Employers Glossary

Glossary items are alphabetical, jump to your topic using the alpha list below

A | B | C | D | E | F | G | I | L | M | N | P | R | S | T | U | V | Y


Some of the terms used in retirement system law have varying definitions in different systems. Unless noted for a specific plan or system, the glossary provides general definitions that are applicable to all systems.

average final compensation (AFC)

A term used in PERS and TRS; means the average final compensation used to calculate a member's retirement benefit. For Plan 1, the AFC is calculated from the member's 24 consecutive highest-paid service credit months. For Plan 2, the AFC is calculated from a member's 60 consecutive highest-paid service credit months.

basic salary

A term used in LEOFF; means the same as compensation.

begin date

Identifies the date a member begins retirement-covered employment. Required on the monthly transmittal when an employee becomes eligible for retirement system membership or when a LEOFF member begins certain leave lasting more than three days. For information, refer to Chapter 8: Transmittal Reporting.

calendar month

The period beginning the first of a month and ending the last day of the same month. For example, the period of January 1 through January 31.

calendar year

The period beginning January 1 and ending December 31.

cash out code

A specific status code used on the monthly transmittal to report lump sum payments of leave cash outs. Cash out codes are used only for PERS Plan 1, TRS Plan 1 and WSPRS members. For information, refer to Chapter 8: Transmittal Reporting.

compensation

That portion of scheduled payment of salaries, wages, or benefits paid to a member that is reportable on the monthly transmittal report. Certain non-monetary benefits are defined as compensation in PERS Plan 1 and TRS Plan 1. Refer to Chapter 4 - Reportable Compensation for more information.

compensation earnable

Compensation that is reportable to DRS. Refer to Chapter 4 - Reportable Compensation for more information.

contributions

Any payment to one of the Washington State retirement systems made to DRS by an employee or employer. Except for a small percentage of employer contributions which pay for administrative expenses of the system, the contributions are deposited in a trust fund to pay for future retirement benefits

contribution rate

The percentage rate of member compensation required to be contributed to a retirement system each month. Members pay a percentage of their compensation. In addition, employers pay contributions based on a percentage of each member's compensation. Contribution rates vary for the different systems and plans. For information, refer to Chapter 6: Contributions.

DRS-The Department of Retirement Systems

The Washington State agency that administers PERS, PSERS, SERS, TRS, LEOFF, WSPRS, JRS, Judges Retirement Fund, and the Deferred Compensation Program.

DRS Notices

The official word from DRS about specific areas of concern to employers, including rate changes, new legislation and policy and procedural changes.

defined benefit plan

A term used to describe retirement benefits for Washington State retirement systems. In a defined benefit plan, a vested member receives a retirement benefit based on accumulated service credit and average final compensation. The amount a member has contributed is not a factor in the calculation of the retirement benefit.

defined contribution

Plan 3 member contributions.

dual member

Someone who is currently a member of one of the dual member systems and has also contributed to another dual member system. To be a dual member an employee canít be retired and canít be receiving disability leave benefits from any DRS-administered retirement system. Dual member systems include: PERS, TRS, SERS, PSERS, LEOFF Plan 2, WSPRS, and the city retirement plans for Seattle, Spokane, and Tacoma. Also referred to as portability.

Note: A member who is employed in a SERS-eligible position and a PERS-eligible position at the same time has a different set of rules. Contact Employer Support Services for more information.

earnable compensation

A term used in TRS; means the same as compensation.

earning period

The calendar month and year in which an employee earns compensation. This may be different from the month in which the compensation was paid to the employee.

education employers

For the purpose of PERS service credit, includes school districts, higher education institutions, community and technical colleges, the State School for the Deaf, and the State School for the Blind. In addition, effective September 1, 1990, educational service districts are considered education employers.

elected or governor-appointed officials

For the purpose of determining participation in a Washington State retirement system, includes elected officials, direct appointees of the governor, appointees to fill vacant elective offices, and city managers or chief administrative officers.

eligible position

A term used to define an employee's eligibility for membership. The definition of eligible position has been changed by law over the years and differs by system and plan. For information, refer to Chapter 2: Membership.

end date

The date a member ends employment in a position eligible for retirement coverage. An end date is required to separate (or stop reporting) a member from the monthly transmittal or to report a LEOFF member ending certain leave longer than three days. For information, refer to Chapter 8: Transmittal Reporting.

excess compensation

A portion of compensation used for benefit calculation for which the extra benefit derived must be paid for by the employer rather than by the retirement system.

final average salary, or FAS

A term used in LEOFF; means the basic salary used to calculate a member's retirement allowance. For LEOFF Plan 2, the FAS is the monthly average of the member's 60 consecutive highest-paid service credit months. For LEOFF Plan 1, the FAS varies according to length of service and conditions of separation. Refer members to the LEOFF Member Handbook.

fiscal year

A term used in TRS Plan 1, means the period from July 1 through June 30 of the following year.

full-time

fully compensated employment

For LEOFF, means the employee earns basic salary and benefits from an employer comparable to the salary received by other full time employees who hold the same or similar rank in a similar position.

fully commissioned

For LEOFF, means employed as an officer empowered to enforce the criminal laws of the state of Washington at any time, including full arrest powers. There is no limitation on the time or place of their arrest powers.

good position control

Defining each position in your organization with a unique identifier so you can track the hours required by each position over a multi-year period, even if more than one employee occupies the position. Assigning another position number each time you hire a new employee may not be appropriate for determining eligibility for retirement system purposes.

ineligible position

A term used in PERS, SERS, and TRS Plan 2 and Plan 3 which means the position is not eligible for retirement coverage. For information, refer to Chapter 2: Membership.

LEOFF

Law Enforcement Officers' and Fire Fighters' Retirement System

LEOFF-covered employer

For LEOFF Plan 1, the legislative authority of any city, town, county, or district or the elected officials of any municipal corporation that employs any law enforcement officer or firefighter in the state of Washington. For LEOFF Plan 2, the legislative authority of any city, town, county, or district, or the elected officials of any municipal corporation, or the governing body of any other general authority law enforcement agency that employs any law enforcement officer or firefighter in the state of Washington.

member

Any employee enrolled in and contributing to a retirement system.

non-substitute

For eligibility determination purposes, employers should not include hours worked as a substitute (working for absent employees). However, you may need to include these hours and compensation for reporting purposes (see the Reporting Section of the Self Audit Program for more information).

partial service credit

Credit earned for working fewer than the number of hours required for a full month of service credit. This applies to PERS, SERS and TRS Plan 2 or Plan 3 members in eligible positions and to full time, fully-compensated LEOFF Plan 2 members. Effective with the September 1991 earning period, members can earn either 1/4 or 1/2 month of service credit.

PERS

Public Employees' Retirement System

PERS education member

A PERS member employed by a school district, higher education institution, community or technical college, the State School for the Deaf, or the State School for the Blind. Effective September 1, 1990, includes service in an educational service district also. PERS service after October 1, 1977 is transferred to SERS if the member is working in a SERS-eligible position and the member was previously PERS Plan 2 or Plan 3.

Plan 1

Plan 1 is a defined benefit plan structured under Section 401(a) of the Internal Revenue Code. This means members receive a benefit based on service credit and average final compensation when they retire. Plan 1 (PERS, TRS, LEOFF, WSPRS) refers to the funding and benefit provisions covering persons who first became members of a retirement system before October 1, 1977.

Plan 2

Plan 2 is a defined benefit plan structured under Section 401(a) of the Internal Revenue Code. This means members receive a benefit based on service credit and average final compensation when they retire. Plan 2 refers to the funding and benefit provisions covering persons who first became members of a retirement system on or after:

Plan 3

Plan 3 is a dual-component benefit plan structured under Section 401(a) of the Internal Revenue Code. Member contributions finance a defined contribution component, and employer contributions finance a defined benefit component. Plan 3 refers to the funding and benefit provisions covering persons who first became members of a retirement system on or after:

political subdivision

Any political entity other than a state agency, a higher education institution or a school district.

portability

See Dual Member

potential member

Someone who has worked in an ineligible or substitute position at a school district or educational service district, but hasn't purchased their substitute service credit and hasn't established membership.

project position

A position, established by an employer, that has a specific goal and end date.

PSERS

Public Safety Employees' Retirement System

reportable work hours calendar

A calendar provided by DRS for employers who need to know the number of reportable work hours each month.

retirement benefit

The benefit a retired member is entitled to based on accumulated service credit and average final compensation. The amount a member has contributed is not a factor in the calculation of the retirement benefit. For information, see Chapter 3: Service Credit.

school day

The number of hours in a day that make up a complete day of work, as defined by the employer. In the absence of an employer definition, WAC defines the school day as seven hours long.

SERS

School Employees' Retirement System

school year

The twelve-month period from September 1 of one year to August 31 of the following year.

separated

No longer employed in a retirement-covered position.

separation date

-See end date.

service

The number of hours or days that an employee receives compensation. Service is reported in days for TRS Plan 1 members and in hours for members of all other systems and plans.

service credit

Months or years of employment credited toward an eventual retirement benefit.

simultaneously

Occurring at the same time. For example, one employee works mornings and another works afternoons; or one employee works M-W and another works Th-F; or two employees work in the same position during the same days and hours.

status code

A A one-letter code which identifies the status of compensation, contributions and/or service reported on the monthly transmittal. For information, refer to Chapter 7: Status Codes.

substitute teacher

Is a non-contracted temporary teacher who is not guaranteed a minimum number of hours.

temporarily occupying a position

An employee who is not performing the full scope of the position and only performing certain critical duties. This employee is not eligible.

TRS

Teachers' Retirement System

teacher

Any individual qualified to teach who is engaged by a public school or an institution of the state of Washington in an instructional, administrative or supervisory capacity. Among other requirements, an individual must meet this definition for eligibility in TRS. For information, see Chapter 2: Membership.

type code

A two-digit code used on the monthly transmittal report to identify the type of employer or type of job an employee performs. For information, refer to Chapter 7: Type Codes.

uniformed fire fighter

For LEOFF, means a uniformed employee that must either perform fire protection activities that are directly concerned with preventing, controlling and extinguishing fires or supervise those who perform those activities.

vested member

An individual who has accumulated the required years of service credit within their retirement plan and has not withdrawn (exception is Plan 3) contributions. A vested member is eligible to receive a retirement allowance when qualified for retirement. Refer members to their Member Handbook for the plan requirements.

year

As used in the definition of an eligible position, means any 12 consecutive month period established, and applied consistently, by an employer to evaluate the eligibility of a specific position. In the case of ongoing positions, the year used by the employer must be the same for all positions. In the case of a project or temporary position, the year used may be specific to the position. The term may include, but is not limited to, a school year, calendar year or fiscal year. Employers should document the 12-month period used to define a year for a given position; such as, January through December, September through August, April through March, etc.


Self Audit