Terms Used in the DRS Employer Handbook
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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. For specific legal definitions, see the Revised Code of Washington (RCW) and the Washington Administrative Code (WAC).
An employee working in an eligible position covered by one of the WA State Retirement Systems, who is not a substitute working in a school district or Educational Service District and who is not a retiree who has returned to work. TRS Plan 1 has a different definition for active membership. For additional information, see the respective plans in Chapter 2: Membership. For information, see Chapter 2: Membership.
A term used in PERS and TRS; means the money payable per year during the lifetime of a retired member by reason of the member's accumulated contributions.
arrears billing (AB)
An adjustment to a member's account for prior earning periods. (Effective January 1999, AB has been replaced by the Employer Correction (CT) invoice.)
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.
A term used in LEOFF; means the same as compensation.
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 leaves lasting more than three days. For information, refer to Chapter 8: Transmittal Reporting.
See PERS Definitions
billing month and year
The month and year in which a billing obligation was incurred. (For the CT billing, this is the same as the reporting period for the monthly transmittal report.) Payments are applied to the billing year and month entered on the Payment Advice form.
The contribution transmittal billing (the bill created from the monthly transmittal report) is identified on the Statement of Account Activity with a CT.
The time 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.
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 that is reportable to DRS. Refer to Chapter 4 - Reportable Compensation for more information.
Any payment made to DRS by an employee or employer to one of the Washington State retirement systems. 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
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.
A process used to correct or move outstanding items on the Statement of Account Activity. The Credit Redistribution allows credits shown on the statement to be moved to a billing month, system, or plan in which there is a debit or balance due. A Credit Redistribution occurs by using the Credit Redistribution Form or by calling an Account Manager.
Deferred Compensation Program, an Internal Revenue Code Section 457 plan administered by DRS.
Now referred to as reporting group number.
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.
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 will receive a retirement benefit based on the accumulated service credit and average final compensation. The amount a member has contributed is not a factor in the calculation of the retirement benefit.
Plan 3 member contributions.
The amount of the DCP participant's compensation, upon which the participant and the employer shall mutually agree (prior to the date on which such compensation is earned), which will be deferred.
Someone who is currently a member of one of the dual member systems and previously contributed to one of the dual member systems, other than the one to which they now belong. To be a dual member you can’t be retired and can’t 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.
Note: If you are employed at the same time in a SERS-eligible position and a PERS-eligible position, a different set of rules apply. Contact Employer Support Services for more information.
early retirement factor
A fraction expressed as a decimal or percentage that DRS uses to reduce a member’s or beneficiary’s retirement benefit when payment of the benefit begins before the member is eligible for a normal benefit. The reduction offsets the cost of paying the benefit over a longer period of time.
A term used in TRS; means the same as compensation.
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.
See transmittal edit reports.
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.
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.
Billings or adjustments to correct employer contributions for taxed earning periods, or to correct employee and employer contributions for non-taxed earning periods. See the list of invoice codes and descriptions.
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 leaves longer than three days. For information, refer to Chapter 8: Transmittal Reporting.
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. For more information, members should refer to the LEOFF Member Handbook.
final compensation report
A form which provides information needed to calculate benefits for retiring members of PERS Plan 1.
A term used in TRS Plan 1, means the period from July 1 through June 30 of the following year.
- For TRS Plan 1, means regular service for four-fifths or more of a school day or an assignment to duties which are the equivalent of four-fifths or more of a full time assignment.
- For LEOFF and PSERS means an employee who is regularly scheduled to earn basic salary from an employer for a minimum of one hundred sixty hours each calendar month.
fully compensated employment
For LEOFF, means employment which is paid at the rate regularly afforded an employee in that position.
A term used for a person who is not currently contributing to their retirement plan. For TRS Plan 1, there is an additional requirement that the person must not have withdrawn contributions.
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.
the unique 8-digit invoice number that appears on the invoice. Refer to Working with Employer Invoices for additional information.
Judges Benefit Multiplier
See PERS Definitions
Judges' Retirement Fund
Judicial Retirement System
Law Enforcement Officers' and Fire Fighters' Retirement System
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.
Any employee enrolled in and contributing to a retirement system.
member information form (MIF)
The MIF is a form used to enroll new PERS, SERS or TRS members; for Plan 2 members who choose to transfer to Plan 3; or for Plan 3 members returning to eligible employment.
Formal notification from DRS to a member of money due. Member invoices are mandatory member obligations such as an Employer Correction (CT) billing, refund overpayments, or pension overpayments. See also optional bills.
minimum medical and health standards (MMHS)
For LEOFF Plan 1 members, means the legislatively mandated medical and health standards which determine eligibility for coverage under the LEOFF retirement system.
non-taxed (or tax-deferred) contributions
Employee retirement contributions for which federal income taxes have not been withheld. See also taxed contributions.
An invoice which the member may pay if he or she wishes to obtain certain service credit. For example, optional bills may be issued to members who are restoring service credit or purchasing service credit for an authorized leave of absence.
Each employer has a unique organization number, which is inclusive of all reporting group numbers assigned to your organization.
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.
Any eligible employee who executes a participation agreement with DRS assenting to the provisions of the Deferred Compensation Program (DCP), once the agreement has been approved by DRS or its designee.
A form used to tell DRS how to apply payments. The Payment Advice form must accompany all payments to DRS. See the alphabetical list of Employer Forms for the three types of Payment Advice forms and descriptions of the forms. Refer to the ePay section of Using the DRS Web-Based Services for how to create a preprinted Payment Advice form or how to submit an electronic payment via the Internet. See Submitting the Payment Advice for payment procedures.
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 is a defined benefit plan structured under Section 401(a) of the Internal Revenue Code. This means members will 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 prior to October 1, 1977.
Plan 2 is a defined benefit plan structured under Section 401(a) of the Internal Revenue Code. This means members will 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:
- October 1, 1977 for PERS, SERS if the member was previously a PERS Plan 2 member, TRS, and LEOFF
- July 1, 2003 for commissioned WSPRS
- July 1, 2006 for PSERS
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:
- July 1, 1996, for TRS Plan 3
- September 1, 2000, for SERS Plan 3
- March 1, 2002 or September 1, 2002 for PERS Plan 3 - New members of PERS have the option of choosing Plan 2 or Plan 3. Refer to PERS Membership for more information.
Any political entity other than a state agency, a higher education institution or a school district.
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.
A preprinted transmittal report which DRS provides to an employer who does not report by automated means. The employer verifies or corrects the report and resubmits the original copy to DRS. For information on when to use the prelist, refer to Procedures for Manual (Paper) Reporting.
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.
reporting group number
A unique number assigned to an employer which identifies the retirement system in which the employer participates.
The process of restoring a member's service credit for prior periods. A member who has left service and withdrawn contributions can, upon reestablishing membership, receive service credit for earlier service. The member must repay all withdrawn contributions plus interest accumulated since the time of withdrawal.
A term used in TRS Plan 1, means the benefit to which a TRS Plan 1 member is entitled. This allowance includes the member's pension benefit plus his or her annuity amount.
The benefit to which a retired member is entitled based on the 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.
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.
School Employees' Retirement System
For the purpose of calculating service credit for TRS Plan 2 and Plan 3 and PERS Plan 1 and Plan 2 education members, means the period from September 1 through August 31 of the following year.
No longer employed in a retirement-covered position.
-See end date.
The number of hours or days for which 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.
Months or years of employment credited toward an eventual retirement benefit.
Statement of Account Activity (formerly Accounts Receivable Statement)
Statement issued to employers once each month, providing a summary of all payment and billing activity in the employer's account.
A one-character code which identifies the status of compensation, contributions, and/or service reported on the monthly transmittal. For information, refer to Chapter 7: Status Codes.
Teachers' Retirement System
tax-deferred (or non-taxed) contributions
Contributions on which taxes have not yet been paid. See also taxed contributions.
Contributions for which federal income taxes have been withheld. All contributions for earning periods prior to September 1984 are taxed. See also non-taxed contributions.
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 to be eligible for membership in TRS. For information, see Chapter 2: Membership.
transmittal edit reports
The DRS transmittal system uses a single edit report to provide information to you about your reporting. The edit report lets you know if information has not been reported, if information has been reported incorrectly, or if information you have reported has been rejected. See the Edit Specifications by Field for additional information.
Report submitted to DRS by each employer. Report contains compensation, contributions, and hours or days worked by each member. For information, refer to Chapter 8: Transmittal Reporting.
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.
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.
The Washington State Patrol Retirement System
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; e.g., January through December, September through August, April through March, etc.