wa-26-21-064: Retirement Systems, Department of — WSR 26-21-064

WSR 26-21-064 (26-21)WSR 26-21-064PROPOSED RULESDEPARTMENT OFRETIREMENT SYSTEMS[Filed October 19, 2026, 11:52 a.m.]Original Notice.Preproposal statement of inquiry was filed as WSR 26-17-081.Title of Rule and Other Identifying Information: Fixing inaccurate cross-references.Hearing Location(s): On December 3, 2026, at 3:00 p.m., via Microsoft Teams at https://www.drs.wa.gov/sitemap/rules/#proposed-rule-hearings, Meeting ID 248 714 990 737 851, Passcode mK92ck6A; or phone 833-322-1218, Code 112 513 934#.Date of Intended Adoption: December 10, 2026.Submit Written Comments to: Bianca Stoner, Department of Retirement Systems (DRS), P.O. Box 48380, Olympia, WA 98504-8380, email drs.rules@drs.wa.gov, beginning November 2, 2026, 8:00 a.m., by December 3, 2026, 2:00 p.m.Assistance for Persons with Disabilities: Contact Bianca Stoner, phone 360-664-7291, TTY 711, email drs.rules@drs.wa.gov, by December 1, 2026.Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: DRS identified cross-references in certain WAC that are not accurate and is correcting them.Statutory Authority for Adoption: RCW 41.50.050.Rule is not necessitated by federal law, federal or state court decision.Name of Proponent: DRS, governmental.Name of Agency Personnel Responsible for Drafting: Sarah White, DRS, P.O. Box 48380, Olympia, WA 98504-8380, 360-664-7205; Implementation and Enforcement: Seth Miller, DRS, P.O. Box 48380, Olympia, WA 98504-8380, 360-664-7304.A school district fiscal impact statement is not required under RCW 28A.305.135.A cost-benefit analysis is not required under RCW 34.05.328. RCW 34.05.328 (5)(a)(i) does not apply to this proposed rule, and DRS is not voluntarily making it applicable.This rule proposal, or portions of the proposal, is exempt from requirements of the Regulatory Fairness Act because the proposal: Is exempt under RCW 19.85.025(4).Explanation of exemptions: Rules from DRS only affect members and beneficiaries of the state retirement systems and participating public employers. As a result, the rules do not affect small businesses.Scope of exemption for rule proposal:Is fully exempt.October 19, 2026Bianca StonerRules CoordinatorRDS-7388.1AMENDATORY SECTION(Amending WSR 97-01-016, filed 12/6/96, effective 1/6/97)WAC 415-104-405Payments in lieu.A payment or any other transfer in lieu of an item that does not qualify as basic salary, is not basic salary. The only exception is compensation paid pursuant to bona fide cafeteria plan, flexible benefit plan or similar arrangement as described in WAC ((415-104-3302))415-104-367.RDS-7389.1AMENDATORY SECTION(Amending WSR 06-18-006, filed 8/24/06, effective 9/24/06)WAC 415-112-332How does the department calculate service credit for Plan 2 and 3 members?(1) How is my service credit calculated? RCW 41.32.010 (((26)))(43)(b) provides three methods that may be used to calculate service credit for Plan 2 and 3 members:(a) Twelve-month method: If you meet the following conditions, you will receive one service credit month for each month of a ((twelve))12-month period (September through August):(i) You were employed at least nine calendar months starting in September; and(ii) You earned earnable compensation for at least ((eight hundred ten))810 hours during September through August.The ((twelve))12 service credit months earned under this subsection are credited to you on August 31.(b) Partial service credit method: If you meet the following conditions, you will receive one-half of a service credit month for each month of a ((twelve))12-month period (September through August):(i) You were employed at least nine calendar months starting in September; and(ii) You earned earnable compensation for at least ((six hundred thirty))630 hours, but less than ((eight hundred ten))810 hours during September through August.The six service credit months earned under this subsection are credited to you on August 31.(c) Month-by-month method: You will receive service credit on a month-by-month basis as follows:(i) One service credit month for each calendar month in which you earn earnable compensation for ((ninety))90 or more hours;(ii) One-half service credit month for each calendar month in which you earn earnable compensation for at least ((seventy))70 hours but less than ((ninety))90 hours; and(iii) A quarter of a service credit month for each calendar month in which you earn earnable compensation for some but less than ((seventy))70 hours.(2)(a) Twelve-month method. If you qualify, the department will calculate your service credit using the ((twelve))12-month method.Example.Sept.60Oct.60Nov.60Dec.60Jan.60Feb.60March160April160May160June July Aug. Total840Mary is a Plan 3 member who worked nine months, for a total of 840 hours, as shown in the table. Using the ((twelve))12-month method, Mary receives one service credit month for each of ((twelve))12 calendar months, for a total of ((twelve))12 service credit months. The department will credit Mary with ((twelve))12 service credit months on August 31. If Mary separates service at the end of May, she will receive nine service credit months. If she separates service at the end of June, she will receive ((ten))10 service credit months.(b) Partial service credit method. If you do not qualify for the ((twelve))12-month method, and you meet the requirements in subsection (1)(b) of this section, the department will calculate your service credit using the partial service credit method.(c) Month-by-month. The month-by-month method will be used if you leave service before the end of the school year or otherwise do not meet the requirements for the ((twelve))12-month method or the partial service credit method.(3) If you are employed by two or more employers, you will receive no more than one service credit month for any calendar month.