INFORMATION ABOUT SSB 5791

(The RFFOW had this bill introduced)

WARNING!!

The RFFOW has learned that scammers are contacting LEOFF retirees by phone and requesting personal information. The scammers are posing as representatives of the Washington State Department of Retirement Systems (DRS).

DRS will NOT call you to get personal information or about the benefit enhancement. They are mailing letters to all retirees and emailing when email information is available.

The scammers state they need the retiree’s Social Security number, DRS account number, bank account number, phone number, and email address to process the member's LEOFF Benefit Enhancement payment. The persons requesting this information ARE NOT DRS EMPLOYEES! The Washington State Department of Retirement Systems does not make unsolicited or cold calls to members of the retirement systems.

Do not give any of your personal information to anyone who contacts you stating they are a representative of DRS (or any other organization that allegedly deals with this subject).  

If you would like to access your online DRS account, you can do so HERE.

If you don’t have a DRS account, there is a video below that tells you how to create a DRS online account (video at bottom of page).

Take care and keep your information safe.

If you have any questions on this, please don’t hesitate to reach out to us (full contact information for us can be found HERE).

FREQUENTLY ASKED QUESTIONS

Here are the Frequently Asked Questions on the DRS website that relate to LEOFF 1 benefits under SSB 5791. Except for these questions and answers, there are no other questions yet officially answered by the DRS on their website:

5 – I retired with a line-of-duty disability with 180 service credit months before this legislation passed. What additional pension benefits are available to me?
In your case, the 180 service credit months you earned equals $18,000. Since the new law allows you to receive the greater of a one-time lump sum benefit equal to $100 per service credit or $20,000, you will earn $20,000.

6 – How are the lump-sum benefits taxed?
The tax status of the lump-sum payments will be the same as the retiree pension payment. For example, the lump-sum benefit of a retiree with a catastrophic disability retirement will have the same tax requirements as their monthly benefit payment. We will provide an IRS form W-4R for non-periodic payments if you wish to change your withholding for this lump-sum benefit.

7 – If a retiree receives a lump-sum benefit, will their beneficiaries also receive one upon their death?
No. This is a one-time benefit payable only once to the retiree. Beneficiaries will only receive this benefit if a member dies before retirement.

8 – How are the lump-sum benefits taxed?

The IRS requires a mandatory withholding of 20% for lump-sum payments. If you wish to withhold more than 20% from the lump-sum benefit, you may use the IRS form W-4R for non-periodic payments.

9 – I retired with a line-of duty disability. Will my lump-sum benefit have a mandatory withholding of 20%?

No. In this situation the tax status for lump-sum payments will be the same as the retiree’s pension payment. For example, if the monthly pension benefit of a retiree who retired for a catastrophic disability is tax free, the lump-sum payment will also be tax free.

If you are retired with a line-of-duty disability and only a portion of your monthly benefit is tax free, your lump-sum benefit will be tax free up to the $20,000 minimum payment and any amount above the $20,000 will have taxes withheld.

10 – Can a LEOFF Plan 1 retiree or beneficiary purchase an annuity with the lump-sum benefit?
No. The funds provided through these enhancements do not qualify for a DRS annuity purchase.

Here is a link to the DRS frequently asked questions section where paragraph 6 addresses this question: DRS Frequently Asked Questions.

The Washington State Department of Retirement Systems (“DRS”) has put up on its website a notice over how it intends to proceed on this bill:

“Providing a lump sum benefit to LEOFF 1 retirees. A lump sum benefit of $100 per service credit month for LEOFF 1 members and their beneficiaries, will be payable by January 31, 2023. DRS will contact affected members later this summer regarding distribution options. If a LEOFF 1 member dies after this bill is effective but before the distribution of the lump sum benefit takes place, the distribution will be made to the member’s designated beneficiary. Members and beneficiaries of members who retire with a line-of-duty disability will receive the greater of a one-time lump sum benefit equal to $100 per service credit month or $20,000.”

Here is the link to the DRS website from which this notice came: Pension-Related Legislation

HOW SS 5791 WORKS

SSB 5791 provides a defined benefit for LEOFF I members or their beneficiaries. The RFFOW is responsible for having the bill introduced on behalf of LEOFF 1 members and thanks to all of your hard work and diligence in lobbying your legislators we got it passed. Thanks is also warranted for so many legislators and other LEOFF 1 organizations for standing together to get it passed

Under LEOFF 1 the defined benefit is a minimum payment of $20,000.00 for duty related disability retirees or their beneficiaries, or a payment of $100.00 for each month of service credit, whichever is greater. Service retirees or their beneficiaries are entitled to a payment of $100.00 for each month of service credit.  For example — $100 per month of service credit, X 12 months, X years of service credit equals:

• Twenty years of service = $24,000.00

• Twenty-five years of service = $30,000.00

• Thirty years of service = #36,000.00

• $100.00 per month for each month of service thereafter.

  The distribution is scheduled to occur before January 31st 2023.

Determine What DRS Shows as Your Months of Service Credit to Calculate Your Potential Distribution Under SSB 5791 & SHB 1701. 

Under SSB 5791, for members who have a duty-related disability pension, the minimum benefit is $20,000.  However, if these members have over two hundred months of service credit, they will receive more than this amount based on their months of service credit.

Members who have a non-duty related disability pension, or those whose pension is based on months of service credit, need to know how many months of service credit they have in order to determine the amount of their cash distribution under SSB 5791 and SHB 1701.

 The best source for determining your service credit months is by looking at your online DRS account which lists your service credit in months of service.  If you already have a DRS account, you can simply login to find this information.