WSR 13-18-034 PERMANENT RULES DEPARTMENT OF RETIREMENT SYSTEMS [Filed August 28, 2013, 10:39 a.m., effective October 1, 2013] Effective Date of Rule: October 1, 2013.
Purpose: Legislation passed in 2012 (SB 6378) gradually lowers the long-term assumed rate of return for most of the pension systems over the next three biennia, which may result in more frequent updates to actuarial factors used in the calculation of retirement costs and benefits. Removing the factors from WAC, and establishing in rule a process for adopting and publishing the factors, will allow the department to maintain transparency and remain responsive to its customers' and stakeholders' interests while updating the factors as necessary.
Citation of Existing Rules Affected by this Order: Repealing WAC 415-02-390; and amending WAC 415-02-177, 415-02-300, 415-02-320, 415-02-340, 415-02-345, 415-02-360, 415-02-370, 415-02-380, 415-103-215, 415-103-225, 415-103-300, 415-104-108, 415-104-111, 415-104-202, 415-104-215, 415-104-480, 415-104-485, 415-106-080, 415-106-600, 415-108-326, 415-108-340, 415-108-436, 415-108-805, 415-110-340, 415-110-436, 415-110-610, 415-111-320, 415-112-040, 415-112-292, 415-112-504, 415-112-505, and 415-112-555.
Statutory Authority for Adoption: RCW 41.50.050(5).
Adopted under notice filed as WSR 13-15-171 on July 24, 2013.
Changes Other than Editing from Proposed to Adopted Version: The only change from the notice filed as WSR 13-15-171 is to revise the table of contents subheading in chapter 415-02 WAC (immediately preceding WAC 415-02-300) to reflect the changes in content.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 32, Repealed 1.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.
Date Adopted: August 28, 2013.
Marcie Frost
Director
AMENDATORY SECTION (Amending WSR 13-06-025, filed 2/27/13, effective 4/1/13)
WAC 415-02-177 May I purchase additional service credit?
(1) What is the option for purchasing additional service credit? The following statutes provide an option for eligible members to purchase additional service credit that provides a guaranteed, lifetime increase to their monthly retirement benefit: (a) RCW 41.26.199 for LEOFF Plan 1 members; (b) RCW 41.26.432 for LEOFF Plan 2 members; (c) RCW 41.40.034 for PERS Plan 1, 2, and 3 members; (d) RCW 41.37.265 for PSERS Plan 2 members; (e) RCW 41.35.183 for SERS Plan 2 and 3 members; (f) RCW 41.32.066 for TRS Plan 1, 2, and 3 members; and (g) RCW 43.43.233 for WSPRS Plan 1 and 2 members. (2) Am I eligible to purchase additional service credit? (a) You may purchase additional service credit if you are eligible to retire from one or more of the following plans and you elect a monthly benefit rather than a lump sum payment: (i) LEOFF Plan 1 or 2 under RCW 41.26.090 or 41.26.430; (ii) PERS Plan 1, 2, or 3 under RCW 41.40.180, 41.40.630, or 41.40.820; (iii) PSERS Plan 2 under RCW 41.37.210; (iv) SERS Plan 2 or 3 under RCW 41.35.420 or 41.35.680; (v) TRS Plan 1, 2, or 3 under RCW 41.32.480, 41.32.765, or 41.32.875; or (vi) WSPRS Plan 1 or 2 under RCW 43.43.250. (b) If you retire as a result of a disability, you may purchase additional service credit if you meet the requirements in (a) of this section. (3) How much additional service credit may I purchase? If you are eligible, you may purchase from one to sixty months of additional service credit in whole month increments. (4) May I use the additional purchased service credit to qualify for normal retirement or an early retirement? No. You may not use the purchased service credit to qualify for normal retirement or to qualify for an early retirement. (5) When must I apply to purchase additional service credit? You must submit your request to purchase additional service credit to the department at the same time you submit your application for retirement. (6) How much will my monthly retirement benefit increase if I purchase additional service credit? The increase in your monthly retirement benefit will be calculated using the benefit formula for your system and plan, with a reduction for early retirement, if applicable. Example 1 (PERS Plan 2): John is a member of PERS Plan 2. He applies for retirement, effective the first month after his 62nd birthday and chooses to purchase an additional sixty months (five years) of service credit. His average final compensation (AFC) is $4000 per month. ((If he purchases sixty months of additional service credit, his monthly retirement)) For illustration purposes in this example only, we will use .7240000 as the corresponding early retirement factor (ERF) for retiring three years early (actuarial factors change periodically). As a result, John's monthly benefit will increase by $289.60 per month, calculated as follows: ((Additional service credit: 60 months ÷ 12 = 5 years Early retirement factor (WAC 415-02-320(5)): .7240000))
Example 2 (TRS Plan 3): Jane is a member of TRS Plan 3. She applies for retirement, effective the first month after her 62nd birthday and chooses to purchase an additional sixty months (five years) of service credit. Her AFC is $4000 per month. ((If she purchases sixty months of additional service credit, her)) For illustration purposes in this example only, we will use .7240000 as the corresponding ERF for retiring three years early (actuarial factors change periodically). As a result, Jane's monthly retirement benefit will increase by $144.80 per month, calculated as follows: ((Additional service credit: 60 months ÷ 12 = 5 years Early retirement factor (WAC 415-02-320(5)): .7240000))
Example 3 (LEOFF Plan 2): Jim is a member of LEOFF Plan 2. He applies for retirement, effective the first month after his 53rd birthday and chooses to purchase an additional sixty months (five years) of service credit. His final average salary (FAS) is $4000 per month. ((If he purchases sixty months of additional service credit, his)) No ERF is needed for this calculation as Jim has already reached normal retirement age for LEOFF Plan 2. Jim's monthly retirement benefit will increase by $400 per month, calculated as follows: ((Additional service credit: 60 months ÷ 12 = 5 years))
(7) How is the cost of the additional purchased service credit calculated? The cost to purchase additional service credit is calculated by dividing the amount of the increase in subsection (6) of this section by the age-based annuity factor in effect at the time of retirement. (See WAC 415-02-340((.)) for more information.) Example. In subsection (6) of this section, Example 1, it was determined that John's retirement benefit would increase by $289.60 per month. ((The)) For illustration purposes in this example only, we will use .0065016 as the annuity factor for John's retirement date (actuarial factors change periodically). As a result, John's cost to purchase the five years of additional service credit would be $44,542.88, calculated as follows:
(8) How and when do I pay for the additional service credit? The department will generate a bill to you for the cost of the additional service credit. (a) Payment may be made with an eligible rollover, a direct rollover or a trustee-to-trustee transfer, if allowed by the transferring plan. Payment may also be made with after-tax dollars, such as money from a personal savings account. However, IRS regulations limit the amount of after-tax dollars you may use to purchase additional service credit. (b) Payment must be made in full within ninety days after the bill issue date. (9) If I choose a benefit option with a survivor feature, will my survivor beneficiary's monthly benefit reflect the additional purchased service credit? Yes. Depending upon the rules for your retirement system and plan and the benefit option you choose at retirement, your survivor beneficiary's monthly benefit will be a percentage of the gross monthly retirement benefit you were receiving at the time of your death. If you choose a benefit option with a survivor feature and your survivor beneficiary dies before you, your monthly retirement benefit will increase to the amount it would have been had you not selected a survivor option. (10) Will I receive a cost of living adjustment (COLA) on the portion of my benefit that is based on the additional purchased service credit? (a) For all systems and plans, except as noted in (b) of this subsection, your COLA will be based on your gross monthly retirement benefit, including the increase due to the purchased service credit. (b) If you retire from PERS Plan 1 or TRS Plan 1 and you do not elect the optional auto COLA, you will not receive a COLA on the additional purchased service credit amount. (11) If I purchase additional service credit and then return to work, how will my retirement benefit be affected? (((a) If you return to work with an employer that participates with the department: (i) Elect to return to membership - Your entire retirement benefit is suspended, including the portion of your retirement benefit attributable to service credit purchased under this section. (ii) Do not elect to return to membership - If your retirement benefit is suspended due to working over the hours allowed annually, the portion of your retirement benefit attributable to service credit purchased under this section will be suspended. (b) If you return to work with an employer that does not participate with the department, your retirement benefit and the portion of your retirement benefit attributable to service credit purchased under this section will not be suspended.)) Your entire retirement benefit, including the amount attributable to purchased service credit, is subject to the return to work provisions of your system and plan. The following rules describe the impact on your benefit if you return to work as a retiree of the referenced systems and plans:
(12) If I retire and purchase less than sixty months of additional service credit, may I purchase more at a later time? ((If you retire and purchase less than sixty months of additional service credit,)) No. You may not purchase additional months of service credit from the same plan unless you return to membership and ((reretire)) retire again from the same system and plan. You must meet the eligibility requirements provided in subsection (2) of this section at the time you ((reretire)) retire again. You may not purchase more than a total of sixty months of service credit regardless of how many times you ((reretire)) retire again from the same system and plan. (13) May I purchase service credit from more than one retirement plan? (a) If you are a dual member under chapter 415-113 WAC, Portability of public employment benefits, and you combine service credit to retire as a dual member, you may purchase up to sixty months of additional service credit from each of your dual member plans. (b) If you retire from more than one plan, but are not a dual member under chapter 415-113 WAC, you may purchase up to sixty months of additional service credit from each plan in which you meet the eligibility requirements in subsection (2) of this section. (14) How are the funds I paid to purchase the additional service credit treated upon my death (and the death of my survivor beneficiary, if applicable)? (a) Plans 1 and 2. The amount paid to purchase the additional service credit is credited to your individual account as part of your accumulated contributions. Distribution of accumulated contributions after your death (and the death of your survivor beneficiary, if any) is governed by the statutes and rules applicable to your plan. See: (i) WAC 415-108-326 for PERS Plan 1 and 2; (ii) WAC 415-112-504(9) for TRS Plan 1; (iii) WAC 415-112-505(7) for TRS Plan 2; (iv) WAC 415-110-610(7) for SERS Plan 2; (v) WAC 415-106-600(7) for PSERS Plan 2; (vi) WAC 415-103-215 for WSPRS Plan 1; (vii) WAC 415-103-225(7) for WSPRS Plan 2; (viii) WAC 415-104-202 for LEOFF Plan 1; or (ix) WAC 415-104-215(7) for LEOFF Plan 2. (b) Plan 3. The amount paid to purchase the additional service credit is credited to the Plan 3 trust fund and not to your member account. There are no circumstances under which the amount will be distributed upon your death.
ACTUARIAL ((TABLES, SCHEDULES, AND)) FACTORS AND SCHEDULES
AMENDATORY SECTION (Amending WSR 10-16-086, filed 7/30/10, effective 9/1/10)
WAC 415-02-300 How does the department adopt and use actuarial ((tables, schedules, and)) factors?
(1) The department uses actuarial ((tables, schedules, and)) factors for, but not limited to, benefit calculations, annuitizing benefits, and calculating cost to purchase service credit for members, retirees, and beneficiaries. (2) The department ((adopted tables, schedules, and)) adopts actuarial factors upon the office of the state actuary's (OSA) recommendation, following OSA's investigation into the mortality, service, compensation, and other experience of retirement plan members, retirees, and beneficiaries. (3) The ((tables, schedules, and)) actuarial factors may be amended from time to time, based upon subsequent actuarial investigations. (((4) The department uses the tables, schedules, and factors: (a) In effect at the time of the member's effective retirement date to calculate the member's retirement benefit. (b) In effect at the time of the annuitizing to calculate an annuitized benefit. (c) In effect at the time of purchase to determine a member's cost to purchase service credit.)) (a) Prior to any amendment, the department will post OSA's recommended changes on its web site. The process and timeline for public comment before adoption of the new factors will also be posted. (b) If the department adopts new factors, they will be available in the department's systems before the effective date, so that benefit estimates can be provided to assist members in retirement planning. (c) Actuarial factors displayed on the department's web site will be updated with new factors when they become effective.
AMENDATORY SECTION (Amending WSR 10-16-086, filed 7/30/10, effective 9/1/10)
WAC 415-02-320 Early retirement factors.
(1) What are early retirement factors? Early retirement factors (ERFs) are actuarial factors used by the department to reduce a monthly retirement benefit when that payment begins before the member has qualified for normal retirement based on age and service. This reduction offsets the cost to the plan of paying the monthly benefit for a longer time. (2) In what situations will the department use an ERF? (a) The department will use an ERF to reduce a monthly benefit in any of the following situations, subject to the law governing your plan, and subject to the exceptions in (b) of this subsection: (i) You choose to retire early. (ii) You retire due to a disability before you are eligible for normal retirement. (iii) You die before you are eligible for normal retirement, and your beneficiary is eligible for a monthly benefit. (b) An ERF is not used in the following circumstances, although another method may be used to reduce benefits as required by the laws governing each plan: (i) You meet your plan's requirements for "alternate early retirement"; (ii) You meet PSERS requirements for "early retirement"; (iii) You retire for service or due to a disability, from PERS Plan 1 or TRS Plan 1; (iv) You are a member of LEOFF Plan 1; (v) You retire due to a duty-related disability from LEOFF Plan 2; (vi) You retire due to a disability or die before retirement from WSPRS Plan 1; or (vii) You retire due to a disability from WSPRS Plan 2. (c) The following table shows the law governing plans that use an ERF:
(3) How does the department determine the number of years on which to base the ERF? The calculation varies among plans: (a) ERFs are based on the number of years between the age at which you retire, or die, and the age at which you would have qualified for normal retirement based on age and service. Example - Early retirement: Sandy, a PERS Plan 2 member, applies for retirement at age 56 years and one month with a total of 21.11 years of service. Her average final compensation (AFC) is $3,500.00. PERS Plan 2 provides for two percent (.02) of AFC per year of service. A PERS Plan 2 member must be age 65 to retire with an unreduced benefit (i.e., normal retirement), but is eligible to retire with an actuarially reduced benefit (i.e., early retirement) at age 55 with 20 years of service credit. The difference between Sandy's age now (56) and the age at which she would have qualified for normal retirement (age 65) is 8 years and 11 months. For illustration purposes in this example only, we will use 0.3987 as the corresponding ERF ((is 0.3987)) for retiring 8 years and 11 months early (actuarial factors change periodically). As a result, Sandy's monthly benefit will be $589.16. ((Therefore,)) The department will ((multiply Sandy's AFC of)) use the following formula to determine Sandy's monthly benefit: $3,500 (AFC) x .02 x 21.11 (service credit years) x 0.3987 (ERF). ((Sandy's monthly retirement benefit will be $589.16.)) (b) WSPRS Plan 2 only: The ERF used to calculate your survivor's monthly benefit if you die before retirement is based on the number of years between the age at which you die and age fifty-five (55) or when you could have attained twenty-five (25) years of service, whichever is less. See RCW 43.43.295. Example - Early retirement: The survivor benefit, in this example, will also have a reduction applied for 100% joint and survivor option, based on the difference between John's age and his survivor's age. John, a WSPRS Plan 2 member dies prior to retirement. John is age 40 and has 15 years of service at the time of his death. John's Average Final Salary (AFS) is $4,000. John's surviving spouse, Emily, is also age 40. Since John would have attained 25 years of service before he would have attained age 55, the ERF used to calculate ((his survivor's)) Emily's benefit will be based on the 10 years it would have taken ((him)) John to reach 25 years of service. For illustration purposes in this example only, we will use 0.403 as the corresponding ERF for retiring 10 years early ((retirement is 0.403.)), and 0.889 as the corresponding joint and survivor (J&S) factor ((that will also be applied to the benefit is 0.889. Therefore, the department will multiply John's AFS of)) (actuarial factors change periodically). As a result, Emily will receive a monthly benefit of $429.92. The department will use the following formula to determine Emily's monthly benefit: $4,000 (AFS) x .02 x 15 (service credit years) x 0.403 (ERF) x 0.889 (J&S). ((John's survivor will receive a monthly benefit of $429.92.)) (c) TRS Plan 1 only: The ERF used to calculate your survivor's monthly benefit if you die before retirement is based on the number of years between the age at which you die and the age at which you would have first become eligible to retire under RCW 41.32.480. See RCW 41.32.520. Example - Death before retirement: Robert, a 56 year-old TRS Plan 1 member, died ((April 1, 2006,)) with 23.17 years of service credit. His AFC is $3,171.74. TRS Plan 1 provides an unreduced benefit (i.e., normal retirement) at age 55 with 25 years of service credit. Robert's wife, Karen, is two years younger than Robert. Karen will receive an actuarially reduced benefit based on the date Robert would have first qualified for an unreduced benefit (i.e., normal retirement). If Robert had continued in service, he would have met eligibility requirements in one year and 10 months, when he earned 25 years of service credit. ((The)) For illustration purposes in this example only, we will use 0.8410 as the corresponding ERF for retiring one year and 10 months ((is 0.8410)) early, and 0.918 as the corresponding J&S Option 2 factor (actuarial factors change periodically). As a result, Karen's monthly benefit will be $1,134.73. ((Karen's monthly benefit will be further reduced by the Option 2 survivor factor, which is based on the age difference between her and Robert. Karen is age 58, two years older than Robert. The Option 2 survivor factor for a beneficiary two years older is 0.918 (see WAC 415-02-380(12)).)) The department will ((multiply)) use the following formula to determine Karen's monthly benefit: 23.17 (Robert's service credit years) x .02 x $3,171.74 (AFC) x 0.8410 (ERF) x 0.918 (the Option 2 factor). ((Karen's monthly benefit will be $1,134.73. (4) Table - This table contains the early retirement factors (ERFs) for members who retire from active service in PERS Plan 1, TRS Plan 1, and WSPRS Plan 2. The ERFs are effective September 1, 2010.
(5) Table - The following early retirement factors (ERFs) for PERS Plans 2 and 3, SERS Plans 2 and 3, and TRS Plans 2 and 3 are effective September 1, 2010.
(6) Table - The following table contains early retirement factors (ERFs) for members who do not retire from active service in PERS Plan 1, PSERS Plan 2, and WSPRS Plans 1 and 2. The ERFs are effective September 1, 2010.
(7) Table - This table contains the early retirement factors (ERFs) for members who retire from active service in LEOFF Plan 2. The ERFs are effective January 1, 2010.
AMENDATORY SECTION (Amending WSR 10-16-086, filed 7/30/10, effective 9/1/10)
WAC 415-02-340 Monthly benefit per $1.00 of accumulation for defined benefit plans.
(1) ((How does the department use the information in the table called)) What does the phrase "monthly benefit per $1.00 of accumulation for defined benefit plans" mean? ((The department uses this information)) It refers to an actuarially equivalent value that the department uses to: (a) Determine what a future lifetime monthly benefit is worth in present-day dollars; (b) Determine the equivalent value of a lump sum when compared with monthly payments; (c) Determine the cost of purchasing additional service credit as described in WAC 415-02-177(7); and (d) For TRS Plan 1 only: Determine the reduction in the monthly retirement benefit if some or all of the accumulated contributions in a member's individual account are withdrawn at retirement pursuant to RCW 41.32.498. (2) What ((type of information is in this table)) information is used to determine the "monthly benefit per $1.00 of accumulation for defined benefit plans" values? The ((information in this table is)) values, which change periodically, are based on the expected duration of lifetime payments for recipients over a range of ages. These values differ by system and plan((, and all reflect an assumed rate of return of 8.0%)). The younger a person is at retirement, the longer the anticipated lifetime of payments would be, and the greater the sum required to provide for these payments. The amount of monthly lifetime benefit that a present-day dollar buys increases as the remaining life expectancy of the recipient decreases. (a) Example: Celina is a 65-year-old PERS Plan 2 member who is eligible to receive $45.00 per month. She wants to know how much money she would receive if she accepted a lump sum payment instead. ((Celina looks at the row in the table for age 65 in the PERS Plan 2 column and learns)) For illustration purposes in this example only, we will assume that $.0069798 per month for life has a present day cash value of one dollar ($1.00) for ((this)) Celina's system, plan, and age class. Celina divides $45.00 by .0069798 and learns that her lump sum payment would be $6,447.18. (b) Example: Fred is a 58-year-old TRS Plan 1 member. The balance in Fred's account is $124,934.00. Upon retirement, Fred chooses to withdraw the $124,934.00 (as only members of TRS Plan 1 can do and still receive a monthly benefit). ((From the row in the table for age 58 in the TRS Plan 1 column, Fred learns)) For illustration purposes in this example only, we will assume that $.0077298 per month for life has a present day cash value of one dollar ($1.00) for ((this)) Fred's system, plan, and age class. Fred multiplies $124,934.00 by .0077298, and learns that his monthly retirement benefit will be reduced by $965.71 per month if he withdraws his account balance. (((3) Table - Monthly benefit per $1.00 of accumulation for defined benefit plans. The rates contained in this table are effective: (a) January 1, 2010, for LEOFF Plan 2. (b) September 1, 2010, for LEOFF Plan 1, PSERS Plan 2, PERS Plans 1, 2, and 3, SERS Plans 2 and 3, TRS Plans 1, 2, and 3, and WSPRS Plans 1 and 2.
AMENDATORY SECTION (Amending WSR 10-16-086, filed 7/30/10, effective 9/1/10)
WAC 415-02-345 TRS Plan 1 Option 1 benefit factors.
(((1))) What is a TRS Plan 1 Option 1 benefit factor? At the time of retirement, a TRS Plan 1 member may choose to receive an Option 1, standard benefit, which is a slightly reduced lifetime monthly benefit. This option allows the final unpaid monthly benefit and any remaining balance of contributions to be paid in a lump sum to the retiree's estate or named beneficiary at the time of the retiree's death. The reduction to the monthly benefit is based on an Option 1 factor and is applied against the annuity portion of the monthly benefit. The actuarial factor that is used is determined by the age of the member at the time of retirement (actuarial factors change periodically). For more information about the Option 1((,)) standard benefit, see RCW 41.32.530 (1)(a). (((2) Table - The following Option 1 benefit factors are effective September 1, 2010.
AMENDATORY SECTION (Amending WSR 10-16-086, filed 7/30/10, effective 9/1/10)
WAC 415-02-360 What is the optional cost-of-living adjustment (COLA) for PERS Plan 1 and TRS Plan 1?
(1) PERS Plan 1 and TRS Plan 1 members can choose to receive an initially reduced retirement benefit in order to receive an annual cost-of-living adjustment in the future. With this optional COLA, the member's monthly retirement benefit is actuarially reduced at the time of retirement. Thereafter, the monthly benefit of the member (and subsequently their beneficiary) is adjusted annually, based on changes in the consumer price index (CPI) ((for the Seattle-Tacoma-Bremerton, Washington area)), up to the statutory maximum. For more information, see: PERS Plan 1: RCW 41.40.188 (1)(c); WAC 415-108-326 TRS Plan 1: RCW 41.32.530 (1)(d); WAC 415-112-504 (2) Examples (a) Ernie is a member of TRS Plan 1. He retires at age 55 with 30 years of service and chooses the Single Life Option (no survivor beneficiary). His average final compensation (AFC) is $4,295.33 per month. (i) If he does not choose the optional COLA, his monthly benefit will be $2,577.20 (2% x 30 x $4,295.33). (ii) If he does choose the optional COLA, his initial monthly benefit will be reduced. For illustration purposes in this example only, we will use 0.7396 as the optional COLA factor for Ernie's age at retirement (actuarial factors change periodically). As a result, Ernie's initial monthly benefit will be reduced to $1,909.19((, based on the factor in the table in subsection (3) of this section)) (.7396 x $2,577.20). This monthly amount may increase each year with changes in the CPI. ((Regardless whether or not Ernie chooses the optional COLA, he will begin to receive the uniform COLA at age 66, consistent with all statutory requirements.)) (b) Tina is a member of PERS Plan 1. She retires with 30 years of service credit at age 52 and 8 months. Because she has 30 years of service, there is no reduction for an early retirement. Tina chooses the Single Life Option (no survivor beneficiary). Her average final compensation (AFC) is $3,825.00 per month. (i) If she does not choose the optional COLA, her monthly benefit will be $2,295.00 (2% x 30 x $3,825.00). (ii) If she does choose the optional COLA, her initial monthly benefit will be reduced. For illustration purposes in this example only, we will use 0.7375 as the optional COLA factor for Tina's age at retirement (actuarial factors change periodically). As a result, Tina's initial monthly benefit will be reduced to $1,692.56((, based on the factor in the table in subsection (3) of this section)) (.7375 x $2,295.00). This monthly amount may increase each year with changes in the CPI. ((Regardless whether or not Tina chooses the optional COLA, she will begin to receive the uniform COLA at age 66, consistent with all statutory requirements. (3) Table. Use these factors to convert monthly benefit payments (any retirement option) without the optional COLA to the same retirement option with the optional COLA. The following factors are effective September 1, 2010. Plan 1 Optional COLA Factors
AMENDATORY SECTION (Amending WSR 06-18-009, filed 8/24/06, effective 9/24/06)
WAC 415-02-370 Factors for establishing or restoring service credit.
RCW 41.50.165(2) and chapter 415-10 WAC allow you to establish or restore service credit by paying the actuarial value of the resulting increase in your monthly retirement allowance. This section ((provides the actuarial factor tables that)) describes how the department uses actuarial factors to calculate the lump sum costs. ((For more information on the factors and their use,)) See also chapter 415-10 WAC. (1) What are the factors for calculating the lump sum costs of establishing or restoring service credit? There are three actuarial factors that may be used to calculate the cost of establishing or restoring service credit: (a) ((Factor 1)) The first factor used represents the pension accrual rate, the annuity price (value of future benefit payments), increases in average final compensation, future salary increases and interest discount between the age at which you establish or restore the service credit and the age at which you would be eligible to retire with ((an unreduced)) a normal retirement allowance. (b) ((Factor 2)) The second factor used represents the cost of lowering the normal retirement age by one year. (c) ((Factor 3)) The third factor used represents future salary increases and interest discount between the age at which you establish or restore the service credit and the age at which you would be eligible to retire with ((an unreduced)) a normal retirement allowance. (2) At which age do I qualify for ((an unreduced)) a normal retirement allowance (((URA)))? Age requirements differ among plans. For specific information see the RCW pertaining to your plan:
(((3) Table - Factor 1. Factor 1 is used in the calculation of the cost to establish or restore service credit for a member in any PERS, PSERS, TRS, SERS, LEOFF, or WSPRS plan. FACTOR 1
(4) Tables - Factor 2 and Factor 3. Factors 2 and 3 will be used in the calculation of the cost to establish or restore service credit only for a member in PERS Plan 1, TRS Plan 1, WSPRS Plan 1 or 2, and only if the service credit would allow the member to retire earlier. FACTOR 2
FACTOR 3
AMENDATORY SECTION (Amending WSR 10-16-086, filed 7/30/10, effective 9/1/10)
WAC 415-02-380 How will my retirement benefit be affected if I choose a benefit option with a survivor feature?
This section applies to LEOFF Plans 1 and 2; PERS Plans 1, 2, and 3; PSERS; SERS Plans 2 and 3; TRS Plans 1, 2, and 3; and WSPRS Plans 1 and 2. (1) What is a survivor feature? ((Some)) A survivor feature is a benefit option((s include a survivor feature, which)) that provides a lifetime monthly benefit for your survivor beneficiary after your death. (2) What is a (("))survivor beneficiary(("))? A survivor beneficiary is the person you name at the time of retirement to receive a lifetime monthly benefit after your death ((is referred to as your "survivor beneficiary)).((")) (3) What benefit options include a survivor feature? Benefit options are described in detail for each system and plan in the following state law and regulations:
(4) How will selecting a benefit option with a survivor feature affect my monthly retirement benefit? ((Yes.)) If you select a benefit option that has a survivor feature, your monthly retirement benefit will be actuarially reduced to offset the cost of the survivor feature. (5) Does my survivor beneficiary's age affect how much my monthly retirement benefit will be reduced? Yes. Your survivor beneficiary's age is used in determining the amount of your monthly retirement benefit and the benefit of your survivor beneficiary. The younger the survivor beneficiary, the longer he or she is expected to receive a benefit. Your monthly benefit will be reduced accordingly. (a) Example: Kendra, a PERS Plan 2 member, chooses Option 3 (joint and 50 percent survivorship) at retirement. Her monthly Option 1 benefit amount before adding a survivor option feature is $2,000.00. She names her nephew, Steve, as her survivor beneficiary. This means, if Kendra dies before Steve, Steve will receive a monthly benefit equal to half the amount Kendra was receiving. Steve is 30 years younger than Kendra. The department will calculate the adjustment to Kendra's monthly retirement benefit by using the survivor option factor ((table ("member older") in subsection (6) of this section.)) associated with a 30-year age difference (((member's age minus beneficiary's age), the value)) in which the member is older than the beneficiary. For illustration purposes in this example only, we will use 0.776 as the corresponding ((to PERS Plan 2 and Option 3 is 0.776. This value, 0.776, is multiplied against the amount Kendra would have received under Option 1 (no survivor feature). Kendra's monthly retirement benefit will be reduced to about 77% of her Option 1 level)) Option 3 benefit factor (actuarial factors change periodically). As a result, Kendra's Option 3 monthly benefit amount will be $1,552.00 ($2,000.00 x 0.776). (b) Example: Mark, a LEOFF Plan 2 member, chooses Option 2 (joint and 100 percent survivorship) at retirement. His monthly Option 1 benefit amount before adding a survivor option feature is $2,000.00. He names his wife, Susan, as his survivor beneficiary. This means, if Mark dies before Susan, Susan will receive a monthly benefit equal to the amount Mark was receiving. Mark is five years younger than Susan. The department will calculate the adjustment to Mark's monthly retirement benefit by using the survivor option factor ((table ("member younger") in subsection (11) of this section.)) that corresponds with a 5-year age difference (((member's age minus beneficiary's age), the value corresponding to LEOFF Plan 2 and Option 2 is 0.898. This value, 0.898, will be multiplied against the amount Mark would have received under Option 1 (no survivor feature). Mark's monthly retirement benefit will be reduced to about 90% of his Option 1 level)) in which the member is younger than the beneficiary. For illustration purposes in this example only, we will use 0.898 as the corresponding Option 2 benefit factor (actuarial factors change periodically). As a result, Mark's Option 2 monthly benefit amount will be $1,796.00 ($2,000.00 x 0.898). (((6) Table - Member older (PERS and SERS). The following factors are effective September 1, 2010. Survivor option factor table: Member older than beneficiary Age difference: Member's age minus beneficiary's age
(7) Table - Member younger (PERS and SERS). The following factors are effective September 1, 2010. Survivor option factor table: Member younger than beneficiary Age difference: Member's age minus beneficiary's age
(8) Table - Member older (PSERS). The following factors are effective September 1, 2010. Survivor option factor table: Member older than beneficiary Age difference: Member's age minus beneficiary's age
(9) Table - Member younger (PSERS). The following factors are effective September 1, 2010. Survivor option factor table: Member younger than beneficiary Age difference: Member's age minus beneficiary's age
(10) Table - Member older (LEOFF Plan 2 and WSPRS Plans 1 and 2). The following factors for LEOFF Plan 2 are effective January 1, 2010; WSPRS Plans 1 and 2 are effective September 1, 2010. Survivor option factor table: Member older than beneficiary Age difference: Member's age minus beneficiary's age
(11) Table - Member younger (LEOFF Plan 2 and WSPRS Plans 1 and 2). The following factors for LEOFF Plan 2 are effective January 1, 2010; WSPRS Plans 1 and 2 are effective September 1, 2010. Survivor option factor table: Member younger than beneficiary Age difference: Member's age minus beneficiary's age
(12) Table - Member younger (TRS). The following factors are effective September 1, 2010. Survivor option factor table: Member younger than beneficiary Age difference: Member's age minus beneficiary's age
(13) Table - Member older (TRS). The following factors are effective September 1, 2010. Survivor option factor table: Member older than beneficiary Age difference: Member's age minus beneficiary's age
(14) Table - Member younger (LEOFF Plan 1). The following factors are effective September 1, 2010. Survivor option factor table: Member younger than beneficiary Age difference: Member's age minus beneficiary's age
(15) Table - Member older (LEOFF Plan 1). The following factors are effective September 1, 2010. Survivor option factor table: Member older than beneficiary Age difference: Member's age minus beneficiary's age
REPEALER
The following section of the Washington Administrative Code is repealed:
AMENDATORY SECTION (Amending WSR 10-16-086, filed 7/30/10, effective 9/1/10)
WAC 415-103-215 What are the WSPRS Plan 1 retirement benefit options?
This section only applies to members commissioned before January 1, 2003. (1) When retiring for service, a married member can choose either Option A (historic retirement option) under RCW 43.43.260 and 43.43.270 or Option B under RCW 43.43.278. Both options include a survivor feature that entitles the eligible surviving spouse and any eligible children to receive a monthly benefit after the retiree dies. (2) Option A (historic retirement option and survivor benefit). The department pays the retiree a monthly retirement benefit in accordance with RCW 43.43.260 (Benefits). The department pays survivor benefits in accordance with RCW 43.43.270 (Retirement allowances). (a) Surviving spouse. When the retiree dies, the department pays the retiree's surviving spouse a monthly retirement benefit equal to the gross monthly benefit then payable to the retiree, or a benefit equal to fifty percent of the average final salary (AFS) used to determine the retiree's benefit, whichever is less. (b) Surviving children when there is a surviving spouse. If the retiree has a surviving spouse and surviving unmarried children under the age of eighteen years, each child shall be entitled to a benefit equal to five percent of the retiree's average final salary (AFS) at retirement. The combined benefits to the surviving spouse and all children cannot exceed sixty percent of the retiree's AFS. (3) Option B (actuarially equivalent retirement option and survivor benefit). The department pays the retiree a monthly retirement benefit that is actuarially reduced from the benefit calculated under Option A. The department pays survivor benefits in accordance with RCW 43.43.278 using an actuarial ((factors in)) reduction. See WAC 415-02-380 (((10) and (11))) for more information on how your benefit is affected by choosing an optional survivor feature. (a) Surviving spouse. When the retiree dies, the department pays the retiree's surviving spouse a monthly retirement benefit equal to the gross monthly benefit then payable to the retiree. (b) Surviving children when there is a surviving spouse. If the retiree has a surviving spouse and surviving unmarried children under the age of eighteen years, each surviving unmarried child under the age of eighteen years shall be entitled to a benefit equal to five percent of the retiree's average final salary (AFS) at retirement. (4) Benefits included in Option A and Option B. (a) Cost-of-living adjustment. The retiree's annual adjustment every July is based upon the provisions in RCW 43.43.260(5). The annual adjustment applies to the eligible surviving spouse and any eligible children, who receive a monthly benefit after the retiree dies. (b) Surviving spouse eligibility. To be eligible for a benefit, the surviving spouse of a retiree must either: (i) Have been married to the retiree prior to his or her retirement and continuously thereafter until the retiree's death; or (ii) Have been married to the retiree for at least two years prior to the retiree's death. (c) Remarriage of surviving spouse. If a surviving spouse who is receiving benefits under this subsection marries another member of WSPRS and that retiree dies before the spouse, the spouse will receive only the higher of the two survivors' benefits for which he or she qualifies. The surviving spouse cannot receive more than one survivor benefit at a time under this subsection. (d) Surviving children when there is no surviving spouse. If there is no surviving spouse or the surviving spouse dies, the unmarried child or children under the age of eighteen years shall be entitled to a benefit equal to thirty percent of the retiree's AFS for one child and an additional ten percent of AFS for each additional child. The combined benefits to the surviving children cannot exceed sixty percent of the retiree's AFS. Benefit payments under this subsection will be divided equally among the children. (e) End of benefits. All benefits end when the surviving spouse dies or the youngest unmarried child reaches age eighteen, whichever occurs last. (f) Distribution of remaining contributions. Any remaining balance of the retiree's accumulated contributions will be paid to: (i) The person(s), trust, organization, or retiree's estate specified by the retiree on the appropriate department designated form, duly executed and properly on file with the department on or before the retiree's death; or (ii) To the retiree's legal representative, if no person or entity designated in (f)(i) of this subsection is living or in existence at the time of the retiree's death. (5) Pop-up provision. (a) This subsection only applies to members retiring on or after July 1, 2000, who select Option B. (b) If the retiree and spouse divorce, or if the spouse dies before the retiree, the retiree's monthly retirement benefit increases, effective the first day of the following month, to: (i) The amount that the retiree would have received had the retiree chosen Option A at retirement; plus (ii) Any cost of living adjustments (COLA) the retiree received prior to the divorce or the spouse's death. (c) Pop-up recalculation example: Option B: ((Bob retires on)) When Bob retired in September ((1,)) 2010((.)), his Option A monthly benefit ((is)) was $3,000. He ((selects)) selected Option B so that his spouse, Linda, ((will)) would receive his monthly benefit and COLA after he dies. Bob is 5 years younger than Linda. For illustration purposes in this example, 0.967 is being used as the Option B actuarial reduction factor (actuarial factors change periodically). As a result, the department ((will calculate the adjustment to Bob's monthly retirement)) calculated Bob's Option B benefit amount by ((using the survivor option factor found in WAC 415-02-380(11). With a -5 year age difference, the value corresponding to WSP Plan 1 Option B is 0.967. This value, 0.967, will be multiplied against the $3,000 Option A benefit amount)) multiplying $3,000 (Option A) by 0.967. Bob's Option B monthly benefit amount ((will be)) at retirement was $2,901. Bob ((receives)) received his first COLA on July 1, 2012, in the amount of $87.03. Bob's monthly benefit amount with the COLA ((is)) was $2,988.03. Linda ((dies)) died in September 2012. Under the "pop-up" provision, Bob's monthly benefit increased in October 2012 to a total of $3,087.03. His new benefit amount ((includes)) included the $3,000 he would have received had he originally chosen Option A, plus the COLA he received in 2012 ($87.03). (d) If a retiree whose benefit increases under this subsection dies and there is no eligible child, all benefit payments end. Any remaining balance of the retiree's accumulated contributions will be paid to: (i) The person(s), trust, organization, or retiree's estate specified by the retiree on the appropriate department designated form, duly executed and properly on file with the department on or before the retiree's death; or (ii) To the retiree's legal representative, if no person or entity designated in (d)(i) of this subsection is living or in existence at the time of the retiree's death. (6) ((For more information)) See chapter 415-02 WAC starting with WAC 415-02-300 for ((the tables,)) information on how the department uses factors and schedules((, and factors the department uses for calculating)) to calculate retirement benefits. (7) Terms used in this section: "Pop-up" - See WAC 415-02-030.
AMENDATORY SECTION (Amending WSR 05-23-062, filed 11/14/05, effective 12/15/05)
WAC 415-103-225 What are my WSPRS Plan 2 retirement benefit options?
This section applies to WSPRS Plan 2 members. Upon retirement for service under RCW 43.43.250, you must choose to have your monthly retirement allowance paid to you by one of the options described in this section. (1) Which option will pay my beneficiary a monthly allowance after my death? Options described in subsection (2)(b) through (d) of this section include a survivor feature. The person you name at the time of retirement to receive a monthly allowance after your death is referred to as your "survivor beneficiary." Upon your death your survivor beneficiary will be entitled to receive a monthly allowance for the duration of his or her life. Your monthly retirement allowance will be actuarially reduced to offset the cost of the survivor feature. ((The factors used to determine the amount of the reduction are in)) See WAC 415-02-380 for more information on how your monthly allowance is affected by choosing a survivor feature. (2) What are my benefit options? (a) Option one: Standard allowance (no survivor option). The department will pay you a monthly retirement allowance throughout your life. Your monthly allowance will cease upon your death. (b) Option two: Joint and whole allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to the gross monthly retirement allowance you were receiving. (c) Option three: Joint and one-half allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to one-half of the gross monthly retirement allowance you were receiving. (d) Option four: Joint and two-thirds allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to two-thirds (66.667 percent) of the gross monthly retirement allowance you were receiving. (3) Do I need my spouse's consent on the option I choose? If you are married, you must submit your spouse's notarized signature indicating consent to the retirement option you select. If you do not provide spousal consent, the department will pay you a monthly retirement allowance based on option three (joint and one-half allowance) and record your spouse as the survivor beneficiary as required by RCW 43.43.271(2). If your survivor beneficiary has been designated by a dissolution order according to subsection (4) of this section, which was filed with the department at least thirty days before your retirement date, spousal consent is not required. (4) Can a dissolution order require that a former spouse be designated as a survivor beneficiary? Yes. A dissolution order may require that a former spouse be designated as a survivor beneficiary. The department is required to pay survivor benefits to a former spouse pursuant to a dissolution order that complies with RCW 41.50.790. (5) What happens if I choose a benefit option with a survivor feature and my survivor beneficiary dies before I do? Your monthly retirement allowance will increase, provided you submit proof of your survivor beneficiary's death to the department. The increase will begin accruing the first day of the month following the death. Your increased monthly allowance will be: (a) The amount you would have received had you chosen the standard allowance option at the time of retirement; plus (b) Any cost-of-living adjustments (COLAs) you received prior to your survivor beneficiary's death, based on your original option selection. Example: John ((retires)) retired from WSPRS in 2008. John ((chooses)) chose a benefit option with a survivor feature and ((names)) named Beatrice, his daughter, as his survivor beneficiary. As a result, John's monthly allowance ((is)) was reduced from $2,000 (standard allowance) to $1,750. Beatrice ((dies)) died in 2013. John's monthly allowance will increase to $2,191.05, which equals the amount he would have received had he chosen the standard allowance option, plus the COLAs he has received (based on his prior monthly allowance).
(6) May I change my benefit option after retirement? Your choice of a benefit option is irrevocable with the following three exceptions: (a) Return to membership. If you retire and then return to membership, you may choose a different retirement option upon your subsequent retirement. (b) Postretirement marriage option. If you select the standard allowance option at the time of retirement and marry after retirement, you may select a benefit option with a survivor feature and name your current spouse as survivor, provided that: (i) Your benefit is not subject to a property division obligation pursuant to a dissolution order. See WAC 415-02-500; (ii) The selection is made during a one-year window, on or after the date of the first anniversary and before the second anniversary of your postretirement marriage; (iii) You provide a copy of your certified marriage certificate to the department; and (iv) You provide proof of your current spouse's birth date((; and (v) You exercise this option one time only)). (c) Removal of a nonspouse survivor option. If you select a benefit option with a survivor feature and name a nonspouse as survivor beneficiary at the time of retirement, you may remove that survivor beneficiary designation and have your benefit adjusted to a standard allowance. You may exercise this option one time only. (7) Who will receive the balance of my accumulated contributions, if any, after my death? (a) If you do not have a survivor beneficiary at the time of your death, and you die before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid: (i) To the person or entity (i.e., trust, organization, or estate) you have nominated by written designation, executed and filed with the department. (ii) If you have not designated a beneficiary, or if your designated beneficiary is no longer living or in existence, then to your surviving spouse. (iii) If not paid according to (a)(i) or (ii) of this subsection, then to your estate. (b) If you have a survivor beneficiary at the time of your death, and your survivor beneficiary dies before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid: (i) To the person or entity (i.e., trust, organization, or estate) your survivor beneficiary has nominated by written designation, executed and filed with the department. (ii) If your survivor beneficiary has not designated a beneficiary, or if the designated beneficiary is no longer living or in existence, then to your survivor beneficiary's spouse. (iii) If not paid according to (b)(i) or (ii) of this subsection, then to your survivor beneficiary's estate. (8) For more information, see RCW 43.43.271.
AMENDATORY SECTION (Amending WSR 02-18-048, filed 8/28/02, effective 9/1/02)
WAC 415-103-300 Actuarial ((tables, schedules, and)) factors and schedules.
See chapter 415-02 WAC starting with WAC 415-02-300 for ((the tables,)) information on how the department uses factors and schedules((, and factors the department uses for calculating)) to calculate optional retirement allowances of members of the Washington state patrol retirement system plan 2.
AMENDATORY SECTION (Amending WSR 02-18-048, filed 8/28/02, effective 9/1/02)
WAC 415-104-108 Actuarial ((tables, schedules, and)) factors and schedules.
See chapter 415-02 WAC starting with WAC 415-02-300 for ((the tables, schedules, and factors)) information on how the department uses ((for calculating)) actuarial factors and schedules to calculate optional retirement allowances of members of the Washington state law enforcement officers' and firefighters' retirement system.
AMENDATORY SECTION (Amending WSR 08-23-071, filed 11/18/08, effective 12/19/08)
WAC 415-104-111 How is my LEOFF Plan 2 retirement allowance affected if I return to work after retirement?
This rule applies to you if you are a LEOFF 2 retiree who returns to work in an eligible LEOFF, public employees' retirement system (PERS), public safety employees' retirement system (PSERS), school employees' retirement system (SERS), or teachers' retirement system (TRS) position. (1) If you return to employment in a LEOFF eligible position, you must reenter membership and your retirement allowance will stop. When you separate from service, the department will calculate your retirement allowance according to this subsection. (a) If you previously retired before age fifty-three, the department will: (i) Calculate your retirement allowance pursuant to RCW 41.26.420 using: (A) Your total years of career service, including service earned prior to your initial retirement and service earned after reentering membership; and (B) Any increase in your final average salary resulting from your reentry into membership; and (ii) Actuarially reduce your retirement allowance: (A) Based on the present value of the retirement allowance payments you received during your initial retirement; (B) To reflect the difference in the number of years between your current age and the attainment of age fifty-three, if you are not yet fifty-three; and (C) To offset the cost of your benefit option if it includes a survivor feature. See WAC 415-104-215. (b) If you previously retired at or after age fifty-three, the department will: (i) Calculate your retirement allowance pursuant to RCW 41.26.420 using: (A) Your total years of career service, including service earned prior to your initial retirement and service earned after reentering membership; and (B) Any increase in your final average salary resulting from your reentry into membership; and (ii) Actuarially reduce your retirement allowance to offset the cost of your benefit option if it includes a survivor feature. See WAC 415-104-215. (c) Under no circumstances will you receive a retirement allowance creditable to a month during which you earned service credit. (2) If you enter employment in a PERS, PSERS, SERS, or TRS eligible position, you have two options: (a) You may decline membership in the PERS, PSERS, SERS, or TRS retirement system. Under this option, you will continue to receive your monthly LEOFF Plan 2 retirement allowance; or (b) You may choose to become a member of the PERS, PSERS, SERS, or TRS retirement system. Under this option, your LEOFF Plan 2 retirement allowance will be suspended while you earn a retirement benefit in the other system. When you terminate employment in the PERS, PSERS, SERS, or TRS eligible position, you will resume receiving your LEOFF Plan 2 retirement allowance, along with a retroactive payment of your LEOFF Plan 2 retirement allowance for the time you were employed. (i) Your ongoing LEOFF Plan 2 retirement allowance will include any cost of living adjustments (COLAs) that you would have received if your LEOFF allowance had not been suspended during the period of non-LEOFF employment. (ii) Your retroactive payment will equal the sum of your suspended LEOFF Plan 2 retirement allowances, including COLAs, during the period of non-LEOFF employment. You may choose to receive your retroactive payment in either of the following forms: (A) A lump sum; or (B) An increase in your ongoing LEOFF Plan 2 retirement allowance on an actuarial basis. The amount of the increase is calculated by taking the lump sum amount and multiplying it by an actuarial factor that is determined by your age at the time your retirement allowance is resumed. See ((the table in)) WAC 415-02-340 for ((the)) more information on how the department uses actuarial factors to determine the equivalent value of a lump sum amount when compared with monthly payments.
AMENDATORY SECTION (Amending WSR 05-22-110, filed 11/2/05, effective 12/3/05)
WAC 415-104-202 Survivor benefit options—LEOFF Plan 1.
(1) To whom does this section apply? This section applies to you if you are a retiree of LEOFF Plan 1. (2) What are flexible survivor benefit options? RCW 41.26.164 allows a retiree to provide a survivor option for a spouse who is not eligible for survivor benefits under RCW 41.26.160 or 41.26.161. The survivor option will provide a lifetime benefit for the spouse after the retiree's death. (3) How will my monthly retirement allowance be affected by selecting a flexible survivor option? Your monthly retirement allowance will be actuarially reduced beginning the first month following the month in which the department receives the completed form. (4) What are the flexible survivor option choices? (a) Joint and whole allowance option. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your surviving spouse a monthly allowance equal to the gross monthly retirement allowance you were receiving. (b) Joint and one-half allowance option. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your surviving spouse a monthly allowance equal to one-half of the gross monthly retirement allowance you were receiving. (c) Joint and two-thirds allowance option. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your surviving spouse a monthly allowance equal to two-thirds (66.667%) of the gross monthly retirement allowance you were receiving. (5) Do I qualify to add a flexible survivor option? You may select a flexible survivor option if: (a) Your current spouse is not eligible for survivor benefits under RCW 41.26.160 or 41.26.161; (b) Some portion of your monthly retirement allowance is payable to you, after any reduction pursuant to a property division obligation under RCW 41.50.670; (c) You have not previously selected a flexible survivor option; and (d) You meet the deadline and application requirements in subsection (6) of this section. (6) How do I add a flexible survivor option? You may select a flexible survivor option and name your current spouse as your survivor beneficiary, provided that: (a) The selection is made: (i) During a one-year window, on or after the date of the first anniversary and before the second anniversary of the marriage; or (ii) No later than June 30, 2006, if you cannot comply with (a)(i) of this subsection because you were married prior to July 1, 2005; (b) You provide a copy of your certified marriage certificate to the department; (c) You provide proof, satisfactory to the department, of your current spouse's birth date; and (d) You file the properly completed forms with the department in a timely manner. (7) May I remove the flexible survivor option in the future? Your choice of a flexible survivor option is irrevocable with the following exceptions: (a) Your spouse dies before you; or (b) You and your spouse divorce. See subsection (8) of this section. (8) What happens if my spouse dies before me, or if we divorce? If your spouse dies before you, or if you divorce, your monthly retirement allowance will increase, effective the first day of the following month. Your increased monthly allowance will be the amount you would have received had you not chosen a flexible survivor option plus any cost-of-living adjustments (COLA) you received prior to your spouse's death. (9) What happens to my eligible surviving children's share if I select a flexible survivor option? There is no impact to the benefit provided under RCW 41.26.160 or 41.26.161 to surviving children if you select a flexible survivor option. (10) Actuarial information. See chapter 415-02 WAC starting with WAC 415-02-300 for ((the tables, schedules, and)) information on how the department uses actuarial factors ((the department uses for calculating)) and schedules to calculate retirement allowances. Terms used in this section: (a) Child or children - RCW 41.26.030(7). (b) Eligible surviving child - RCW 41.26.160 and 41.26.161. (c) Eligible surviving spouse - RCW 41.26.161 and 41.26.162. (d) Surviving spouse - RCW 41.26.030(6).
AMENDATORY SECTION (Amending WSR 05-23-062, filed 11/14/05, effective 12/15/05)
WAC 415-104-215 What are my retirement benefit options—LEOFF Plan 2?
If you retire for service under RCW 41.26.430 or nonduty disability under RCW 41.26.470, or if you choose to receive a monthly allowance for duty disability under RCW 41.26.470, you must choose to have your monthly retirement allowance paid to you by one of the options described in this section. (1) Which option will pay my beneficiary a monthly allowance after my death? Options described in subsection (2)(b) through (d) of this section include a survivor feature. The person you name at the time of retirement to receive a monthly allowance after your death is referred to as your "survivor beneficiary." Upon your death your survivor beneficiary will be entitled to receive a monthly allowance for the duration of his or her life. Your monthly retirement allowance will be actuarially reduced to offset the cost of the survivor feature. ((The factors used to determine the amount of the reduction are in)) See WAC 415-02-380 for more information on how your monthly allowance is affected by choosing a survivor feature. (2) What are my benefit options? (a) Option one: Standard allowance (no survivor feature). The department will pay you a monthly retirement allowance throughout your lifetime. Your monthly allowance will cease upon your death. (b) Option two: Joint and whole allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to the gross monthly retirement allowance you were receiving. (c) Option three: Joint and one-half allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to one-half of the gross monthly retirement allowance you were receiving. (d) Option four: Joint and two-thirds allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to two-thirds (66.667%) of the gross monthly retirement allowance you were receiving. (3) Do I need my spouse's consent on the option I choose? If you are married, you must provide your spouse's notarized signature indicating consent to the retirement option you select. If you do not provide spousal consent, the department will pay you a monthly retirement allowance based on option three (joint and one-half allowance) and record your spouse as the survivor beneficiary as required by RCW 41.26.460(2). If your survivor beneficiary has been designated by a dissolution order according to subsection (4) of this section, which was filed with the department at least thirty days before your retirement date, spousal consent is not required. (4) Can a dissolution order require that a former spouse be designated as a survivor beneficiary? Yes. A dissolution order may require that a former spouse be designated as a survivor beneficiary. The department is required to pay survivor benefits to a former spouse pursuant to a dissolution order that complies with RCW 41.50.790. (5) What happens if I choose a benefit option with a survivor feature and my survivor beneficiary dies before I do? Your monthly retirement allowance will increase, provided you submit proof of your survivor beneficiary's death to the department. The increase will begin accruing the first day of the month following the death. (a) Members who retire on or after January 1, 1996. Your increased monthly allowance will be: (i) The amount you would have received had you chosen the standard allowance option at the time of retirement; plus (ii) Any cost-of-living adjustments (COLAs) you received prior to your survivor beneficiary's death based on your original option selection. Example: Agnes retires in 1996. She chooses a benefit option with a survivor feature and names Beatrice, her daughter, as her survivor beneficiary. As a result, Agnes's monthly allowance is reduced from $2,000 (standard allowance) to $1,750. Beatrice dies in January 2001. Agnes's monthly allowance will increase to $2,191.05, which equals the amount she would have received had she chosen the standard allowance option, plus the COLAs she has received (based on her prior monthly allowance).
(b) Members who retired before January 1, 1996. Your monthly retirement allowance will be adjusted according to the provisions of RCW 41.26.460(3). (6) May I change my benefit option after retirement? Your choice of a benefit option is irrevocable with the following three exceptions: (a) Return to membership. If you retire and then return to membership, you may choose a different retirement option upon your subsequent retirement. (b) Postretirement marriage option. If you select the standard allowance option at the time of retirement and marry after retirement, you may select a benefit option with a survivor feature and name your current spouse as survivor beneficiary, provided that: (i) Your benefit is not subject to a property division obligation pursuant to a dissolution order. See WAC 415-02-500; (ii) The selection is made during a one-year window, on or after the date of the first anniversary and before the second anniversary of your postretirement marriage; (iii) You provide a copy of your certified marriage certificate to the department; and (iv) You provide proof of your current spouse's birth date((; and (v) You exercise this option one time only)). (c) Removal of a nonspouse survivor option. If you select a benefit option with a survivor feature and name a nonspouse as survivor beneficiary at the time of retirement, you may remove that survivor beneficiary designation and have your benefit adjusted to a standard allowance. You may exercise this option one time only. (7) Who will receive the balance of my accumulated contributions, if any, after my death? (a) If you do not have a survivor beneficiary at the time of your death, and you die before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid: (i) To the person or entity (i.e., trust, organization, or estate) you have nominated by written designation, executed and filed with the department. (ii) If you have not designated a beneficiary, or if the designated beneficiary is no longer living or in existence, then to your surviving spouse. (iii) If not paid according to (a)(i) or (ii) of this subsection, then to your estate. (b) If you have a survivor beneficiary at the time of your death, and your survivor beneficiary dies before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid: (i) To the person or entity (i.e., trust, organization, or estate) your survivor beneficiary has nominated by written designation, executed and filed with the department. (ii) If your survivor beneficiary has not designated a beneficiary, or if the designated beneficiary is no longer living or in existence, then to your survivor beneficiary's spouse. (iii) If not paid according to (b)(i) or (ii) of this subsection, then to your survivor beneficiary's estate. (8) For more information, see RCW 41.26.460.
AMENDATORY SECTION (Amending WSR 06-18-007, filed 8/24/06, effective 9/24/06)
WAC 415-104-480 LEOFF Plan 2 duty disability benefits.
This section applies to you if you are a LEOFF Plan 2 member who incurs a disability in the line of duty per RCW 41.26.470 (6) and (7) and this section. (1) Who is entitled to duty disability benefits? Any member of LEOFF Plan 2 who the department determines has: (a) Incurred a physical or mental disability in the line of duty; (b) Become totally incapacitated for continued employment in a LEOFF eligible position; and (c) Separated from a LEOFF eligible position due to the disability. (2) How is "line of duty" defined? Line of duty means any action or activity occurring in conjunction with your employment or your status as a law enforcement officer or firefighter and required or authorized by law, rule, regulations, or condition of employment or service. (3) When are the duty disability provisions effective? The duty disability provisions under RCW 41.26.470 (6) and (7) are effective June 10, 2004. (4) How do I apply for duty disability benefits? The department must receive: (a) A completed three-part disability retirement application on the form provided by the department. (i) Part 1: Disability retirement application. You must complete and sign the application. If you are married, your spouse must sign consenting to the retirement payment option you choose. Your signature(s) must be notarized. (ii) Part 2: Employer's statement and report. Your employer must complete, sign and return it directly to the department. (iii) Part 3: Medical report. You must complete Section 1. The remainder must be completed and signed by a person licensed according to Washington state law to practice medicine and surgery, osteopathic medicine and surgery, chiropractic, clinical psychology, podiatry, dentistry, or optometry; (b) Additional information requested by the department; and (c) Any other material you want the department to consider. (5) What evidence will the department use to determine whether I am entitled to benefits under this section? The department will consider any relevant information submitted by you or your employer, or otherwise available to the department, including: (a) Information and determinations by the department of labor and industries (L&I) or a self-insurer; (b) Medical, vocational, and other information about your disability; (c) Your job description; (d) Your membership records, maintained by the department; and (e) Any other relevant evidence. (6) What would disqualify me for duty disability benefits? You are not eligible for duty disability benefits if any of the following apply: (a) Your application does not provide adequate proof that you are totally incapacitated for continued employment in a LEOFF-eligible position; (b) Your application does not provide adequate proof that your disability was incurred in the line of duty; (c) The disability occurred as a result of intentional misconduct including but not limited to: (i) An action you took intentionally to bring about your own disability; (ii) Gross negligence on your part; or (iii) Your voluntary intoxication. As used in this section, "intoxication" means a disturbance of mental or physical faculties resulting from the introduction of: (A) Alcohol into the body as evidenced by: (I) A blood alcohol level of .20 per centum or greater; or (II) A blood alcohol level of at least .10 per centum but less than .20 per centum unless the department receives convincing evidence that the officer or firefighter was not acting in an intoxicated manner immediately prior to the injury; or (B) Drugs or other substances in the body. (7) Who decides if I meet the requirements for benefits under this section? The LEOFF plan administrator. (8) May I petition a decision made by the LEOFF plan administrator? Yes. If the LEOFF plan administrator denies your request for a disability benefit under this section, you may petition for review under chapter 415-04 WAC. (9) What are the duty disability retirement benefits? As a duty disability retiree, you may choose between: (a) A nontaxable, one-time lump sum payment equal to one hundred fifty percent of your retirement contributions; except that, any payments made to restore service credit after the five-year deadline will be paid at one hundred percent; or (b) A monthly allowance equal to: (i) Ten percent of your final average salary (FAS), which is nontaxable; and (ii) Two percent of your FAS for each year of service beyond five years. Your monthly allowance will not be adjusted for early retirement. However, if you choose a benefit option with a survivor feature as described in WAC 415-104-215, your monthly allowance will be actuarially reduced to offset the cost. ((The factors used to determine the amount of the reduction are in)) See WAC 415-02-380 for more information on how your monthly allowance is affected by choosing a survivor feature.
((Tom's minimum duty disability allowance, calculated at 10 percent of his final average salary (FAS) is:
In addition, Tom will receive:
Tom will receive $435 (nontaxable) plus $1305 (taxable), for a total monthly allowance of $1740.))
(10) Are my duty disability benefits taxable? The department reports disability benefits to the Internal Revenue Service as required by federal law. Based on current federal law, part of your benefit may be taxable. You should consult with your own tax advisor regarding all questions of federal or state income, payroll, personal property or other tax consequences regarding any payments you receive from the department. The department does not: (a) Guarantee that payments are exempt from federal income tax; (b) Guarantee that it was correct in withholding or not withholding taxes from benefit payments to you; (c) Represent or guarantee that any particular federal or state income, payroll, personal property or other tax consequence will occur because of its determination; or (d) Assume any liability for your compliance with the Internal Revenue Code. (11) If I previously withdrew my contributions, may I apply for duty disability benefits? If you separated from employment due to a disability and withdrew your contributions, you may apply for duty disability benefits according to the provisions of subsection (4) of this section. (12) If I previously withdrew my contributions and am approved for duty disability benefits, what will I receive as a benefit? If the LEOFF plan administrator determines you are entitled to duty disability benefits, the department will amend Internal Revenue Service reporting to designate your previous withdrawal as nontaxable. In addition, you may choose either of the following: (a) If you previously withdrew 100% of your contributions, you may choose to receive an additional lump sum payment equal to 50% of the contributions you withdrew. The payment will be nontaxable; or (b) If you previously withdrew 100% or 150% of your contributions, you may choose to receive a monthly allowance according to subsection (9) of this section. You must repay the amount you withdrew, either in a lump sum payment or by having your monthly allowance permanently actuarially reduced to offset the amount of your previous withdrawal.
If John repays the entire amount he withdrew in a lump sum, his monthly allowance will be calculated according to the formula in subsection (9)(b) of this section:
If John repays the withdrawn amount through a permanent actuarial reduction, his monthly allowance will be reduced as follows:
(13) When does a duty disability retirement benefit end? The department may require comprehensive medical examinations to reevaluate your eligibility for continued disability benefits according to the provisions of RCW 41.26.470(2). Your duty disability benefit will cease if: (a) You return to work in a LEOFF-eligible position; or (b) Medical examination reveals that you are no longer totally incapacitated for employment in a LEOFF eligible position and you are no longer entitled to workers' compensation benefits under Title 51 RCW. (14) If I retire for a duty disability and die, will my survivor beneficiary receive a monthly allowance? If you choose a benefit option with a survivor feature under WAC 415-104-215(2) at the time of retirement, your survivor beneficiary will receive a monthly allowance after your death. (15) What happens if I return to a LEOFF-eligible position? If you return to a LEOFF-eligible position, your monthly allowance will stop. (16) If I return to a LEOFF-eligible position, how will my future retirement benefit be affected? When you reretire, your monthly allowance will be calculated pursuant to RCW 41.26.500 and WAC 415-104-111.
AMENDATORY SECTION (Amending WSR 07-09-032, filed 4/10/07, effective 5/11/07)
WAC 415-104-485 LEOFF nonduty disability benefits.
This section applies to you if you are a LEOFF Plan 2 member who incurs a disability not in the line of duty. If your disability or injury was incurred in the line of duty, see WAC 415-104-480. (1) Who is entitled to nonduty disability benefits? Any member of LEOFF Plan 2 who the department determines has: (a) Incurred a physical or mental disability while not in the line of duty; (b) Become totally incapacitated for continued employment in a LEOFF eligible position; and (c) Separated from a LEOFF-eligible position due to the disability. (2) How is "line of duty" defined? Line of duty means any action or activity occurring in conjunction with your employment or your status as a law enforcement officer or firefighter and required or authorized by law, rule, regulations, or condition of employment or service. (3) How do I apply for nonduty disability benefits? The department must receive: (a) A completed three-part disability retirement application on the form provided by the department. (i) Part 1: Disability retirement application. You, or a person with legal authority to apply on your behalf, must complete and sign the application. If you are married, your spouse must sign consenting to the retirement payment option you choose. Your signature(s) must be notarized. (ii) Part 2: Employer's statement and report. Your employer must complete, sign and return it directly to the department. (iii) Part 3: Medical report. You must complete Section 1. The remainder must be completed and signed by a person licensed according to Washington state law to practice medicine and surgery, osteopathic medicine and surgery, chiropractic, clinical psychology, podiatry, dentistry, or optometry; (b) Additional information requested by the department; and (c) Any other material you want the department to consider. (4) Is there a time limit for filing an application for nonduty disability benefits? No. There is no time limit for applying for benefits. However, if you have separated from employment, your application must be based on your condition at the time of separation. (5) What evidence will the department use to determine whether I am entitled to benefits under this section? The department will consider any relevant information submitted by you or your employer, or otherwise available to the department, including: (a) Information and determinations by the department of labor and industries (L&I) or a self-insurer; (b) Medical, vocational, and other information about your disability; (c) Your job description; (d) Your membership records, maintained by the department; and (e) Any other relevant evidence. (6) What would disqualify me for nonduty disability benefits? You are not eligible for nonduty disability benefits if any of the following apply: (a) Your application does not provide adequate proof that you are totally incapacitated for continued employment in a LEOFF-eligible position; (b) Your disability is the result of your criminal conduct committed after April 21, 1997. See RCW 41.26.061. (7) Who decides if I meet the requirements for benefits under this section? The LEOFF plan administrator. (8) May I petition a decision made by the LEOFF plan administrator? Yes. If the LEOFF plan administrator denies your request for a disability benefit under this section, you may petition for review under chapter 415-04 WAC. (9) What are the nonduty disability retirement benefits? As a nonduty disability retiree, your retirement benefit is a monthly allowance equal to: (a) Two percent times your final average salary times your service credit years. This allowance will be actuarially reduced to reflect the difference in age at the time of disability retirement and age 53. If you qualify for alternative early retirement per RCW 41.26.430(3), your reduction will be three percent per year before age 53. (b) If you choose a benefit option with a survivor feature as described in WAC 415-104-215, your monthly allowance will be actuarially reduced to offset the cost. ((The factors used to determine the amount of reduction are in)) See WAC 415-104-380 for more information on how your monthly allowance is affected by choosing a survivor feature.
((Tom's nonduty disability allowance is: Nonduty disability allowance $5,000 x 2% x 20 years = $2,000 Allowance after the actuarial reduction for early retirement $2,000 x 0.39 = $780 Allowance after the actuarial reduction for Option Two (survivor feature) $780 x .87 = $679)) (10) Are my nonduty disability benefits taxable? The department reports disability benefits to the Internal Revenue Service as required by federal law. Based on current federal law, your benefit may be taxable. You should consult with your own tax advisor regarding all questions of federal or state income, payroll, personal property or other tax consequences regarding any payments you receive from the department. The department does not: (a) Guarantee that payments are exempt from federal income tax; (b) Guarantee that it was correct in withholding or not withholding taxes from benefit payments to you; (c) Represent or guarantee that any particular federal or state income, payroll, personal property or other tax consequence will occur because of its determination; or (d) Assume any liability for your compliance with the Internal Revenue Code. (11) If I previously retired for service under the alternative early retirement provisions of RCW 41.26.430(3), but I qualified for a disability retirement, can I apply for duty or nonduty disability benefits? Yes. If you retired under the alternative early retirement provisions of RCW 41.26.430(3) on or before January 1, 2001, you can apply to retire under the disability provisions of RCW 41.26.470. Your benefit will be reduced by three percent per year before age 53 instead of actuarially reduced by the early retirement factors in WAC 415-02-320. (12) If I previously retired for disability but was otherwise qualified for a service retirement under the alternative early retirement provisions of RCW 41.26.430(3), can I have my benefit recalculated to reflect a three percent reduction instead of being actuarially reduced by the early retirement reduction factors in WAC 415-102-320? Yes. If you retired on or after January 1, 2001, and met the requirements of RCW 41.26.430(3), you can have your disability benefit recalculated under those provisions. (13) When does a nonduty disability retirement benefit end? The department may require comprehensive medical examinations to reevaluate your eligibility for continued disability benefits according to the provisions of RCW 41.26.470(2). Your nonduty disability benefit will cease if: (a) You return to work in a LEOFF-eligible position; or (b) Medical examination reveals that you are no longer totally incapacitated for employment in a LEOFF-eligible position and you are no longer entitled to workers' compensation benefits under Title 51 RCW. (14) If I retire for a nonduty disability and die, will my survivor beneficiary receive a monthly allowance? If you choose a benefit option with a survivor feature under WAC 415-104-215(2) at the time of retirement, your survivor beneficiary will receive a monthly allowance after your death. (15) What happens if I return to a LEOFF-eligible position? If you return to a LEOFF-eligible position, your monthly allowance will stop. (16) If I return to a LEOFF-eligible position, how will my future retirement benefit be affected? When you reretire, your monthly allowance will be calculated pursuant to RCW 41.26.500 and WAC 415-104-111.
AMENDATORY SECTION (Amending WSR 08-02-046, filed 12/27/07, effective 1/27/08)
WAC 415-106-080 Actuarial ((tables,)) factors and schedules((, and factors)).
See chapter 415-02 WAC starting with WAC 415-02-300 for information on how the ((tables, schedules, and factors the)) department uses ((for calculating)) factors and schedules to calculate optional retirement allowances for PSERS members.
AMENDATORY SECTION (Amending WSR 08-02-046, filed 12/27/07, effective 1/27/08)
WAC 415-106-600 What are my retirement benefit options?
Upon retirement for service under RCW 41.37.210 or retirement for disability under RCW 41.37.230, you must choose to have your retirement allowance paid to you by one of the options described in this section. (1) Which option will pay my beneficiary a monthly allowance after my death? Options described in subsection (2)(b) through (d) of this section include a survivor feature. The person you name at the time of retirement to receive a monthly allowance after your death is referred to as your "survivor beneficiary." Upon your death your survivor beneficiary will be entitled to receive a monthly allowance for the duration of his or her life. Your monthly retirement allowance will be actuarially reduced to offset the cost of the survivor feature. ((The factors used to determine the amount of the reduction are in)) See WAC 415-02-380 for more information on how your monthly allowance is affected by choosing a survivor feature. (2) What are my benefit options? (a) Option one: Standard allowance (no survivor feature). The department will pay you a monthly retirement allowance throughout your lifetime. Your monthly retirement allowance will cease upon your death. (b) Option two: Joint and whole allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to the gross monthly retirement allowance you were receiving. (c) Option three: Joint and one-half allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to one-half of the gross monthly retirement allowance you were receiving. (d) Option four: Joint and two-thirds allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to two-thirds (66.667%) of the gross monthly retirement allowance you were receiving. (3) Do I need my spouse's consent on the option I choose? If you are married, you must provide your spouse's notarized signature indicating consent to the retirement option you select. If you do not provide spousal consent, the department will pay you a monthly retirement allowance based on option three (joint and one-half allowance) and record your spouse as the survivor beneficiary as required by RCW 41.37.170(2). If your survivor beneficiary has been designated by a dissolution order according to subsection (4) of this section, which was filed with the department at least thirty days before your retirement date, spousal consent is not required. (4) Can a dissolution order require that a former spouse be designated as a survivor beneficiary? Yes. A dissolution order may require that a former spouse be designated as a survivor beneficiary. The department is required to pay survivor benefits to a former spouse pursuant to a dissolution order that complies with RCW 41.50.790. (5) What happens if I choose a benefit option with a survivor feature and my survivor beneficiary dies before I do? Your monthly retirement allowance will increase, provided you submit proof of your survivor beneficiary's death to the department. The increase will accrue from the first day of the month following the death. Your increased monthly allowance will be: (a) The amount you would have received had you chosen the standard allowance option at the time of retirement; plus (b) Any cost-of-living adjustments (COLAs) you received prior to your survivor beneficiary's death, based on your original option selection.
(6) May I change my benefit option after retirement? Your choice of a benefit option is irrevocable with the following three exceptions: (a) Return to membership. If you retire and then return to membership for at least two years of uninterrupted service, you may choose a different retirement option upon your subsequent retirement. See RCW 41.37.050(3). (b) Postretirement marriage option. If you select the standard allowance option at the time of retirement and marry after retirement, you may select a benefit option with a survivor feature and name your current spouse as survivor beneficiary, provided that: (i) Your benefit is not subject to a property division obligation pursuant to a dissolution order. See WAC 415-02-500; (ii) The selection is made during a one-year window, on or after the date of the first anniversary and before the second anniversary of your postretirement marriage; (iii) You provide a copy of your certified marriage certificate to the department; and (iv) You provide proof of your current spouse's birth date((; and (v) You exercise this option one time only)). (c) Removal of a nonspouse survivor option. If you select a benefit option with a survivor feature and name a nonspouse as survivor beneficiary at the time of retirement, you may remove that survivor beneficiary designation and have your benefit adjusted to a standard allowance. You may exercise this option one time only. (7) Who will receive the balance of my accumulated contributions, if any, after my death? (a) If you do not have a survivor beneficiary at the time of your death, and you die before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid: (i) To the person or entity (i.e., trust, organization, or estate) you have nominated by written designation, executed and filed with the department. (ii) If you have not designated a beneficiary, or if your designated beneficiary is no longer living or in existence, then to your surviving spouse. (iii) If not paid according to (a)(i) or (ii) of this subsection, then to your estate. (b) If you have a survivor beneficiary at the time of your death, and your survivor beneficiary dies before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid: (i) To the person or entity (i.e., trust, organization, or estate) your survivor beneficiary has nominated by written designation, executed and filed with the department. (ii) If your survivor beneficiary has not designated a beneficiary, or if the designated beneficiary is no longer living or in existence, then to your survivor beneficiary's spouse. (iii) If not paid according to (b)(i) or (ii) of this subsection, then to your survivor beneficiary's estate. See RCW 41.37.170.
AMENDATORY SECTION (Amending WSR 05-23-062, filed 11/14/05, effective 12/15/05)
WAC 415-108-326 What are my retirement benefit options?
Upon retirement for service under RCW 41.40.180, 41.40.630, or 41.40.820, or for disability under RCW 41.40.210, 41.40.230, 41.40.670, or 41.40.825, you must choose to have the defined benefit portion of your retirement allowance paid to you by one of the options described in this section. If you are a Plan 1 member, you may also select an optional supplemental cost of living adjustment (COLA). (1) Which option will pay my beneficiary a monthly allowance after my death? Options described in subsection (2)(b) through (d) of this section include a survivor feature. The person you name at the time of retirement to receive a monthly allowance after your death is referred to as your "survivor beneficiary." Upon your death your survivor beneficiary will be entitled to receive a monthly allowance for the duration of his or her life. Your monthly retirement allowance will be actuarially reduced to offset the cost of the survivor feature. ((The factors used to determine the amount of the reduction are in)) See WAC 415-02-380 for more information on how your monthly allowance is affected by choosing a survivor feature. (2) What are my benefit options? (a) Option one: Standard allowance (no survivor feature). The department will pay you a monthly retirement allowance throughout your lifetime. Your monthly allowance will cease upon your death. (b) Option two: Joint and whole allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to the gross monthly retirement allowance you were receiving. (c) Option three: Joint and one-half allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to one-half of the gross monthly retirement allowance you were receiving. (d) Option four: Joint and two-thirds allowance (available to members retiring on or after January 1, 1996). The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to two-thirds (66.667%) of the gross monthly retirement allowance you were receiving. (3) Do I need my spouse's consent on the option I choose? If you are married, you must provide your spouse's notarized signature indicating consent to the retirement option you select. If you do not provide spousal consent, the department will pay you a monthly retirement allowance based on option three (joint and one-half allowance) and record your spouse as the survivor beneficiary as required by RCW 41.40.188, 41.40.660 and 41.40.845. If your survivor beneficiary has been designated by a dissolution order according to subsection (4) of this section, which was filed with the department at least thirty days before your retirement date, spousal consent is not required. (4) Can a dissolution order require that a former spouse be designated as a survivor beneficiary? Yes. A dissolution order may require that a former spouse be designated as a survivor beneficiary. The department is required to pay survivor benefits to a former spouse pursuant to a dissolution order that complies with RCW 41.50.790. (5) What is the supplemental COLA option for Plan 1 members? If you are a Plan 1 member, in addition to choosing a retirement benefit option described in subsection (2) of this section, you may choose to receive a supplemental annual COLA. If you select this option, your monthly retirement allowance will be actuarially reduced to offset the cost of this benefit. (6) What happens if I choose a benefit option with a survivor feature and my survivor beneficiary dies before I do? Your monthly retirement allowance will increase, provided you submit proof of your survivor beneficiary's death to the department. The increase will begin accruing the first day of the month following the death. (a) Members who retired on or after January 1, 1996. Your increased benefit will be: (i) The amount you would have received had you chosen the standard allowance option at the time of retirement; plus (ii) Any COLAs you received prior to your survivor beneficiary's death, based on your original option selection. Example: Agnes retires from PERS Plan 2 in 1996. She chooses a benefit option with a survivor feature and names Beatrice, her daughter, as her survivor beneficiary. As a result, Agnes's monthly allowance is reduced from $2,000 (standard allowance) to $1,750. Beatrice dies in 2001. Agnes's monthly allowance will increase to $2,191.05, which equals the amount she would have received had she chosen the standard allowance option, plus the COLAs she has received (based on her prior monthly allowance).
(b) Members who retire before January 1, 1996. Your monthly retirement allowance will be adjusted according to the provisions of RCW 41.40.188(3) (Plan 1) or RCW 41.40.660(3) (Plan 2). (7) May I change my benefit option after retirement? Your choice of a benefit option is irrevocable with the following three exceptions: (a) Return to membership. If you retire and then return to membership for at least two years of uninterrupted service, you may choose a different retirement option upon your subsequent retirement. See RCW 41.40.037. (b) Postretirement marriage option. If you select the standard allowance option at the time of retirement and marry after retirement, you may select a benefit option with a survivor feature and name your current spouse as survivor beneficiary, provided that: (i) Your benefit is not subject to a property division obligation pursuant to a dissolution order. See WAC 415-02-500; (ii) The selection is made during a one-year window, on or after the date of the first anniversary and before the second anniversary of your postretirement marriage; (iii) You provide a copy of your certified marriage certificate to the department; and (iv) You provide proof of your current spouse's birth date((; and (v) You exercise this option one time only)). (c) Removal of a nonspouse survivor option. If you select a benefit option with a survivor feature and name a nonspouse as survivor beneficiary at the time of retirement, you may remove that survivor beneficiary designation and have your benefit adjusted to a standard allowance. You may exercise this option one time only. (8) Who will receive the balance of my accumulated contributions, if any, after my death? (a) Plan 1 and 2 members: (i) If you do not have a survivor beneficiary at the time of your death, and you die before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid: (A) To the person or entity (i.e., trust, organization, or estate) you have nominated by written designation, executed and filed with the department. (B) If you have not designated a beneficiary, or if your designated beneficiary is no longer living or in existence, then to your surviving spouse. (C) If not paid according to (a)(i)(A) or (B) of this subsection, then to your estate. (ii) If you have a survivor beneficiary at the time of your death, and your survivor beneficiary dies before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid: (A) To the person or entity (i.e., trust, organization, or estate) your survivor beneficiary has nominated by written designation, executed and filed with the department. (B) If your survivor beneficiary has not designated a beneficiary, or if the designated beneficiary is no longer living or in existence, then to your survivor beneficiary's spouse. (C) If not paid according to (a)(ii)(A) or (B) of this subsection, then to your survivor beneficiary's estate. (b) Plan 3 members: The defined benefit stops upon your death or upon the death of your survivor beneficiary, if applicable. As a Plan 3 member, you do not contribute to the defined benefit portion of your retirement allowance. The defined contribution portion of your benefit will be distributed according to WAC 415-111-310.
AMENDATORY SECTION (Amending WSR 02-18-048, filed 8/28/02, effective 9/1/02)
WAC 415-108-340 Actuarial ((tables, schedules, and)) factors and schedules.
See chapter 415-02 WAC starting with WAC 415-02-300 for information on how the ((tables, schedules, and)) department uses actuarial factors ((the department uses for calculating)) and schedules to calculate optional retirement allowances of members of the Washington state public employees' retirement system.
AMENDATORY SECTION (Amending WSR 05-12-106, filed 5/27/05, effective 6/27/05)
WAC 415-108-436 PERS Plans 2 and 3 disability benefits.
This section covers disability benefits provided for in RCW 41.40.670 and 41.40.825 for members of PERS Plans 2 and 3. Disability provisions are designed primarily to provide an income to members who have been forced to leave the workforce because of an incapacitating disability. This section applies equally to on- or off-the-job injuries and/or illnesses. Members may also be eligible for benefits from the Washington state departments of labor and industries (workers' compensation benefits) and social and health services, the U.S. Social Security Administration, employers, disability insurers, and others. Please contact these organizations directly for more information. (1) Am I eligible for disability benefits? You are eligible for a disability allowance if, at the time of your separation from employment, you are totally incapacitated to perform the duties of your job or any other position for a PERS employer for which you are qualified by training or experience. Objective medical evidence is required to establish total incapacitation. Vocational and/or occupational evidence may be required at the discretion of the department. (2) If eligible, what will I receive as my monthly disability benefits under the standard option? (a) If you are a Plan 2 member, you will receive two percent times average final compensation (AFC) times service credit years, permanently actuarially reduced to reflect the difference in the number of years between your age when you separate for disability and age sixty-five. See WAC 415-02-320 for more information on early retirement ((factors and examples)). (b) If you are a Plan 3 member, you will receive a defined benefit of one percent times average final compensation times service credit years, permanently actuarially reduced to reflect the difference in the number of years between your age when you separate for disability and age sixty-five. See WAC 415-02-320 for more information on early retirement ((factors and examples)). (c) The degree of your disability or impairment will not impact the amount of your disability benefit. (3) May I choose a benefit option that provides a monthly allowance to my survivor beneficiary? You may choose to have your benefit paid according to any of the benefit options described in WAC 415-108-326. If you choose an option with a survivor feature, your monthly benefit will be actuarially reduced to offset the cost. (4) How do I apply? (a) You or your representative must contact the department to request an application. The three-part application must be completed by the proper persons and returned to the department. (i) Part 1: Disability retirement application. You must complete, sign and have notarized. If you are married, your spouse must sign consent of the benefit option you choose. (ii) Part 2: Employer's statement and report. Your employer must complete, sign and return directly to the department. (iii) Part 3: Medical report. You must complete section one. Your physician must complete the remainder of the form, attach supporting documentation, sign and return directly to the department. You are responsible for all medical expenses related to your application for benefits. (b) When the department receives Part 1 of your application, you are considered to be an applicant for disability benefits. However, your eligibility will not be determined until the department receives all three parts of the application. (5) What is the time limit for filing an application for disability benefits? There is no time limit for applying for benefits. However, if you have separated from employment, your application must be based on your condition at the time of separation. (6) If I am eligible to retire, may I still apply for disability benefits? Yes, however, there will be no difference in the dollar amount of your benefit. (7) Once my application is approved, when will my benefit begin? (a) You will start accruing disability benefits the first day of the calendar month immediately following your separation from employment. If you are continuing to earn service credit while on paid leave or through programs such as shared leave, you are not considered to be separated from employment. (b) Your first benefit payment will include all retroactive benefits to which you are entitled. (c) Department approval will expire ninety days after the approval date if you have not officially separated from PERS employment. (i) If you are continuing to perform the duties of your position or another PERS position, you may reapply for disability benefits according to subsection (4) of this section if your condition worsens. (ii) If you are on leave, the department may reinstate approval upon your request and your employer's verification of your leave status. (8) What are my options if my application is denied? (a) You may submit additional information that shows you were totally incapacitated at the time of your separation from employment. (b) If you continue to work in a PERS position, you may reapply for disability benefits at a later time if your condition worsens. (c) You may petition for review of the department's decision according to the provisions of chapter 415-04 WAC. (9) What information must be provided to the department if I am receiving disability benefits? (a) You and your doctor must report any improvement in your condition; and (b) You must report the name of your employer and monthly salary if you resume employment, regardless of the number of hours you work. (10) How long will my disability benefits last? You may receive benefits throughout your lifetime, subject to the provisions of subsection (15) of this section. (11) Are my disability benefits taxable? You should consult with your tax advisor regarding all questions of federal or state income, payroll, personal property or other tax consequences regarding any payments you receive from the department. The department does not: (a) Guarantee that payments should or should not be designated as exempt from federal income tax; (b) Guarantee that it was correct in withholding or not withholding taxes from disability payments; (c) Represent or guarantee that any particular federal or state income, payroll, personal property or other tax consequence will occur because of its nontaxable determination; or (d) Assume any liability for your compliance with the Internal Revenue Code. (12) Are disability benefits subject to court or administrative orders? Your benefits may be subject to orders for spousal maintenance, child support, property division, or any other administrative or court order expressly authorized by federal law. For more information, see RCW 41.40.052(3) or contact the department. (13) Am I eligible for disability benefits if my disability is the result of my criminal conduct committed after April 21, 1997? No. For more information, see RCW 41.40.054. (14) How is my disability benefit affected if I am a member of more than one retirement system? If you are a member of more than one retirement system, your benefit is governed by portability law (see chapters 41.54 RCW and 415-113 WAC). You may apply for disability only from your active system. However, if you qualify for a disability benefit from your active system, you will also be eligible for a service retirement calculated under the laws governing the inactive system. (15) Is it possible to lose my disability benefits after I begin receiving them? (a) The department may, at its expense, require comprehensive medical examinations to reevaluate your eligibility for disability benefits. You will no longer be eligible to receive disability benefits if both of the following apply: (i) Medical evidence indicates you have recovered from the disability for which the department granted your disability benefits; and (ii) You have been offered reemployment by an employer, as defined in RCW 41.40.010 (4)(b), at a comparable compensation. (b) If you return to employment and reenter PERS membership, your benefits will cease. (16) If I take my disability benefit in a lump sum and return to work, may I restore my service credit? Yes, you may restore your service credit if you take a lump sum benefit and return to PERS membership at a later date. (a) You may restore your service credit within two years of reentering membership or prior to retirement, whichever comes first. You must pay back the lump sum amount you received, minus the monthly amount for which you were eligible, plus interest as determined by the director. (b) If you restore your service after two years, you will have to pay the actuarial value of the resulting increase in your future retirement benefit. See RCW 41.50.165. (c) The provisions for restoring service credit vary according to retirement plan. (i) If you are a member of PERS Plan 2, see RCW 41.40.625. (ii) If you are a member of PERS Plan 3, see RCW 41.40.815.
AMENDATORY SECTION (Amending WSR 07-10-013, filed 4/20/07, effective 5/21/07)
WAC 415-108-805 What is the PERS Plan 1 minimum allowance?
RCW 41.40.1984 entitles certain PERS Plan 1 retirees and beneficiaries to a minimum monthly allowance. Subsection (3) of this section provides the amount of the minimum allowance and explains how it may be adjusted. (1) Do I qualify for the minimum allowance? Except as provided in subsection (2) of this section: (a) You qualify if your current monthly allowance, excluding any amount you receive for an additional (optional) annuity based on extra contributions, is less than the minimum allowance calculated under subsection (3) of this section, and: (i) You have twenty-five or more years of PERS Plan 1 service credit and have been retired at least twenty years; or (ii) You have twenty or more years of PERS Plan 1 service credit and have been retired at least twenty-five years. (b) You qualify if you are a PERS Plan 1 member's survivor beneficiary under WAC 415-108-326 and your current monthly allowance is less than the minimum allowance calculated under subsection (3) of this section, provided: (i) The member had twenty-five or more years of PERS Plan 1 service credit and retired at least twenty years ago; or (ii) The member had twenty or more years of PERS Plan 1 service credit and retired at least twenty-five years ago. (2) Do I qualify if I receive a duty disability allowance? You do not qualify to receive the minimum allowance provided by this rule if you are a: (a) Retiree currently receiving a duty disability retirement allowance under RCW 41.40.220(1); (b) Retiree currently receiving a statewide city employees' retirement system duty disability retirement allowance under RCW 41.44.170(3); or (c) Beneficiary currently receiving an allowance under RCW 41.44.170(5). (3) How much is the minimum allowance in RCW 41.40.1984, and how is it adjusted? (a) Minimum allowance. The minimum allowance prior to July 1, 2006, was $1000. On July 1, 2006, and each July 1 thereafter, the minimum allowance increases by three percent, rounded to the nearest cent. (b) Adjustment. The minimum allowance in (a) of this subsection will be adjusted each July by the same factors that were otherwise used in the calculation of your monthly allowance, including, but not limited to: (i) Early retirement; (ii) Automatic cost-of-living (COLA) increases chosen at retirement; (iii) Benefit option chosen at retirement (see WAC 415-108-326); (iv) Survivor percentage. See Example 2 in this subsection.
((The tables, schedules, and factors the department currently uses to calculate benefits are located in WAC 415-02-300 through 415-02-380. However, factors have changed over time, and your minimum allowance will be adjusted using the same factors that were used to calculate your current monthly allowance.)) (4) If the minimum allowance is less than my current monthly allowance, will my monthly allowance be reduced? The department will compare the amount of the minimum allowance calculated under subsection (3) of this section with your current monthly allowance. You will always receive the higher of the two benefits. (5) If I qualify for the minimum allowance, when will I begin to receive it? (a) If your eligibility is based on meeting the requirements of subsection (1)(a)(i) or (b)(i) of this section, and: (i) You were eligible on July 1, 2004, you began receiving the minimum allowance in effect at that time, in lieu of your regular monthly allowance, in July 2004. (ii) You become eligible after July 1, 2004, you will begin receiving the minimum allowance, in lieu of your regular monthly allowance, the month in which you qualify. (b) If your eligibility is based on meeting the requirements of subsection (1)(a)(ii) or (b)(ii) of this section, and: (i) You were eligible on July 1, 2006, you began receiving the minimum allowance in effect at that time, in lieu of your regular monthly allowance, in July 2006. (ii) You become eligible after July 1, 2006, you will begin receiving the minimum allowance, in lieu of your regular monthly allowance, the month in which you qualify. (6) Will I receive cost-of-living adjustments (COLAs)? You will not receive the uniform COLA (based on your years of service credit) while you are receiving the minimum allowance. (7) How long will I continue to receive the minimum allowance? You will receive the minimum allowance calculated under subsection (3) of this section, for your lifetime or until your regular retirement allowance, plus COLAs and other eligible adjustments, exceeds the minimum allowance. At that time you will automatically start receiving the higher allowance. Example:
AMENDATORY SECTION (Amending WSR 02-18-048, filed 8/28/02, effective 9/1/02)
WAC 415-110-340 Actuarial ((tables,)) factors and schedules((, and factors)).
See chapter 415-02 WAC starting with WAC 415-02-300 for ((the tables, schedules, and factors)) information on how the department uses ((for calculating)) actuarial factors and schedules to calculate optional retirement allowances of members of the Washington state school employees' retirement system.
AMENDATORY SECTION (Amending WSR 05-19-014, filed 9/9/05, effective 10/10/05)
WAC 415-110-436 SERS Plans 2 and 3 disability benefits.
This section covers disability benefits provided for in RCW 41.35.440 and 41.35.690 for members of SERS Plans 2 and 3. Disability provisions are designed primarily to provide an income to members who have been forced to leave the workforce because of an incapacitating disability. This section applies equally to on- or off-the-job injuries and/or illnesses. Members may also be eligible for benefits from the Washington state departments of labor and industries (workers' compensation benefits) and social and health services, the U.S. Social Security Administration, employers, disability insurers, and others. Please contact these organizations directly for more information. (1) Am I eligible for disability benefits? You are eligible for a disability allowance if, at the time of your separation from employment, you are totally incapacitated to perform the duties of your job or any other position for a SERS employer for which you are qualified by training or experience. Objective medical evidence is required to establish total incapacitation. Vocational and/or occupational evidence may be required at the discretion of the department. (2) If eligible, what will I receive as my monthly disability benefits under the standard option? (a) If you are a Plan 2 member, you will receive two percent times average final compensation (AFC) times service credit years, permanently actuarially reduced to reflect the difference in the number of years between your age when you separate for disability and age sixty-five. See WAC 415-02-320 for more information on early retirement ((factors and examples)). (b) If you are a Plan 3 member, you will receive a defined benefit of one percent times average final compensation times service credit years, permanently actuarially reduced to reflect the difference in the number of years between your age when you separate for disability and age sixty-five. See WAC 415-02-320 for more information on early retirement ((factors and examples)). (c) The degree of your disability or impairment will not impact the amount of your disability benefit. (3) May I choose a benefit option that provides a monthly allowance to my survivor beneficiary? You may choose to have your benefit paid according to any of the benefit options described in WAC 415-110-326. If you choose an option with a survivor feature, your monthly benefit will be actuarially reduced to offset the cost. (4) How do I apply? (a) You or your representative must contact the department to request an application. The three-part application must be completed by the proper persons and returned to the department. (i) Part 1: Disability retirement application. You must complete, sign and have notarized. If you are married, your spouse must sign consent of the benefit option you choose. (ii) Part 2: Employer's statement and report. Your employer must complete, sign and return directly to the department. (iii) Part 3: Medical report. You must complete section one. Your physician must complete the remainder of the form, attach supporting documentation, sign and return directly to the department. You are responsible for all medical expenses related to your application for benefits. (b) When the department receives part 1 of your application, you are considered to be an applicant for disability benefits. However, your eligibility will not be determined until the department receives all three parts of the application. (5) What is the time limit for filing an application for disability benefits? There is no time limit for applying for benefits. However, if you have separated from employment, your application must be based on your condition at the time of separation. (6) If I am eligible to retire, may I still apply for disability benefits? Yes, however, there will be no difference in the dollar amount of your benefit. (7) Once my application is approved, when will my benefit begin? (a) You will start accruing disability benefits the first day of the calendar month immediately following your separation from employment. If you are continuing to earn service credit while on paid leave or through programs such as shared leave, you are not considered to be separated from employment. (b) Your first benefit payment will include all retroactive benefits to which you are entitled. (c) Department approval will expire ninety days after the approval date if you have not officially separated from SERS employment. (i) If you are continuing to perform the duties of your position or another SERS position, you may reapply for disability benefits according to subsection (4) of this section if your condition worsens. (ii) If you are on leave, the department may reinstate approval upon your request and your employer's verification of your leave status. (8) What are my options if my application is denied? (a) You may submit additional information that shows you were totally incapacitated at the time of your separation from employment. (b) If you continue to work in a SERS position, you may reapply for disability benefits at a later time if your condition worsens. (c) You may petition for review of the department's decision according to the provisions of chapter 415-04 WAC. (9) What information must be provided to the department if I am receiving disability benefits? (a) You and your doctor must report any improvement in your condition; and (b) You must report the name of your employer and monthly salary if you resume employment, regardless of the number of hours you work. (10) How long will my disability benefits last? You may receive benefits throughout your lifetime, subject to the provisions of subsection (15) of this section. (11) Are my disability benefits taxable? You should consult with your tax advisor regarding all questions of federal or state income, payroll, personal property or other tax consequences regarding any payments you receive from the department. The department does not: (a) Guarantee that payments should or should not be designated as exempt from federal income tax; (b) Guarantee that it was correct in withholding or not withholding taxes from disability payments; (c) Represent or guarantee that any particular federal or state income, payroll, personal property or other tax consequence will occur because of its nontaxable determination; or (d) Assume any liability for your compliance with the Internal Revenue Code. (12) Are disability benefits subject to court or administrative orders? Your benefits may be subject to orders for spousal maintenance, child support, property division, or any other administrative or court order expressly authorized by federal law. For more information, see RCW 41.35.100(3) or contact the department. (13) Am I eligible for disability benefits if my disability is the result of my criminal conduct committed after April 21, 1997? No. For more information, see RCW 41.35.110. (14) How is my disability benefit affected if I am a member of more than one retirement system? If you are a member of more than one retirement system, your benefit is governed by portability law (see chapters 41.54 RCW and 415-113 WAC). You may apply for disability only from your active system. However, if you qualify for a disability benefit from your active system, you will also be eligible for a service retirement calculated under the laws governing the inactive system. (15) Is it possible to lose my disability benefits after I begin receiving them? (a) The department may, at its expense, require comprehensive medical examinations to reevaluate your eligibility for disability benefits. You will no longer be eligible to receive disability benefits if both of the following apply: (i) Medical evidence indicates you have recovered from the disability for which the department granted your disability benefits; and (ii) You have been offered reemployment by an employer, as defined in RCW 41.35.010(4), at a comparable compensation. (b) If you return to employment and reenter SERS membership, your benefits will cease. (16) If I take my disability benefit in a lump sum and return to work, may I restore my service credit? Yes, you may restore your service credit if you take a lump sum benefit and return to SERS membership at a later date. (a) You may restore your service credit within two years of reentering membership or prior to retirement, whichever comes first. You must pay back the lump sum amount you received, minus the monthly amount for which you were eligible, plus interest as determined by the director. (b) If you restore your service after two years, you will have to pay the actuarial value of the resulting increase in your future retirement benefit. See RCW 41.50.165. (c) The provisions for restoring service credit vary according to retirement plan. (i) If you are a member of SERS Plan 2, see RCW 41.35.410. (ii) If you are a member of SERS Plan 3, see RCW 41.35.670.
AMENDATORY SECTION (Amending WSR 05-23-062, filed 11/14/05, effective 12/15/05)
WAC 415-110-610 What are my retirement benefit options?
Upon retirement for service under RCW 41.35.420 or 41.35.680, or for disability under RCW 41.35.440 or 41.35.690, you must choose to have the defined benefit portion of your retirement allowance paid to you by one of the options described in this section. (1) Which option will pay my beneficiary a monthly allowance after my death? Options described in subsection (2)(b) through (d) of this section include a survivor feature. The person you name at the time of retirement to receive a monthly allowance after your death is referred to as your "survivor beneficiary." Upon your death your survivor beneficiary will be entitled to receive a monthly allowance for the duration of his or her life. Your monthly retirement allowance will be actuarially reduced to offset the cost of the survivor feature. ((The factors used to determine the amount of the reduction are in)) See WAC 415-02-380 for more information on how your monthly allowance is affected by choosing a survivor feature. (2) What are my benefit options? (a) Option one: Standard allowance (no survivor feature). The department will pay you a monthly retirement allowance throughout your lifetime. Your monthly retirement allowance will cease upon your death. (b) Option two: Joint and whole allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to the gross monthly retirement allowance you were receiving. (c) Option three: Joint and one-half allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to one-half of the gross monthly retirement allowance you were receiving. (d) Option four: Joint and two-thirds allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to two-thirds (66.667%) of the gross monthly retirement allowance you were receiving. (3) Do I need my spouse's consent on the option I choose? If you are married, you must provide your spouse's notarized signature indicating consent to the retirement option you select. If you do not provide spousal consent, the department will pay you a monthly retirement allowance based on option three (joint and one-half allowance) and record your spouse as the survivor beneficiary as required by RCW 41.35.220. If your survivor beneficiary has been designated by a dissolution order according to subsection (4) of this section, which was filed with the department at least thirty days before your retirement date, spousal consent is not required. (4) Can a dissolution order require that a former spouse be designated as a survivor beneficiary? Yes. A dissolution order may require that a former spouse be designated as a survivor beneficiary. The department is required to pay survivor benefits to a former spouse pursuant to a dissolution order that complies with RCW 41.50.790. (5) What happens if I choose a benefit option with a survivor feature and my survivor beneficiary dies before I do? Your monthly retirement allowance will increase, provided you submit proof of your survivor beneficiary's death to the department. The increase will begin accruing the first day of the month following the death. Your increased monthly allowance will be: (a) The amount you would have received had you chosen the standard allowance option at the time of retirement; plus (b) Any cost-of-living adjustments (COLAs) you received prior to your survivor beneficiary's death, based on your original option selection. Example: Agnes retires from SERS Plan 2 in 2006. Agnes chooses a benefit option with a survivor feature and names Beatrice, her daughter, as her survivor beneficiary. As a result, Agnes's monthly allowance is reduced from $2,000 (standard allowance) to $1,750. Beatrice dies in 2011. Agnes's monthly allowance will increase to $2,191.05, which equals the amount she would have received had she chosen the standard allowance option, plus the COLAs she has received (based on her prior monthly allowance).
(6) May I change my benefit option after retirement? Your choice of a benefit option is irrevocable with the following three exceptions: (a) Return to membership. If you retire and then return to membership for at least two years of uninterrupted service, you may choose a different retirement option upon your subsequent retirement. See RCW 41.35.060. (b) Postretirement marriage option. If you select the standard allowance option at the time of retirement and marry after retirement, you may select a benefit option with a survivor feature and name your current spouse as survivor beneficiary, provided that: (i) Your benefit is not subject to a property division obligation pursuant to a dissolution order. See WAC 415-01-500; (ii) The selection is made during a one-year window, on or after the date of the first anniversary and before the second anniversary of your postretirement marriage; (iii) You provide a copy of your certified marriage certificate to the department; and (iv) You provide proof of your current spouse's birth date((; and (v) You exercise this option one time only)). (c) Removal of a nonspouse survivor option. If you select a benefit option with a survivor feature and name a nonspouse as survivor beneficiary at the time of retirement, you may remove that survivor beneficiary designation and have your benefit adjusted to a standard allowance. You may exercise this option one time only. (7) Who will receive the balance of my accumulated contributions, if any, after my death? (a) Plan 2 members: (i) If you do not have a survivor beneficiary at the time of your death, and you die before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid: (A) To the person or entity (i.e., trust, organization, or estate) you have nominated by written designation, executed and filed with the department. (B) If you have not designated a beneficiary, or if your designated beneficiary is no longer living or in existence, then to your surviving spouse. (C) If not paid according to (a)(i)(A) or (B) of this subsection, then to your estate. (ii) If you have a survivor beneficiary at the time of your death, and your survivor beneficiary dies before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid: (A) To the person or entity (i.e., trust, organization, or estate) your survivor beneficiary has nominated by written designation, executed and filed with the department. (B) If your survivor beneficiary has not designated a beneficiary, or if the designated beneficiary is no longer living or in existence, then to your survivor beneficiary's spouse. (C) If not paid according to (a)(ii)(A) or (B) of this subsection, then to your survivor beneficiary's estate. (b) Plan 3 members: The defined benefit stops upon your death or upon the death of your survivor beneficiary, if applicable. As a Plan 3 member, you do not contribute to the defined benefit portion of your retirement allowance. The defined contribution portion of your benefit will be distributed according to WAC 415-111-310. (8) For more information, see RCW 41.35.220.
AMENDATORY SECTION (Amending WSR 10-16-086, filed 7/30/10, effective 9/1/10)
WAC 415-111-320 May I purchase a life annuity with my Plan 3 defined contribution account?
Any time after you become eligible to withdraw funds from your Plan 3 account, you may use part or all of your funds to purchase a life annuity according to this section. To purchase a Total Allocation Portfolio (TAP) Annuity that is administered by the state of Washington you must use funds that are in the Washington state investment board (WSIB) investment program. To purchase an annuity through an insurance company that is offered by the self-directed investment program, you must use funds that are in the self-directed investment program. (1) What is a life annuity? A life annuity is a contract that provides a guaranteed income for the rest of your life in exchange for a lump-sum dollar amount you pay up front. The contract specifies the amount you pay to purchase the annuity, the amount you will receive each month, and any other terms and conditions. (a) A single life annuity is based on your lifetime. It provides guaranteed payments for as long as you live. The payments stop upon your death. (b) A joint life annuity is based on two lifetimes, yours and another person that you choose (referred to as your joint annuitant). It provides guaranteed payments to you during your lifetime, and then, if your joint annuitant survives you, to your joint annuitant for the remainder of his/her lifetime. The payments stop when both you and your joint annuitant die. (c) A term-certain—Single life annuity is based on your lifetime. It provides you with regular payments for as long as you live. It also guarantees the payments for a specific, predetermined period of time (term-certain). If you die before the specified period of time, payments will continue to your beneficiary for the balance of the specified period. (d) A term-certain—Joint life annuity is based on two lifetimes, yours and your joint annuitant's. It provides regular payments for as long as you or your joint annuitant lives. It also guarantees those payments for a specific, predetermined period of time (term-certain). If you and your joint annuitant should both die before the specified period of time, payments will continue to your beneficiary for the balance of the specified period. Example (term-certain—Joint life annuity): John purchased a 20-year term-certain joint life annuity. He received monthly payments until his death 10 years later. Upon John's death, Mary, John's joint annuitant, will receive payments for the duration of her life.
(2) Are the life annuities offered by each investment program different? The life annuities offered through the WSIB investment program and the self-directed investment program have distinct features and options. Each program may offer some or all of the annuities described in subsection (1) of this section. Minimum purchase price, payment frequency, survivorship percentages, length of term-certain annuities, and other optional features differ between programs as well. (3) How is the original purchase price of the life annuity determined? You will choose how much of your defined contribution funds to use as your original purchase price. The minimum purchase price depends on the type of annuity you purchase: The minimum purchase price for a TAP annuity is twenty-five thousand dollars and the minimum purchase price for an annuity through a self-directed investment program insurance company is five thousand dollars. The minimum purchase price for a life annuity is subject to change. (4) How are the monthly annuity payments calculated? The amount of your monthly annuity payment is based on various actuarial assumptions, including without limitation, assumptions about life expectancy and anticipated investment returns. The amount of your monthly annuity payment will vary depending on: (a) The original purchase price; (b) Your age; (c) The age of your joint annuitant (if any); (d) The survivorship percentage you select on a joint annuity (if any); and (e) Other features of your specific annuity, including, but not limited to, COLAs or refunds of undistributed balances upon your death. ((For more information about the factors used in calculating a TAP annuity, see WAC 415-02-390. For more information about the factors used in calculating an annuity through a self-directed investment program insurance company, contact the Plan 3 record keeper.)) (5) May I cancel my purchase of an annuity contract? Your contract will specify a period of time in which you can cancel your decision to purchase the annuity. Once the rescission period expires, your decision is irrevocable. (6) Can the terms of the annuity be changed after the rescission period expires? You may not make any changes after the rescission period unless your annuity contract explicitly states otherwise. Some contracts allow you to make changes in specific circumstances. For instance, you may make changes to an annuity purchased through the Washington state investment board investment program only as follows: (a) If you name someone other than your spouse as the joint annuitant, you may convert to a single life annuity at any time after your payments begin. This option may only be used once and is irrevocable. (b) If you marry after purchasing a single life annuity, you may convert to a joint life annuity and name your new spouse as joint annuitant, provided that: (i) Your monthly annuity payment is not subject to property division pursuant to a dissolution order (definition of dissolution order in RCW 41.50.500 includes orders of legal separation); (ii) The selection is made during a one-year window on or after the date of the first anniversary and before the second anniversary of your marriage; and (iii) You provide satisfactory proof of your new marriage and your new spouse's birth date. (7) What are the tax consequences of a life annuity? (a) You, your joint annuitant or your beneficiary may be liable for federal and/or state taxes on payments from your annuity in the year in which they are received. You will receive an annual statement indicating the taxable portion of your annuity payments. (b) For a TAP annuity, if you do not submit a tax withholding Form W-4P to the department before your first payment, taxes will be withheld according to Internal Revenue Service requirements, using a filing status of married with three exemptions. (c) The department does not: (i) Guarantee that payments should or should not be designated as exempt from federal income tax; (ii) Guarantee that it was correct in withholding or not withholding taxes from benefit payments to you; (iii) Represent or guarantee any particular federal or state income, payroll, personal property or other tax consequence because of the department's determination of the taxable status of a distribution; or (iv) Assume any liability for your compliance with the Internal Revenue Code. (8) How do I purchase a life annuity? (a) The forms required to purchase an annuity and the applicable directions are available on the department's web site or upon request from the department, and include: (i) Plan 3 Request for Payment of Defined Contributions Funds Form; (ii) Plan 3 Annuity Payment Request Form; (iii) Spousal consent form, if married; (iv) Proof of your birth date; (v) Proof of your joint annuitant's birth date, if applicable; and (vi) Tax withholding Form W-4P. (b) You may transfer funds from one investment program to the other in order to have sufficient funds in the appropriate investment program to cover the cost of the annuity purchase. (9) What if there is an error in my contract? Carefully examine your contract upon receipt. If there is an error or omission, you must report the error or omission immediately according to the instructions in your contract.
AMENDATORY SECTION (Amending WSR 02-18-048, filed 8/28/02, effective 9/1/02)
WAC 415-112-040 Actuarial ((tables,)) factors and schedules((, and factors)).
See chapter 415-02 WAC starting with WAC 415-02-300 for ((the tables, schedules, and)) information on how the department uses actuarial factors ((the department uses for calculating)) and schedules to calculate optional retirement allowances of members of the Washington state teachers' retirement system.
AMENDATORY SECTION (Amending WSR 10-14-112, filed 7/7/10, effective 8/7/10)
WAC 415-112-292 May I purchase TRS Plan 2 or Plan 3 service credit for public education experience gained by teaching out-of-state or for the federal government?
If you earned service credit for teaching out-of-state or for the federal government, you may be eligible to purchase that public education experience as TRS service credit. The public education claimed must have been covered by a retirement or pension plan and must have been as a teacher, as defined by that retirement or pension plan. (1) Do I qualify to purchase TRS service credit for public education experience outside of the state of Washington? You are eligible to purchase service credit under this section if you meet all the following requirements at the time of purchase: (a) You are employed in a TRS Plan 2 or Plan 3 eligible position; (b) You have at least two years of TRS service credit; (c) You earned the education experience service credit by teaching in a public school in another state within the United States or with the United States federal government; (d) The service was covered by a state, political subdivision of a state, or federal retirement plan; (e) You are not receiving a benefit from the other system; and (f) You are not eligible for an unreduced benefit from the other system. (2) Do I qualify to purchase public education experience service credit if I am a substitute teacher? You may purchase service credit under this section if your employer is currently reporting you as an active substitute teacher and you meet the requirements in subsection (1)(b) through (f) of this section. (3) If I purchase TRS service credit for public education experience, how may it be used? The service credit you purchase under this section will be treated the same as service credit you earn in TRS. It will be used in the calculation of your retirement allowance, to qualify for retirement or early retirement, and to meet the Plan 3 ten-year vesting requirement. (4) What is the cost of the service credit? You must pay the actuarial value of the resulting increase in your retirement allowance. The following formula is used to calculate the cost:
(5) How much TRS service credit may I purchase for out-of-state or federal public education experience? If you meet the requirements in this section, you may purchase up to seven years (eighty-four months) of TRS service credit. You may purchase service credit in one-month increments but may not purchase a partial month of service credit. (6) May I purchase some service credit now and some at a later date? No, you may not purchase some service credit now and some at a later date. You have one opportunity to purchase service credit under this section. You may purchase service credit from more than one retirement system provided you purchase it at the same time. (7) How do I purchase the service credit? To purchase TRS Plan 2 or Plan 3 service credit for out-of-state or federal public education experience, you must do the following: (a) You must complete an application provided by the department. (i) You must complete, sign, and forward the application to your former retirement system(s). (ii) Your former retirement system(s) must verify your service credit according to the instructions on the application. (iii) If you are purchasing service credit from more than one retirement system, each retirement system must verify your service on a separate application. (iv) Upon receipt of your properly completed application, the department will bill you for the service credit using the formula in subsection (4) of this section; the department will set a due date for the payment. (b) You must make payment in full by the due date. If your payment is not received by the due date, your bill will become null and void. You may request a new bill from the department at a later date and it will reflect factors in effect at that time. (i) You may make direct payment with either a personal or cashier's check. It may be possible to transfer funds from another eligible retirement account to pay your bill. However, DRS cannot accept funds in excess of the cost to make your purchase. You are advised to check with the administrator of your account to see if you can transfer those dollars. (ii) Your employer may, at its option, pay some or all of the cost of the service credit. (iii) If you are a Plan 2 member, your payment will be placed in your member account. (iv) If you are a Plan 3 member, fifty percent of your payment will be placed in your defined contribution account and fifty percent will be placed in the trust fund from which your retirement allowance will be paid. (8) Do I need to give up my right to a benefit from my previous retirement system for the service credit I purchase in TRS? No, you do not need to give up your right to a benefit from your previous retirement system for the service credit you purchase in TRS. At the time you purchase TRS service credit, you only need to prove that you are not currently receiving a benefit from your previous system and that you are not currently eligible for an unreduced benefit. Your previous retirement system will be required to verify this information on your application. (9) May I purchase public education experience service credit to add to my TRS service credit and also use out-of-state teaching service credit to qualify for early retirement? Yes, you may purchase public education experience to add to your TRS service credit and/or use out-of-state teaching to qualify for early retirement. However, you may not use the same out-of-state service for both programs. Please see WAC 415-112-295. For example, if you have seven years of eligible out-of-state service credit, you may purchase five years to increase your TRS service credit and use the remaining two years to qualify for early retirement.
AMENDATORY SECTION (Amending WSR 05-23-062, filed 11/14/05, effective 12/15/05)
WAC 415-112-504 What are the benefit options for Plan 1 members?
Upon retirement from Plan 1 for service under RCW 41.32.480 or disability under RCW 41.32.550 (1)(c), you must choose to have your retirement allowance paid to you by one of the options described in this section. You may also select an optional supplemental cost-of-living (COLA) adjustment. (1) May I withdraw any of my contributions? You may withdraw some or all of your accumulated contributions as follows: (a) If you retire according to the provisions of RCW 41.32.498, you may withdraw some or all of your accumulated contributions at the time of retirement. Your monthly retirement allowance will be actuarially reduced according to the amount you withdraw. (b) If you terminate service due to a disability under the conditions of RCW 41.32.550 (1)(a), you may withdraw all your accumulated contributions in a lump sum payment. You will receive no monthly retirement allowance. (2) Which option will pay my beneficiary a monthly allowance after my death? Options described in subsection (3)(c) through (e) of this section include a survivor feature. The person you name at the time of retirement to receive a monthly allowance after your death is referred to as your "survivor beneficiary." Upon your death your survivor beneficiary will be entitled to receive a monthly allowance for the duration of his or her life. Your monthly retirement allowance will be actuarially reduced to offset the cost of the survivor feature. ((The factors used to determine the amount of the reduction are in)) See WAC 415-02-380 for more information on how your monthly allowance is affected by choosing a survivor feature. (3) What are my benefit options? (a) Maximum benefit allowance (no survivor feature). The department will pay you the maximum benefit allowed by statute. Under this option you will receive a monthly retirement allowance throughout your lifetime. Your monthly allowance will cease upon your death, and any remaining balance of accumulated contributions will be: (i) Retained by the retirement fund if you retired for service under RCW 41.32.497 or 41.32.498; or (ii) Paid according to subsection (9) of this section if you retired because of disability and were receiving a monthly retirement allowance under RCW 41.32.550 (1)(c). (b) Option one: Standard allowance for service retirement (no survivor feature). The department will pay you a monthly retirement allowance throughout your lifetime. Your monthly allowance will cease upon your death, and any remaining balance of accumulated contributions will be paid according to subsection (9) of this section. (i) This benefit option has a lower monthly allowance than the maximum benefit allowance in (a) of this subsection because, with this option, any remaining accumulated contributions will be paid to your beneficiaries upon your death. (ii) If you are retiring because of disability under RCW 41.32.550 (1)(c), you will not benefit from this option because your beneficiaries will receive any remaining accumulated contributions under the maximum benefit allowance in (a) of this subsection. (c) Option two: Joint and whole allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to the gross monthly retirement allowance you were receiving. (d) Option three: Joint and one-half allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to one-half of the gross monthly retirement allowance you were receiving. (e) Option four: Joint and two-thirds allowance (available to members retiring on or after January 1, 1996). The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to two-thirds (66.667%) of the gross monthly retirement allowance you were receiving. (4) Do I need my spouse's consent on the option I choose? If you are married, you must provide your spouse's notarized signature indicating consent to the retirement option you select. If you do not provide spousal consent, the department will pay you a monthly retirement allowance based on option three (joint and one-half allowance) and record your spouse as the survivor beneficiary as required by RCW 41.32.530(2). If your survivor beneficiary has been designated by a dissolution order according to subsection (5) of this section, which was filed with the department at least thirty days before your retirement date, spousal consent is not required. (5) Can a dissolution order require that a former spouse be designated as a survivor beneficiary? Yes. A dissolution order may require that a former spouse be designated as a survivor beneficiary. The department is required to pay survivor benefits to a former spouse pursuant to a dissolution order that complies with RCW 41.50.790. (6) What is the supplemental COLA option? In addition to choosing a retirement benefit option described in subsection (3) of this section, you may choose a supplemental annual COLA. If you select this option, your monthly retirement allowance will be actuarially reduced to offset the cost of this benefit. (7) What happens if I choose a benefit option with a survivor feature and my survivor beneficiary dies before I do? Your monthly retirement allowance will increase, provided you submit proof of your survivor beneficiary's death to the department. The increase will begin accruing the first day of the month following the death. (a) Members who retire on or after January 1, 1996: Your increased monthly allowance will be: (i) The amount you would have received had you chosen the maximum benefit at the time of retirement; (ii) Minus any reduction in the maximum allowance resulting from a withdrawal of contributions; (iii) Plus any COLAs you received prior to your survivor beneficiary's death, based on your original option selection. Example: Lucinda retires from TRS Plan 1 in 1996. Lucinda withdraws some of her contributions, which actuarially reduces her maximum monthly allowance from $2,000 to $1,963.86. She chooses a benefit option with a survivor feature, and names Garth, her husband, as her survivor beneficiary. As a result, Lucinda's monthly allowance is further reduced from $1,963.86 to $1,846.03. Garth dies in January 2001. Lucinda's monthly allowance will increase to $1,963.86, the amount she would have received had she chosen the maximum benefit option (after reduction for her withdrawals). The total amount of the COLAs she received (based on her prior monthly allowance) will be added to the $1,963.86. (b) Members who retired before January 1, 1996: Your monthly retirement allowance will be adjusted according to the provisions of RCW 41.32.530(3). (8) May I change my benefit option after retirement? Your choice of a benefit option is irrevocable with the following three exceptions: (a) Return to membership. If you retire and then return to membership, you may choose a different retirement option upon your subsequent retirement. See RCW 41.32.044. (b) Postretirement marriage option. If you select the maximum benefit option or the standard allowance option at the time of retirement and marry after retirement, you may select a benefit option with a survivor feature and name your current spouse as survivor beneficiary, provided that: (i) Your benefit is not subject to a property division obligation pursuant to a dissolution order. See WAC 415-02-500; (ii) The selection is made during a one-year window, on or after the date of the first anniversary and before the second anniversary of your postretirement marriage; (iii) You provide a copy of your certified marriage certificate to the department; and (iv) You provide proof of your current spouse's birth date((; and (v) You exercise this option one time only)). (c) Removal of a nonspouse survivor option. If you select a benefit option with a survivor feature and name a nonspouse as survivor beneficiary at the time of retirement, you may remove that survivor beneficiary designation and have your benefit adjusted to a standard allowance. You may exercise this option one time only. (9) Who will receive the balance of my accumulated contributions, if any, after my death? (a) If you do not have a survivor beneficiary at the time of your death, and you die before the total of the annuity payments paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid according to this subsection. (i) Except as provided in (a)(ii) of this subsection, any remaining balance will be paid to the person or entity (i.e., trust, organization, or estate) you have nominated by written designation, executed and filed with the department. (ii) If you retired for service and chose the maximum benefit option, any remaining balance will be retained by the retirement fund. (b) If you have a survivor beneficiary at the time of your death, and your survivor beneficiary dies before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid to the person or entity (i.e., trust, organization, or estate) your survivor beneficiary has nominated by written designation, executed and filed with the department. (10) For more information, see RCW 41.32.530 and 41.32.550.
AMENDATORY SECTION (Amending WSR 08-10-025, filed 4/25/08, effective 5/26/08)
WAC 415-112-505 What are the benefit options for Plan 2 and 3 members?
Upon retirement for service under RCW 41.32.765 or 41.32.875, or disability under RCW ((415-112-790)) 41.32.790 or ((415-112-880)) 41.32.880, you must choose to have the defined benefit portion of your retirement allowance paid to you by one of the options described in this section. (1) Which option will pay my beneficiary a monthly allowance after my death? Options described in subsection (2)(b), (c), and (d) of this section include a survivor feature. The person you name at the time of retirement to receive a monthly allowance after your death is referred to as your "survivor beneficiary." Upon your death your survivor beneficiary will be entitled to receive a monthly allowance for the duration of his or her life. Your monthly retirement allowance will be actuarially reduced to offset the cost of the survivor feature. ((The factors used to determine the amount of the reduction are in)) See WAC 415-02-380 for more information on how your monthly allowance is affected by choosing a survivor feature. (2) What are my benefit options? (a) Option one: Standard allowance for service retirement (no survivor feature). The department will pay you a monthly retirement allowance throughout your lifetime. Your monthly allowance will cease upon your death. (b) Option two: Joint and whole allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to the gross monthly retirement allowance you were receiving. (c) Option three: Joint and one-half allowance. The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to one-half of the gross monthly retirement allowance you were receiving. (d) Option four: Joint and two-thirds allowance (available to members retiring on or after January 1, 1996). The department will pay you a reduced monthly retirement allowance throughout your lifetime. After your death, the department will pay your survivor beneficiary a monthly allowance equal to two-thirds (66.667%) of the gross monthly retirement allowance you were receiving. (3) Do I need my spouse's consent on the option I choose? If you are married, you must submit your spouse's notarized signature indicating consent to the retirement option you selected. If you do not provide spousal consent, the department will pay you a monthly retirement allowance based on option three (joint and one-half allowance) and record your spouse as the survivor beneficiary as required by RCW 41.32.785(2) and 41.32.851(2). If your survivor beneficiary has been designated by a dissolution order under RCW 41.50.790, which was filed with the department at least thirty days before your retirement date, spousal consent is not required. (4) Can a dissolution order require that a former spouse be designated as a survivor beneficiary? Yes. A dissolution order may require that a former spouse be designated as a survivor beneficiary. The department is required to pay survivor benefits to a former spouse pursuant to a dissolution order that complies with RCW 41.50.790. (5) What happens if I choose a benefit option with a survivor feature and my survivor beneficiary dies before I do? Your monthly retirement allowance will increase, provided you submit proof of your survivor beneficiary's death to the department. The increase will begin accruing the first day of the month following the death. (a) Members who retire on or after January 1, 1996: Your increased monthly allowance will be: (i) The amount you would have received had you chosen the standard allowance option; plus (ii) Any cost-of-living adjustments (COLAs) you received prior to your survivor beneficiary's death, based on your original option selection. Example: Agnes retires from TRS Plan 2 in 1996. She chooses a benefit option with a survivor feature and names Beatrice, her daughter, as her survivor beneficiary. As a result, Agnes's monthly allowance is reduced from $2,000 (standard allowance) to $1,750. Beatrice dies in 2001. Agnes's monthly allowance will increase to $2,191.05, which equals the amount she would have received had she chosen the standard allowance option, plus the COLAs she has received (based on her prior monthly allowance).
(b) Members who retired before January 1, 1996: Your monthly retirement allowance will be adjusted according to the provisions of RCW 41.32.785(3). (6) May I change my benefit option after retirement? Your choice of a benefit option is irrevocable with the following three exceptions: (a) Return to membership. If you retire and then return to membership, you may choose a different retirement option upon your subsequent retirement. See RCW 41.32.044. (b) Postretirement marriage option. If you select the standard allowance option at the time of retirement and marry after retirement, you may select a benefit option with a survivor feature and name your current spouse as survivor beneficiary, provided that: (i) Your benefit is not subject to a property division obligation pursuant to a dissolution order. See WAC 415-02-500; (ii) The selection is made during a one-year window, on or after the date of the first anniversary and before the second anniversary of your postretirement marriage; (iii) You provide a copy of your certified marriage certificate to the department; (iv) You provide proof of your current spouse's birth date; and (v) You exercise this option one time only. (c) Removal of a nonspouse survivor option. If you select a benefit option with a survivor feature and name a nonspouse as survivor beneficiary at the time of retirement, you may remove that survivor beneficiary designation and have your benefit adjusted to a standard allowance. You may exercise this option one time only. (7) Who will receive the balance of my accumulated contributions, if any, after my death? (a) Plan 2: (i) If you do not have a survivor beneficiary at the time of your death, and you die before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid: (A) To the person or entity (i.e., trust, organization, or estate) you have nominated by written designation, executed and filed with the department. (B) If you have not designated a beneficiary, or if your designated beneficiary is no longer living, then to your surviving spouse. (C) If not paid according to (a)(i)(A) or (B) of this subsection, then to your estate. (ii) If you have a survivor beneficiary at the time of your death, and your survivor beneficiary dies before the total of the retirement allowance paid equals the amount of your accumulated contributions at the time of retirement, the balance will be paid: (A) To the person or entity (i.e., trust, organization, or estate) your survivor beneficiary has nominated by written designation, executed and filed with the department. (B) If your survivor beneficiary has not designated a beneficiary, or if the designated beneficiary is no longer living, then to your survivor beneficiary's spouse. (C) If not paid according to (a)(ii)(A) or (B) of this subsection, then to your survivor beneficiary's estate. (b) Plan 3: The defined benefit stops upon your death or upon the death of your survivor beneficiary, if applicable. As a Plan 3 member, you do not contribute to the defined benefit portion of your retirement allowance. The defined contribution portion of your benefit will be distributed according to WAC 415-111-310.
AMENDATORY SECTION (Amending WSR 07-10-013, filed 4/20/07, effective 5/21/07)
WAC 415-112-555 What is the TRS Plan 1 minimum allowance?
RCW 41.32.4851 entitles certain TRS Plan 1 retirees and beneficiaries to a minimum monthly allowance. Subsection (3) of this section provides the amount of the minimum allowance and explains how it may be adjusted. (1) Do I qualify for the minimum allowance? Except as provided in subsection (2) of this section: (a) You qualify if your current monthly allowance, excluding any amount you receive for an additional (optional) annuity based on extra contributions, is less than the minimum allowance calculated under subsection (3) of this section, and: (i) You have twenty-five or more years of TRS Plan 1 service credit and have been retired at least twenty years; or (ii) You have twenty or more years of TRS Plan 1 service credit and have been retired at least twenty-five years. (b) You qualify if you are a TRS Plan 1 member's survivor beneficiary under WAC 415-112-504 and your current monthly allowance is less than the minimum allowance calculated under subsection (3) of this section, provided: (i) The member had twenty-five or more years of TRS Plan 1 service credit and retired at least twenty years ago; or (ii) The member had twenty or more years of TRS Plan 1 service credit and retired at least twenty-five years ago. (2) Do I qualify if I am receiving a temporary disability benefit? You do not qualify to receive the minimum allowance provided by this rule if you are currently receiving a temporary disability benefit under RCW 41.32.540. (3) How much is the minimum allowance in RCW 41.32.4851, and how is it adjusted? (a) Minimum allowance. The minimum allowance prior to July 1, 2006, was $1000. On July 1, 2006, and each July 1 thereafter, the minimum allowance increases by three percent, rounded to the nearest cent. (b) Adjustment. The minimum allowance in (a) of this subsection will be adjusted each July by the same factors that were otherwise used in the calculation of your monthly allowance, including, but not limited to: (i) Annuity withdrawal; (ii) Early retirement; (iii) Automatic cost-of-living (COLA) increases chosen at retirement; (iv) Joint survivor option chosen at retirement; (v) Survivor percentage. See Example 2 in this subsection.
((The tables, schedules, and factors the department currently uses to calculate benefits are located in WAC 415-02-300 through 415-02-380. However, factors have changed over time, and your minimum allowance will be adjusted using the same factors that were used to calculate your current monthly allowance.)) (4) If the minimum allowance is less than my current monthly allowance, will my monthly allowance be reduced? The department will compare the amount of the minimum allowance calculated under subsection (3) of this section with your current monthly allowance. You will always receive the higher of the two benefits. (5) If I qualify for the minimum allowance, when will I begin to receive it? (a) If your eligibility is based on meeting the requirements of subsection (1)(a)(i) or (b)(i) of this section, and: (i) You were eligible on July 1, 2004, you began receiving the minimum allowance in effect at that time, in lieu of your regular monthly allowance, in July 2004. (ii) You become eligible after July 1, 2004, you will begin receiving the minimum allowance, in lieu of your regular monthly allowance, the month in which you qualify. (b) If your eligibility is based on meeting the requirements of subsection (1)(a)(ii) or (b)(ii) of this section, and: (i) You were eligible on July 1, 2006, you began receiving the minimum allowance in effect at that time, in lieu of your regular monthly allowance, in July 2006. (ii) You become eligible after July 1, 2006, you will begin receiving the minimum allowance, in lieu of your regular monthly allowance, the month in which you qualify. (6) Will I receive cost-of-living adjustments (COLAs)? You will not receive the uniform COLA (based on your years of service credit) while you are receiving the minimum allowance. (7) How long will I continue to receive the minimum allowance? You will receive the minimum allowance calculated under subsection (3) of this section for your lifetime or until your regular retirement allowance, plus COLAs and other eligible adjustments, exceeds your minimum allowance. At that time you will automatically start receiving the higher benefit. Example:
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