Under PERS Plan 3, the defined-benefit component is the benefit you receive at retirement that is based on your service credit, age and average final compensation.
Your benefits under the defined benefit component of Plan 3 are funded by contributions made by your employer during your period of membership, and investment earnings from those contributions. Employer contributions are held in trust and invested by the WSIB.
Service credit is an important factor in determining your defined benefit. “Service credit” is based on the number of hours of compensated employment reported by your employer.
You receive one service credit month for each calendar month in which you earn compensation for 90 or more hours. No more than one service credit month can be obtained in any calendar month, even if you work more than 90 hours for each of two or more employers in a month. Beginning September 1, 1991, one half of a service credit month is granted for any calendar month in which you receive compensation for fewer than 90, but at least 70 hours. One quarter of a service credit month is granted for fewer than 70 hours in a calendar month.
Your service credit years at retirement are calculated by dividing service credit months by 12.
Suppose you were hired April 1, 1982, and worked full-time until February 23, 2002, when you retired. In your final month of employment you are compensated for 88 hours. Your service credit would be as follows:
| Period | Months |
|---|---|
| April 1982 — December 1982 | 9.0 |
| January 1983 — December 2001 | 228.0 |
| January and February 2002 | 1.5 |
| Total | 238.5 |
238.5 months ÷ 12 months = 19.88 years, or 19 years and 10.5 service credit months
If you are employed by the State School for the Blind, the Washington School for the Deaf, or an institution of higher learning, you may receive 12 service credit months for the school year if you:
You may receive six service credit months for each school year if you:
If you earn compensation in fewer than nine months of the school year, you will receive service credit based on the number of hours compensated each month.
You may be able to combine your PERS service credit with credit earned in other Washington State retirement systems in order to qualify for retirement. For more information, see “What if I’ve previously been a member of another retirement system?”.
Suppose you are an active PERS Plan 3 member, age 55, and have 13 PERS Plan 3 service credit years. If you also have seven service credit years in TRS Plan 1, you have a total of 20 service credit years — enough to be eligible to retire with a reduced benefit. See additional information about retiring at age 55, and calculating a dual member benefit.
You may be eligible to receive up to five years of service credit for military service by paying member contributions for the time spent in the military. You must complete payment of these contributions prior to retirement or five years from the time you resume employment, whichever comes first. To qualify you must have:
For more information, refer to the Military Service Credit publication for PERS Plan 3 members.
Note: Effective July 24, 2005, a member who becomes totally incapacitated for continued employment as a result of service in the uniformed services of the United States, or the surviving spouse or eligible children of a member who dies while serving in the uniformed services of the United States, may apply for interruptive military service credit. The member or eligible spouse or children would pay only the employee contributions. Contact DRS for more information.
You may earn service credit for an unpaid leave of absence authorized by your employer. Service credit for a leave of absence is limited to a maximum of two years during your working career.
To obtain service credit for unpaid leave, you must return to work in an eligible position for a PERS-covered employer, and pay both member and employer contributions, including interest for both, for the time on leave. Payment must be completed within five years of returning to service, or retirement, whichever comes first.