RCW ch. 41.50 — Revised Code of Washington Chapter 41.50 RCW — Department Of Retirement Systems

RCW 41.50.005 Policy and intent. The legislature sets forth as retirement policy and intent: (1) The retirement systems of the state shall provide similar benefits wherever possible. (2) Persons hired into eligible positions shall accrue service credit for all service rendered. (3) The calculation of benefits shall be done in such a manner as to prevent the arithmetic lowering of benefits. (4) Liberalization of the granting of service credit shall not jeopardize part-time employment of retirees in ineligible positions. [ 1991 c 343 s 2.] NOTES: Findings— RCW 41.50.010 Definitions. As used in this chapter, unless the context clearly indicates otherwise: (1) "Actuarial value" means the present value of a change in actuarial liability; (2) "Department" means the department of retirement systems; and (3) "Director" means the director of the department of retirement systems. [ 1994 c 197 s 30; 1975-'76 2nd ex.s. c 105 s 3.] NOTES: Intent— RCW 41.50.020 Department of retirement systems—Created—Director. There is created a department of state government to be known as the department of retirement systems. The executive and administrative head of the department shall be the director, who shall be appointed by the governor with the consent of the senate. The director shall serve at the pleasure of the governor and may be removed upon written notification by the governor to the respective retirement boards. The director shall have complete charge of and supervisory powers over the department and shall be paid a salary fixed by the governor in accordance with the provisions of RCW 43.03.040. If a vacancy occurs in the position of director while the senate is not in session, the governor shall make a temporary appointment until the next meeting of the senate at which time he or she shall present to that body the name of the person appointed to the position of director. [ 2012 c 117 s 82; 1975-'76 2nd ex.s. c 105 s 4.] RCW 41.50.030 Transfer of powers, duties, and functions of certain systems, administrators, and committees to department of retirement systems. (Effective until June 30, 2029.) (1) As soon as possible but not more than one hundred and eighty days after March 19, 1976, there is transferred to the department of retirement systems, except as otherwise provided in this chapter, all powers, duties, and functions of: (a) The Washington public employees' retirement system; (b) The Washington state teachers' retirement system; (c) The Washington law enforcement officers' and firefighters' retirement system; (d) The Washington state patrol retirement system; (e) The Washington judicial retirement system; and (f) The state treasurer with respect to the administration of the judges' retirement fund imposed pursuant to chapter 2.12 RCW. (2) On July 1, 1996, there is transferred to the department all powers, duties, and functions of the deferred compensation committee. (3) The department shall administer chapter 41.34 RCW. (4) The department shall administer the Washington school employees' retirement system created under chapter 41.35 RCW. (5) The department shall administer the Washington public safety employees' retirement system created under chapter 41.37 RCW. (6) The department shall administer the collection of employer contributions and initial prefunding of the higher education retirement plan supplemental benefits, also referred to as the annuity or retirement income plans created under chapter 28B.10 RCW. [ 2011 1st sp.s. c 47 s 20; 2004 c 242 s 42; 1998 c 341 s 501; 1995 c 239 s 316; 1975-'76 2nd ex.s. c 105 s 5.] NOTES: Intent— RCW 41.50.033 Crediting interest to retirement system accounts. (Effective until June 30, 2029.) (1) The director shall determine when interest, if provided by a plan, shall be credited to accounts in the public employees' retirement system, the teachers' retirement system, the school employees' retirement system, the public safety employees' retirement system, the law enforcement officers' and firefighters' retirement system, or the Washington state patrol retirement system. The amounts to be credited and the methods of doing so shall be at the director's discretion, except that if interest is credited, it shall be done at least quarterly. (2) Interest as determined by the director under this section is "regular interest" as defined in RCW 41.40.010, 41.32.010, 41.35.010, 41.37.010, 41.26.030, and 43.43.120. (3) The legislature affirms that the authority of the director under RCW 41.40.020 and 41.50.030 includes the authority and responsibility to establish the amount and all conditions for regular interest, if any. The legislature intends chapter 493, Laws of 2007 to be curative, remedial, and retrospectively applicable. [ 2019 c 64 s 18; 2007 c 493 s 1.] NOTES: Explanatory statement— RCW 41.50.040 Manner of selection and terms of transferred board members not affected. This chapter shall not affect the manner for selecting members of the boards affected by RCW 41.50.030, nor shall it affect the terms of any members serving on such boards. [1975-'76 2nd ex.s. c 105 s 6.] RCW 41.50.050 Powers, duties, and functions of director. The director shall: (1) Have the authority to organize the department into not more than four divisions, each headed by an assistant director; (2) Have free access to all files and records of various funds assigned to the department and inspect and audit the files and records as deemed necessary; (3) Employ personnel to carry out the general administration of the department; (4) Submit an annual written report of the activities of the department to the governor and the chairs of the appropriate legislative committees with one copy to the staff of each of the committees, including recommendations for statutory changes the director believes to be desirable; (5) Adopt such rules and regulations as are necessary to carry out the powers, duties, and functions of the department pursuant to the provisions of chapter 34.05 RCW. [ 1995 c 239 s 317; 1993 c 61 s 1; 1987 c 505 s 24; 1981 c 3 s 33; 1977 ex.s. c 251 s 1; 1975-'76 2nd ex.s. c 105 s 7.] NOTES: Intent— RCW 41.50.055 Director of retirement systems to administer Washington law enforcement officers' and firefighters' retirement system—Duties. (Effective until June 30, 2029.) The administration of the Washington law enforcement officers' and firefighters' retirement system is hereby vested in the director of retirement systems, and the director shall: (1) Keep in convenient form such data as shall be deemed necessary for actuarial evaluation purposes; (2) As of March 1, 1970, and at least every two years thereafter, through the state actuary, make an actuarial valuation as to the mortality and service experience of the beneficiaries under this chapter and the various accounts created for the purpose of showing the financial status of the retirement fund; (3) Adopt for the Washington law enforcement officers' and firefighters' retirement system the mortality tables and such other tables as shall be deemed necessary; (4) Keep a record of all its proceedings, which shall be open to inspection by the public; (5) From time to time adopt such rules and regulations not inconsistent with chapter 41.26 RCW, for the administration of the provisions of this chapter, for the administration of the fund created by this chapter and the several accounts thereof, and for the transaction of the business of the system; (6) Prepare and publish annually a financial statement showing the condition of the Washington law enforcement officers' and firefighters' fund and the various accounts thereof, and setting forth such other facts, recommendations and data as may be of use in the advancement of knowledge concerning the Washington law enforcement officers' and firefighters' retirement system, and furnish a copy thereof to each employer, and to such members as may request copies thereof; (7) Perform such other functions as are required for the execution of the provisions of chapter 41.26 RCW; (8) Fix the amount of interest to be credited at a rate which shall be based upon the net annual earnings of the Washington law enforcement officers' and firefighters' fund for the preceding twelve-month period and from time to time make any necessary changes in such rate; (9) Pay from the department of retirement systems expense fund the expenses incurred in administration of the Washington law enforcement officers' and firefighters' retirement system from those funds appropriated for that purpose; (10) Perform any other duties prescribed elsewhere in chapter 41.26 RCW; (11) Issue decisions relating to appeals initiated pursuant to RCW 41.16.145 and 41.18.104 as now or hereafter amended and shall be authorized to order increased benefits pursuant to RCW 41.16.145 and 41.18.104 as now or hereafter amended. [ 1991 c 35 s 16; 1982 c 163 s 6; 1981 c 3 s 27; 1975-'76 2nd ex.s. c 44 s 3; 1971 ex.s. c 216 s 1; 1969 ex.s. c 209 s 6. Formerly RCW 41.26.060.] NOTES: Intent— RCW 41.50.060 Delegation of powers, duties, and functions—Director's responsibilities. The director may delegate the performance of such powers, duties, and functions, other than those relating to rule making, to employees of the department, but the director shall remain and be responsible for the official acts of the employees of the department. The director shall be responsible for the public employees' retirement system, the teachers' retirement system, the school employees' retirement system, the judicial retirement system, the law enforcement officers' and firefighters' retirement system, the public safety employees' retirement system, and the Washington state patrol retirement system. The director shall also be responsible for the deferred compensation program. [ 2004 c 242 s 43; 1998 c 341 s 502; 1995 c 239 s 318; 1975-'76 2nd ex.s. c 105 s 8.] NOTES: Effective date— RCW 41.50.065 Accumulated service credit—Annual notification to members. (1) The department shall annually notify each member of each retirement system listed in RCW 41.50.030 of his or her: (a) Service credit accumulated in the preceding calendar year; and (b) Total service credit accumulated. (2) The department shall begin notifying members under this section according to the following schedule: (a) All members of the teachers' retirement system shall begin receiving annual notification of accumulated service credit and service credit earned within the preceding school year or one school year, as appropriate, no later than January 1, 1991; (b) All members, other than members of the teachers' retirement system, shall begin receiving annual notification of service credit accumulated within the preceding calendar year or school year, as appropriate, no later than June 30, 1992; (c) All members within five years of being eligible for service retirement shall begin receiving annual notification of total service credit accumulated no later than October 1, 1993; (d) Members, other than members of the teachers' retirement system, who are not within five years of being eligible for service retirement shall begin receiving annual notification of total service credit accumulated according to the following schedule: (i) For members of the law enforcement officers' and firefighters' retirement system, Washington state patrol retirement system, judicial retirement system, and judges' retirement system, no later than August 30, 1993; (ii) For employees of the state of Washington who are members of the public employees' retirement system, no later than August 30, 1994; (iii) For employees of political subdivisions of the state of Washington, no later than January 31, 1995; (iv) For employees of institutions of higher education as defined in RCW 28B.10.016, no later than June 30, 1995; and (v) For school district employees who are members of the public employees' retirement system, no later than April 30, 1996. (3) The department shall adopt rules implementing this section. [ 1991 c 282 s 1; 1990 c 8 s 2.] NOTES: Findings— RCW 41.50.070 Personnel. In addition to the exemptions set forth in RCW 41.06.070, the assistant directors, not to exceed two, and an internal auditor shall also be exempt from the application of the state civil service law, chapter 41.06 RCW. The officers and exempt personnel appointed by the director pursuant to this section shall be paid salaries fixed by the governor in accordance with the procedure established by law for fixing salaries for officers exempt from the operation of the state civil service law. All employees classified under chapter 41.06 RCW and engaged in duties pertaining to the functions transferred by this chapter shall be assigned to the department to perform their usual duties upon the same terms as formerly, without any loss of rights, subject to any action that may be appropriate thereafter in accordance with the laws and rules governing the state merit system. [1975-'76 2nd ex.s. c 105 s 9.] RCW 41.50.075 Funds established. (Effective until June 30, 2029.) (1) Two funds are hereby created and established in the state treasury to be known as the Washington law enforcement officers' and firefighters' system plan 1 retirement fund, and the Washington law enforcement officers' and firefighters' system plan 2 retirement fund which shall consist of all moneys paid into them in accordance with the provisions of this chapter and chapter 41.26 RCW, whether such moneys take the form of cash, securities, or other assets. The plan 1 fund shall consist of all moneys paid to finance the benefits provided to members of the law enforcement officers' and firefighters' retirement system plan 1, and the plan 2 fund shall consist of all moneys paid to finance the benefits provided to members of the law enforcement officers' and firefighters' retirement system plan 2. (2) All of the assets of the Washington state teachers' retirement system shall be credited according to the purposes for which they are held, to two funds to be maintained in the state treasury, namely, the teachers' retirement system plan 1 fund and the teachers' retirement system combined plan 2 and 3 fund. The plan 1 fund shall consist of all moneys paid to finance the benefits provided to members of the Washington state teachers' retirement system plan 1, and the combined plan 2 and 3 fund shall consist of all moneys paid to finance the benefits provided to members of the Washington state teachers' retirement system plan 2 and 3. (3) There is hereby established in the state treasury two separate funds, namely the public employees' retirement system plan 1 fund and the public employees' retirement system combined plan 2 and plan 3 fund. The plan 1 fund shall consist of all moneys paid to finance the benefits provided to members of the public employees' retirement system plan 1, and the combined plan 2 and plan 3 fund shall consist of all moneys paid to finance the benefits provided to members of the public employees' retirement system plans 2 and 3. (4) There is hereby established in the state treasury the school employees' retirement system combined plan 2 and 3 fund. The combined plan 2 and 3 fund shall consist of all moneys paid to finance the benefits provided to members of the school employees' retirement system plan 2 and plan 3. (5) There is hereby established in the state treasury the public safety employees' retirement system plan 2 fund. The plan 2 fund shall consist of all moneys paid to finance the benefits provided to members of the public safety employees' retirement system plan 2. (6)(a)(i) There is hereby established in the state treasury the higher education retirement plan supplemental benefit fund. The higher education retirement plan supplemental benefit fund shall consist of all moneys paid to finance the benefits provided to members of each of the higher education retirement plans. (ii) The fund in this subsection (6) was originally created under chapter 47, Laws of 2011 1st sp. sess. (Engrossed Substitute House Bill No. 1981). (b) The office of financial management must create individual accounts for each institution of higher education within the higher education retirement plan supplemental benefit fund. For fiscal year 2021, the office of financial management must transfer all the assets of the higher education retirement plan supplemental benefit fund into the individual accounts for each institution that will be used to manage the accounting for each benefit plan. The higher education retirement plan supplemental benefit fund will include all the amounts in the individual accounts created in this subsection. [ 2020 c 103 s 5; 2004 c 242 s 44; 2000 c 247 s 601; 1998 c 341 s 503; 1996 c 39 s 16; 1995 c 239 s 312; 1991 c 35 s 108.] NOTES: Findings— RCW 41.50.077 State treasurer is custodian of funds. The state treasurer is the custodian of, and accountant for, all funds and holdings of the retirement systems listed in RCW 41.50.030. [ 1991 c 35 s 109.] NOTES: Intent— RCW 41.50.080 Investment of funds of various systems. (Effective until June 30, 2029.) The state investment board shall provide for the investment of all funds of the Washington public employees' retirement system, the teachers' retirement system, the school employees' retirement system, the Washington law enforcement officers' and firefighters' retirement system, the Washington state patrol retirement system, the Washington judicial retirement system, the Washington public safety employees' retirement system, the higher education retirement plan supplemental benefit fund, and the judges' retirement fund, pursuant to RCW 43.84.150, and may sell or exchange investments acquired in the exercise of that authority. [ 2011 1st sp.s. c 47 s 21; 2004 c 242 s 45; 1998 c 341 s 504; 1981 c 3 s 34; 1977 ex.s. c 251 s 2; 1975-'76 2nd ex.s. c 105 s 10.] NOTES: Intent— RCW 41.50.085 Investments in accordance with established standards. Any investments under RCW 43.84.150 by the state investment board shall be made in accordance with the standards established in RCW 43.33A.140. [ 1998 c 14 s 2; 1977 ex.s. c 251 s 7.] RCW 41.50.088 Duties of director—Retirement investments. (1) The director shall adopt rules as necessary and exercise the following powers and duties: (a) The director shall recommend to the state investment board types of options for member self-directed investment in the teachers' retirement system plan 3, the school employees' retirement system plan 3, and the public employees' retirement system plan 3 as deemed by the director to be reflective of the members' preferences; (b) By July 1, 2005, subject to favorable tax determination by the internal revenue service, the director shall make optional actuarially equivalent life annuity benefit payment schedules available to members and survivors that may be purchased from the combined plan 2 and plan 3 funds under RCW 41.50.075; and (c) Determination of the basis for administrative charges to the self-directed investment fund to offset self-directed account expenses; (2) The director shall recommend to the state investment board types of options for participant self-directed investment in the state deferred compensation plan, as deemed by the director to be reflective of the participants' preferences. [ 2010 1st sp.s. c 7 s 28; 2005 c 327 s 14; 2000 c 247 s 602. Prior: 1998 c 341 s 507; 1998 c 116 s 10; 1995 c 239 s 302.] NOTES: Effective date— RCW 41.50.090 Department succeeds to and vested with transferred powers, duties, and functions—Boards to be kept informed—Approval of rules—Disability benefit applications. (Effective until June 30, 2029.) (1) Except as otherwise provided in this section, on the effective date of transfer as provided in RCW 41.50.030, the department shall succeed to and is vested with all powers, duties, and functions now or by any concurrent act of this 1976 legislature vested in the individual retirement boards set forth in RCW 41.50.030 relating to the administration of their various retirement systems, including but not limited to the power to appoint a staff and define the duties thereof: PROVIDED, That actuarial services required by the department shall be performed by the state actuary as provided in RCW 44.44.040. (2) The department shall keep each retirement board fully informed on the administration of the corresponding retirement system, and shall furnish any information requested by a retirement board. (3) Rules proposed by the director under RCW 2.10.070, 41.50.055, 41.32.025, or 41.40.020 shall be submitted to the appropriate retirement boards for review prior to adoption. After receiving approval of the members of the appropriate board, such rules shall become effective as provided by the administrative procedure act, chapter 34.05 RCW. (4) Each retirement board shall continue to perform all functions as are vested in it by law with respect to applications for benefits paid upon either temporary or permanent disability, with such staff assistance from the department as may be required. The director shall perform those functions with respect to disability benefits as are vested in him or her by RCW 41.26.120, 41.26.125, and 41.26.200. [ 1985 c 102 s 6; 1983 c 3 s 97; 1981 c 294 s 8; 1975-'76 2nd ex.s. c 105 s 11.] NOTES: Purpose— RCW 41.50.110 Expenses of administration paid from department of retirement systems expense fund—Administrative expense fee. (Effective until June 30, 2029.) (1) Except as provided by RCW 41.50.255 and subsection (6) of this section, all expenses of the administration of the department, the expenses of administration of the retirement systems, and the expenses of the administration of the office of the state actuary created in chapters 2.10, 2.12, 28B.10, 41.26, 41.32, 41.40, 41.34, 41.35, 41.37, 43.43, and 44.44 RCW shall be paid from the department of retirement systems expense fund. (2) In order to reimburse the department of retirement systems expense fund on an equitable basis the department shall ascertain and report to each employer, as defined in RCW 28B.10.400, 41.26.030, 41.32.010, 41.35.010, 41.37.010, or 41.40.010, the sum necessary to defray its proportional share of the entire expense of the administration of the retirement system that the employer participates in during the ensuing biennium or fiscal year whichever may be required. Such sum is to be computed in an amount directly proportional to the estimated entire expense of the administration as the ratio of monthly salaries of the employer's members bears to the total salaries of all members in the entire system. It shall then be the duty of all such employers to include in their budgets or otherwise provide the amounts so required. (3) The department shall compute and bill each employer, as defined in RCW 28B.10.400, 41.26.030, 41.32.010, 41.35.010, 41.37.010, or 41.40.010, at the end of each month for the amount due for that month to the department of retirement systems expense fund and the same shall be paid as are its other obligations. Such computation as to each employer shall be made on a percentage rate of salary established by the department. However, the department may at its discretion establish a system of billing based upon calendar year quarters in which event the said billing shall be at the end of each such quarter. (4) The director may adjust the expense fund contribution rate for each system at any time when necessary to reflect unanticipated costs or savings in administering the department. (5) An employer who fails to submit timely and accurate reports to the department may be assessed an additional fee related to the increased costs incurred by the department in processing the deficient reports. Fees paid under this subsection shall be deposited in the retirement system expense fund. (a) Every six months the department shall determine the amount of an employer's fee by reviewing the timeliness and accuracy of the reports submitted by the employer in the preceding six months. If those reports were not both timely and accurate the department may prospectively assess an additional fee under this subsection. (b) An additional fee assessed by the department under this subsection shall not exceed fifty percent of the standard fee. (c) The department shall adopt rules implementing this section. (6) Expenses other than those under RCW 41.34.060(4) shall be paid pursuant to subsection (1) of this section. (7) During the 2025-2027 fiscal biennium, the legislature may direct the state treasurer to transfer money in the department of retirement systems' expense fund to the state general fund. [ 2025 c 424 s 941; 2015 3rd sp.s. c 4 s 951. Prior: 2011 1st sp.s. c 50 s 936; 2011 1st sp.s. c 47 s 22; 2009 c 564 s 924; 2008 c 329 s 911; 2005 c 518 s 923; 2004 c 242 s 46; 2003 1st sp.s. c 25 s 914; prior: 2003 c 295 s 3; 2003 c 294 s 11; 1998 c 341 s 508; 1996 c 39 s 17; 1995 c 239 s 313; 1990 c 8 s 3; 1979 ex.s. c 249 s 8.] NOTES: Effective date— RCW 41.50.112 Report of member data—Department-designed format. (Effective until June 30, 2029.) Employers, as defined in RCW 41.26.030, 41.32.010, 41.34.020, 41.35.010, and 41.40.010, must report all member data to the department in a format designed and communicated by the department. Employers failing to comply with this reporting requirement shall be assessed an additional fee as defined under RCW 41.50.110(5). [ 2000 c 247 s 1107.] NOTES: Effective dates— RCW 41.50.120 Payment of moneys due department by employers—Interest. Notwithstanding any provision of law to the contrary, all employers of members of retirement systems administered by the department shall transmit by a warrant or check to the department within fifteen days following the end of each calendar month the moneys due the department as determined by the statutes governing each system together with such reports as the department may require. The director may collect interest on any employer's overdue payments at the rate of one percent per month on the outstanding balance where necessary to secure adherence to timeliness requirements. [ 1979 ex.s. c 249 s 9.] RCW 41.50.125 Interest on contributions—Department may charge. The department may charge interest, as determined by the director, on member or employer contributions owing to any of the retirement systems listed in RCW 41.50.030. The department's authority to charge interest shall extend to all optional and mandatory billings for contributions where member or employer contributions are paid other than immediately after service is rendered. Except as explicitly limited by statute, the director may delay the imposition of interest charges on late contributions under this section if the delay is necessary to implement required changes in the department's accounting and information systems. [ 1994 c 177 s 2.] NOTES: Findings— RCW 41.50.130 Correction of retirement systems' records—Adjustment in payment of benefits—Limitations. (1) The director may at any time correct errors appearing in the records of the retirement systems listed in RCW 41.50.030. Should any error in such records result in any member, beneficiary, or other person or entity receiving more or less than he or she would have been entitled to had the records been correct, the director, subject to the conditions set forth in this section, shall adjust the payment in such a manner that the benefit to which such member, beneficiary, or other person or entity was correctly entitled shall be paid in accordance with the following: (a) In the case of underpayments to a member or beneficiary, the retirement system shall correct all future payments from the point of error detection, and shall compute the additional payment due for the allowable prior period which shall be paid in a lump sum by the appropriate retirement system. (b) In the case of overpayments to a retiree or other beneficiary, the retirement system shall adjust the payment so that the retiree or beneficiary receives the benefit to which he or she is correctly entitled. The retiree or beneficiary shall either repay the overpayment in a lump sum within ninety days of notification or, if he or she is entitled to a continuing benefit, elect to have that benefit actuarially reduced by an amount equal to the overpayment. The retiree or beneficiary is not responsible for repaying the overpayment if the employer is liable under RCW 41.50.139 or 41.26.570. (c) In the case of overpayments to a person or entity other than a member or beneficiary, the overpayment shall constitute a debt from the person or entity to the department, recovery of which shall not be barred by laches or statute of limitations. (2) Except in the case of actual fraud or overpayments under RCW 41.26.570, in the case of overpayments to a member or beneficiary, the benefits shall be adjusted to reflect only the amount of overpayments made within three years of discovery of the error, notwithstanding any provision to the contrary in chapter 4.16 RCW. (3) Except in the case of actual fraud, no monthly benefit shall be reduced by more than fifty percent of the member's or beneficiary's corrected benefit. Any overpayment not recovered due to the inability to actuarially reduce a member's benefit due to: (a) The provisions of this subsection; or (b) the fact that the retiree's monthly retirement allowance is less than the monthly payment required to effectuate an actuarial reduction, shall constitute a claim against the estate of a member, beneficiary, or other person or entity in receipt of an overpayment. (4) Except as provided in subsection (2) of this section, obligations of employers or members until paid to the department shall constitute a debt from the employer or member to the department, recovery of which shall not be barred by laches or statutes of limitation. [ 2024 c 304 s 301; 1997 c 254 s 15; 1994 c 177 s 3; 1987 c 490 s 1; 1982 c 13 s 1.] NOTES: Effective date— RCW 41.50.131 Correction of errors in reporting compensation earnable. (1) Notwithstanding RCW 41.50.130, the department is not required to correct, nor to cause any employer to correct the reporting error described in subsection (2) of this section. (2) Standby pay and other similar forms of compensation that are not pay for time worked were not salary or wages for personal services within the meaning of RCW 41.40.010(8). Contrary to RCW 41.40.010(8), some employers have been reporting standby pay to the department as compensation earnable. To avoid unduly impacting the retirement allowances of persons who have retired on or before June 9, 1994, the department is not required to correct, nor cause to be corrected, any misreporting of amounts identified as standby pay through June 9, 1994. Any erroneous reporting of amounts identified as standby pay to the department on or after June 9, 1994, shall be corrected as an error under RCW 41.50.130. (3) The forgiveness of past misreporting under subsection (2) of this section constitutes a benefit enhancement for those individuals for whom amounts received as standby pay were misreported to the department. Prior to June 9, 1994, no retirement system member had any right, contractual or otherwise, to have amounts identified as standby pay included as compensation earnable. [ 1994 c 177 s 9.] NOTES: Findings— RCW 41.50.132 Correction of erroneous deduction or pickup of contributions. (1) By December 31, 1992, the department of retirement systems shall implement and complete the following process for those members of the law enforcement officers' and firefighters' retirement system plan 2, public employees' retirement system plans 1 and 2, and teachers' retirement system plan 2 who erroneously had contributions either deducted or picked-up from their earnings on and after January 1, 1987: (a) Create a list of transactions by employer for those members whose employer either deducted or picked-up employee contributions during a month where an employee did not work sufficient hours to earn service credit; (b) Provide the affected employers with direction and guidance for the review of the transmitted lists from this subsection and the employers' preparation of any necessary correcting transactions to the department's records; (c) Receive all correcting transactions submitted by the employer. (2) All debits and credits to all member accounts affected by this remedial process shall be reconciled by the department. (3) All moneys payable to an affected member, or any moneys to be further deducted or picked-up from such member's earnings, shall be determined and accomplished solely by the employer. (4) After December 31, 1992, no credit of employer contributions shall be made. (5) Return of contributions to an employee by the department is limited solely to when such member retires or otherwise terminates his or her membership and chooses to withdraw them with any accumulated interest. (6) Employer contributions forfeited under this section shall be transferred to the department of retirement systems expense account. [ 1991 c 343 s 13.] NOTES: Findings— RCW 41.50.133 Recovery of certain overpayments to surviving beneficiaries under the teachers' retirement system. (1) The director of the department of retirement systems shall not recover from surviving beneficiaries of members who died in service any pension overpayment based on the application of section 2, chapter 96, Laws of 1979 ex. sess., nor shall such benefits be reduced. (2) The director of the department of retirement systems shall not recover from retirees any pension overpayments made between July 1, 1990, and February 1, 1992, based upon the application of *RCW 41.40.198, 41.40.1981, 41.40.325, 41.32.485, 41.32.487, or 41.32.575 due to the incorrect calculation of the "age sixty-five allowance" as this term is defined in *RCW 41.32.575(1)(a) and 41.40.325(1)(a). [ 1992 c 212 s 21; 1987 c 490 s 2.] NOTES: *Reviser's note: RCW 41.50.135 Collection of overpayments—Determination of liability—Administrative process created. (1) If the department finds that any member, beneficiary, or other person or entity has been paid an amount of retirement benefits to which that person or entity is not entitled, and the person is not entitled to a continuing benefit from any of the retirement systems listed in RCW 41.50.030, the department may issue an order and notice of assessment specifying the amount due, including interest, to be remitted to the department. The order and notice of assessment shall be served upon any person or entity who may have received benefits to which the person or entity is not entitled. The order and notice of assessment shall be served by the department in the manner prescribed for the service of a summons in a civil action, or by certified mail to the last known address of the obligor as shown by the records of the department. (2) Any notice of assessment under subsection (1) of this section shall constitute a determination of liability from which the member, beneficiary, or other person or entity served may appeal by filing a petition for adjudicative proceedings with the director personally or by mail within sixty days from the date the assessment was served. If a petition for adjudicative proceedings is not filed within sixty days of the delivery of the notice of assessment, the determination that was the basis for establishing the overpayment debt and the assessment is conclusive and final. (3) This section creates an administrative process for the collection of overpayments from persons who are not entitled to a continuing benefit from one of the retirement systems listed in RCW 41.50.030. The collection of overpayments from persons entitled to a continuing benefit from one of the retirement systems listed in RCW 41.50.030 is governed by RCW 41.50.130. [ 1996 c 56 s 1.] RCW 41.50.136 Collection of overpayments—Issuance of warrant—Lien. Whenever a notice of determination of liability becomes conclusive and final under RCW 41.50.135, the director, upon giving at least twenty days notice by certified mail return receipt requested to the individual's last known address of the intended action, may file with the superior court clerk of any county within the state a warrant in the amount of the notice of determination of liability plus a filing fee under RCW 36.18.012(10). The clerk of the county where the warrant is filed shall immediately designate a superior court cause number for the warrant, and the clerk shall cause to be entered in the judgment docket under the superior court cause number assigned to the warrant, the name of the person mentioned in the warrant, the amount of the notice of determination of liability, and the date when the warrant was filed. The amount of the warrant as docketed shall become a lien upon the title to, and any interest in, all real and personal property of the person against whom the warrant is issued, the same as a judgment in a civil case duly docketed in the office of such clerk. A copy of the warrant shall be mailed to the person mentioned in the warrant by certified mail to the person's last known address within five days of its filing with the clerk. [ 2001 c 146 s 5; 1996 c 56 s 2.] RCW 41.50.137 Collection of overpayments—Department may issue subpoenas. The department may issue subpoenas to compel the statement of witnesses and the production of any books, records, or documents necessary or relevant to the department's administration of duties under this chapter. It is unlawful for any person or entity, without just cause, to fail to comply with any subpoena issued under this section. [ 1996 c 56 s 3.] RCW 41.50.138 Collection of overpayments—Waiver of overpayment. (1) The director may waive repayment of all or part of a retirement allowance overpayment, under RCW 41.50.130 only, if: (a) The overpayment was not the result of the retiree's or the beneficiary's nondisclosure, fraud, misrepresentation, or other fault; and (b) The director finds in his or her sole discretion that recovery of the overpayment would be a manifest injustice. (2) The director may not waive an overpayment if the member, retiree, or beneficiary: (a) Provided incorrect information to the department or the employer which caused the overpayment; (b) Failed to provide information to the department or the employer which was necessary to correctly calculate the retirement allowance; (c) Caused the employer to provide incorrect information or fail to provide necessary information; or (d) Knew or reasonably should have known that he or she was in receipt of an overpayment. (3) If the director waives an overpayment and the overpayment occurred because the member's or retiree's employer: (a) Provided incorrect information to the department which caused the overpayment; (b) Failed to provide information to the department which was necessary to correctly calculate the retirement allowance; (c) Caused another party to provide incorrect information or fail to provide necessary information; or (d) Knew or reasonably should have known that the information provided would cause the retiree or beneficiary to be overpaid; then the department shall bill the member's or retiree's employer for the amount of the overpayment that would have been recoverable under RCW 41.50.130 had the overpayment not been waived pursuant to this section. (4) Nothing in this section authorizes the director to waive the prospective correction of an overstated retirement allowance. (5) If the director waives an overpayment he or she must state in writing: (a) The nature of and reason for the overpayment; (b) The reason for the waiver; and (c) The amount of the overpayment that is waived. The department will maintain a file containing documentation of all overpayments waived. The department will provide the file to any person upon request. (6) This section applies to overpayments identified on or after September 1, 1994. [ 1996 c 56 s 4.] RCW 41.50.139 Retirement status reports—Overpayments—Employer obligations. (1) Retirement system employers shall elicit on a written form from all new employees as to their having been retired from a retirement system listed in RCW 41.50.030. Employers must report any retirees in their employ to the department. If a retiree works in excess of applicable postretirement employment restrictions and the employer failed to report the employment of the retiree, that employer is liable for the loss to the trust fund. (2) If an employer erroneously reports to the department that an employee has separated from service such that a person receives a retirement allowance in contravention of the applicable retirement system statutes, the person's retirement status shall remain unaffected and the employer is liable for the resulting overpayments. (3) Upon receipt of a billing from the department, the employer shall pay into the appropriate retirement system trust fund the amount of the overpayment plus interest as determined by the director. The employer's liability under this section shall not exceed the amount of overpayments plus interest received by the retiree within three years of the date of discovery, except in the case of fraud. In the case of fraud, the employer is liable for the entire overpayment plus interest. [ 1997 c 254 s 16.] NOTES: Intent— RCW 41.50.140 Cooperation of employers in administration of systems—Employer contributions for retroactive service credit—Employee contributions paid by employer. (1) Every employer participating in one or more of the retirement systems listed in RCW 41.50.030 shall fully cooperate in the administration of the systems in which its employees participate, including the distribution of information to employees, and shall accept and carry out all other duties as required by law, regulation, or administrative instruction. (2) If an employee is entitled to retroactive service credit which was not previously established through no fault of the employee, or through an employer error which has caused a member's compensation or contributions to be understated or overstated so as to cause a loss to the retirement funds, the director may bill the employer for the loss, to include interest, if applicable. The employer contributions, with interest thereon, will be treated as if in fact the interest was part of the normal employer contribution and no distribution of interest received shall be required. (3) Employer-paid employee contributions will not be credited to a member's account until the employer notifies the director in writing that the employer has been reimbursed by the employee or beneficiary for the payment. The employer shall have the right to collect from the employee the amount of the employee's obligation. Failure on the part of the employer to collect all or any part of the sums which may be due from the employee or beneficiary shall in no way cause the employer obligation for the total liability to be lessened. [ 1982 1st ex.s. c 52 s 33.] NOTES: Effective dates— RCW 41.50.145 Plan 3—Loss of investment return due to error—Liability. (1) If the department determines that due to employer error a member of plan 3 has suffered a loss of investment return, the employer shall pay the department for credit to the member's account the amount determined by the department as necessary to correct the error. (2) If the department determines that due to departmental error a member of plan 3 has suffered a loss of investment return, the department shall credit to the member's account from the appropriate retirement system combined plan 2 and 3 fund the amount determined by the department as necessary to correct the error. [ 1999 c 223 s 2; 1998 c 341 s 515.] NOTES: Effective date— RCW 41.50.150 Retirement benefits based on excess compensation—Employer liable for extra retirement costs. (Effective until June 30, 2029.) (1) The employer of any employee whose retirement benefits are based in part on excess compensation, as defined in this section, shall, upon receipt of a billing from the department, pay into the appropriate retirement system the present value at the time of the employee's retirement of the total estimated cost of all present and future benefits from the retirement system attributable to the excess compensation. The state actuary shall determine the estimated cost using the same method and procedure as is used in preparing fiscal note costs for the legislature. However, the director may in the director's discretion decline to bill the employer if the amount due is less than fifty dollars. Accounts unsettled within thirty days of the receipt of the billing shall be assessed an interest penalty of one percent of the amount due for each month or fraction thereof beyond the original thirty-day period. (2) "Excess compensation," as used in this section, includes the following payments, if used in the calculation of the employee's retirement allowance: (a) A cash out of unused annual leave in excess of two hundred forty hours of such leave. "Cash out" for purposes of this subsection means: (i) Any payment in lieu of an accrual of annual leave; or (ii) Any payment added to salary or wages, concurrent with a reduction of annual leave; (b) A cash out of any other form of leave; (c) A payment for, or in lieu of, any personal expense or transportation allowance to the extent that payment qualifies as reportable compensation in the member's retirement system; (d) The portion of any payment, including overtime payments, that exceeds twice the regular daily or hourly rate of pay; and (e) Any termination or severance payment. (3) This section applies to the retirement systems listed in RCW 41.50.030 and to retirements occurring on or after March 15, 1984. Nothing in this section is intended to amend or determine the meaning of any definition in chapter 2.10, 2.12, 41.26, 41.32, 41.40, 41.35, 41.37, or 43.43 RCW or to determine in any manner what payments are includable in the calculation of a retirement allowance under such chapters. (4) An employer is not relieved of liability under this section because of the death of any person either before or after the billing from the department. [ 2004 c 242 s 47; 1998 c 341 s 509; 1997 c 221 s 1; 1995 c 244 s 1; 1984 c 184 s 1.] NOTES: Effective date— RCW 41.50.152 Payment of excess compensation—Public notice requirements. (1) Except as limited by subsection (3) of this section, the governing body of an employer under chapter 41.32, 41.35, 41.37, or 41.40 RCW shall comply with the provisions of subsection (2) of this section prior to executing a contract or collective bargaining agreement with members under chapter 41.32, 41.35, 41.37, or 41.40 RCW which provides for: (a) A cash out of unused annual leave in excess of two hundred forty hours of such leave. "Cash out" for purposes of this subsection means any payment in lieu of an accrual of annual leave or any payment added to regular salary, concurrent with a reduction of annual leave; (b) A cash out of any other form of leave; (c) A payment for, or in lieu of, any personal expense or transportation allowance; (d) The portion of any payment, including overtime payments, that exceeds twice the regular rate of pay; or (e) Any other termination or severance payment. (2) Any governing body entering into a contract that includes a compensation provision listed in subsection (1) of this section shall do so only after public notice in compliance with the open public meetings act, chapter 42.30 RCW. This notification requirement may be accomplished as part of the approval process for adopting a contract in whole, and does not require separate or additional open public meetings. At the public meeting, full disclosure shall be made of the nature of the proposed compensation provision, and the employer's estimate of the excess compensation billings under RCW 41.50.150 that the employing entity would have to pay as a result of the proposed compensation provision. The employer shall notify the department of its compliance with this section at the time the department bills the employer under RCW 41.50.150 for the pension impact of compensation provisions listed in subsection (1) of this section that are adopted after July 23, 1995. (3) The requirements of subsection (2) of this section shall not apply to the adoption of a compensation provision listed in subsection (1) of this section if the compensation would not be includable in calculating benefits under chapter 41.32, 41.35, 41.37, or 41.40 RCW for the employees covered by the compensation provision. [ 2004 c 242 s 48; 1998 c 341 s 510; 1995 c 387 s 1.] NOTES: Effective date— RCW 41.50.155 Erroneous withdrawals of contributions—Restoration. (1) If a person receives a withdrawal of accumulated contributions from any of the retirement systems listed in RCW 41.50.030 in contravention of the restrictions on withdrawal for the particular system, the member shall no longer be entitled to credit for the period of service represented by the withdrawn contributions. The erroneous withdrawal shall be treated as an authorized withdrawal, subject to all conditions imposed by the member's system for restoration of withdrawn contributions. Failure to restore the contributions within the time permitted by the system shall constitute a waiver by the member of any right to receive a retirement allowance based upon the period of service represented by the withdrawn contributions. (2) All erroneous withdrawals occurring prior to June 9, 1994, shall be subject to the provisions of this section. The deadline for restoring the prior erroneous withdrawals shall be five years from June 9, 1994, for members who are currently active members of a system. [ 1994 c 177 s 4.] NOTES: Findings— RCW 41.50.160 Restoration of withdrawn contributions. The department of retirement systems shall incorporate the development of individual member accounts receivable into its information systems projects for fiscal years 1993 and 1994, so that by January 1, 1994, members of state retirement systems who are otherwise eligible to restore previously withdrawn contributions have the option to make restoration in a manner determined by the department. [ 1994 c 197 s 31; 1992 c 195 s 2.] NOTES: Intent— RCW 41.50.165 Establishing, restoring service credit—Conditions. (1) Except for those affected by subsection (4) of this section, a member of a retirement system specified by RCW 41.50.030 or, one previously established by the state but closed to new membership, may, as provided in each retirement system: (a) Establish allowable membership service not previously credited; (b) Restore all or a part of that previously credited membership service represented by withdrawn contributions; or (c) Restore service credit represented by a lump sum payment in lieu of benefits. (2) Persons who previously have failed to: (a) Establish service credit for service previously earned; or (b) Reestablish service credit by the restoration of withdrawn contributions or repayment of a lump sum payment in lieu of a benefit, may now establish or reestablish such service credit by paying the actuarial value of the resulting increase in their benefit in a manner defined by the department. (3) Any establishment of service credit for service previously rendered, restoration of service credit destroyed, or repayment of a lump sum received in lieu of benefit must be completed prior to retirement. (4) Service credit is established for or restored to the period in which the service credit is earned. [ 1994 c 197 s 2.] NOTES: Intent— RCW 41.50.170 Notification of restoration rights. Upon termination for reasons other than retirement, the department shall inform a member withdrawing his or her contributions, and the member shall acknowledge in writing, of the right to restore such contributions upon reestablishment of membership in the respective retirement system and the requirements involved in such restoration. [ 1994 c 197 s 3.] NOTES: Intent— RCW 41.50.175 Adoption of rules. The department shall adopt rules under chapter 34.05 RCW implementing and administering chapter 197, Laws of 1994. These rules are to include, but are not limited to: (1) The application and calculation of actuarial value, with the agreement of the state actuary; and (2) Establishing the minimum partial payment or the minimum units of restored service, or both. [ 1994 c 197 s 4.] NOTES: Intent— RCW 41.50.180 Inactive accounts—Identification, closing, and refund. (1) By January 1, 2022, the department will establish by rule an effective means of: (a) Identifying inactive accounts of nonvested members of the retirement systems listed in RCW 41.50.030 whose account balance is less than one thousand dollars; and (b) Providing for the orderly closing and refunding of member account balances in those accounts in accordance with the federal internal revenue code. (2) The refund of a member's account balance will terminate all rights to future benefits, unless otherwise restored under the rules for each of the respective retirement systems. [ 2021 c 189 s 1.] RCW 41.50.200 Subdivision of retirement system funds. In the records of the teachers' retirement system the teachers' retirement system plan 1 fund shall be subdivided into the member reserve, the pension reserve, and other funds as may from time to time be created by the director for the purpose of the internal accounting record. The director may adopt rules creating or deleting funds as he or she deems necessary. [ 1992 c 212 s 2; 1991 c 35 s 32; 1989 c 273 s 16; 1982 1st ex.s. c 52 s 7; 1969 ex.s. c 150 s 1; 1963 ex.s. c 14 s 2; 1955 c 274 s 2; 1947 c 80 s 3; Rem. Supp. 1947 s 4995-28. Prior: 1941 c 97 s 2, part; 1937 c 221 s 3, part; 1923 c 187 s 5, part; Rem. Supp. 1941 s 4995-3, part. Formerly RCW 41.32.030.] NOTES: Intent— RCW 41.50.205 Records—Teachers' retirement system annual report. The department shall keep a record of all its proceedings, which shall be open to public inspection. It shall publish annually a report showing the fiscal transactions of the Washington state teachers' retirement system for the preceding school year; the amount of the accumulated cash and securities of the system, and the last balance sheet showing the financial condition of the system by means of an actuarial valuation of the assets and liabilities of the retirement system. [ 1991 c 35 s 33; 1969 ex.s. c 150 s 4; 1947 c 80 s 12; Rem. Supp. 1947 s 4995-31. Prior: 1941 c 97 s 2, part; 1937 c 221 s 3, part; Rem. Supp. 1941 s 4995-3, part. Formerly RCW 41.32.120.] NOTES: Intent— RCW 41.50.210 Medical director. The director shall designate a medical director. If required, other physicians may be employed to report on special cases. The medical director shall arrange for and pass upon all medical examinations required under the provisions of chapter 41.32 RCW, investigate all essential statements and certificates by or on behalf of a member in connection with an application for a disability allowance, and report in writing to the board of trustees the conclusions and recommendations upon all matters under referral. [ 1992 c 72 s 10; 1991 c 35 s 34; 1947 c 80 s 13; Rem. Supp. 1947 s 4995-32. Prior: 1941 c 97 s 2, part; 1937 c 221 s 3, part; Rem. Supp. 1941 s 4995-3, part. Formerly RCW 41.32.130.] NOTES: Intent— RCW 41.50.215 Teachers' retirement system funds—Annual interest to be credited. From interest and other earnings on the moneys of the Washington state teachers' retirement system, and except as otherwise provided in *RCW 41.32.499, at the close of each fiscal year the department shall make an allowance of regular interest on the balance which was on hand at the beginning of the fiscal year in each of the teachers' retirement system funds as they may deem advisable; however, no interest shall be credited to the expense fund. [ 1992 c 212 s 6; 1991 c 35 s 36; 1973 1st ex.s. c 189 s 7; 1955 c 274 s 5; 1947 c 80 s 19; Rem. Supp. 1947 s 4995-38. Prior: 1941 c 97 s 6, part; 1939 c 86 s 6, part; 1937 c 221 s 7, part; Rem. Supp. 1941 s 4995-7, part. Formerly RCW 41.32.190.] NOTES: *Reviser's note: RCW 41.50.220 Trustees, employees not to guarantee loans. No trustee or employee of the department shall become an endorser or surety or an obligor for moneys loaned by the department. [ 1991 c 35 s 37; 1947 c 80 s 23; Rem. Supp. 1947 s 4995-42. Prior: 1941 c 97 s 6, part; 1939 c 86 s 6, part; 1937 c 221 s 7, part; Rem. Supp. 1941 s 4995-7, part. Formerly RCW 41.32.230.] NOTES: Intent— RCW 41.50.230 Employer reports to department. On or before a date specified by the department in each month every employer shall file a report with the department on a form provided, stating the name of the employer and with respect to each employee who is a member or who is required to become a member of the Washington state teachers' retirement system: (1) The full name, (2) the earnable compensation paid, (3) the employee's contribution to the retirement system, and (4) other information as the department shall require. [ 1991 c 35 s 51; 1983 c 56 s 14; 1975-'76 2nd ex.s. c 16 s 1. Prior: 1975 1st ex.s. c 275 s 150; 1975 c 43 s 32; 1969 ex.s. c 176 s 96; 1967 c 50 s 4; 1963 ex.s. c 14 s 13; 1947 c 80 s 42; Rem. Supp. 1947 s 4995-61. Formerly RCW 41.32.420.] NOTES: Intent— RCW 41.50.235 Teachers' retirement system salary deductions. Every officer authorized to issue salary warrants to teachers shall deduct from the salary payments to any member of the Washington state teachers' retirement system plan 1 regularly employed an amount which will result in total deductions of six percent of the amount of earnable compensation paid in any fiscal year. These deductions shall be transmitted and reported to the retirement system as directed by the department. [ 1991 c 35 s 52; 1967 c 50 s 5; 1963 ex.s. c 14 s 14; 1955 c 274 s 20; 1947 c 80 s 43; Rem. Supp. 1947 s 4995-62. Prior: 1941 c 97 s 5, part; 1939 c 86 s 5, part; 1937 c 221 s 6, part; Rem. Supp. 1941 s 4995-6, part. Formerly RCW 41.32.430.] NOTES: Intent— RCW 41.50.240 Duties of payroll officer. The person responsible for making up the payroll shall transmit promptly to the department at the end of each and every payroll period a copy of the original payroll voucher or such other payroll report as the department may require showing thereon all deductions for contributions for the teachers' retirement system made from the earnable compensation of a member of the teachers' retirement system together with warrants or checks covering the total of such deductions. The department shall place such moneys into the proper funds established in this chapter. [ 1977 ex.s. c 293 s 17. Formerly RCW 41.32.830.] NOTES: Effective date— RCW 41.50.255 Payment of expenses of retirement systems. (Effective until June 30, 2029.) (1) The director is authorized to pay from the interest earnings of the trust funds of the public employees' retirement system, the teachers' retirement system, the Washington state patrol retirement system, the Washington judicial retirement system, the judges' retirement system, the school employees' retirement system, the public safety employees' retirement system, or the law enforcement officers' and firefighters' retirement system lawful obligations of the appropriate system for legal and medical expenses, which expenses are primarily incurred for the purpose of protecting the appropriate trust fund or are incurred in compliance with statutes governing such funds. (2) The term "legal expense" includes, but is not limited to, legal services provided through the legal services revolving fund, fees for expert witnesses, travel expenses, fees for court reporters, cost of transcript preparation, and reproduction of documents. (3) The term "medical expense" includes, but is not limited to, expenses for the medical examination or