Date of Adoption: December 12, 2000.

Purpose: To promulgate and amend department rules in order to implement the law codified in chapters 41.34 and 41.35 RCW creating TRS Plan 3 and SERS, respectively. TRS Plan 3 became effective July 1, 1996. SERS became effective September 1, 2000.

Citation of Existing Rules Affected by this Order:

Statutory Authority for Adoption: Chapters 41.32, 41.34, 41.35, 41.50 RCW.

Adopted under notice filed as WSR 00-22-076 on October 31, 2000.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 69, Amended 20, Repealed 2.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 69, Amended 20, Repealed 2.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 5, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0. Effective Date of Rule: Thirty-one days after filing.

December 12, 2000

John Charles

Director

OTS-4459.1

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

WAC 415-108-0109   System acronyms -- Definition.   The acronyms used in this chapter are defined as follows:

     (1) "PERS" means the public employees' retirement system.

     (2) "TRS" means the teachers' retirement system.

     (3) "SERS" means the school employees' retirement system.

[Statutory Authority: RCW 41.50.050.      95-16-053, § 415-108-0109, filed 7/25/95, effective 8/25/95.]

     (i) You work for a PERS employer and an employer covered by a retirement system of the city of Seattle, Spokane or Tacoma (First Class City Retirement System); and

     (ii) You cannot report service for the First Class City Retirement System in PERS;

     (b) The combined service credit under PERS and the retirement system listed in (a) of this subsection may not exceed one month of service for a calendar month of employment.

     (c) To qualify for PERS service credit, it is up to the employee to initiate the process by applying under subsection (2) of this section.

Example:

A member works part time for the City of Seattle and part time for the University of Washington (UW). She may receive partial service credit in PERS for the UW service since she cannot report the time she works for Seattle under PERS.

Note:

The combined service credit under PERS and the City of Seattle Retirement System may not exceed one month of service for a calendar month of employment. To receive PERS service credit she must apply to the department.

     (2) How do I apply?

     (a) To apply for membership and service credit under subsection (1) of this section you must send the department an application.      The application is a statement that you want membership and/or service credit in PERS.      Include:

     (i) Your name;

     (ii) Your SSN;

     (iii) All period(s) of service that you want to receive service credit for;

     (iv) All PERS and non-PERS employer(s) that you worked for during the periods of service referenced in (a)(iii) of this subsection.

     (b) After the department receives your application, it will contact your employer(s) to verify how much service credit you have earned.      When the department receives the necessary information, it will determine how much service credit you will receive.      At that time the department will send you a bill for member contributions and interest that must be paid in order to establish the service credit.

     (3) When should I submit my payment?

     You should pay contributions and interest required under subsection (2)(b) of this section within twenty-four consecutive months from the last day of the calendar year for which you claim service credit.      After that date, you must pay the actuarial cost of purchasing the service credit under RCW 41.40.104 and 41.50.165.

     (4) What if I worked before this WAC became effective?

     If you worked for a PERS employer and for one of the retirement systems listed in subsection (1) of this section, before this WAC became effective, you have until December 31, 2000, to apply in order to purchase service credit by paying member contributions plus interest.      After December 31, 2000, you must pay the actuarial cost of purchasing the service credit under RCW 41.40.104 and 41.50.165.

     (5) You may participate in PERS if you are concurrently employed, as described in WAC 415-113-200, in a SERS position.

     (6) Defined terms used.      Definitions for the following terms used in this section may be found in the sections listed.

     (a) "Membership" - RCW 41.40.023.

     (b) "Retirement plan" - WAC 415-108-0105.

     (c) "Service" - RCW 41.40.010.

     (d) "Normally" - WAC 415-108-0102.

[Statutory Authority: RCW 41.50.050.      99-22-043, § 415-108-726, filed 10/29/99, effective 11/29/99; 95-16-053, § 415-108-726, filed 7/25/95, effective 8/25/95.]

Former TRS Plan ((I)) 1 Members ¹/

Type of ((Concurrent)) Employment 2/	Type of Employer(s)	System You Will Be Reported In
A substitute or less than full-time teaching position and a PERS-eligible position	Same employer	PERS - for both positions.
	Separate TRS employers	PERS - for PERS position only. Your substitute part-time position is not reported unless you qualify for and elect to establish TRS membership under RCW 41.32.240. If you elect to establish TRS membership, your employers will report you in TRS for both positions. Any previously reported service credit and compensation in PERS will be transferred to TRS.
	A TRS employer and non-TRS employer	PERS - for PERS position only. Your substitute part-time position is not reported unless you qualify for and elect to establish TRS membership under RCW 41.32.240. If you elect to establish TRS membership, you must elect either to: 1.     Have your TRS service reported in PERS and receive service credit in PERS for both positions; or 2.     Have your TRS service reported in TRS and not receive service credit for the PERS position.
A full-time teaching position and an eligible PERS position	Same employer	TRS - for both positions.
	Separate TRS employers	TRS - for both positions.
	A TRS employer and non-TRS employer	You must elect to: 1.     Have your TRS service reported in PERS and receive service credit in PERS for both positions; or 2.     Have your TRS service reported in TRS and not receive service credit for the PERS position.

TRS Plan ((I)) 1 Members

Type of ((Concurrent)) Employment 2/	Type of Employer(s)	System You Will Be Reported In
A full-time or less than full-time TRS position and an eligible PERS position	Same employer	TRS - for both positions.
	Separate TRS employers	TRS - for both positions.
	A TRS employer and non-TRS employer	You must elect either to: 1.     Have your TRS service reported in PERS and receive service credit in PERS for both positions; or 2.     Have your TRS service reported in TRS and not receive service credit for PERS position.
A full-time or less than full-time TRS position and an ineligible PERS position	Same employer	TRS - for both positions.
	Separate TRS employers	TRS - for both positions.
	A TRS employer and non-TRS employer	TRS - for the TRS position only; your ineligible PERS position is not reportable.

TRS Plan ((II)) 2 Members

Type of ((Concurrent)) Employment 2/	Type of Employer(s)	System You Will Be Reported In
An eligible TRS position and an ineligible PERS position	Same employer	TRS - for both positions.
	Separate TRS employers	TRS - for TRS position only; your ineligible PERS position is not reported.
	A TRS employer and non-TRS employer	TRS - for TRS position only; your ineligible PERS position is not reported.
An eligible TRS position and an eligible PERS position	Same employer	TRS - for both positions.
	Separate TRS employers	TRS - for both positions.3/
	A TRS employer and non-TRS employer	You must elect either to: 1.     Have your TRS service reported in PERS and receive service credit in PERS for both positions; or 2.     Have your TRS service reported in TRS and not receive service credit for the PERS position.

PERS Members

Type of ((Concurrent)) Employment 2/	Type of Employer(s)	System You Will Be Reported In
An eligible PERS position and an ineligible TRS or substitute position	Same employer	PERS - for both positions.
	Separate TRS employers	PERS - for the PERS position only, unless you qualify for and elect to establish membership in TRS at the end of the school year under WAC 415-112-125(1). If you elect to establish TRS membership, your employers will report you in TRS for both positions. Any previously reported service credit and compensation in PERS will be transferred to TRS.
	A TRS employer and non-TRS employer	PERS - for the PERS position only. You will not be reported for the TRS position unless you elect to either: 1.     Have your TRS service reported in PERS and receive service credit in PERS for both positions; or 2.     Have your TRS service reported in TRS and not receive service credit for the PERS position.

Neither TRS Nor PERS Member

Type of ((Concurrent)) Employment 2/	Type of Employer(s)	System You Will Be Reported In
An ineligible TRS and an ineligible PERS position	Same employer	TRS - for both positions if the positions combined, qualify as an eligible position.
	Separate employers, TRS or non-TRS	Neither position reported.
A substitute teaching position and an ineligible PERS position	Same employer	Neither position reported. However, if you qualify, you may elect to establish membership in TRS at the end of the school year for your substitute teaching position under RCW 41.32.013 and WAC 415-112-140.
	Separate employers, TRS or non-TRS	Neither position reported. However, if you qualify, you may elect to establish membership in TRS at the end of the school year for your substitute teaching position under RCW 41.32.013 and WAC 415-112-140.

1/	"Former TRS ((I)) 1 member", as used here, means you terminate your membership by withdrawing your contributions.
2/	(("Concurrently")) Means during the same school year.
3/	EXAMPLE: A TRS ((II)) 2 member teaches in an eligible position and during the summer, she works for a state agency in an eligible position under PERS. Because the member has established membership in TRS ((II)) 2 through employment as a teacher, her state agency employer must report her service and compensation from the PERS position to the Department in TRS ((II)) 2.
	EXAMPLE: A TRS ((II)) 2 member is employed concurrently by School District A in an eligible TRS position and by School District B in an eligible PERS position. Because he is a TRS ((II)) 2 member, School District B employer must report his service and compensation from the PERS position to the Department in TRS ((II)) 2. If the member terminates his employment in the TRS position with School District A, School District B will report him in PERS for the PERS position.

     (2) Defined terms used.      Definitions for the following terms used in this section may be found in the sections listed.

     (a) "Eligible position" - RCW 41.40.010.

     (b) "Employer" - RCW 41.40.010 (PERS); RCW 41.32.010 (TRS).

     (c) "Ineligible position" - RCW 41.40.010.

     (d) "Member" - RCW 41.40.010.

     (e) "Membership" - RCW 41.40.023.

     (f) "Report" - WAC 415-108-0104

     (g) "Service" - RCW 41.40.010.

[Statutory Authority: RCW 41.50.050.      95-16-053, § 415-108-728, filed 7/25/95, effective 8/25/95.]

OTS-4460.2

[]

[]

[]

[]

Example:	An employer has used the twelve consecutive month period from September 1 to August 31 to evaluate the eligibility of positions. When the employer hires a new employee to fill an existing position, the employer must continue to use the September 1 through August 31 period to define a year for the position.
Example:	If the same employer in the above example hires a person to work in a project position beginning in November, the employer will use the twelve-month period beginning in November to evaluate the eligibility of the new position. The employer must consistently apply this twelve-month period to evaluate the eligibility of this position.

[]

     (1) "PERS" means the public employees' retirement system.

     (2) "TRS" means the teachers' retirement system.

     (3) "SERS" means the school employees' retirement system.

[]

[]

[]

[]

[]

     Any person aggrieved by any final decision must, before he/she appeals to a superior court, file a notice of appeal with the director personally or by mail, within sixty days from the date such decision was communicated to such person. The notice of appeal must contain the information required by WAC 415-08-020 as now existing or hereafter amended.

[]

     (1) As a member, you have the right to designate a beneficiary or beneficiaries to receive a benefit in the event of your death while you are an active member. You may change your beneficiary designation at any time by filing a change of beneficiary form with the department.

     (2) You may name:

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

     (b) Your estate;

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

     (i) A copy of the trust document;

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

     (iii) The tax identification number;

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

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

     Examples:

     EXAMPLE ONE.

     Facts

     John, a member, completes a beneficiary designation form.

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

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

     Result

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

     EXAMPLE TWO.

     Facts

     John, a member, completes a beneficiary designation form.

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

     In the place on the form reserved for trust/organizational beneficiaries, he lists his daughter Barbara personally (no trust name is provided). He checks the box labeled "primary beneficiary." John misunderstands the form and rather than provide the names of the trustee or trust administrator, John writes the word "both" in the blank provided.

     Result

     At John's death, the department learns that John has created no trusts. Subject to existing statute, if the department receives no notice of competing claims to John's death benefit, the department will distribute the death benefit to Ann. If the department receives notice of competing claims, a court resolution may be required.

[]

     (1) Definition. Qualified service credit -- For purposes of this section, the following types of service credit may be used to qualify for retirement:

     (a) SERS Plan 3 service credit;

     (b) Service credit earned in a dual member system, but only in combination with SERS Plan 3 service credit (chapter 41.54 RCW); or

     (c) Up to forty-five days of sick leave (RCW 41.35.010).

     (2) Members must be age 65 to retire with an unreduced defined benefit. SERS Plan 3 members can retire with an unreduced defined benefit at age 65 if they have accumulated the following amounts of qualified service credit:

     (a) Ten service credit years;

     (b) Five service credit years, including twelve service credit months after attaining age 54; or

     (c) Five service credit years by September 1, 2000, under Plan 2.

     (3) Members may retire with a reduced benefit after attaining age 55. A SERS Plan 3 member who has attained age 55 may retire with an actuarially reduced defined benefit (RCW 41.35.680) if they have accumulated at least ten years of qualified service credit.

     (4) Members may use only qualified service credit to receive a retirement benefit from the SERS Plan 3 defined benefit component.

     (5) To be eligible to receive a retirement benefit, SERS Plan 3 members must:

     (a) Submit a completed, signed, and notarized SERS Plan 3 retirement application; and

     (b) Terminate employment with all retirement system employers from which they are claiming service credit. Termination from non-SERS system employers is required in cases where a member is using dual member rules to qualify for retirement (chapter 41.54 RCW).

[]

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

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

[]

     (1) Option one (standard allowance). The department will pay a monthly retirement allowance based solely on the single life of the member, as provided by RCW 41.35.220, 41.35.440, or 41.35.690. When the retiree dies all benefits cease. Any remaining balance of the retiree's accumulated contributions will be paid to:

     (a) The retiree's designated beneficiary; or if none, to

     (b) The retiree's surviving spouse; or if none, to

     (c) The retiree's legal representative.

     The member must designate a beneficiary at the time of retirement by filing a completed and notarized form provided by the department.

     (2) Benefit options with a survivor feature. A retiring member is allowed to select from several retirement options which create an actuarially equivalent benefit that includes a survivor feature. The survivor feature entitles the survivor to receive a monthly allowance after the retiree dies. If the member chooses one of the survivor options, the monthly benefit the member will receive is actuarially reduced to offset the cost of the survivor feature. After the retiree dies, the department pays the survivor an allowance for the duration of his or her life. If the retiree and the survivor both die before the retiree's accumulated contributions are exhausted, the remaining balance is retained in the retirement fund.

     Once retired with a survivor option, the retiree may only change the survivor option upon returning to eligible employment for two consecutive years.

     (a) Option two (joint and whole allowance). When the retiree dies, the department pays the survivor an allowance equal to the gross monthly allowance received by the retiree.

     (b) Option three (joint and one-half allowance). When the retiree dies, the department pays the survivor an allowance equal to one-half of the retiree's gross monthly retirement allowance.

     (c) Option four (joint and two-thirds allowance).

     (i) This subsection applies to members retiring on or after January 1, 1996.

     (ii) When the retiree dies, the department pays the survivor an allowance equal to two-thirds (66.667%) of the retiree's gross monthly retirement allowance.

     (3) If a member retires on or after June 6, 1996, the department is required to pay an exspouse survivor benefits pursuant to a marital dissolution order that complies with RCW 41.50.790.

     (4) Benefit increases when survivor predeceases retiree (pop-up provision).

     (a) This section applies to members retiring on or after January 1, 1996, who select option two, three, or four.

     (b) If the survivor dies before the retiree, the retiree's monthly retirement allowance increases, effective the first day of the following month, to:

     (i) The amount that would have been received had the retiree chosen option one; plus

     (ii) Any cost-of-living adjustments the retiree received prior to the survivor's death based on the original option selection.

     (c) Pop-up recalculation examples.

     Plan two:

     Agnes retires from SERS Plan 2 in 2006 (Year 0). Agnes would like Beatrice, her daughter, to receive a monthly allowance after Agnes dies. Therefore, Agnes selects a retirement benefit option with a survivor feature. As a result, her monthly allowance is reduced from $2,000 (standard allowance) to $1,750. Unfortunately, Beatrice dies in 2011 (Year 5). Under the "pop-up" provision, Agnes' monthly benefit will increase to $2,191.05, the amount she would have received had she chosen option one (standard allowance) plus her accumulated COLAs:

Year		Option One (Standard Allow.)	Survivor Option (2, 3, 4) plus COLAs		COLA incr. (3% max)		$ Increase
0 (2006)		2,000.00	1,750.00		(ineligible)		0.00
1 (2007)			1,750.00		.02		35.00
2 (2008)			1,785.00		.03		53.55
3 (2009)			1,838.55		.025		45.96
4 (2010)			1,884.51		.03		56.54
5 (2011)		2,000.00	1,941.05		-		-
					Total COLAs		191.05
	Original Option One Benefit Amount $2000			+ Total COLAs + $191.05		= New Benefit Amount = $2,191.05*

* In the future (i.e. Year 4), COLAs will be based on the increased benefit amount.

     (d) If the survivor dies and the retiree's benefit increases under this section, and thereafter the retiree also dies before all contributions are exhausted, the remaining balance is retained by the retirement fund.

     (5) Any retiree who retired before January 1, 1996, and who elected to receive a reduced retirement allowance under subsection (2) of this section is entitled to receive a retirement allowance adjustment if the retiree meets the following conditions:

     (a) The retiree's designated beneficiary predeceases or has predeceased the retiree; and

     (b) The retiree provides to the department proper proof of the designated beneficiary's death. The retiree is not required to apply for the increased benefit provided by this subsection.

     The adjusted retirement allowance will be effective on July 1, 1998, or the first of the month following the date of death of the designated beneficiary, whichever comes last. The adjustment is computed as described in RCW 41.35.220 (3)(c) for Plan 2 retirees.

     (6) Survivor. For the purposes of this provision, "survivor" means a person nominated by the member to receive a monthly benefit allowance after the member dies. A member nominates the survivor at the time of retirement by filing a completed and notarized form provided by the department.

[]

SCHOOL EMPLOYEES RETIREMENT SYSTEM

Plant 2 Option 1

Monthly Benefit per $1.00

of Accumulation

SERS 2 Survivor Option Factors

Member Younger

Age Difference	OPTION II (100%)	OPTION IV (66 2/3%)	OPTION III (50%)
-20	0.928	0.951	0.962
-19	0.925	0.949	0.961
-18	0.922	0.946	0.959
-17	0.919	0.945	0.958
-16	0.916	0.942	0.956
-15	0.912	0.940	0.954
-14	0.908	0.937	0.952
-13	0.904	0.933	0.949
-12	0.898	0.930	0.946
-11	0.892	0.925	0.943
-10	0.885	0.920	0.939
-9	0.879	0.916	0.935
-8	0.873	0.911	0.932
-7	0.865	0.906	0.927
-6	0.857	0.900	0.923
-5	0.849	0.894	0.918
-4	0.839	0.887	0.912
-3	0.828	0.878	0.906
-2	0.813	0.867	0.897
-1	0.797	0.855	0.887

Member Older

Age Difference	OPTION II (100%)	OPTION IV (66 2/3%)	OPTION III (50%)
0	0.779	0.841	0.876
1	0.763	0.829	0.866
2	0.748	0.817	0.856
3	0.735	0.807	0.848
4	0.725	0.798	0.841
5	0.716	0.791	0.835
6	0.708	0.785	0.830
7	0.698	0.777	0.823
8	0.687	0.767	0.815
9	0.674	0.757	0.806
10	0.662	0.747	0.797
11	0.653	0.739	0.791
12	0.646	0.733	0.786
13	0.640	0.728	0.781
14	0.634	0.722	0.776
15	0.628	0.717	0.772
16	0.622	0.712	0.767
17	0.616	0.707	0.763
18	0.611	0.702	0.759
19	0.606	0.698	0.755
20	0.602	0.694	0.751
21	0.596	0.689	0.747
22	0.591	0.684	0.743
23	0.587	0.681	0.740
24	0.582	0.676	0.736
25	0.577	0.672	0.732
26	0.573	0.668	0.729
27	0.569	0.665	0.726
28	0.565	0.661	0.722
29