When you apply for a service or disability retirement, you must select a benefit option. This option generally cannot be changed after you retire. (You are considered a retiree on the first of the month in which you retire.)
If you are married, the law requires that you provide the written consent of your spouse for the benefit option you choose. This consent must be provided on your Retirement Application and must be witnessed by a notary. If consent is not provided, the law requires that an Option 3 benefit be paid with your spouse as beneficiary.
This option pays you a benefit for your lifetime. If you die before the total benefits you receive equal your contributions plus interest as of the date you retire, the balance will be paid in a lump sum to your named beneficiary.
Under this option, you receive a reduced benefit. If your designated beneficiary survives you, the benefit amount remains the same and your beneficiary continues to receive it for his or her lifetime.
This option also provides a reduced benefit, but the reduction is smaller than in Option 2. If your designated beneficiary survives you, 50 percent of your benefit is paid to your beneficiary
for his or her lifetime.
This option provides a reduced benefit that is smaller than in Option 2, but larger than in Option 3. If your designated beneficiary survives you, 66.67 percent of your benefit is paid to your beneficiary for his or her lifetime.
Note: Changes were made to this provision during the 2007 legislative session.
You qualify for the Uniform COLA if you have been retired for at least one year by July 1 in the calendar year in which the increase is given, and you reach age 66 by December 31 of the same year. Your benefit will be adjusted each July thereafter. The size of your benefit adjustment will be based on the total service credit you accumulated as a PERS member. If you have chosen a survivor option and you die, your beneficiary will receive the COLA in the July following his or her 66th birthday, providing it has been at least one year since you retired.
The Uniform COLA is calculated by multiplying your years of service times the COLA amount. The COLA can be as much as 3 percent per year, as measured by the Consumer Price Index of Seattle.
When applying for retirement, you may elect to receive an additional COLA. This COLA option is in addition to the Uniform COLA (explained above). If you elect the Cost-of-Living Option at retirement, you will receive that COLA every July after being retired one year regardless of age. The COLA is up to 3 percent per year, as measured by the Consumer Price Index of Seattle. To offset the cost of this annual adjustment, your benefit is reduced.
To qualify for gain sharing, you must first qualify for the Uniform COLA. When earnings for the state retirement fund average more than 10 percent over a four-year period, the portion over 10 percent is declared “extraordinary gains.” One-half of the extraordinary gains is used to increase retirement benefits. The four-year average is measured every two years, and if there are extraordinary gains, gain sharing benefits will be paid in January of even years. The base amount for the gain sharing benefit is computed by the State Actuary, and is paid for each year of service credit earned. Note: House Bill 2391, signed by Governor Gregoire on May 15, 2007, makes changes to gain sharing.
Suppose you retired in April 1998 at age 65. You had 20 years of service credit and received a benefit of $1,200 per month. In July 1999, you were age 66 and retired for over one year, therefore, eligible to receive the Uniform COLA. Your 1999 COLA would be computed by multiplying your service credit years times the COLA amount. Because you have qualified for the Uniform COLA, you also qualify for gain sharing. In 2000, there was a 28¢ base for gain-sharing, which was paid in January.
April 1998—June 1999 benefit = $1,200 a month
1999 COLA = 20 years x 77¢ = $15.40
July—December 1999 benefit = $1,215.40 a month
2000 Gain sharing is 28¢ (28¢ x 20 = $5.60)
January—June 2000 benefit = $1221.00
2000 COLA= 20-years x $1.08 = $21.60)
2000 Benefit = $1242.60 (July 2000-June 01)
2001 COLA = 20 years x $1.11= $22.20
2001 benefit = $1264.80 (July 2001-June 02)
2002 — insufficient gains, no gainsharing
Once you retire you may change your benefit option and beneficiary only by returning to active membership, except in the following circumstances: