Your future benefits are funded by contributions made by you and your employer during your period of membership and the investment earnings from those contributions. These contributions are held in trust and invested by the Washington State Investment Board (WSIB).
Your plan is a defined benefit plan structured under Section 401(a) of the Internal Revenue code. This means that you will receive a benefit based on your service credit and final average salary at retirement. The amount of your contributions will not be a factor in the calculation of your retirement benefit.
You are required to contribute a percentage of your “earnable compensation” to TRS. The contribution rate is set by the Pension Funding Council and may change as necessary to reflect the cost of the plan. “Earnable compensation” means salaries or wages earned during a payroll period for personal services, including overtime and tax-deferred wages, if any. Not included in “earnable compensation” are lump-sum payments for unused sick leave, unused vacation leave, or any form of severance pay.
If you are regularly employed in an eligible position, your contribution is deducted from your paycheck each pay period and is forwarded to TRS. Since September 1984, your contributions that were made through payroll deductions have not been taxed. Retirement benefits are taxable income.
Substitute teachers have the option to join TRS and pay contributions at the end of each school year. For more information, see the publication, The Substitute Teacher’s Guide to Obtaining Service Credit, which is available through your personnel office or from DRS.