Original Notice.

Preproposal statement of inquiry was filed as WSR 01-07-078.

Title of Rule: WAC 415-111-220 How do I choose a defined contribution rate?

Purpose: On March 27, 2001, the Department of Retirement Systems (DRS) adopted an emergency amended rule to continue providing contribution rates for Teacher's Retirement System (TRS) Plan 3 and the School Employees' Retirement System (SERS) Plan 3. The proposed amended permanent rule also provides contribution rates for the Public Employees' Retirement System (PERS) Plan 3. (PERS Plan 3 becomes effective March 1, 2002). The proposed permanent rule provides procedures and timeframes for making the choice. DRS is also attempting to make the rule more clear and easier to understand.

Statutory Authority for Adoption: RCW 41.50.050(5).

Statute Being Implemented: RCW 41.34.040.

Summary: The proposed amended permanent rule provides contribution rate information for TRS Plan 3, SERS Plan 3, and PERS Plan 3.

Reasons Supporting Proposal: The proposed amended permanent rule is needed to implement the Employee Retirement Benefits Board's contribution rate options for TRS Plan 3, SERS Plan 3, and PERS Plan 3.

Name of Agency Personnel Responsible for Drafting: Merry A. Kogut, P.O. Box 48380, Olympia, WA 90504-8380, (360) 664-7291; and Implementation: Department-wide impact.

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 proposed amended permanent rule is needed to implement the Employee Retirement Benefits Board's contribution rate options for TRS Plan 3, SERS Plan 3, and PERS Plan 3. The proposed amended permanent rule provides procedures and timeframes for making the choice. DRS is also attempting to make the rule more clear and easier to understand.

Proposal Changes the Following Existing Rules: As compared with the current emergency rule, the proposed permanent rule makes one or two minor "wordsmithing" changes.

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 July 3, 2001, at 10:30 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 July 3, 2001.

Date of Intended Adoption: No sooner than July 5, 2001.

May 22, 2001

Merry A. Kogut

Rules Coordinator

OTS-4749.4

AMENDATORY SECTION(Amending WSR 01-01-059, filed 12/12/00, effective 1/12/01)

WAC 415-111-220   How do I choose a defined contribution rate ((election.))?   ((A Plan 3 member shall)) (1) Contribution rates: If you are a member of the Teachers' Retirement System Plan 3, the School Employees' Retirement System Plan 3, or the Public Employees' Retirement System Plan 3, you are required to contribute from ((his or her)) your compensation according to one of the following rate structures ((described in RCW 41.34.040.

Pursuant to WAC 415-111-110, you bear the responsibility for completing)):

Option A	Contribution Rate
All ages	5.0% fixed
Option B
Up to age 35	5.0%
Age 35 to 44	6.0%
Age 45 and above	7.5%
Option C
Up to age 35	6.0%
Age 35 to 44	7.5%
Age 45 and above	8.5%
Option D
All ages	7.0%
Option E
All ages	10.0%
Option F
All ages	15.0%

(2) How do I make the choice? Under WAC 415-111-110, it is your responsibility to complete the correct form for ((making)) choosing a contribution rate ((election)) and submitting ((it)) the form in a timely manner to your employer as directed on the form.

(((1))) (3) Where do I get the form to make my ((election)) choice? Your employer must provide the appropriate form to ((elect)) choose a contribution rate if you are enrolling ((into)) in Plan 3 or transferring from Plan 2 to Plan 3.

(((2))) (4) When do I have to ((elect a contribution rate)) choose? You must irrevocably ((elect)) choose a contribution rate within ninety calendar days from your date of hire in an eligible position. However, if you are transferring from Plan 2 to Plan 3, you must ((elect)) choose a contribution rate ((when)) at the same time you transfer. The ninety-day period does not apply to a member transferring from Plan 2 to Plan 3.

(5) When do contributions begin?

(a) Once ((a member elects)) you choose a contribution rate, contributions will begin the first day of the pay cycle in which ((the member makes the election)) you make the choice.

(b) If ((it is determined that a member)) the employer advises the department that you should be reported into Plan 3 membership retroactively, the ninety-day period starts from the date it is discovered((, as determined by the department, that the member)) that you should have been reported. The department will decide which date to use.

(((c))) (6) What if I work for more than one employer? If you are a Plan 3 member working in eligible positions for more than one employer, you may select a different contribution rate with each employer.

(((3))) (7) What happens if I do not make a ((contribution rate election)) choice? ((Pursuant to)) Under RCW 41.34.040, you will be irrevocably assigned to Option A if:

(a) You are a new employee or changing your employer, and do not ((make)) choose a contribution rate ((election)) within the ninety-day election period described in subsection (((2))) (4) of this section; or

(b) You are transferring from Plan 2 to Plan 3 and do not ((make)) choose a contribution rate ((election)) at the time of transfer. Contributions required under subsection (a) or (b) ((shall)) will begin ((effective)) the first day of the pay cycle in which you are assigned to Option A.

(((4))) (8) Can I change my contribution rate? Once you elect a contribution rate or are defaulted into Option A, you cannot change your contribution rate unless you change employers. Each time you change employers, you will be allowed the ninety-day period described in subsection (((2))) (4) of this section to ((elect)) choose a new contribution rate. ((For the purposes of this section, employer is defined as each school district and each educational service district.))

[Statutory Authority: Chapters 41.32, 41.34, 41.35, 41.50 RCW. 01-01-059, 415-111-220, filed 12/12/00, effective 1/12/01.]

Washington State Code Reviser's Office