Plan Choice Compare

Plan structure

Plan 2

The benefit in Plan 2 is based on the length of time you’ve worked, your pay and your age at retirement. You'll receive a benefit for the rest of your life. The payments are guaranteed by the state of Washington. Both you and your employer contribute to your plan.

Plan 3

Defined benefit: This part of the benefit in Plan 3 is based on the length of time you’ve worked, your pay and your age at retirement. You'll receive a benefit for the rest of your life. The payments are guaranteed by the state of Washington. Your employer contributes this part of your plan.

 

Defined Contribution: This part of the benefit is based on what you contribute to the plan and how the investments you select perform.

Benefit calculation

Plan 2

2% x service credit years x Average Final Compensation = monthly benefit


Plan 3

Defined benefit: 1% x service credit years x Average Final Compensation = monthly benefit

 

Defined Contribution: The calculation is determined by your contributions, investment performance and withdrawal choices.

Contribution rates

Plan 2

Public Employees: 7.38%

School Employees: 7.27%

Teachers: 7.06%

Rates are as of 2017. Contribution rates are adjusted as needed every two years in odd-numbered years.



Plan 3

Defined benefit: Your employer contributes this part of your benefit; you do not.

Defined Contribution: You select your rate. You cannot change your rate unless you change employers.

Option A 5% all ages

Option B 5% up to age 35 6% ages 35-44 7.5% ages 45 and older

Option C 6% up to age 35 7.5% ages 35-44 8.5% ages 45 and older

Option D 7% all ages

Option E 10% all ages

Option F 15% all ages.

The role of investments

Plan 2

Your contributions are invested by the Washington State Investment Board (WSIB). Your benefit is guaranteed and is not dependent on investment performance.


Plan 3

Defined benefit: Your employer contributes this part of your benefit. Those contributions are invested by the WSIB. Your benefit is guaranteed and is not dependent on investment performance.

 

Defined Contribution: You choose how your contributions will be invested from a range of options provided by the WSIB. The amount of your benefit depends on the amount you contribute and the performance of your investments.

Vesting

Plan 2

You earn the right to a monthly benefit in retirement when you have 5 years of service credit.


Plan 3

Defined benefit: You earn the right to a monthly benefit in retirement after 10 years of service credit in most cases, or after 5 years of service credit with at least 12 months earned after age 44.

 

Defined Contribution: Vesting does not apply to this part of your benefit. You may withdraw the account balance if you leave employment or you may leave it in until you reach retirement.

Eligibility for normal retirement

Plan 2

Age 65 or older with at least 5 service credit years.



Plan 3

Defined benefit: Age 65 or older with at least 10 service credit years, or age 65 or older with at least five service credit years if at least 12 of those months were earned after age 44.

 

Defined Contribution: There is no specific age requirement for this part of your benefit. You may access your money at any time after you leave employment.

Eligibility for early retirement with a reduced benefit

Plan 2

Age 55 or older with at least 20 service credit years. There is less of a reduction to your benefit if you have at least 30 service credit years.

If you are age 55 with 30 years of service credit, your benefit reduction is 5% for each year (prorated monthly) before you turn age 65.

Plan 3

Defined benefit: Age 55 or older with at least 10 service credit years. There is less of a reduction to your benefit if you have at least 30 service credit years.

If you are age 55 with 30 years of service credit, your benefit reduction is 5% for each year (prorated monthly) before you turn age 65.

 

Defined Contribution: There is no age requirement for this part of your benefit. You may withdraw your money at any time after you leave employment.

Leaving employment before you’re eligible to retire

Plan 2

Your money can remain in the plan or you can withdraw your contributions and the interest they’ve earned. However, if you withdraw, you give up your right to a future retirement benefit.

Plan 3

Defined benefit: You don’t contribute to the defined benefit part of your plan. Your employer makes those contributions, and you cannot withdraw them.

 

Defined Contribution: Your money can remain in the plan, or you can access your contributions and investment earnings. A variety of distribution options are available.

Cost-of-Living Adjustments (COLAs)

Plan 2

On July 1 of every year after your first full year of retirement, your monthly benefit will be adjusted by the percentage change in the Consumer Price Index, up to a maximum of 3% per year.

Plan 3

Defined benefit: On July 1 of every year after your first full year of retirement, your monthly benefit will be adjusted by the percentage change in the Consumer Price Index, up to a maximum of 3% per year.

 

Defined Contribution: There are no Cost-of-Living Adjustments for the defined contribution part of your benefit. If you choose to purchase an annuity using your defined contribution funds, some annuity options include a COLA.

Health care coverage in retirement (PEBB)

This section applies to employees receiving health insurance through the Public Employees Benefits Board (PEBB). Not all DRS employers participate in the PEBB program – contact your employer to verify your health insurance provider. You can also contact PEBB (800-200-1004).

Plan 2

To qualify, you must elect coverage within 60 days of termination and begin receiving your retirement benefit as soon as you leave employment. If you delay receiving your retirement benefit, you will not be eligible for health care coverage under PEBB.

Plan 3

Defined benefit: To qualify, you must elect coverage within 60 days of termination. As long as you meet the age and service requirements of the plan (age 55 or older with 10 or more years of service credit), you can delay receiving your retirement benefit and still be eligible for PEBB coverage.

 

Defined Contribution: Leaving your contributions in the plan or starting to draw them does not impact your eligibility for health care coverage under PEBB.