WSR 02-03-120

PERMANENT RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed January 23, 2002, 8:03 a.m. , effective March 1, 2002 ]

     Date of Adoption: January 18, 2002.

     Purpose: These rule changes are necessary to implement the Public Employees' Retirement System Plan 3. DRS is also converting as much language as possible to "Plain English." Some changes to the Teachers' Retirement System (TRS) and School Employees' Retirement System (SERS), and other DRS WACs are also being changed, as necessary, to fully implement Plan 3.

     Citation of Existing Rules Affected by this Order:

WAC # WAC Title Statutory Authority (RCWs) Amended or New?
415-02-130 Will I receive retirement and account information? 41.50.065 Amended
415-10-010 Can I purchase service credit after the statutory deadline?, and 415-10-030 Calculation of cost to purchase service credit. 41.50.165 Amended
415-10-020 Definitions and 415-108-340 Actuarial tables, schedules, and factors. Chapter 41.45 RCW Amended
415-10-080 If I purchase service credit under RCW 41.50.165, can I receive a refund of my payments? 41.26.540, 41.32.498, 41.40.730, 41.40.830, 41.50.160, 41.50.165, 41.50.175 Amended
415-10-100 Can a Plan 3 member purchase service credit? 41.50.165, 41.50.175 Amended
415-108-315 Can I specify who can receive my benefits if I die in service? 41.40.270, 41.40.700, 41.40.835 Amended
415-108-324 I am married - do I need my spouse's consent on the retirement option I choose? 41.40.188(2), 41.40.660(2), 41.40.845(2) Amended
415-108-425 How do I determine if I have choice rights or transfer rights to PERS Plan 3? 41.40.785 New
415-108-441 Purpose and scope of compensation earnable rules, and 415-108-443 PERS Reportable compensation table. 41.40.010(8), chapter 41.40 RCW Amended
415-108-445 What compensation can be reported?, 415-108-480 Vehicles -- Does the value of my use of an employer vehicle qualify as compensation earnable?, and 415-108-679 Purpose and scope of eligibility rules 41.40.010 Amended
415-108-456 Leave payments earned over time, 415-108-458 Severance pay earned over time, and 415-108-464 Legislative leave. 41.40.010(8) Amended
415-108-465 Is paid leave not earned over time reportable compensation for PERS? 41.40.710 Amended
415-108-466 Do I receive reportable compensation for union leave? 41.40.010, 41.40.175, 41.40.710, 41.40.805 Amended
415-108-491 Salary imputed to periods of unpaid leave. 41.40.038, 41.40.170, 41.40.710, 41.40.805 Amended
415-108-570 As an elected or appointed official, what are my requirements for service credit? 41.40.023 Amended
415-108-640 Effect of meeting union verification requirements. 41.40.010 (4)(a), 41.40.057, 41.40.363 Amended
415-108-690 How is my membership eligibility evaluated? 41.40.010, 41.40.023 Amended
415-108-720 Participation -- Can I be excluded from participating in membership even if I am employed in an eligible position? 41.40.023, 41.40.150, 41.40.690 Amended
415-108-727 Can I transfer service credit earned as a cadet in the public employees' retirement system to the Washington state patrol retirement system? 41.40.092 New
415-108-815 What is the minimum dollar limit used to determine a Plan 3 lump sum benefit payment? 41.40.815 New
415-108-830 Actuarial recomputation of a Plan 2 or 3 retirement allowance upon retirement following reemployment. 41.40.620, 41.40.690 Amended
415-108-980 Will I receive a transfer payment when I transfer to Plan 3? 41.32.8401, 41.35.630, 41.40.795 New
415-110-815 What is the minimum dollar limit used to determine a Plan 3 lump sum benefit payment? 41.35.670 New
415-110-910 Conversion of service from PERS to SERS. 41.35.005 through 41.35.030, 41.40.070 Amended
415-111-100 To whom does this chapter apply? Chapter 41.34 RCW Amended
415-111-110 Member and employer responsibility. 41.50.112, 41.50.145, chapter 41.34 RCW Amended
415-111-310 Defined contribution account distribution (withdrawal). 41.34.070 Amended
415-111-400 Optional service credit purchase rules. 41.32.810, 41.32.865, 41.35.470, 41.35.650, 41.40.710, 41.40.805 New
415-111-410 Submitting a beneficiary designation for Plan 3 members. 41.40.835, 41.40.845 New
415-111-440 What is gainsharing? Chapter 41.31A RCW New
415-111-450 How does a court-ordered division of property affect my Plan 3 account? 41.50.670 through 41.50.720 New
415-112-250 Can I receive service credit for leave with pay? 41.32.267, 41.32.810, 41.32.850 Amended
415-112-400 When does the employer deduct salary for retirement contributions? 41.32.270 Amended
415-112-412 Are nonmoney payments from my employer considered compensation earnable? 41.32.010 (10)(b) Amended
415-112-413 Vehicles -- Does the value of my use of an employer vehicle qualify as earnable compensation? 41.32.010(10), IRC Section 61 Amended
415-112-725 Married member's benefit selection -- Spousal consent required. 41.32.530(2), 41.32.785(2), 41.32.851(2) Amended
415-113-0303 Dual member system -- Definitions and system acronyms. 41.54.010 Amended
415-113-041 Am I a dual member? 41.54.010, 41.54.061 Amended
415-113-042 What can terminate my status as a dual member? 41.54.010, 41.54.030 Amended
415-113-065 Can I substitute salary from one system to another?, and 415-113-070 If I retire as a dual member, must I receive benefits from both systems immediately? 41.54.030 Amended
415-113-090 What is the maximum retirement benefit that I may receive under chapter 41.54 RCW? 41.54.070 Amended
415-113-200 SERS and PERS concurrent employment. Chapters 41.32, 41.34, 41.35, 41.40, and 41.50 RCW Amended
415-200-030 Plan 3 external administrators. 41.50.088 Amended

     Repealed: WAC 415-10-110 and 415-113-0310.

     Statutory Authority for Adoption: RCW 41.50.050(5).

     Other Authority: See Citation of Existing Rules above.

      Adopted under notice filed as WSR 01-18-072 on September 4, 2001; WSR 01-20-037 on September 26, 2001; WSR 01-21-070 on September [October] 18, 2001, and WSR 01-23-051 on November 20, 2001.

     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 8, Amended 41, Repealed 2.

     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 0, Repealed 2.

     Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 8, Amended 41, Repealed 2.

     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: March 1, 2002.

January 18, 2002

John Charles

Director

OTS-5184.1


AMENDATORY SECTION(Amending WSR 00-10-016, filed 4/21/00, effective 5/22/00)

WAC 415-02-130   ((Members)) Will I receive retirement and account information ((annually.))?   (1) DRS provides ((information in an annual)) statements to all members who are currently employed and are being reported, and to inactive members who provide a mailing address.

     (2) If you are a member of Plan 1 or 2, you will receive annual statements. The statements include, but are not limited to, the following information:

     (a) Service credit;

     (b) Contributions; ((and))

     (c) Interest; and

     (d) Various retirement information.

     (((2) The annual statement is based on information provided to the department by the employer as of a certain date. At the time the department compiles the annual statement, it may not have all the information necessary to make a final computation of any data reported. Information in the annual statement is subject to correction.)) (3) For a member of Plan 3, you will receive two types of statements.

     (a) The defined benefit portion of your plan will provide an annual statement of your accumulated service credit and various retirement information.

     (b) The defined contribution portion of your plan will provide annual and quarterly statements. The statements include, but are not limited to, contributions and account activity.

     (4) Statements are based on information provided to the department by your employer and are subject to correction.

[Statutory Authority: RCW 41.50.050. 00-10-016, § 415-02-130, filed 4/21/00, effective 5/22/00.]

OTS-4925.2


AMENDATORY SECTION(Amending WSR 00-22-049, filed 10/27/00, effective 11/27/00)

WAC 415-10-020   Definitions.   As used in this chapter:

     (1) (("))Average earnings((")) means:

     (a) In PERS Plan 1, TRS Plan 1 or WSPRS Plan 1: The average of your two highest consecutive years of compensation as of the date of your service credit purchase ((if you are purchasing service credit in PERS Plan 1, TRS Plan 1 or WSPRS;)).

     (b) In Plan 2 or Plan 3: The average of your five highest consecutive years of compensation as of the date of your service credit purchase ((if you are purchasing service credit in Plan 2 or Plan 3)).

     (c) In LEOFF Plan 1: The basic salary attached to your position at the date of your service credit purchase ((if you are purchasing service credit in LEOFF Plan 1)).

     (2) Factors:

     (a) "Factor 1" means the actuarial cost factor calculated by the state actuary and adopted by the department. The actual factor used varies depending upon the time between the date of payment and the projected date of retirement. Generally, the longer the gap between date of payment and date of retirement the lower the factor.

     (((3))) (b) "Factor 2" is the actuarial factor calculated by the state actuary based upon demographic differences between the membership of the different retirement systems. Those factors are: .00788 (PERS Plan 1); .00698 (TRS Plan 1); and .00908 (WSPRS Plan 1).

     (((4))) (c) "Factor 3" means the interest factor calculated by the state actuary and adopted by the department. This factor is used only when the service credit purchase lowers the projected retirement age and is based upon the higher cost to the system of the earlier retirement.

     (((5) ")) (3) LEOFF((")) means the law enforcement officers' and fire fighters' retirement system established under chapter 41.26 RCW.

     (((6) ")) (4) PERS((")) means the public employees' retirement system established under chapter 41.40 RCW.

     (((7) "Plan 1" means the retirement system plan that includes persons who established membership before October 1, 1977. PERS and LEOFF are divided into Plan 1 and Plan 2. TRS is divided into Plan 1, Plan 2 and Plan 3. WSPRS has only one plan.

     (8) "Plan 2" means the retirement system plan that includes persons who established membership on or after October 1, 1977. PERS and LEOFF are divided into Plan 1 and Plan 2. TRS is divided into Plan 1, Plan 2 and Plan 3. SERS is divided into Plan 2 and Plan 3. WSPRS has only one plan.

     (9) "Plan 3" means the teachers' retirement system Plan 3 established by RCW 41.32.831 and the school employees' retirement system Plan 3 established by RCW 41.35.600.

     (10) ")) (5) SERS means the school employees' retirement system established under chapter 41.35 RCW.

     (6) Service credit being purchased((")) means the number of service credit months or service credit years you are purchasing.

     (((11) ")) (7) TRS((")) means the teachers' retirement system established under chapter((s)) 41.32 ((and 41.34)) RCW.

     (((12) ")) (8) WSPRS((")) means the Washington state patrol retirement system established under chapter 43.43 RCW.

     (((13) ")) (9) Years of earlier retirement((")) equals the number of years or fractions of years you will be able to retire earlier as a result of your purchase of service credit.

     (((14) ")) (10) Years of service((")) equals the total anticipated years of service you will have accrued at retirement, including the additional service credit you purchase under this section.

     (((15) "SERS" means the school employees' retirement system established under chapters 41.34 and 41.35 RCW.))

[Statutory Authority: Chapter 41.50 RCW. 00-22-049, § 415-10-020, filed 10/27/00, effective 11/27/00. Statutory Authority: RCW 41.50.050 and 41.50.165. 97-01-014, § 415-10-020, filed 12/6/96, effective 1/6/97.]

OTS-5185.3


AMENDATORY SECTION(Amending WSR 00-22-049, filed 10/27/00, effective 11/27/00)

WAC 415-10-010   Can I purchase service credit after the statutory deadline?   RCW 41.50.165 generally allows ((the member)) you to purchase service credit that ((he or she)) you failed to establish or reestablish within the statutory deadline.

     (1) You must pay the actuarial value of the increase to your retirement ((allowance)) benefit. The actuarial value of the increase to ((the member's)) your benefit means the cost to the retirement system trust fund of:

     (a) Including the additional service credit in ((the member's)) your retirement ((allowance)) benefit calculation; and

     (b) ((Commencing the member's)) Beginning your retirement ((allowance)) benefit at an earlier age, if applicable. This second factor ((will not apply if the member's retirement system is LEOFF 1, LEOFF 2, PERS 2, or TRS 2, because length of service is not a factor in determining eligibility to retire in those systems)) applies only to PERS Plan 1, TRS Plan 1, and WSPRS Plans 1 and 2.

     (2) The valuation is based upon economic assumptions. The cost to the retirement system trust fund for the increased value to ((the member's)) your benefit is calculated based upon interest rate assumptions adopted by the pension funding council and actuarial factors adopted or approved by the state actuary.

[Statutory Authority: Chapter 41.50 RCW. 00-22-049, § 415-10-010, filed 10/27/00, effective 11/27/00. Statutory Authority: RCW 41.50.050 and 41.50.165. 97-01-014, § 415-10-010, filed 12/6/96, effective 1/6/97.]


AMENDATORY SECTION(Amending WSR 00-22-049, filed 10/27/00, effective 11/27/00)

WAC 415-10-030   Calculation of cost to purchase service credit ((in LEOFF Plan 1, LEOFF Plan 2, PERS Plan 2, TRS Plan 2, or SERS Plan 2)) in certain plans.   If you are a member of LEOFF Plan 1 or 2, ((LEOFF Plan 2,)) PERS Plan 2 or 3, TRS Plan 2 or 3, ((TRS Plan 3,)) or SERS Plan 2 or ((SERS Plan)) 3, the department will calculate the actuarial value of the service credit you purchase under RCW 41.50.165(2) using the following formula:

Average Earnings ((•)) x Service Credit Being Purchased ((•)) x Factor 1

= Cost to purchase service credit


[Statutory Authority: Chapter 41.50 RCW. 00-22-049, § 415-10-030, filed 10/27/00, effective 11/27/00. Statutory Authority: RCW 41.50.050 and 41.50.165. 97-01-014, § 415-10-030, filed 12/6/96, effective 1/6/97.]


AMENDATORY SECTION(Amending WSR 00-22-049, filed 10/27/00, effective 11/27/00)

WAC 415-10-080   If I purchase service credit under RCW 41.50.165, can I receive a refund of my payments?   (1) You may ((not)) receive a refund ((unless)) only after you separate from service and ((withdraw)) apply for withdrawal of your contributions. ((Except as provided under subsections (2) and (3) of this section,)) Your payments to purchase service credit under RCW 41.50.165(2) qualify as a part of your accumulated contributions. ((As with other accumulated contributions, you may not receive a refund of your payments unless you separate from service and withdraw all your contributions.)) There are additional restrictions for TRS Plan 1, LEOFF Plan 2 and members of the Plan 3 systems as listed in subsections (2), (3), and (4) of this section.

     (2) ((Additional)) Restrictions for TRS Plan 1 members. ((If you are a TRS 1 member)) At the time of retirement, RCW 41.32.498(2) prohibits you from withdrawing payments made to purchase service credit under RCW 41.50.165(2) ((at the time of retirement)).

     (3) ((Additional)) Restrictions for LEOFF Plan 2 members. ((If you are a LEOFF Plan 2 member,)) Payments made to purchase service credit under RCW 41.50.165(2) and interest on those payments ((may)) will be refunded at one hundred percent. ((However, such)) Those payments ((may)) will not be included when calculating the one hundred fifty percent refund of contributions under RCW 41.26.540 (1)(b).

     (4) Restrictions for Plan 3 members of TRS, SERS and PERS. When you apply for service credit under RCW 41.50.165(2), one-half of the amount due will go into your defined benefit plan and one-half will go into your defined contribution plan. As a member of any Plan 3 system, you may apply for a refund of your contributions from the defined contribution portion of your account upon separation from employment. Your refund will be based on the market value of your contributions, including earnings and losses, at the time you withdraw. The defined benefit portion will be paid when you are eligible to receive benefits.


     Example 1 (Market has gains):


     Joe restores 5 years of service credit at a total cost of $10,000.00. One-half, or $5,000.00, goes into Joe's defined contribution plan member account, and the other $5,000.00 goes into the pension trust fund for his defined benefit plan. Joe separates two years later and applies for the withdrawal of his defined contribution account. While Joe was in service the market experienced gains. The value of Joe's defined contribution account is now $6,000.00. Joe receives $6,000.00 (minus applicable taxes and penalties). The defined benefit portion is not refundable but Joe will receive a one percent defined benefit allowance when he is eligible.


     Example 2 (Market has losses):


     Joe restores 5 years of service credit at a total cost of $10,000.00. One-half, or $5,000.00, goes into Joe's defined contribution plan member account, and the other $5,000.00 goes into the pension trust fund for his defined benefit plan. Joe separates two years later and applies for the withdrawal of his defined contribution account. While Joe was in service the market suffered a loss. The value of Joe's defined contribution account is now $4,000.00. Joe receives $4,000.00 (minus applicable taxes and penalties). The defined benefit portion is not refundable but Joe will receive a one percent defined benefit allowance when he is eligible.

[Statutory Authority: Chapter 41.50 RCW. 00-22-049, § 415-10-080, filed 10/27/00, effective 11/27/00. Statutory Authority: RCW 41.50.050 and 41.50.165. 97-01-014, § 415-10-080, filed 12/6/96, effective 1/6/97.]


AMENDATORY SECTION(Amending WSR 00-22-049, filed 10/27/00, effective 11/27/00)

WAC 415-10-100   ((Can I purchase TRS Plan 2 credit in TRS Plan 3?)) Can a Plan 3 member purchase service credit?   ((Yes.)) (1) Transferring purchased ((TRS)) Plan 2 credit under RCW 41.50.165(2) into ((TRS)) Plan 3. If you purchase ((TRS)) Plan 2 service credit under this chapter and later ((elect to)) enter ((TRS)) Plan 3, that credit will also transfer to ((TRS)) Plan 3.

     (a) Fifty percent of the money you paid to purchase the service credit will be credited to the ((TRS)) Plan 3 defined contribution account ((established under chapter 41.34 RCW)).

     (b) The other fifty percent will be credited to the ((TRS)) Plan 3 defined benefit ((portion)) plan established under RCW 41.32.831 for TRS Plan 3, RCW 41.35.600 for SERS Plan 3, and RCW 41.40.780 for PERS Plan 3.

     (2) Purchasing ((TRS)) Plan 2 service credit after transferring to ((TRS)) Plan 3. You may purchase service credit initially available under ((TRS)) Plan 2 after you transfer to ((TRS)) Plan 3. The service will be credited in ((TRS)) Plan 3. If you purchase Plan 2 service credit under this chapter, fifty percent of the money you pay to purchase the service credit will be credited to ((the TRS)) your Plan 3 defined contribution account ((established under chapter 41.34 RCW)). The other fifty percent will be credited to the ((TRS)) Plan 3 defined benefit portion established under RCW 41.32.831 for TRS Plan 3, RCW 42.35.600 for SERS Plan 3 and RCW 41.40.780 for PERS Plan 3.

     (3) Not applicable for service earned after transferring to ((TRS)) Plan 3 ((cannot be purchased)). Service ((earned)) you earn as a Plan 3 member is automatically recredited if ((the member)) you reenter((s)) membership and earn((s)) at least twelve service credit months. Plan 3 does not have any deadlines on establishing optional service. Because there are no deadlines for establishing or reestablishing service credit there is no provision for purchasing service credit earned in Plan 3 under RCW 41.50.165.

[Statutory Authority: Chapter 41.50 RCW. 00-22-049, § 415-10-100, filed 10/27/00, effective 11/27/00. Statutory Authority: RCW 41.50.050 and 41.50.165. 97-01-014, § 415-10-100, filed 12/6/96, effective 1/6/97.]


REPEALER

     The following section of the Washington Administrative Code is repealed:
WAC 415-10-110 Can I purchase SERS Plan 2 credit in SERS Plan 3?

OTS-5183.3


AMENDATORY SECTION(Amending WSR 00-10-015, filed 4/21/00, effective 5/22/00)

WAC 415-108-315   ((Designation of beneficiaries -- Death benefit if a member dies before retirement.)) Can I specify who can receive my benefits if I die in service?   (1) ((As a member,)) You have the right to designate a beneficiary or beneficiaries to receive a benefit ((in the event of your death)) if you die while you are an active member. You may change your beneficiary designation at any time by filing a change of beneficiary form with the department.

     (2) As a member you may name:

     (a) An organization or person, including your unborn or later adopted children. Unborn or later adopted children will not be included unless you specifically designate them as beneficiaries on the form. You must state the date of birth for any living person you name as a beneficiary;

     (b) Your estate; and/or

     (c) A trust ((in existence at the time of death)). Before making a distribution to any trust the department must receive:

     (i) A copy of the trust document;

     (ii) The name, address, and telephone number of the current trustee; and

     (iii) The tax identification number((;

     (d) A trust to be established under your last will)).

     (3) You may name contingent beneficiaries in addition to primary beneficiaries.

     (4) If you are a member of Plan 3, you may name the same or different beneficiaries for your defined benefit and defined contribution accounts.


     Examples:


     EXAMPLE ONE.

     Facts


     John, a member, completes a beneficiary designation form.


     In the place on the form reserved for persons, he names his daughter Ann. He checks the box to indicate that Ann is a primary beneficiary.


     In the place on the form reserved for trust/organizational beneficiaries, he lists the "Barbara Trust." His daughter Barbara is the trust beneficiary. He checks the box to indicate that the trust is a primary beneficiary.


     Result


     Subject to applicable statute, at John's death, the department will consider both the Barbara Trust and daughter Ann as primary beneficiaries. The department will require the name of the trustee, the tax identification number, a copy of the trust and other information specified in this rule before distribution to the trust.


     EXAMPLE TWO.

     Facts


     John, a member, completes a beneficiary designation form.


     In the place on the form reserved for persons, he names his daughter Ann. He checks the box to indicate that Ann is a primary beneficiary.


     In the place on the form reserved for trust/organizational beneficiaries, he lists his daughter Barbara personally ((()) i.e., no trust name is provided(())). ((He checks the box labeled "primary beneficiary." John misunderstands the form and rather than provide the names of the trustee or trust administrator, John writes the word "both" in the blank provided.)) John checks the corresponding box to indicate a primary beneficiary designation. At John's death, the department learns that John has created no trusts.


     Result


     ((At John's death, the department learns that John has created no trusts. Subject to existing statute, if the department receives no notice of competing claims to John's death benefit, the department will distribute the death benefit to Ann.)) Because John has created no trust, the designation in the trust/organizational location on the form is void. Subject to existing law, the department will issue the death benefit to Ann unless it receives a notice of a competing claim. If the department receives notice of competing claims, a court resolution may be required.

[Statutory Authority: RCW 41.50.050. 00-10-015, § 415-108-315, filed 4/21/00, effective 5/22/00.]


AMENDATORY SECTION(Amending WSR 99-14-008, filed 6/24/99, effective 7/25/99)

WAC 415-108-324   ((Married member's benefit selection -- Spousal consent required.)) I am married - do I need my spouse's consent on the retirement option I choose?   (1) ((The member,)) If married, you must provide ((the)) your spouse's written consent to the option you selected under WAC 415-108-326. If, as a married member ((does)), you do not provide spousal consent, the department will pay ((the retired member)) you as a retiree, a joint and one-half survivor benefit allowance and record ((the member's)) your spouse as the survivor in compliance with ((chapter 41.40 RCW and RCW 41.40.660(2))) RCW 41.40.188 (2)(a), 41.40.660 (2)(a), and 41.40.845 (2)(a).

     (2) Spousal consent is not needed to enforce a marital dissolution order requiring the department to pay an ex-spouse under RCW 41.50.790.

     (3) "Spousal consent" means that ((the married member's)) your spouse consents to the retirement option you selected ((by the member)). ((The)) Your spouse's notarized signature on a completed retirement application constitutes spousal consent.

[Statutory Authority: RCW 41.50.050. 99-14-008, § 415-108-324, 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, § 415-108-324, filed 12/14/95, effective 1/14/96. Statutory Authority: RCW 34.05.050 and 1990 c 249. 91-03-015, § 415-108-324, filed 1/7/91, effective 2/7/91.]


AMENDATORY SECTION(Amending WSR 96-03-100, filed 1/19/96, effective 2/19/96)

WAC 415-108-340   Actuarial tables, schedules, and factors.   This ((chapter)) section contains the tables, schedules, and factors ((adopted by the director of the department of retirement systems)) for calculating optional retirement allowances and postretirement adjustments of members of the Washington state public employees' retirement system (PERS). These tables, schedules, and factors were adopted by the director upon the recommendation of the state actuary ((based on the actuary's)) after investigation into the mortality, service, compensation, and other experience of the PERS members and beneficiaries ((of public employees' retirement system. The tables, schedules, and factors contained in this chapter shall govern the retirement allowances only of members retiring during the period from January 1, 1996, until such time as these tables, schedules, and factors are amended by the director following the next actuarial investigation conducted by the state actuary. The retirement allowances calculated at the time of retirement of members retiring before January 1, 1996, shall continue to be governed by the tables, schedules, and factors in effect when each member retires. Any new tables, schedules, and factors adopted by the director in the future shall govern retirement allowances calculated at the time of retirement only of members retiring after the adoption of such new tables, schedules, and factors)).

     (1) These tables, schedules and factors may be amended from time to time, based upon subsequent actuarial investigation.

     (2) The department will use the tables, schedules and factors in effect upon the member's retirement to calculate the member's retirement allowance. Accordingly, these values apply to the calculation of retirement allowances for those who retire on or after January 1, 1996 (until subsequent amendment).

     (3) The department will use these tables, schedules and factors to calculate postretirement adjustments that become effective on or after January 1, 1996, even though the member's retirement allowance was initially calculated using a prior set of tables, schedules and factors.


PUBLIC EMPLOYEES RETIREMENT SYSTEM

PLAN 1

Early Retirement Factors

by Year and Month
0 0 1.0000
1 .9915
2 .9830
3 .9746
4 .9661
5 .9576
6 .9491
7 .9407
8 .9322
9 .9237
10 .9152
11 .9068
1 0 .8983
1 .8908
2 .8834
3 .8759
4 .8685
5 .8610
6 .8536
7 .8461
8 .8387
9 .8312
10 .8238
11 .8163
2 0 .8089
1 .8023
2 .7957
3 .7892
4 .7826
5 .7760
6 .7694
7 .7629
8 .7563
9 .7497
10 .7431
11 .7366
3 0 .7300
1 .7242
2 .7183
3 .7125
4 .7067
5 .7009
6 .6951
7 .6892
8 .6834
9 .6776
10 .6718
11 .6660
4 0 .6601
1 .6550
2 .6498
3 .6446
4 .6395
5 .6343
6 .6291
7 .6240
8 .6188
9 .6136
10 .6085
11 .6033
5 0 .5981
1 .5935
2 .5889
3 .5843
4 .5797
5 .5751
6 .5705
7 .5659
8 .5613
9 .5567
10 .5521
11 .5475
6 0 .5429
1 .5388
2 .5347
3 .5306
4 .5265
5 .5224
6 .5182
7 .5141
8 .5100
9 .5059
10 .5018
11 .4977
7 0 .4936
1 .4899
2 .4862
3 .4825
4 .4789
5 .4752
6 .4715
7 .4678
8 .4642
9 .4605
10 .4568
11 .4531
8 0 .4494
1 .4461
2 .4428
3 .4395
4 .4362
5 .4329
6 .4296
7 .4263
8 .4230
9 .4197
10 .4164
11 .4131
9 0 .4098
1 .4068
2 .4039
3 .4009
4 .3979
5 .3950
6 .3920
7 .3890
8 .3860
9 .3831
10 .3801
11 .3771
10 0 .3742
1 .3715
2 .3688
3 .3661
4 .3635
5 .3608
6 .3581
7 .3554
8 .3528
9 .3501
10 .3474
11 .3447
11 0 .3420
1 .3396
2 .3372
3 .3348
4 .3324
5 .3300
6 .3275
7 .3251
8 .3227
9 .3203
10 .3179
11 .3154
12 0 .3130
1 .3108
2 .3087
3 .3065
4 .3043
5 .3021
6 .2999
7 .2977
8 .2955
9 .2933
10 .2912
11 .2890
13 0 .2868
1 .2848
2 .2828
3 .2808
4 .2789
5 .2769
6 .2749
7 .2729
8 .2709
9 .2689
10 .2670
11 .2650
14 0 .2630
1 .2612
2 .2594
3 .2576
4 .2558
5 .2540
6 .2522
7 .2504
8 .2486
9 .2468
10 .2450
11 .2432
15 0 .2414
1 .2398
2 .2381
3 .2365
4 .2348
5 .2332
6 .2316
7 .2299
8 .2283
9 .2267
10 .2250
11 .2234
16 0 .2218
1 .2203
2 .2188
3 .2173
4 .2158
5 .2143
6 .2128
7 .2113
8 .2098
9 .2084
10 .2069
11 .2054
17 0 .2039
1 .2025
2 .2012
3 .1998
4 .1985
5 .1971
6 .1957
7 .1944
8 .1930
9 .1917
10 .1903
11 .1890
18 0 .1876
1 .1864
2 .1851
3 .1839
4 .1826
5 .1814
6 .1802
7 .1789
8 .1777
9 .1764
10 .1752
11 .1740
19 0 .1727
1 .1716
2 .1705
3 .1693
4 .1682
5 .1671
6 .1659
7 .1648
8 .1637
9 .1625
10 .1614
11 .1603
20 0 .1591
1 .1581
2 .1571
3 .1560
4 .1550
5 .1540
6 .1529
7 .1519
8 .1509
9 .1498
10 .1488
11 .1478
21 0 .1467
1 .1458
2 .1448
3 .1439
4 .1429
5 .1420
6 .1410
7 .1401
8 .1391
9 .1382
10 .1372
11 .1363
22 0 .1353
1 .1345
2 .1336
3 .1327
4 .1319
5 .1310
6 .1301
7 .1293
8 .1284
9 .1275
10 .1267
11 .1258
23 0 .1249
1 .1241
2 .1233
3 .1225
4 .1217
5 .1209
6 .1201
7 .1193
8 .1185
9 .1177
10 .1169
11 .1161
24 0 .1153
1 .1146
2 .1139
3 .1132
4 .1124
5 .1117
6 .1110
7 .1102
8 .1095
9 .1088
10 .1080
11 .1073
25 0 .1066
1 .1059
2 .1052
3 .1046
4 .1039
5 .1032
6 .1025
7 .1019
8 .1012
9 .1005
10 .0998
11 .0992
26 0 .0985
1 .0979
2 .0973
3 .0966
4 .0960
5 .0954
6 .0948
7 .0942
8 .0936
9 .0929
10 .0923
11 .0917
27 0 .0911
1 .0905
2 .0899
3 .0894
4 .0888
5 .0882
6 .0877
7 .0871
8 .0865
9 .0860
10 .0854
11 .0848
28 0 .0842
1 .0837
2 .0832
3 .0827
4 .0822
5 .0816
6 .0811
7 .0806
8 .0801
9 .0795
10 .0790
11 .0785
29 0 .0780
1 .0775
2 .0770
3 .0765
4 .0760
5 .0755
6 .0751
7 .0746
8 .0741
9 .0736
10 .0731
11 .0726
30 0 .0722
1 .0717
2 .0713
3 .0708
4 .0704
5 .0699
6 .0695
7 .0690
8 .0686
9 .0682
10 .0677
11 .0673
31 0 .0668
1 .0664
2 .0660
3 .0656
4 .0652
5 .0648
6 .0644
7 .0639
8 .0635
9 .0631
10 .0627
11 .0623
32 0 .0619
1 .0615
2 .0611
3 .0608
4 .0604
5 .0600
6 .0596
7 .0592
8 .0589
9 .0585
10 .0581
11 .0577
33 0 .0573
1 .0570
2 .0566
3 .0563
4 .0559
5 .0556
6 .0552
7 .0549
8 .0545
9 .0542
10 .0538
11 .0535
34 0 .0531
1 .0528
2 .0525
3 .0522
4 .0518
5 .0515
6 .0512
7 .0509
8 .0506
9 .0502
10 .0499
11 .0496
35 or more .0493

PUBLIC EMPLOYEES RETIREMENT SYSTEM

((Plan II)) Plans 2 and 3 Option 1

Monthly Benefit per $1.00

of Accumulation

20 .0039357
21 .0039525
22 .0039702
23 .0039887
24 .0040081
25 .0040286
26 .0040500
27 .0040726
28 .0040963
29 .0041213
30 .0041476
31 .0041753
32 .0042044
33 .0042351
34 .0042675
35 .0043015
36 .0043375
37 .0043756
38 .0044157
39 .0044581
40 .0045029
41 .0045502
42 .0046001
43 .0046528
44 .0047084
45 .0047670
46 .0048287
47 .0048939
48 .0049626
49 .0050352
50 .0051120
51 .0051933
52 .0052795
53 .0053712
54 .0054687
55 .0055727
56 .0056837
57 .0058025
58 .0059296
59 .0060657
60 .0062116
61 .0063676
62 .0065347
63 .0067134
64 .0069044
65 .0071085
66 .0073263
67 .0075587
68 .0078066
69 .0080711
70 .0083537
71 .0086558
72 .0089785
73 .0093230
74 .0096898
75 .0100792
76 .0104910
77 .0109250
78 .0113811
79 .0118589
80 .0123587
81 .0128793
82 .0134243
83 .0139934
84 .0145880
85 .0152103
86 .0158600
87 .0165374
88 .0172413
89 .0179682
90 .0187162
91 .0194835
92 .0202654
93 .0210569
94 .0218459
95 .0226265
96 .0234038
97 .0241752
98 .0249356
99 .0256785

Public Employees Retirement System PERS I Optional COLA* Public Employees Retirement System Plan 1 Option 1 Monthly Benefit per $1.00 of Accumulation

Age
20 0.6369 20 .0061792
21 0.6386 21 .0061891
22 0.6404 22 .0061997
23 0.6422 23 .0062111
24 0.6441 24 .0062232
25 0.6460 25 .0062362
26 0.6480 26 .0062501
27 0.6501 27 .0062650
28 0.6522 28 .0062809
29 0.6544 29 .0062979
30 0.6567 30 .0063162
31 0.6590 31 .0063357
32 0.6614 32 .0063566
33 0.6639 33 .0063790
34 0.6665 34 .0064030
35 0.6691 35 .0064286
36 0.6718 36 .0064561
37 0.6747 37 .0064856
38 0.6775 38 .0065173
39 0.6805 39 .0065512
40 0.6836 40 .0065875
41 0.6867 41 .0066263
42 0.6899 42 .0066677
43 0.6932 43 .0067119
44 0.6966 44 .0067590
45 0.7001 45 .0068091
46 0.7036 46 .0068624
47 0.7073 47 .0069190
48 0.7111 48 .0069792
49 0.7149 49 .0070432
50 0.7188 50 .0071114
51 0.7229 51 .0071843
52 0.7270 52 .0072621
53 0.7312 53 .0073455
54 0.7355 54 .0074351
55 0.7399 55 .0075313
56 0.7444 56 .0076350
57 0.7490 57 .0077467
58 0.7537 58 .0078672
59 0.7585 59 .0079972
60 0.7633 60 .0081375
61 0.7682 61 .0082885
62 0.7733 62 .0084509
63 0.7783 63 .0086255
64 0.7835 64 .0088128
65 0.7887 65 .0090135
66 0.7939 66 .0092282
67 0.7992 67 .0094577
68 0.8046 68 .0097029
69 0.8099 69 .0099651
70 0.8154 70 .0102454
71 0.8208 71 .0105455
72 0.8263 72 .0108665
73 0.8317 73 .0112093
74 0.8372 74 .0115744
75 0.8426 75 .0119617
76 0.8480 76 .0123709
77 0.8534 77 .0128014
78 0.8584 78 .0132528
79 0.8641 79 .0137246
80 0.8693 80 .0142169
81 0.8745 81 .0147281
82 0.8796 82 .0152621
83 0.8846 83 .0158184
84 0.8896 84 .0163986
85 0.8945 85 .0170045
86 0.8993 86 .0176361
87 0.9040 87 .0182936
88 0.9086 88 .0189757
89 0.9131 89 .0196789
90 0.9174 90 .0204015
91 0.9216 91 .0211420
92 0.9255 92 .0218957
93 0.9294 93 .0226575
94 0.9329 94 .0234160
95 0.9363 95 .0241655
96 0.9395 96 .0249116
97 0.9424 97 .0256520
98 0.9452 98 .0263822
99 0.9477 99 .0270961

PERS I Survivor Option Factors


Member Younger

Age Difference OPTION II (100%) OPTION IV

(66 2/3%)

 OPTION III (50%)

20

 0.948 0.965 0.973
-19 0.945 0.963 0.972
-18 0.940 0.959 0.969
-17 0.936 0.956 0.967
-16 0.933 0.954 0.965
-15 0.929 0.951 0.963
-14 0.925 0.949 0.961
-13 0.921 0.946 0.959
-12 0.916 0.943 0.956
-11 0.910 0.938 0.953
-10 0.906 0.935 0.950
-9 0.900 0.931 0.948
-8 0.895 0.928 0.945
-7 0.889 0.923 0.941
-6 0.882 0.918 0.937
-5 0.876 0.914 0.934
-4 0.868 0.908 0.930
-3 0.860 0.902 0.925
-2 0.849 0.894 0.918
-1 0.836 0.884 0.911

Member Older

Age

Difference

 OPTION II (100%) OPTION IV

(66 2/3%)

 OPTION III (50%)
0 .822 0.874 0.902
1 0.808 0.863 0.894
2 0.796 0.854 0.886
3 0.787 0.848 0.881
4 0.782 0.844 0.878
5 0.778 0.840 0.875
6 0.773 0.837 0.872
7 0.766 0.831 0.868
8 0.757 0.824 0.862
9 0.746 0.815 0.854
10 0.736 0.807 0.848
11 0.729 0.801 0.843
12 0.724 0.798 0.840
13 0.720 0.794 0.837
14 0.715 0.790 0.834
15 0.711 0.787 0.832
16 0.708 0.784 0.829
17 0.704 0.781 0.827
18 0.702 0.779 0.825
19 0.698 0.776 0.822
20 0.695 0.774 0.820
21 0.692 0.772 0.818
22 0.689 0.769 0.816
23 0.686 0.767 0.814
24 0.683 0.764 0.812
25 0.681 0.763 0.811
26 0.679 0.761 0.809
27 0.677 0.759 0.808
28 0.675 0.758 0.806
29 0.673 0.756 0.805
30 0.671 0.754 0.804
31 0.669 0.753 0.802
32 0.668 0.752 0.801
33 0.667 0.750 0.800
34 0.666 0.749 0.799
35 0.664 0.747 0.798
36 0.663 0.747 0.797
37 0.662 0.746 0.796
38 0.661 0.745 0.796
39 0.660 0.744 0.795
40 0.659 0.743 0.794
Age difference = member's age minus beneficiary's age

PERS ((II)) Plans 2 and 3 Survivor Option Factors


Member Younger

Age

Difference

 OPTION II (100%) OPTION IV

(66 2/3%)

 OPTION III (50%)
-20 .928 0.951 0.962
-19 0.925 0.949 0.961
-18 0.922 0.946 0.959
-17 0.919 0.945 0.958
-16 0.916 0.942 0.956
-15 0.912 0.940 0.954
-14 0.908 0.937 0.952
-13 0.904 0.933 0.949
-12 0.898 0.930 0.946
-11 0.892 0.925 0.943
-10 0.885 0.920 0.939
-9 0.879 0.916 0.935
-8 0.873 0.911 0.932
-7 0.865 0.906 0.927
-6 0.857 0.900 0.923
-5 0.849 0.894 0.918
-4 0.839 0.887 0.912
-3 0.828 0.878 0.906
-2 0.813 0.867 0.897
-1 0.797 0.855 0.887

Member Older

Age

Difference

 OPTION II

(100%)

 OPTION IV

(66 2/3%)

 OPTION III

(50%)
0 0.779 0.841 0.876
1 0.763 0.829 0.866
2 0.748 0.817 0.856
3 0.735 0.807 0.848
4 0.725 0.798 0.841
5 0.716 0.791 0.835
6 0.708 0.785 0.830
7 0.698 0.777 0.823
8 0.687 0.767 0.815
9 0.674 0.757 0.806
10 0.662 0.747 0.797
11 0.653 0.739 0.791
12 0.646 0.733 0.786
13 0.640 0.728 0.781
14 0.634 0.722 0.776
15 0.628 0.717 0.772
16 0.622 0.712 0.767
17 0.616 0.707 0.763
18 0.611 0.702 0.759
19 0.606 0.698 0.755
20 0.602 0.694 0.751
21 0.596 0.689 0.747
22 0.591 0.684 0.743
23 0.587 0.681 0.740
24 0.582 0.676 0.736
25 0.577 0.672 0.732
26 0.573 0.668 0.729
27 0.569 0.665 0.726
28 0.565 0.661 0.722
29 0.562 0.658 0.720
30 0.558 0.655 0.717
31 0.555 0.652 0.714
32 0.552 0.649 0.712
33 0.549 0.647 0.709
34 0.546 0.644 0.707
35 0.543 0.641 0.705
36 0.540 0.638 0.702
37 0.538 0.637 0.700
38 0.535 0.634 0.698
39 0.533 0.632 0.696
40 0.531 0.630 0.695
Age difference = member's age minus beneficiary's age

PUBLIC EMPLOYEES RETIREMENT SYSTEM

PLANS 2 AND 3

Early Retirement Factors

by Year and Month
0 0 1.0000
1 .9910
2 .9821
3 .9731
4 .9641
5 .9551
6 .9462
7 .9372
8 .9282
9 .9193
10 .9103
11 .9013
1 0 .8923
1 .8845
2 .8767
3 .8688
4 .8610
5 .8531
6 .8453
7 .8374
8 .8296
9 .8217
10 .8139
11 .8061
2 0 .7982
1 .7913
2 .7844
3 .7776
4 .7707
5 .7638
6 .7569
7 .7500
8 .7431
9 .7363
10 .7294
11 .7225
3 0 .7156
1 .7096
2 .7035
3 .6975
4 .6914
5 .6853
6 .6793
7 .6732
8 .6672
9 .6611
10 .6551
11 .6490
4 0 .6429
1 .6376
2 .6322
3 .6269
4 .6215
5 .6162
6 .6109
7 .6055
8 .6002
9 .5948
10 .5895
11 .5841
5 0 .5788
1 .5740
2 .5693
3 .5646
4 .5598
5 .5551
6 .5504
7 .5456
8 .5409
9 .5362
10 .5314
11 .5267
6 0 .5220
1 .5178
2 .5136
3 .5094
4 .5052
5 .5010
6 .4968
7 .4926
8 .4884
9 .4842
10 .4800
11 .4758
7 0 .4716
1 .4678
2 .4641
3 .4603
4 .4566
5 .4529
6 .4491
7 .4454
8 .4416
9 .4379
10 .4342
11 .4304
8 0 .4267
1 .4234
2 .4200
3 .4167
4 .4134
5 .4100
6 .4067
7 .4033
8 .4000
9 .3967
10 .3933
11 .3900
9 0 .3867
1 .3837
2 .3807
3 .3777
4 .3747
5 .3718
6 .3688
7 .3658
8 .3628
9 .3598
10 .3569
11 .3539
10 0 .3509
1 .3482
2 .3456
3 .3429
4 .3402
5 .3375
6 .3349
7 .3322
8 .3295
9 .3269
10 .3242
11 .3215
11 0 .3188
1 .3165
2 .3141
3 .3117
4 .3093
5 .3069
6 .3045
7 .3021
8 .2997
9 .2973
10 .2949
11 .2925
12 0 .2901
1 .2879
2 .2858
3 .2836
4 .2815
5 .2793
6 .2771
7 .2750
8 .2728
9 .2707
10 .2685
11 .2664
13 0 .2642
1 .2623
2 .2603
3 .2584
4 .2564
5 .2545
6 .2526
7 .2506
8 .2487
9 .2467
10 .2448
11 .2429
14 0 .2409
1 .2392
2 .2374
3 .2357
4 .2339
5 .2322
6 .2304
7 .2287
8 .2269
9 .2252
10 .2234
11 .2216
15 0 .2199
1 .2183
2 .2167
3 .2151
4 .2136
5 .2120
6 .2104
7 .2088
8 .2072
9 .2057
10 .2041
11 .2025
16 0 .2009
1 .1995
2 .1980
3 .1966
4 .1952
5 .1937
6 .1923
7 .1909
8 .1894
9 .1880
10 .1866
11 .1851
17 0 .1837
1 .1824
2 .1811
3 .1798
4 .1785
5 .1772
6 .1759
7 .1746
8 .1733
9 .1720
10 .1707
11 .1694
18 0 .1681
1 .1670
2 .1658
3 .1646
4 .1634
5 .1623
6 .1611
7 .1599
8 .1587
9 .1575
10 .1564
11 .1552
19 0 .1540
1 .1529
2 .1519
3 .1508
4 .1497
5 .1487
6 .1476
7 .1465
8 .1455
9 .1444
10 .1433
11 .1422
20 0 .1412
1 .1402
2 .1392
3 .1383
4 .1373
5 .1363
6 .1353
7 .1344
8 .1334
9 .1324
10 .1315
11 .1305
21 0 .1295
1 .1286
2 .1277
3 .1269
4 .1260
5 .1251
6 .1242
7 .1233
8 .1224
9 .1215
10 .1207
11 .1198
22 0 .1189
1 .1181
2 .1173
3 .1165
4 .1157
5 .1149
6 .1140
7 .1132
8 .1124
9 .1116
10 .1108
11 .1100
23 0 .1092
1 .1085
2 .1077
3 .1070
4 .1063
5 .1055
6 .1048
7 .1041
8 .1033
9 .1026
10 .1018
11 .1011
24 0 .1004
1 .0997
2 .0990
3 .0984
4 .0977
5 .0970
6 .0963
7 .0957
8 .0950
9 .0943
10 .0937
11 .0930
25 0 .0923
1 .0917
2 .0911
3 .0905
4 .0898
5 .0892
6 .0886
7 .0880
8 .0874
9 .0868
10 .0862
11 .0856
26 0 .0849
1 .0844
2 .0838
3 .0833
4 .0827
5 .0821
6 .0816
7 .0810
8 .0804
9 .0799
10 .0793
11 .0788
27 0 .0782
1 .0777
2 .0772
3 .0767
4 .0761
5 .0756
6 .0751
7 .0746
8 .0741
9 .0736
10 .0731
11 .0725
28 0 .0720
1 .0716
2 .0711
3 .0706
4 .0701
5 .0697
6 .0692
7 .0687
8 .0683
9 .0678
10 .0673
11 .0668
29 0 .0664
1 .0659
2 .0655
3 .0651
4 .0646
5 .0642
6 .0638
7 .0634
8 .0629
9 .0625
10 .0621
11 .0616
30 0 .0612
1 .0608
2 .0604
3 .0600
4 .0596
5 .0592
6 .0588
7 .0584
8 .0580
9 .0576
10 .0572
11 .0568
31 0 .0564
1 .0561
2 .0557
3 .0553
4 .0550
5 .0546
6 .0543
7 .0539
8 .0535
9 .0532
10 .0528
11 .0524
32 0 .0521
1 .0517
2 .0514
3 .0511
4 .0507
5 .0504
6 .0501
7 .0497
8 .0494
9 .0491
10 .0487
11 .0484
33 0 .0481
1 .0478
2 .0475
3 .0471
4 .0468
5 .0465
6 .0462
7 .0459
8 .0456
9 .0453
10 .0450
11 .0447
34 0 .0444
1 .0441
2 .0438
3 .0435
4 .0433
5 .0430
6 .0427
7 .0424
8 .0421
9 .0418
10 .0416
11 .0413
35 0 .0410
1 .0407
2 .0405
3 .0402
4 .0400
5 .0397
6 .0394
7 .0392
8 .0389
9 .0387
10 .0384
11 .0381
36 0 .0379
1 .0376
2 .0374
3 .0372
4 .0369
5 .0367
6 .0364
7 .0362
8 .0360
9 .0357
10 .0355
11 .0352
37 0 .0350
1 .0348
2 .0346
3 .0343
4 .0341
5 .0339
6 .0337
7 .0335
8 .0332
9 .0330
10 .0328
11 .0326
38 0 .0324
1 .0322
2 .0320
3 .0318
4 .0316
5 .0313
6 .0311
7 .0309
8 .0307
9 .0305
10 .0303
11 .0301
39 0 .0299
1 .0297
2 .0296
3 .0294
4 .0292
5 .0290
6 .0288
7 .0286
8 .0284
9 .0282
10 .0281
11 .0279
40 0 .0277
1 .0275
2 .0273
3 .0272
4 .0270
5 .0268
6 .0266
7 .0265
8 .0263
9 .0261
10 .0260
11 .0258
41 0 .0256
1 .0255
2 .0253
3 .0251
4 .0250
5 .0248
6 .0247
7 .0245
8 .0243
9 .0242
10 .0240
11 .0239
42 0 .0237
1 .0236
2 .0234
3 .0233
4 .0231
5 .0230
6 .0228
7 .0227
8 .0225
9 .0224
10 .0222
11 .0221
43 0 .0219
1 .0218
2 .0217
3 .0215
4 .0214
5 .0213
6 .0211
7 .0210
8 .0209
9 .0207
10 .0206
11 .0205
44 0 .0203
1 .0202
2 .0201
3 .0199
4 .0198
5 .0197
6 .0196
7 .0194
8 .0193
9 .0192
10 .0191
11 .0189
45 or more .0188

[Statutory Authority: RCW 41.50.050. 96-03-100, § 415-108-340, filed 1/19/96, effective 2/19/96. Statutory Authority: RCW 41.50.050, 41.40.165, 41.40.020 and 41.40.022. 91-02-018, § 415-108-340, filed 12/21/90, effective 1/21/91.]


AMENDATORY SECTION(Amending WSR 98-09-059, filed 4/17/98, effective 5/18/98)

WAC 415-108-441   Purpose and scope of compensation earnable rules.   WAC 415-108-443 through 415-108-488 codify the department's ((existing)) interpretation of statutes and ((existing)) administrative practice regarding classification of payments as compensation earnable in PERS Plan ((I and PERS Plan II)) 1, 2, or 3. ((The department has applied and will apply)) These rules will be used to determine the proper characterization of payments occurring prior to and after the effective dates of these sections.

[Statutory Authority: RCW 41.50.050. 98-09-059, § 415-108-441, filed 4/17/98, effective 5/18/98.]


AMENDATORY SECTION(Amending WSR 98-09-059, filed 4/17/98, effective 5/18/98)

WAC 415-108-443   PERS reportable compensation table.   The following table ((is provided as a quick reference guide to)) will help you ((characterize)) determine whether certain types of payments are reportable compensation under Plan ((I and Plan II)) 1, 2, or 3. Be sure to ((turn to)) read the referenced rule to ensure that you have correctly identified the payment in question. The department determines compensation earnable based upon the nature of the payment, not the name applied ((to it,)). See WAC 415-108-445.


Type of Payment PERS ((I)) 1 Reportable

Compensation?

 PERS ((II)) 2 or 3 Reportable

Compensation?
Annual Leave Cash Outs Yes - WAC 415-108-456 No - WAC 415-108-456
Assault Pay (State Emp.) Yes - WAC 415-108-468 Yes - WAC 415-108-468
Base Rate Yes - WAC 415-108-451 Yes - WAC 415-108-451
Car Allowances No - WAC 415-108-4851 No - WAC 415-108-485
Cafeteria Plans Yes - WAC 415-108-455 Yes - WAC 415-108-455
Deferred Wages Yes - WAC 415-108-459 Yes - WAC 415-108-459
Disability Payments No - WAC 415-108-477 No - WAC 415-108-477
Disability: Salary lost while on disability leave Yes - WAC 415-108-468 Yes - WAC 415-108-468
RCW 41.40.038 RCW 41.40.038
Employer Provided Vehicle No - WAC 415-108-4802 No - WAC 415-108-480
Employer taxes/contributions No - WAC 415-108-459 No - WAC 415-108-459
Fringe Benefits No - WAC 415-108-475 No - WAC 415-108-475
Illegal Payments No - WAC 415-108-482 No - WAC 415-108-482
Legislative Leave Yes - WAC 415-108-464 Yes - WAC 415-108-464
Longevity/Education

Attainment Pay

 Yes - WAC 415-108-451 Yes - WAC 415-108-451
Nonmoney Maintenance Yes - WAC 415-108-4703 No - WAC 415-108-470
Optional Payments No - WAC 415-108-483 No - WAC 415-108-483
Payments in Lieu of

Excluded Items

 No - WAC 415-108-463 No - WAC 415-108-463
Performance Bonuses Yes - WAC 415-108-453 Yes - WAC 415-108-453

     1A portion of the value of an employer car allowance may be reportable, see WAC 415-108-485.


     2A portion of the value of an employer provided vehicle may be reportable in Plan I only, see WAC 415-108-480.


     3A portion of the value of nonmoney maintenance provided may be reportable in Plan I only, see WAC 415-108-470.


Type of Payment PERS ((I)) 1 Reportable

Compensation?

 PERS ((II)) 2 or 3 Reportable

Compensation?
Retroactive Salary Increase Yes - WAC 415-108-457 Yes - WAC 415-108-457
Reimbursements No - WAC 415-108-484 No - WAC 415-108-484
Reinstatement Payments Yes - WAC 415-108-467 Yes - WAC 415-108-467
Retirement or Termination

Bonuses

 No - WAC 415-108-487 No - WAC 415-108-487
Severance Pay - Earned

Over Time

 Yes - WAC 415-108-458 No - WAC 415-108-458
Severance Pay - Not Earned

Over Time

 No - WAC 415-108-488 No - WAC 415-108-488
Shared Leave - State Emp. Yes - WAC 415-108-468 Yes - WAC 415-108-468
Shared Leave - Local

Government Employees

 No - WAC 415-108-468 No - WAC 415-108-468
Sick Leave Cash Outs - State

Employees

 No - WAC 415-108-456 No - WAC 415-108-456
Sick Leave Cash Out - Local

Government Employees

 Yes - WAC 415-108-456 No - WAC 415-108-456
Standby Pay Yes - WAC 415-108-469 Yes - WAC 415-108-469
Time Off with Pay Yes - WAC 415-108-456 Yes - WAC 415-108-456
WAC 415-108-465 WAC 415-108-465
Union Leave4 Yes - WAC 415-108-466 Yes - WAC 415-108-466
Worker's Compensation No - WAC 415-108-479 No - WAC 415-108-479

     4Only specific types of union leave are reportable, see WAC 415-108-466.

[Statutory Authority: RCW 41.50.050. 98-09-059, § 415-108-443, filed 4/17/98, effective 5/18/98.]


AMENDATORY SECTION(Amending WSR 98-09-059, filed 4/17/98, effective 5/18/98)

WAC 415-108-456   Leave payments earned over time.   (1) Sick and annual leave usage. ((Sick leave and annual leave is accumulated over time and paid to a person during a period of excused absence. Leave accrues at a prescribed rate, usually a certain number of hours per month. The employee earns a leave day by rendering service during the month the leave accrued. When the employee uses his or her accrued leave by taking a scheduled work day off with pay, the payment is deferred compensation for services previously rendered. The payment is a salary or wage earned for services rendered and is reportable.))

     (a) Leave accrues at a prescribed rate, usually a certain number of hours per month.

     (b) You earn a leave day by providing service during the month the leave accrued.

     (c) Sick leave and annual leave are accumulated over time and paid to you during a period of excused absence.

     (d) When you use your accrued leave by taking a scheduled work day off with pay, the payment is deferred compensation for services previously provided.

     (e) The payment is a salary or wage earned for services provided and is reportable.

     (2) Annual leave cash outs. Annual leave cash outs, like payments for leave usage, are deferred compensation earned for services previously ((rendered)) provided. Whether, and to what extent an annual leave cash out qualifies as reportable compensation depends upon ((which)) the PERS plan ((the member)) to which you belong((s to)) and the type of employer.

     (a) Plans 2 and 3: Annual leave cash outs are not reportable compensation ((for PERS Plan II members)). Although the payments are for services ((rendered)) provided, they are excluded from the definition of compensation earnable by statute((,)). See RCW 41.40.010 (8)(b).

     (b) Plan 1, state government employees: A cash out of up to thirty days of annual leave for state government employees is reportable compensation ((for PERS Plan I,)). See RCW 43.01.040. A cash out in excess of thirty days of annual leave:

     (i) Qualifies as reportable compensation if ((it)) the leave is authorized by a letter of necessity under RCW 43.01.040. Annual leave qualifies as authorized under a letter of necessity only if the leave was earned after the letter of necessity was issued;

     (ii) Does not qualify as reportable compensation if ((it)) the leave is earned between the date that ((the member)) you accrued thirty days of annual leave and ((the member's)) your anniversary date under RCW 43.01.044.

     (c) Plan 1 employees not covered by (2)(b): All annual leave cash outs received by PERS Plan ((I)) 1 members who are not state employees qualify as reportable compensation.

     (3) Sick leave cash outs. Sick leave cash outs are deferred compensation for services previously ((rendered)) provided.

     (a) Sick leave cash outs are excluded from the definition of compensation earnable for PERS Plan ((II)) 2 or 3 members by statute((,)). See RCW 41.40.010 (8)(b).

     (b) Sick leave cash outs are reportable compensation for PERS Plan ((I)) 1 members other than state, school district, and educational service district employees.

     (c) Sick leave cash outs are excluded from reportable compensation for:

     (i) State employees by RCW 41.04.340;

     (ii) School district employees by RCW 28A.400.210; and

     (iii) Educational service district employees by RCW 28A.310.490.

     See RCW 41.40.010 (8)(a).

[Statutory Authority: RCW 41.50.050. 98-09-059, § 415-108-456, filed 4/17/98, effective 5/18/98.]


AMENDATORY SECTION(Amending WSR 98-09-059, filed 4/17/98, effective 5/18/98)

WAC 415-108-458   Severance pay earned over time.   (1) ((Plan I.)) PERS Plan 1: Severance pay ((must be)) earned over time ((in the same manner as annual leave or sick leave in order to be deferred compensation for services previously rendered and to be reportable in Plan I)) is reportable compensation. Conversely, severance pay ((is)) not earned over time ((if the employment contract(s) or compensation policies in effect at the beginning of a given period of employment specify that a certain amount of severance pay will be earned during that period in consideration for services rendered)) is not reportable compensation (see WAC 415-108-488). The difference is that severance pay earned over time is deferred compensation for services previously provided.

     Severance pay is earned over time if the employment contract(s) or compensation policies in effect at the beginning of a given period of employment specify that a certain amount of severance pay will be earned during that period in consideration for services provided.


Example: Mr. Jones is a PERS Plan ((I)) 1 member employed as a city manager. Since the beginning of his term of employment with the city, his contract has specified that he will earn one week of severance pay for every year of his employment. The earned severance pay will be paid at the time of his separation. His severance pay is reportable compensation. When Mr. Jones retires, the two weeks severance pay that he earned during his two highest paid years (i.e., one week per year for two years) will be included in his PERS Plan ((I)) 1 retirement calculation.

To the extent that severance pay qualifies as reportable compensation and is earned within ((the member's)) your average final compensation period, the severance pay is excess compensation((,)). See RCW 41.50.150.

     (2) PERS Plans ((II.)) 2 and 3: All forms of severance pay are excluded from earnable compensation ((for Plans II by)). See RCW 41.40.010 (8)(b).

     (((3) Severance pay that is not earned over time is not earned for services rendered and is not reportable in Plan I or II, see WAC 415-108-488.))

[Statutory Authority: RCW 41.50.050. 98-09-059, § 415-108-458, filed 4/17/98, effective 5/18/98.]


AMENDATORY SECTION(Amending WSR 98-09-059, filed 4/17/98, effective 5/18/98)

WAC 415-108-464   Legislative leave.   If ((a PERS member)) you take((s a)) leave without pay from an eligible position to serve in the legislature, ((the member)) you may ((elect)) choose to participate in PERS as a legislator.

     (1) Plan ((I. The salary the employee would have earned from their employer is reportable compensation if the required member contribution is paid by the member and the required employer contribution is paid by the member or the employer.)) 1: Your reportable compensation is the salary you would have earned from your employer. You must pay employee contributions on this amount. Either you or your employer must pay employer contributions on the amount.

     (2) Plan ((II. The employee)) 2 or 3: You may choose ((between:

(a) The)) your reportable compensation ((he or she)) to be:

     (a) The reportable compensation you would have earned ((had the member not served in the legislature)) from your employer; or

     (b) ((The)) Your actual reportable compensation for your legislative and nonlegislative ((public employment and the legislative)) service combined.

     If ((the member selects option)) you choose (2)(a) of this subsection((, he or she is responsible for paying the additional employer and employee contributions to the extent the reportable compensation reported is higher than it would have been under (b) of this subsection)) and your reportable compensation is higher than it would have been under (2)(b) of this subsection, you must pay both employee and employer contributions on the excess amount.

[Statutory Authority: RCW 41.50.050. 98-09-059, § 415-108-464, filed 4/17/98, effective 5/18/98.]


AMENDATORY SECTION(Amending WSR 98-09-059, filed 4/17/98, effective 5/18/98)

WAC 415-108-465   Is paid leave not earned over time((.)) reportable compensation for PERS?   ((If paid leave is not based upon earned leave accumulated over time, the payment is not a deferred payment for services previously rendered. Further, the member on leave is not currently rendering services in exchange for the payment. However,)) RCW 41.40.175 and 41.40.710 identify payments received from the employer while on paid leave as reportable for PERS. Contributions are due on these payments to the extent they meet the following conditions:

     (1) The payment is equal to the salary ((for the position that the person is on leave from;)) that you normally earn in your position; and

     (2) The payment is actually from the employer. Payments from an employer that are conditioned upon reimbursement from a third party are payments from the third party. Because the payments are not from the employer, they are not reportable compensation. The only exception is union leave paid by the employer subject to reimbursement from the union under the conditions specified in RCW 41.40.175 (Plan ((I)) 1) ((and)), RCW 41.40.710 (Plan ((II)) 2), RCW 41.40.805 (Plan 3), and WAC 415-108-466.

Example: Joe injures himself off the job and collects labor and industries payments instead of compensation from his employer. Because the payments are not from his employer, they are not reportable compensation.

[Statutory Authority: RCW 41.50.050. 98-09-059, § 415-108-465, filed 4/17/98, effective 5/18/98.]

OTS-5337.2


NEW SECTION
WAC 415-108-425   How do I determine if I have choice rights or transfer rights to PERS Plan 3?   (1) Definitions:

     (a) "Concurrently employed" means you are employed at the same time, in eligible positions, by a Phase 1 employer and by a Phase 2 employer.

     (b) "Exercising choice rights" means choosing Plan 2 or Plan 3 or defaulting into Plan 3.

     (c) "Phase 1 employer" means state agencies and institutes of higher education.

     (d) "Phase 2 employer" means all other employers.

     (e) "Phase 1 transfer period" is the period from March 1, 2002, through and including August 31, 2002.

     (f) "Phase 2 transfer period" is the period from September 1, 2002, through and including May 31, 2003.

     (2) What determines if I have "choice rights" or "transfer rights"? Your current employment status and your employment history will be used to determine if you have choice rights or transfer rights. If your employment status changes, your rights must be reevaluated. A change in your employment status, such as separating from employment or becoming reemployed, may change your rights.

     (3) What are "choice rights" and how are they applied? "Choice rights" refers to your right, within a ninety-day period, to make an irrevocable choice to become a member of Plan 2 or Plan 3.

     (a) You will be reported in Plan 2 until you exercise choice rights.

     (b) You must make a choice within ninety days of your first day of employment in an eligible position.

     (c) You will be defaulted into Plan 3 if you continue employment past the ninety-day choice period without making a choice.

     (d) You may exercise choice rights only once.

     (4) Do I have "choice rights"?

     (a) You have choice rights if your initial PERS membership began on or after March 1, 2002, with a Phase 1 employer in an eligible position.

     (i) If you separate from employment and did not exercise your choice rights, you retain choice rights if you are reemployed in an eligible position with a Phase 1 employer.

     (ii) If you separate from employment and did not exercise your choice rights, and you are not employed by a Phase 2 employer during Phase 2, you retain choice rights if you begin another period of employment in an eligible position with a Phase 2 employer after May 31, 2003.

     (b) You have choice rights if your initial PERS membership began on or after September 1, 2002, with a Phase 2 employer in an eligible position. If you separate from employment and did not exercise your choice rights, you retain choice rights if you begin another period of employment in an eligible position with a Phase 1 or Phase 2 employer.

     (5) What are "transfer rights" and how are they applied? "Transfer rights" refers to your right as a Plan 2 member to transfer into Plan 3 during an applicable transfer period to your employment type.

     (a) You are not required to exercise transfer rights. If you have transfer rights, you will remain in Plan 2 unless you decide to transfer to Plan 3.

     (b) If you do not transfer to Plan 3 during the Phase 1 or the Phase 2 transfer periods, you will not qualify to receive the additional transfer payment under RCW 41.40.795 or retroactive gainsharing payment under RCW 41.31A.040.

     (6) Do I have transfer rights?

     (a) You have transfer rights if you:

     (i) Are a Plan 2 member;

     (ii) Are employed in an eligible position by a Phase 1 employer during the Phase 1 transfer period; and

     (iii) Were not eligible for choice rights under subsection (4)(a) of this section.

     (b) You have transfer rights if you:

     (i) Are a Plan 2 member;

     (ii) Are employed in an eligible position by a Phase 2 employer during the Phase 2 transfer period; and

     (iii) Were not eligible for choice rights under subsection (4)(b) of this section.

     (7) What are "January transfer rights" and how are they applied? "January transfer rights" refers to a Plan 2 member's right to transfer to Plan 3 during any January after the close of a transfer period.

     (a) If you are employed by a Phase 1 employer, in an eligible position, the first January you can transfer is January 2003.

     (b) If you are employed by a Phase 2 employer, in an eligible position, the first January you can transfer is January 2004.

     (c) You must earn service credit in the January in which you transfer.

     (8) Do I have January transfer rights?

     (a) You have January transfer rights if you were eligible for transfer rights and did not transfer to PERS Plan 3 during the transfer period that applied to you.

     (b)     You have January transfer rights if you:

     (i) Were employed in an eligible position with a Phase 1 employer before the Phase 1 transfer period, or were employed in an eligible position by a Phase 2 employer before the Phase 2 transfer period;

     (ii) Were not employed by a Phase 1 employer during the Phase 1 transfer period;

     (iii) Were not employed by a Phase 2 employer during the Phase 2 transfer period; and

     (iv) Are employed by a Phase 1 employer in an eligible position that you began after the Phase 1 transfer period ended, or are employed by a Phase 2 employer in an eligible position that you began after the Phase 2 transfer period ended.

     (9) What happens after I become a Plan 3 member? Once you choose Plan 3 or default to Plan 3 or transfer to Plan 3, you will remain a Plan 3 member. You will not have any additional transfer rights or choice rights to exercise.

     (10) What rules apply to me if I am concurrently employed?If you are, or become concurrently employed during the Phase 1 transfer period in an eligible position, you will have transfer rights but must wait until the Phase 2 transfer period to transfer. If you separate from one of the employers, your membership rights must be reevaluated.

Examples: The examples are written, for the most part, for a Phase 1 employer. Use the Phase 2 transfer period (September 1, 2002, through and including May 31, 2003) to apply the rules to a Phase 2 employer.
Plan Choice Rights:
     Example 1: Pat starts working for a state agency in an eligible position (Phase 1 employer) as of:
     A. April 1, 2002. Since Pat has not previously been a member of PERS, Pat has ninety days to make a plan choice for Plan 2 or Plan 3. See subsection (3)(b) of this section.
     B. After forty-five days, Pat leaves service without making a choice, and then returns in an eligible position one year later. Pat has a new ninety day period in which to make his plan choice. See subsection (4)(a)(i) of this section.
     C. Pat chooses Plan 3 within his ninety days. Pat is now a Plan 3 member regardless of future employment. See subsection (9) of this section.
     D. Instead of choosing Plan 3, Pat lets his ninety day plan choice period go by with out choosing Plan 2 or Plan 3. Pat is defaulted into Plan 3 and is now a Plan 3 member regardless of future employment. See subsections (3)(c) and (9) of this section.

Transfer Rights:
     Example 2:
     A. Chris has been a Plan 2 member since 1977. Chris is working at a state agency (Phase 1 employer) as of March 1, 2002. Since Chris was a member prior to the start of Plan 3, Chris has the right to transfer to Plan 3 in the transfer period (March 1, 2002, through August 31, 2002). See subsection (6)(a) of this section.
     B. However, Chris did not make a decision to transfer prior to the close of the Phase 1 transfer period. If Chris remains employed for a Phase 1 employer, the right to transfer to Plan 3 is limited to January of each year. See subsection (8)(a) of this section.
     C. In this variation, Chris was a Plan 2 member from March 1, 1987, through February 1, 2002. Chris returns on October 15, 2002, for a state agency (Phase 1 employer). Since Chris returned to service after the transfer period (March 1, 2002, through August 31, 2002), Chris only has the right to transfer to Plan 3 in January of each year. See subsection (8)(b) of this section.

Irrevocable Choice Rule:
     Example 3: Mike starts working for a state agency (Phase 1 employer) as of April 1, 2002. Since Mike has not previously been a member of PERS, he has ninety days to make a plan choice for Plan 2 or Plan 3. Mike chooses Plan 3 within his ninety days. Mike is now a Plan 3 member regardless of future employment. See subsection (9) of this section.
     Example 4: Pat starts working for a state agency (Phase 1 employer) as of April 1, 2002. Since Pat has not previously been a member of PERS, he has ninety days to make a plan choice for Plan 2 or Plan 3. Pat chooses Plan 2 within his ninety days. Pat is now a Plan 2 member who can no longer have a plan choice regardless of future employment. See subsection (3)(d) of this section.

Concurrent Employment in Phase 1 and 2:
     Example 5: Using example 2A, Chris also accepts employment for a county (Phase 2 employer) on April 1, 2002, prior to transferring to Plan 3. Since Chris is concurrently employed at a Phase 1 and a Phase 2 employer, Chris must wait for the Phase 2 window before he can transfer to Plan 3. See subsection (10) of this section.

[]


NEW SECTION
WAC 415-108-980   Will I receive a transfer payment when I transfer to Plan 3?   (1) PERS Plan 3 will be implemented on March 1, 2002. If you transfer from PERS Plan 2 to PERS Plan 3 during your transfer period, and establish any service credit in February 2003, you will receive a transfer payment to be added to your member account on or after June 1, 2003, once the department receives the transfer information from your employer. The transfer period and payment amount you will receive is based upon your employer type and your account balance as of March 1, 2002.

     (a) You will receive a payment of one hundred and ten percent of your transfer basis if you are employed in an eligible position by a Phase 1 employer and you transfer to Plan 3 during the Phase 1 transfer period. State agencies and institutes of higher education are Phase 1 employers.

     (b) You will receive a payment of one hundred and eleven percent of your transfer basis if you are employed in an eligible position by a Phase 2 employer and you transfer to Plan 3 during the Phase 2 transfer period. All other employers are Phase 2 employers.

     (2) Your transfer basis is your total accumulated contributions (and interest) on March 1, 2002, less fifty percent of any contributions you made under RCW 41.50.165(2).

     (3) If you request to transfer but die before payment is made, the transfer payment will be paid immediately to your defined contribution account. These moneys will be distributed when payment is made from your account to your estate, or the person or persons, trust or organization you nominated by the most recent written beneficiary designation filed with the department.


Examples:

Phase 1 Employer (110%) (state agencies and institutes of higher education)

• Al works for a Phase 1 employer and makes $2,000 a month.

• On March 1, 2002, Al's defined benefit (DB) account balance is $10,000.

• On June 1, 2002, Al transfers to PERS Plan 3 and chooses contribution rate option A (5%).

• On June 1, 2002, the department transfers approximately $10,185 to Al's new defined contribution (DC) account. The transfer amount is the sum of:

⧫ Al's $10,000 account balance on March 1, 2002;

⧫ Approximately $50 in contributions between March 1st and June 1st; and

⧫ Approximately $135 in interest in Plan 2 at 5.5% annually, compounded quarterly.

• Al continues working for his Phase 1 employer through June 2003, including the month of February.

• In June 2003, after he receives his transfer payment, Al will have approximately $22,385 in his DC account. Here is how:

⧫ In June 2002, when Al transferred to Plan 3, he started with approximately $10,185 in his DC account.

⧫ He then made twelve monthly contributions of $100 (5% of a $2,000 salary, June 2002 through May 2003) for a total of $1,200.

⧫ In June 2003, he receives a transfer payment of $11,000 (110% of $10,000, his account balance on March 1, 2001).

⧫ The total is approximate because it will depend on earnings or losses on the investments of the original amount transferred the previous year, and the contributions made to date.


Phase 2 Employer (111%) (local government)

• Peggy works for a Phase 2 employer and makes $2,000 a month.

• On March 1, 2002, Peggy's defined benefit (DB) account balance is $10,000.

• On November 1, 2002, Peggy transfers to PERS Plan 3 and chooses contribution rate option A (5%).

• On November 1, 2002, the department transfers approximately $10,560 to Peggy's new defined contribution (DC) account. The transfer amount is the sum of:

⧫ Peggy's $10,000 account balance on March 1, 2002;

⧫ Approximately $140 in contributions between March 1st and November 1st;

⧫ Approximately $420 in interest in Plan 2 at 5.50% annually, compounded quarterly.

• Peggy continues working for her Phase 2 employer through June 2003, including the month of February.

• In June 2003, after she receives her transfer payment, Peggy will have approximately $22,360 in her DC account. Here is how:

⧫ In November 2002, when Peggy transferred to Plan 3, she started with approximately $10,560 in her DC account.

⧫ She then made monthly contributions of $100 (5% of a $2,000 salary) for a total of $700.

⧫ In June 2003, she receives a transfer payment of $11,100 (111% of $10,000, her account balance on March 1, 2001).

⧫ The total is approximate because it will depend on earnings or losses on the investments of the original amount transferred the previous year, and the contributions made to date.


     (4) Terms defined:

     Phase 1 transfer period: WAC 415-108-420.

     Phase 2 transfer period: WAC 415-108-420.

     Service: RCW 41.40.010 (9)(b).

     Transfer basis: RCW 41.40.795 (1)(b).

     Transfer period: RCW 41.40.795 (1)(a).

[]

OTS-4924.4


AMENDATORY SECTION(Amending WSR 98-09-059, filed 4/17/98, effective 5/18/98)

WAC 415-108-445   What compensation can be reported?   ((In order for payments to be subject to retirement system contributions and included in the calculation of a member's retirement benefit, those payments must meet the definition of compensation earnable in RCW 41.40.010(8).

     (1) Payments for personal services rendered. To determine whether a payment meets this definition and can be reported, ask the following questions:

     (a) Was the payment earned as a salary or wage for personal services rendered during a fiscal year? If the answer is no, the payment is not reportable. If the answer is yes, ask question (b).

     (b) Was the payment paid by an employer to an employee? If the answer is no, the payment is not reportable. If the answer is yes, report the payment.

     (2) Payments included that are not for personal services rendered. The legislature has included certain specific payments within the definition of compensation earnable even though those payments are not for personal services rendered by the employee to the employer. (See WAC 415-108-464 through 415-108-469.)

     (3) Reportable compensation is earned when the service is rendered, rather than when payment is made.


Example:      If a member works during June but does not receive payment for the work until July, the reportable compensation was earned during June and must be reported to the department as June earnings.

     (4) Salary characterizations are based upon the nature of the payment. A payment is reportable compensation if it meets the criteria of subsection (1) or (2) of this section. The name given to the payment or the document authorizing it is not controlling in determining whether the payment is reportable compensation. The department determines whether a payment is reportable compensation by considering:

     (a) What the payment is for; and

     (b) Whether the reason for the payment brings it within the statutory definition of compensation earnable.


Example: A payment conditioned upon retirement is not reportable compensation. Attaching the label "longevity" to the payment does not change the fact that the payment is conditioned on retirement. Such a payment is not for services rendered and will not be counted as reportable compensation despite being identified by the employer as a longevity payment.

     (5) Differences in reportable compensation between plans. WAC 415-108-445 through 415-108-488 define reportable compensation for each of the two PERS plans. "Compensation earnable" is defined in very similar terms for both PERS Plan I and PERS Plan II. The characterization of payments as reportable compensation or not reportable compensation in WAC 415-108-455 through 415-108-488 is the same for both PERS Plan I and PERS Plan II except as specifically noted.)) (1) Compensation earnable:

     (a) Compensation earnable must meet the definition in RCW 41.40.010(8) and:

     (i) Be earned as a salary or wage for personal services provided during a fiscal year and paid by an employer to an employee; or

     (ii) Qualify as compensation earnable under WAC 415-108-464 through 415-108-470.

     (b) The department determines whether payments to an employee are compensation earnable based on the nature, not the name, of the payment. The department considers the reason for the payment and whether the reason brings the payment within the statutory definition of compensation earnable.

Example: "Longevity pay" conditioned on retirement is not for services provided and is therefore not compensation earnable.
     (c) "Compensation earnable" is defined in very similar terms for all three PERS plans. Any differences among plans are specifically noted in WAC 415-108-443 through 415-108-488.

     (2) Reportable compensation:

     (a) Reportable compensation is the compensation paid by an employer to an employee that the employer must report to the department.

     (b) An employer must report all compensation earnable of an employee, as defined by RCW 41.40.010(8) and WAC 415-108-445(1) to the department.

     (c) An employer must report compensation for the month in which it was earned. Compensation is earned when the service is provided, rather than when payment is made.

Example: A member is paid in July for work performed during June. The employer must report the compensation to the department as "June earnings."

[Statutory Authority: RCW 41.50.050. 98-09-059, § 415-108-445, filed 4/17/98, effective 5/18/98.]


AMENDATORY SECTION(Amending WSR 98-09-059, filed 4/17/98, effective 5/18/98)

WAC 415-108-466   Do I receive reportable compensation for union leave((.))?   If ((a member)) you take((s)) an authorized leave of absence to serve as an elected official of a labor organization and ((the)) your employer pays ((the member)) you while you are on leave subject to reimbursement from the union, ((the person's)) your pay qualifies as reportable compensation provided that all the conditions of RCW 41.40.175 (Plan ((I)) 1) ((or)), RCW 41.40.710 (Plan ((II)) 2), or RCW 41.40.805 (Plan 3) as appropriate, are met.

[Statutory Authority: RCW 41.50.050. 98-09-059, § 415-108-466, filed 4/17/98, effective 5/18/98.]


AMENDATORY SECTION(Amending WSR 95-22-006, filed 10/18/95, effective 11/18/95)

WAC 415-108-480   Vehicles--Does the value of my use of an employer vehicle qualify as compensation earnable?   (((1) PERS Plan I members:

     (a) If you use an employer vehicle solely in connection with your employer's business, your use of the vehicle does not qualify as compensation earnable. Use of an employer-provided vehicle only qualifies as compensation earnable to the extent that you use it for personal, rather than business, purposes. Your use of an employer vehicle does not qualify as compensation earnable if:

     (i) You use the vehicle solely in connection with your employer's business; or

     (ii) Your employer has an established policy prohibiting you from using the vehicle for any purpose other than in connection with your employer's business.

     (b) The department presumes that any employer-provided vehicle is used solely in connection with your employer's business and does not qualify as compensation earnable.

     (c) A portion of your use of an employer-provided vehicle may qualify as compensation earnable. In order for any portion of your use of an employer vehicle to qualify as compensation earnable, your employer must either:

     (i) Report your personal use of the vehicle to the Internal Revenue Service (IRS) as income; or

     (ii) Maintain monthly records reflecting your personal use of the vehicle.

     (d) Your personal use of an employer vehicle qualifies as compensation earnable if your employer reports your use to the IRS as taxable income. Your employer may report your personal use of an employer vehicle to the Internal Revenue Service (IRS) as taxable income as provided under the Internal Revenue Code (I.R.C.). See I.R.C. Section 61 and Treas. Reg. Section 1.61-21. If so, the department will consider the amount reported to the IRS as compensation earnable.

     (e) Your personal use of an employer vehicle qualifies as compensation earnable to the extent your employer documents your personal use of the vehicle. If your employer does not report your use of an employer vehicle to the IRS as income, your use of the vehicle may qualify as compensation earnable if your employer maintains monthly contemporaneous records detailing your personal use of the vehicle. Your employer records must reflect all of the following:

     (i) Whether your employer authorized you to have the vehicle for personal use, including commuting;

     (ii) Whether you used the vehicle for commuting and, if so, the distance you normally commuted on a daily basis during the month;

     (iii) The dates, if any, on which you used the vehicle for other personal purposes, including the miles you drove the vehicle on each personal trip and your itinerary for each trip;

     (iv) The total number of miles you drove the vehicle during the month; and

     (v) The percentage of the total miles you drove the car during the month for personal use, including commuting.

     (f) Your employer must report as compensation earnable an amount based on your personal use of the vehicle. If your employer maintains records documenting your personal use of the vehicle as provided in (e) of this subsection, your employer must report to the department as monthly compensation earnable the lesser of the following amounts:
    
(i) Monthly Fair Market Lease Value of the Vehicle
x
Percentage of Personal Use of the Vehicle During the Month;
or
(ii) Miles of Personal Use
x
IRS Mileage Rate

     "IRS mileage rate" means the mileage rate adopted by the Internal Revenue Service for use by taxpayers in computing the value of the use of a vehicle.)) (1) PERS Plan 1 members:

     (a) Use of an employer vehicle for business purposes does not qualify as compensation earnable. If your employer's established policy prohibits the use of an employer vehicle for nonbusiness uses, all use of the vehicle will be deemed business use.

     (b) Use of an employer vehicle for nonbusiness purposes qualifies as compensation earnable if:

     (i) Your employer reports your personal use of the vehicle to the IRS as taxable income under IRC Section 61 and Treas. Reg. Section 1.61-21; or

     (ii) Your employer maintains monthly records of your personal use. These records must contain:

     (A) Your employer's authorization of your personal use;

     (B) The distance normally commuted each day during the month, if you use the vehicle to commute;

     (C) The dates, mileage, and itinerary of each personal trip other than a commute trip;

     (D) Your total mileage for the month; and

     (E) The ratio of personal mileage to total mileage, expressed as a percent.

     (c) The department presumes that your use of an employer vehicle is solely for business purposes. If you used an employer vehicle for personal use, your employer must report the value of this use as compensation earnable on a monthly basis. Monthly compensation earnable is the lesser of the following:

     (i) Fair Market Lease Value x Percentage of Personal Use

     (ii) Miles of Personal Use x IRS Mileage Rate.

     The IRS Mileage Rate is the mileage rate adopted by the Internal Revenue Service for use by taxpayers in computing the value of the use of a vehicle.

     (2) PERS Plan ((II)) 2 and 3 members. If you are a ((PERS Plan II)) member of PERS Plan 2 or 3, you are not entitled to count any of the value of an employer-provided vehicle as compensation earnable.

[Statutory Authority: RCW 41.50.050. 95-22-006, § 415-108-480, filed 10/18/95, effective 11/18/95. Statutory Authority: RCW 41.40.010(8) and 41.40.020. 87-17-061 (Order DRS 87-08), § 415-108-480, filed 8/19/87.]


AMENDATORY SECTION(Amending WSR 95-16-053, filed 7/25/95, effective 8/25/95)

WAC 415-108-679   Purpose and scope of eligibility rules.   WAC 415-108-680 through 415-108-728 codify the department's existing interpretation of statutes ((and existing administrative practice)) regarding eligibility for membership in ((PERS Plan I and Plan II. The department has applied and will apply these rules to determine eligibility for service occurring prior to effective dates of these sections)) all three PERS plans.

[Statutory Authority: RCW 41.50.050. 95-16-053, § 415-108-679, filed 7/25/95, effective 8/25/95.]

OTS-5230.4


AMENDATORY SECTION(Amending WSR 98-09-059, filed 4/17/98, effective 5/18/98)

WAC 415-108-491   Salary imputed to periods of unpaid leave.   In some circumstances specified in statute, a member may ((elect)) choose to establish service credit for periods of unpaid leave. The salary imputed to a member for purposes of calculating contributions owing for such periods of leave is not reportable compensation. Depending on the type of leave, the imputed compensation may or may not be included as average final compensation in calculating a member's retirement allowance.

     (1) Authorized unpaid leave. RCW 41.40.710 provides Plan ((II)) 2 members with an option to establish service credit for periods of unpaid leave. RCW 41.40.805 provides Plan 3 members with an option to establish service credit for periods of unpaid leave. RCW 41.40.038 provides members with an option to establish service credit for periods of disability covered by industrial insurance. Salary imputed to members in order to calculate contributions for such periods is not reportable compensation and can not be included as average final compensation in calculating a member's retirement allowance.

     (2) Military leave. For Plan 2 and Plan 3, salary imputed to a member for purposes of calculating contributions owing for periods of interrupted military service is not reportable compensation. Federal law requires that if a member ((elects)) chooses to purchase credit for such periods of military service, and that period falls in the member's average final compensation period, the member is entitled to have the imputed salary he or she would have earned during the period of absence used in the calculation of his or her average final compensation.

[Statutory Authority: RCW 41.50.050. 98-09-059, § 415-108-491, filed 4/17/98, effective 5/18/98.]


AMENDATORY SECTION(Amending WSR 94-12-014, filed 5/23/94, effective 6/23/94)