Each member and employer is required to contribute a set percentage of the member's monthly compensation to the retirement fund. Plan 3 members must select one of six rate options available. Contribution rates are listed on the contribution rate tables.
Except for Plan 3, member and employer contributions and their investment earnings fund the current and future retirement benefits of members of the retirement systems. A small percentage of the employer contribution rate pays the administrative expenses of DRS. For Plan 3, the employer contributions and their investment earnings fund the defined benefit component of the retirement benefit; the defined contribution component is financed by the member's contributions and provides a tax-deferred investment program for the member.
Member contribution rates for PERS Plan 1, TRS Plan 1, LEOFF Plan 1, and WSPRS Plan 1 and Plan 2 are set in statute and will not change unless changed by law. Employer contribution rates for all plans and member rates for PERS Plan 2, PSERS Plan 2, TRS Plan 2, SERS Plan 2, and LEOFF Plan 2 are established by the Pension Funding Council. Council members are the chair and ranking minority members of the House Appropriations and the Senate Ways and Means Committees, and the directors of DRS and OFM. Contribution rates vary for the different systems and plans.
Plan 3 member rates are established by the Employee Retirement Benefits Board (ERBB). The ERBB is chaired by the Director of DRS and is composed of eight members. The eight members are appointed by the Governor as follows:
PERS Plan 1, 2 and 3 members and TRS Plan 1 members who participate in the Judicial Benefit Multiplier program and their employers pay an additional contribution rate above the regular PERS rate. The additional amount is set in statute.
All DRS plans are defined benefit plans. Vested members will receive a benefit based on their accumulated service credit and final average salary (compensation) at time of retirement.
Plan 3 also includes a defined contribution component which is funded by member contributions. These contributions and the associated investment earnings (both gains and losses) will determine the amount a member receives, in addition to their defined benefit. Member contributions have no impact to the defined benefit component of a Plan 3 retirement benefit.
Member contributions and benefits are explained more fully in the member handbooks. If you have additional questions about contributions and retirement benefits, contact the appropriate retirement services unit at DRS.