DRS Email 20-008, New Plan Default Rules for Plan Choice Members

Notice No: 20-008 
Date:  June 9, 2020
Applies to: All Employers
Subject: DRS Email 20-008, New Plan Default Rules for Plan Choice Members

Under legislation approved earlier this year (SB 5360), the default plan will soon change for newly hired PERS/SERS/TRS choice members who do not make a plan selection within the 90-day Plan Choice Window. Specifically, the default will change to Plan 2 for new choice members hired on or after June 30, 2020. The default for new choice members hired before June 30 remains Plan 3 (Option A, Self-Directed). To help you better understand the changes, we have provided the information in a Question and Answer format.

Higher Education employers, please note this legislation does not impact the choice higher education members get between Plan 3 and HERP.

When does the Plan Choice Window start?

A new choice member’s 90-day Plan Choice Window starts the day immediately following the begin date reported by the employer.

What plan would a new choice member be defaulted into if hired into an eligible position on or after 6/30/2020?

The member would be defaulted into Plan 2. If a new PERS/SERS/TRS choice member is hired on 6/30/2020, their Plan Choice Window would start on 7/1/2020, making them fall under the new default legislation in SB 5360.

What plan would a new choice member be defaulted into if they were hired into an eligible position on or before 6/29/2020 and completed their 90-day choice window?

The member would be defaulted into Plan 3 (Option A, Self-directed). If a new PERS/SERS/TRS choice member is hired on or before 6/29/2020, their Plan Choice Window would start before 7/1/2020 – the Plan 2 default is not effective until 7/1/2020.

What if a new choice member was hired into an eligible position on or before 6/29/2020 but separated before the end of their 90-day choice window without making a plan choice?

If the member returned to DRS-covered employment in an eligible position on or after 6/30/2020, they would receive a new Plan Choice Window with Plan 2 as the default because the new window would start on or after 7/1/2020.

How do we report the new Plan 2 default?

Employers will not report Plan 2 default to DRS. DRS will automatically apply a Plan 2 default to the member’s account approximately 60 days after the end of the member’s established Plan Choice Window. The default date applied will be the day immediately following the end of the Plan Choice Window.

Since we do not report the Plan 2 default to DRS, are employers required to track the 90-day Plan Choice Window for new members hired on or after June 30, 2020?

No. Your primary responsibility is to provide the appropriate plan choice information to the member and ensure the correct begin date is reported to DRS. You must continue to track outstanding Plan 3 default members until they choose or are defaulted to Plan 3 using your existing process.

Will members who haven’t made a plan choice within 90 days still be listed on the Plan Choice/January Transfer list in ERA?

Yes. They will show until a Plan Choice is reported or the member is defaulted into Plan 2 by DRS.

Will we be supplied with new plan choice information for our employees?

Yes. An initial supply of printed plan choice guides will be provided and should begin arriving this week. Please make sure to use the old plan choice guides for new members hired on or before 6/29/2020 and reserve the new supply for new members hired on or after 6/30/2020. Additional guides can be requested by emailing DRS.

What is the statute authority that was changed for Plan 2 default?

PERS – RCW 41.40.785

SERS – RCW 41.35.610

TRS – RCW 41.32.835

Will there be any WACs changed or updated to support this default plan change?

Yes. Two WACs will be updated to accommodate and clarify the changes made by SB 5360 – WAC 415-108-425 and WAC 415-02-030. The changes are currently going through the revision process with the Code Reviser’s Office and have not yet been published.

If you have any questions regarding this DRS Notice, please contact Employer Support Services at 360-664-7200, option 2, or 800-547-6657, option 6, option 2, or email us.

Communications

Beneficiary Designation

Members, you can update your beneficiary information from your online retirement account. Select “My Account” in the navigation menu and then “View/Edit” beside “Beneficiary.”

(If you prefer to fill out and mail in a printed form, select this link.)