Employer Handbook: Chapter 1

Handbook Organization

Organization by Subject

The Department of Retirement Systems has created this handbook as a vehicle to provide current and accurate information to the employer community about retirement and deferred compensation reporting.

The handbook contains a table of Contents and 12 chapters, with information presented by subject area. Each chapter includes a brief summary of the information in the chapter. There is also a reference section, which includes contact information, a glossary, a list of acronyms, and links to some of the most frequently used tables and charts.

Use of the Handbook

The DRS Employer Handbook is your resource for information about DRS and retirement system reporting. If you need additional information or information about topics not covered in this handbook, please contact DRS for assistance.

Handbook Navigation

How to Navigate the Handbook

The Handbook has several ways to locate information. Use the Menu button (right hand at the top of the page) to navigate to specific chapters.

Use the chapter categories (top and center of the web page) to locate more detailed information found in the chapter, and use the search box at the top of each page for locating information both in the Handbook and on the DRS Web site.

  Search the Handbook and DRS Web site using search terms.

  Each chapter has an index.

  Return to Handbook contents from any page.

Handbook References Index

The References section includes a list of acronyms, a glossary, contact information, and links to quick reference lists and charts that are useful for reporting retirement.

Retirement Systems

Retirement Systems

Over the years, the Washington State Legislature has passed legislation to provide retirement coverage to state employees, city and county employees, teachers, classified employees of educational institutions, state patrol officers, law enforcement officers, fire fighters and others. This retirement coverage is provided by eight separate retirement systems administered by DRS. Three of these retirement systems have two retirement plans. Two retirement systems have three retirement plans.

The retirement systems and plans and the applicable laws contained in the Revised Code of Washington (RCW) are:

The following summarizes the main provisions of each of these retirement systems and highlights the important distinctions between the systems. Refer to the Employer Handbook - Chapter 2 for a complete description of each system's plan rules.

Member benefits are explained in Member Handbooks published by DRS for each system and plan. To order bulk copies of these handbooks, email DRS Forms and Publications.


The Public Employees' Retirement System (PERS)

The Public Employees' Retirement System (PERS) was established by the Legislature in 1947. PERS Plan 1 was capped and individuals hired in eligible positions on or after October 1, 1977, become members of PERS Plan 2. On March 1, 2002, PERS Plan 3, Phase 1, was initiated, followed by Phase 2 on September 1, 2002. Plan 3 is optional and new members must choose either Plan 2 or Plan 3 within 90 days, or the employer defaults them into Plan 3.

Members who have completed five years of eligible service are able to receive a retirement allowance when qualified for retirement. System members include: elected officials; state employees; elected or appointed judges of the Supreme, Appeals and Superior Courts (other than judges currently in JRS); employees of legislative committees; certain employees of community colleges, technical colleges, and universities; judges of district and municipal courts; non certificated employees of school districts; employees of local government and other eligible employees.

Plan 1 members are eligible to retire at any age with 30 years of service, at age 60 with five years of service or at age 55 with 25 years of service. Plan 1 provides disability and survivor benefits.

Plan 2 members can retire at age 65 with five years of service or at age 55 with 20 years of service. Retirement benefits for members who retire before age 65 are actuarially reduced. Plan 2 provides disability and survivor benefits.

Plan 3 members have a two-component benefit structure: a defined benefit component and a defined contribution component. Members are eligible for the defined benefit component at age 65 if they have:

  • ten service credit years; or
  • five service credit years, including 12 service credit months after attaining age 44; or
  • five service credit years by June 1, 2003, under Plan 2 and transferred to Plan 3.

Members are also eligible for the defined benefit component at or after age 55 if they have at least ten service credit years. Retirement benefits for members who retire before age 65 are actuarially reduced. Plan 3 provides disability and survivor benefits. Members who separate from employment, at or before the defined benefit eligibility date, have immediate access to the defined contribution component.


The Public Safety Employees' Retirement System (PSERS)

The Public Safety Employees' Retirement System (PSERS) was established by the Legislature in 2004. It is for certain public employees whose jobs contain a high degree of physical risk to their own personal safety. Eligible members of Public Employees’ Retirement System (PERS) Plan 2 and Plan 3 on July 1, 2006, were given the option to elect PSERS and become dual members in both systems. Employees hired on or after July 1, 2006, into a PSERS position are mandated to become PSERS Plan 2 members. Members of PERS Plan 1 may not become PSERS members. TRS Plan 1 members are eligible only if they have not withdrawn their contributions and are working for a non TRS employer.

To be eligible for PSERS, an employee must work full-time for a PSERS employer and meet one of the following four criteria:

  • Completion of a certified criminal justice training course with authority to arrest, conduct criminal investigations, enforce the criminal laws of Washington, and carry a firearm as part of the job.
  • Primary responsibility is to ensure the custody and security of incarcerated or probationary individuals.
  • Function as a limited authority Washington peace officer, as defined in RCW 10.93.020.
  • Primary responsibility is to supervise eligible PSERS members.

PSERS members are eligible for:

  • Full retirement benefits at age 65 with at least five years of PSERS service credit
  • Full retirement benefits at age 60 with at least 10 years of PSERS service credit
  • Early retirement at age 53 with at least 20 years of service credit – with a benefit reduction of three percent per year from age 60.

PSERS provides disability and survivor benefits.


The School Employees' Retirement System (SERS)

SERS became effective September 1, 2000 and has both a Plan 2 and a Plan 3. An individual establishes membership in the system by being employed as a classified employee of a school district or an educational service district.

  • New SERS members with no prior PERS Plan 2 service hired in eligible positions September 2, 2000 through June 30, 2007 become members of Plan 3.
  • Beginning July 1, 2007 new SERS members and potential SERS members (substitutes) with no prior PERS Plan 2 service hired into eligible positions have 90 calendar days to choose between Plan 2 or Plan 3, or the employer defaults them into Plan 3.
  • From September 1, 2000 through July 31, 2009, new SERS members and potential SERS members (substitutes) with prior PERS 2 membership become members of SERS Plan 2. These plan 2 members have a January option to transfer to SERS Plan 3.
  • Effective August 1, 2009 new SERS members with prior PERS Plan 2 are also given the 90 day plan choice option.

Plan 2 members can retire at age 65 with five years of service or at age 55 with 20 years of service. Retirement benefits for members who retire before age 65 are actuarially reduced. Plan 2 provides disability and survivor benefits.

Plan 3 members have a two-component benefit structure: a defined benefit component and a defined contribution component. Members are eligible for the defined benefit component at age 65 if they have:

  • ten service credit years; or
  • five service credit years, including 12 service credit months after attaining age 44; or
  • five service credit years by September 1, 2000, under Plan 2 and transferred to Plan 3.

Members are also eligible for the defined benefit component at or after age 55 if they have at least ten service credit years. Retirement benefits for members who retire before age 65 are actuarially reduced. Plan 3 provides disability and survivor benefits. Members who separate from employment, at or before the defined benefit eligibility date, have immediate access to the defined contribution component.


The Teachers' Retirement System (TRS)

The Teacher's Retirement System (TRS) has three retirement plans. TRS was established by the Legislature in 1938. TRS Plan 1 was capped and individuals hired in eligible positions from October 1, 1977, through June 30, 1996, became members of TRS Plan 2.

TRS Plan 2 was capped and individuals hired in eligible positions on or after July 1, 1996, through June 30, 2007 became members of TRS Plan 3.

Beginning July 1, 2007, new and potential (substitute) TRS members hired into eligible positions have 90 calendar days to choose between Plan 2 or Plan 3, or the employer defaults them into Plan 3.

An individual establishes membership in the system by being employed as a teacher in the public schools. "Teacher" means any person who is qualified to teach and who is employed by a public school as an instructor, administrator or supervisor. "Teacher" includes:

  • state, school district and educational service district superintendents and their assistants;
  • state, school district and educational service district employees who are certificated by the Washington Superintendent of Public Instruction; and
  • any full-time school doctor who is employed by a public school and who renders instructional or educational services.

The plans were established by the Legislature as follows:

  • Plan 1-1938
  • Plan 2-October 1, 1977
  • Plan 3-July 1, 1996

Plan 1 members are eligible to retire at any age with 30 years of service, at age 60 with five years of service or at age 55 with 25 years of service. Plan 1 provides temporary disability benefits, disability retirement benefits and survivor benefits.

Plan 2 members can retire at age 65 with five years of service or at age 55 with 20 years of service. Retirement benefits for members who retire before age 65 are actuarially reduced. Plan 2 provides disability and survivor benefits.

Plan 3 members have a two-component benefit structure: a defined benefit component and a defined contribution component. Members are eligible for the defined benefit component at age 65 if they have:

  • ten service credit years; or
  • five service credit years, including 12 service credit months after attaining age 44; or
  • five service credit years by July 1, 1996, under Plan 2 and transferred to Plan 3.

Members are also eligible for the defined benefit component at or after age 55 if they have at least ten service credit years. Retirement benefits for members who retire before age 65 are actuarially reduced. Plan 3 provides disability and survivor benefits. Members who separate from employment, at or before the defined benefit eligibility date, have immediate access to the defined contribution component.


Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF)

The Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) Plan 1 was established by the Legislature in 1970. LEOFF Plan 1 was capped and eligible employees hired on or after October 1, 1977, become members of Plan 2.

Membership includes full-time, fully compensated law enforcement officers and fire fighters. Members who have completed five years of eligible service can receive a retirement allowance when qualified for retirement.

Plan 1 members are eligible to retire at age 50, provided they have at least five years of service. Plan 1 provides disability benefits, survivor benefits and medical benefits.

Plan 2 members are eligible to retire at age 53 with five years of service, or at age 50 with 20 years of service. Retirement benefits for members who retire before age 53 are actuarially reduced. Plan 2 provides disability and survivor benefits.


The Washington State Patrol Retirement System (WSPRS)

The Washington State Patrol Retirement System (WSPRS) Plan 1 was created by the Legislature in 1947. WSPRS Plan 1 was closed and eligible employees hired on or after January 1, 2003, become members of Plan 2. WSPRS provides retirement coverage to commissioned employees in the Washington State Patrol.

Members are eligible to retire at any age with 25 or more years of service credit or at age 55 with no minimum required service credit. Members who are not in service (inactive) and under age 60 must have at least five years of service credit to be eligible for retirement.

Beginning July 1, 2007 members must retire on the first day of the calendar month following their 65th birthday. This requirement does not apply to the Chief of the Washington State Patrol.

WSPRS provides survivor benefits to a member's spouse and children.


The Judges' Retirement Fund (JRF)

The Judges' Retirement Fund (JRF) was created by the Legislature in 1937 for judges appointed or elected to the Supreme Court, the Superior Court or the Court of Appeals. When legislation created the Judicial Retirement System (JRS) on August 9, 1971, judges elected or appointed to office after that date were required to join JRS. Members are eligible to receive a full retirement allowance at age 70 with ten years of credited service or at any age with 18 years of credited service. Members are eligible to receive a partial retirement allowance after 12 years of credited service as a judge. JRF provides disability and survivor benefits.

The Judicial Retirement System (JRS)

The Judicial Retirement System (JRS) was created in 1971 for judges elected or appointed to the Supreme Court, the Superior Court, or the Court of Appeals. The system was capped on July 1, 1988. At that time, current members were given an option to remain in JRS or transfer membership to PERS. Judges appointed or elected to office on or after July 1, 1988, may elect to join PERS if they meet eligibility requirements.

Members are eligible to receive a retirement benefit at age 60 with 15 years of credited service if service ends voluntarily. If service ends involuntarily, members are eligible to receive a retirement benefit after 12 years of service provided the member retires at least 15 years after beginning judicial service. JRS provides disability and survivor benefits to members.

History - The Department of Retirement Systems

Creation of DRS

Six Washington State retirement systems originally were housed in separate facilities and administered by separate boards. In 1976, to consolidate operations and to improve the overall administration of retirement system activities, the individual systems were brought together into a single agency--the Washington State Department of Retirement Systems, with a director appointed by the Governor. In 1996, the Legislature brought the Committee for Deferred Compensation under the administration of DRS. Today DRS administers eight retirement systems and the Deferred Compensation Program.





Duties of DRS

DRS administers the state retirement systems and the Deferred Compensation Program (DCP) in accordance with laws established by the Washington State Legislature. DRS is responsible for the record keeping, accounting and reporting of member accounts for the Judicial Retirement Account (JRA) which was established by the Legislature in 1988 for judges elected or appointed to the Supreme Court, the Superior Court or the Court of Appeals. Beginning January 1, 2007, newly elected or appointed justices or judges who choose to join PERS are mandated into PERS JBM and membership in JRA is closed to new members.

DRS maintains a history of each member's retirement information from the date of entry into the system until his or her death, or in some instances, until the death of his or her beneficiary. An individual record may span as many as 80 years.

Important Dates

  • The Judges' Retirement Fund begins

  • The Teachers' Retirement System begins

  • The Public Employees' Retirement System and the Washington State Patrol Retirement System begin

  • The Law Enforcement Officers' and Fire Fighters' Retirement System begins

  • The Judicial Retirement System begins

  • The Department of Retirement Systems is created to administer the state's retirement systems. The Office of the State Actuary is created to provide pension cost estimates.

  • Plan 2 begins October 1, 1977, for PERS, TRS and LEOFF

  • The State Investment Board is created to handle the investment of all state trust funds

  • Beginning September 1, 1984, school districts, higher education and state agencies are mandated to be non taxed employers

  • The Joint Committee on Pension Policy is created

  • The Dependent Care Assistance Program is established

  • The Judicial Retirement Account begins

  • Pension Funding Reform is enacted requiring the full funding of pension benefit obligations and the adoption into law of actuarially established contribution rates.

  • The Employer Advisory Committee is established and includes employer representatives, employer service bureau representatives and DRS staff which makes recommendations and provides feedback to the DRS and employer management regarding retirement issues.

  • The administration of the Deferred Compensation is transferred to DRS

  • The Employee Retirement Benefits Board (ERBB) is established

  • The Retirement Advisory Committee is established to facilitate the sharing of information between DRS and the associations and organizations representing active and retired members of the public pension plans administered by DRS.

  • Teachers' Retirement System Plan 3 begins July 1, 1996

  • School Employees' Retirement System Plan 3 begins September 1, 2000

  • Public Employees' Retirement System Plan 3 begins March 1, 2002, for state and higher education employees, and September 1, 2002, for local government employees. New PERS members get a 90-day window to make a plan choice of Plan 2 or Plan 3.

  • Washington State Patrol Plan 2 begins January 1, 2003

  • Select Committee on Pension Policy is established. Prior to 2003, the Joint Committee on Pension Policy studied pension issues and made recommendations to the Legislature.

  • LEOFF Plan 2 Retirement Board is established effective July 1, 2003, to study pension issues, be fiduciaries of the LEOFF Plan 2 retirement plan, set contribution rates, and recommend pension policy to the Legislature for LEOFF Plan 2. DRS administers the LEOFF Plan 2 benefits and provides customer service.

  • Public Safety Employees' Retirement System Plan 2 begins July 1, 2006

  • Judges Benefit Multiplier Program begins January 1, 2007. JRA is closed to new members.

    Plan choice is implemented for new members of SERS and TRS. New SERS with no prior PERS Plan 2 service and TRS members hired on or after July 1, 2007 get a 90-day window to make a plan choice of Plan 2 or Plan 3.

The Employer Community

Types of Employers Reporting to DRS

The employers who report retirement information to the Department of Retirement Systems are:

  • State agencies
  • School districts
  • Educational service districts
  • Community and technical colleges
  • Universities
  • Cities and towns
  • Counties
  • Fire protection districts
  • Public health agencies
  • Emergency service districts
  • Housing authorities
  • Irrigation and water districts
  • Mosquito districts
  • Weed control districts
  • Libraries and library districts
  • Port authorities
  • Commodity commissions
  • Public utility districts
  • Sewer districts
  • Transit authorities
  • Other nonfederal, government entities

The Employer Community

The ability of DRS to provide services to retirement system members depends upon the assistance and cooperation of employers. By providing timely and accurate transmittal information, employers ensure that DRS can maintain current and reliable member information. By submitting prompt and correct payments, employers ensure that DRS can meet its financial obligations to retirement system members.

DRS and the employer community form a vital partnership. Through the continued assistance, cooperation and dedication of the many individuals who make up this community, DRS is able to fulfill its mission.





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