In order for payments to be subject to retirement system
contributions and included in the calculation of a member's retirement benefit,
those payments must meet the definition of compensation earnable in
RCW
41.35.010.
(1)
Payments for personal services
rendered. To determine whether a payment meets this definition and can
be reported, ask the following questions:
(a)
Was the payment earned as a salary or wage for personal services rendered
during a fiscal year? If the answer is no, the payment is not reportable. If
the answer is yes, ask question (b).
(b) Was the payment paid by an employer to an
employee? If the answer is no, the payment is not reportable. If the answer is
yes, report the payment.
(2)
Payments included that are not for
personal services rendered. The legislature has included certain
specific payments within the definition of compensation earnable even though
those payments are not for personal services rendered by the employee to the
employer. (See WAC
415-110-464 through
415-110-469.)
(3)
Reportable compensation is earned
when the service is rendered, rather than when payment is made.
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Example:
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If a member works during September but does not
receive payment for the work until October, the reportable compensation was
earned during September and must be reported to the department as September
earnings.
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(4)
Salary characterizations are based upon the nature of the payment.
A payment is reportable compensation if it meets the criteria of subsection (1)
or (2) of this section. The name given to the payment or the document
authorizing it is not controlling in determining whether the payment is
reportable compensation. The department determines whether a payment is
reportable compensation by considering:
(a)
What the payment is for; and
(b)
Whether the reason for the payment brings it within the statutory definition of
compensation earnable.
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Example:
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A payment conditioned upon retirement is not
reportable compensation. Attaching the label "longevity" to the payment does
not change the fact that the payment is conditioned on retirement. Such a
payment is not for services rendered and will not be counted as reportable
compensation despite being identified by the employer as a longevity
payment.
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(5)
Differences in reportable
compensation between plans. WAC
415-110-445 through
415-110-488 define reportable
compensation for each of the two SERS plans. The characterization of payments
as reportable compensation or not reportable compensation in WAC
415-110-455 through
415-110-488 is the same for both
SERS Plan 2 and SERS Plan 3.
