PROPOSED RULES
RETIREMENT SYSTEMS
Original Notice.
Preproposal statement of inquiry was filed as WSR 01-05-094.
Title of Rule: WAC 415-100-055 Retirement benefit options.
Purpose: The department proposes amending this WAC to give judicial members benefits that are actuarially equivalent to other retirement plans. The member's estate, rather than the retirement fund, will receive any remaining accumulated contributions. Changes will also be made to make this WAC easier to understand. Similar changes are being made to the WACs in five other retirement plans.
Statutory Authority for Adoption: RCW 41.50.050(5).
Statute Being Implemented: RCW 2.10.052, 2.10.070(6), 2.10.140 - [2.10.]146, 2.12.030.
Summary: See Purpose above.
Reasons Supporting Proposal: Currently, remaining accumulated contributions stay in the retirement fund, rather than being given to a member's estate.
Name of Agency Personnel Responsible for Drafting: Merry A. Kogut, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7291; Implementation and Enforcement: Zan Johnston, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7049.
Name of Proponent: Department of Retirement Systems, governmental.
Rule is not necessitated by federal law, federal or state court decision.
Explanation of Rule, its Purpose, and Anticipated Effects: The [department] proposes amending WAC 415-100-055 Retirement benefit options, to give judicial members benefits that are actuarially equivalent to other plans. The member's estate, rather than the retirement fund, will receive any remaining accumulated contributions. Changes will also be made to make this WAC easier to understand.
Proposal Changes the Following Existing Rules: The department proposes amending this WAC to give judicial members benefits that are actuarially equivalent to other retirement plans. The member's estate, rather than the retirement fund, will receive any remaining accumulated contributions. Changes will also be made to make this WAC easier to understand. Similar changes are being made to the WACs in five other retirement plans.
No small business economic impact statement has been prepared under chapter 19.85 RCW. These amendments have no effect on businesses.
RCW 34.05.328 does not apply to this rule adoption. The Department of Retirement Systems is not one of the named departments in RCW 34.05.328.
Hearing Location: Department of Retirement Systems, 6835 Capitol Boulevard, Boardroom 3rd Floor, Tumwater, WA, on June 5, 2001, at 10:00 a.m.
Assistance for Persons with Disabilities: Contact the rules coordinator seven days before the hearing, if possible, phone (360) 664-7291, TTY (360) 586-5450, e-mail merryk@drs.wa.gov.
Submit Written Comments to: Identify WAC Numbers, Merry A. Kogut, Rules Coordinator, Department of Retirement Systems, P.O. Box 48380, Olympia, WA 98504-8380, e-mail Merryk@drs.wa.gov, fax (360) 753-3166, by 5:00 p.m. on June 5, 2001.
Date of Intended Adoption: No sooner than June 6, 2001.
April 30, 2001
Merry A. Kogut
Rules Coordinator
OTS-4689.3
AMENDATORY SECTION(Amending WSR 96-01-047, filed 12/14/95,
effective 1/14/96)
WAC 415-100-055
Retirement benefit options.
RCW 2.10.146,
enables the department to provide retiring 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 based solely on the single life of the
member, in accordance with RCW 2.10.146. When the retiree dies,
all benefits cease. Any remaining balance of the retiree's
accumulated contributions((,)) will be paid to:
(((a) The member's designated beneficiary; or if none, to
(b) The member's surviving spouse; or if none, to
(c) The member'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 judge has nominated by written designation duly executed and filed with the department of retirement systems; or
(b) If there is no such designated person or persons still living at the time of the judge'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 judge'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
remaining balance is retained in the retirement fund.
(a))) 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 judge has nominated by written designation duly executed and filed with the department of retirement systems; or
(ii) If there is no such designated person or persons still living at the time of the judge'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 judge's legal representative.
(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 member's gross monthly retirement allowance.
(3) Benefit increases when survivor predeceases retiree (pop-up provision).
(a) This ((section)) subsection applies to members retiring
on or after January 1, 1996, who selected Option Two, Three, or
Four.
(b) If the survivor dies before the retiree, the retiree's monthly retirement allowance will increase, effective the first day of the following month, to:
(i) The amount that would have been received had the retiree chosen Option One described in subsection (1) of this section; plus
(ii) Any cost-of-living adjustments received prior to the survivor's death based on original selection.
(c) Pop-up recalculation example.
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 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 | + Total COLA's | = New Benefit Amount | |||||||
| $2000 | + $191.05 | = $2,191.05* | |||||||
| * | In the future (i.e., Year 5), Agnes' COLA will be based on the increased benefit amount ($2,191.05). |
(a) Such person or persons, trust, or organization as the judge has nominated by written designation duly executed and filed with the department of retirement systems; or
(b) If there is no such designated person or persons still living at the time of the judge'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 judge's legal representative.
(4) Survivor. For the purposes of this ((provision))
section, "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 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, § 415-100-055, filed 12/14/95, effective 1/14/96. Statutory Authority: RCW 34.05.050 and 1990 c 249. 91-03-013, § 415-100-055, filed 1/7/91, effective 2/7/91.]