficiary, provided that:
(i) The retiree's monthly benefit is not subject to a property settlement agreement from a court decree of dissolution or legal separation;
(ii) The selection is made either:
(A) During a one year window, on or after the date of the first anniversary and before the second anniversary of the postretirement marriage; or
(B) Before June 1, 2002, if the postretirement marriage occurred before June 1, 2001;
(iii) The retiree provides a marriage certificate as proof of the postretirement marriage and provides proof of the birthdate of the new spouse; and
(iv) A member may exercise this option one time only.
(b) Removal of a nonspouse survivor option. Members who selected a nonspouse as survivor beneficiary at the time of retirement may remove that survivor designation and have the benefit adjusted to a standard allowance. A member may exercise this option one time only.
(c) Selection (a) or (b) of this subsection will become effective the first of the month following the department's receipt of the required paperwork.
[Statutory Authority: Chapters 41.32, 41.34, 41.35, 41.50 RCW. 01-01-059, 415-112-727, filed 12/12/00, effective 1/12/01. Statutory Authority: RCW 41.50.050. 99-14-008, 415-112-727, filed 6/24/99, effective 7/25/99. Statutory Authority: RCW 2.10.146, 41.26.460, 41.32.530, 41.50.050, 41.32.785, 41.40.188 and 41.40.660. 96-01-047, 415-112-727, filed 12/14/95, effective 1/14/96. Statutory Authority: RCW 34.05.050 and 1990 c 249. 91-03-016, 415-112-727, filed 1/7/91, effective 2/7/91.]