A cost-of-living adjustment (COLA) is an annual adjustment applied to your retirement income to reflect changes in the economy (inflation). Most DRS retirement plans offer a COLA, but Plan 1 members in PERS and TRS only have a COLA if they selected it during retirement. View the 2025 COLA percentages by retirement date and plan. When will I receive the 2025 COLA? LEOFF Plan 1 COLAs take effect April 1 and start with April 30 benefit payments. All other DRS Plan COLAs take effect July 1 and start with July 31 benefit payments. You need to be retired by July 1 for at least one year to be eligible for a COLA. Once you’re eligible, you’ll receive any COLA starting with the pension payment issued at the end of July, and every year after. You don’t need to apply to receive the COLA – it’s automatic. How much will the COLA be? The maximum annual COLA you can receive for most DRS plans is 3%. If inflation that year is above 3%, the additional amount is applied to future adjustments (called COLA banking). Any year inflation is lower than 3%, the COLA can pull from banked amounts in prior years. This happens automatically and the adjustment is made for you. You could receive a different adjustment each year, depending on the amount available in your COLA bank. Will PERS 1 and TRS 1 receive a benefit increase? If the legislature changes the current law, most of these retirees could receive a one-time increase in July. There are several bills that could affect this decision. You can track all bills here.

In today’s climate of economic uncertainty and budgetary challenges, many public employees in Washington State are facing difficult decisions regarding their careers and financial futures. Whether due to organizational restructuring, budget cuts, or personal considerations, transitioning out of public service can be a daunting prospect. Understanding the implications of such transitions on your retirement benefits is crucial. This article discusses the retirement impacts of career transitions. The Employment Security Department covers additional information about benefits and reemployment services for state workers. If you leave your public service employment, you’ll have choices to make about your DRS retirement accounts. Here are the three big ones: Leaving your money in the account Withdrawing or rolling over the account funds Retiring Here is helpful information to have about each of these options. First a question for you. Are you vested? Vesting means you’ve earned the minimum amount of service credit you need to be eligible to retire with a lifetime monthly pension from your plan. For Plan 2, this is 5 years. For Plan 3, you need 10 years or 5 years if at least one year is earned over age 44. The service credit you earn toward vesting is cumulative. This means if you separate but later return to public service, you can continue to earn service credit toward your vested status even if you didn’t yet qualify when you separated. If you are in Plan 2, and you withdraw your contributions when you separate, your service credit balance goes to zero. If you are in Plan 3 and you separate, you might not yet qualify for the pension part of Plan 3, but if you were to return to service at a later date, you would keep earning credit toward that vested pension amount. Leaving your money in the account Let’s look at what happens if you leave your money in your account after you leave public service. How much is in your account? You can look at your account balance through your online account. Select your plan summary to see the pension balance. You can also review the investment balances if you have DCP or Plan 3. Is your account balance at least $1,000? If yes, you are eligible to leave your money in the account when you separate. If you are inactive and non-vested with a balance of less than $1,000, DRS is required to close your account and return the funds to you. Plans 1 and 2 members: After you meet age and service requirements, you will be entitled to a monthly benefit for the rest of your life as long as you remain a member of your retirement plan. The money in your account will continue to earn interest until you retire or withdraw it. Plan 3 members: Because you have both a pension and investment part of your plan, you have more options when you separate. Your investment contributions (funded by you): If you leave money in your investment account, it will stay invested while you maintain control of your investment choices. Your pension account (funded by your employer): Once you meet age and service requirements, you qualify for a lifetime monthly pension. See the vesting section above for what it means to meet service requirements. If you have at least 20 years of service credit when you leave employment and do not start to receive your pension, it will increase by approximately 3% for each year you delay receiving it up to age 65 (this is called indexing and is exclusively available to Plan 3 and LEOFF 2). Withdrawing or rolling over retirement account funds Plans 1 and 2 members: Withdrawing your money means you are no longer a member of your retirement plan and, therefore, ineligible to receive a retirement benefit. There is no partial withdrawal option. Plan 3 members: You can withdraw your investment contributions and investment earnings without affecting your pension income eligibility. If you meet the vesting requirements when you separate, you will still receive a monthly pension benefit when you are eligible to retire. Taxes: If I withdraw my retirement or DCP funds, will they be taxed? Yes. Payments you receive are subject to income tax. Rollovers are not subject to income tax. To find out more about how taxes could affect you, contact a tax advisor. Retiring If you are 55 or older, you might be eligible to retire. Review the requirements for your retirement system on your plan page. DRS has several resources for retiring members including a retirement planning checklist and available seminars. DCP account options If you retire or leave your public service job, you can leave your money in your DCP account or choose to receive or roll over some or all of your account balance. If you continue public employment, you can continue, increase, reduce or stop your DCP contributions. In limited circumstances, the Internal Revenue Service allows for hardship withdrawals while you are still employed. Contact the DCP record keeper Voya at 800-547-6657 to find out more about this option. More career change information What happens if I change to another public employer? If you go directly to another DRS-covered eligible position with the state or a participating public employer, you will continue to contribute to your retirement account. What happens to my account if I return to public service? If a DRS-covered retirement system is offered for your position, the choice you made when you left employment will determine the answer: You retired: You might be able work limited hours without affecting your benefit. Contact us to hear your options. You’re a Plan 3 member and you left your money in your account or withdrew it: You will begin contributing to your retirement account again. Plan 3 members can withdraw their investment funds but not the pension funds their employers contribute. You withdrew from Plan 1 or 2: You will begin contributing to your account again. For a limited time, you will have the option to repay the money you withdrew plus interest to restore your service credit. This retirement benefit is a monthly pension based on your service credit years as well as your earnings.

That might sound like an unnecessary question but read on to see why we’re asking. Our Retirement Specialists take calls from DRS customers who are often unaware they have retirement funds waiting for them in their accounts. There are several reasons this happens: Plan 3 members (in PERS, SERS and TRS) don’t realize their pension has two parts – a defined benefit and a defined contribution Members of all plans leave public service and think they either don’t qualify for a benefit, or they forget they’ve left funds in their accounts because it was many years ago Beneficiaries have a loved one who left them their retirement funds, but they’re unaware Imagine her surprise Melissa is a Retirement Specialist at DRS who loves her job. She had a recent positive experience with Cynthia, a TRS Plan 3 customer. Cynthia reached out to DRS because she got a letter from Voya about an account balance she didn’t even know she had. Melissa was more than happy to deliver the good news. “I reviewed her account, explained the pension, did a ballpark estimate and logged an estimate, says Melissa. “She was very surprised to find out that her Plan 3 and pension were two separate things.” It’s those two parts mentioned in the top bullet – a pension, called a defined benefit account and a personal investment account called a defined contribution – that sometimes confuses customers who are Plan 3 members. Melissa says she sees this scenario occur mainly with Plan 3 customers who worked in public service back in the ‘70s, ‘80s and ‘90s – you know – the 20th Century, and started in Plan 2. They later chose to become Plan 3 members. “This was back when Plan 3 was an entirely new program,” she says, “and the participants had a hard time understanding what they had. And some still think those contributions they’re pulling out of Plan 3 are their (entire) benefit.” Does your loved one have a retirement account? Renee’s husband just might. She called DRS about her own account because something jogged her memory. “I looked at her account and saw that she could have retired five years ago,” says Retirement Specialist Cami. “I always love these phone calls! It’s kind of nice to tell people they’re sitting on a gold mine. She was super happy,” says Cami. “She also thought that her husband may have the same or a similar situation as he hasn't retired officially, so we may be getting another call from him soon (hopefully)!” We have a search tool for that If you separate from public service employment, you can choose to either leave your contributions in the plan until you’re eligible to retire or withdraw them. If you’re in Plan 1 or 2 and leave your contributions, you become a former member. Former Plan 1 and 2 members can check whether they have funds available using this Inactive accounts search. What triggers a call to DRS? Normally, if you leave your public service job (known as separating from employment), you know you’re either going to apply for your pension or withdraw your contributions; most of these customers are on top of it. But those who left their jobs along with their contributions lose track and can’t remember what to do. Cami says a lot of times, customers who are nearing retirement are trying to “get all their ducks in a row,” so they begin going back through their entire work history – in both public service and in the private sector. This usually leads them to trying to remember if they have an old 401k from their days spent working in a tire repair shop or for Boeing, and also wondering if they qualify for a retirement benefit from their time spent in public service. Keeping track now will give you peace of mind when it’s time to retire. Cami says she’s noticing that younger people have their finances figured out. “People in their 30s and even their 20s are starting to think about retirement. We’ve all been told, ‘the sooner, the better.’” Another call-trigger is the IRS requirement for Plan 3 and Deferred Compensation Program (DCP) customers to begin taking payment of their pretax funds by the time they are 73, unless they are still employed. This is called a Required Minimum Distribution or RMD. These inactive members receive a letter (a memory jogger) when they’re nearing age 73. This sometimes triggers a call to DRS by people who forgot they left their contributions in their account. But if you wait until you’re past the normal retirement age for your system and plan, you’ll and you’re vested, you might be in Renee’s situation. Stay on top of your retirement account so you don’t risk finding out in your 70s that you could have had a retirement income stream much sooner. Are you vested and don’t know it? Getting vested in your retirement plan means you can retire once you’ve met the age requirement for your plan and system. Kayleigh, who works in the DRS Contact Center, says she heard “alarm bells” when a Plan 2 customer recently sent in some paperwork to process a withdrawal. “I saw she was eligible for an unreduced retirement,” she says. This is important because if you remain a Plan 1 or Plan 2 member rather than pull your contributions out, you can qualify for a lifetime benefit. “If you’re separated and vested, you can retire back to the first date of your eligibility,” says Kayleigh. This is a retroactive benefit. Here’s why: The customer was born in 1954, putting her in her 70’s, but she was eligible for retirement in 2020 Because she hadn’t applied for retirement when she reached age 65, she qualified for a retroactive payment in 2025, meaning she was eligible for five years’ worth of pension payments plus cost-of-living increases Kayleigh says the customer’s account balance for a rollover was $36,500. However, her missed pension payments totaled over $31,000. She chose to start her pension, plus she added a survivor option for her husband. This benefit will last for both of their lifetimes, plus the payments will continue to get annual cost-of-living adjustments. “She got her $31,000, which she originally wanted, plus $674 a month for her and her husband’s lifetime,” says Kayleigh. Retirement education “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.” This old saying is about showing someone how to help themselves so that they can become self-sufficient. Retirement is one of the most important milestones in a person’s life and any necessary decisions are personal. With that in mind, this website has tailored content just for you. Dive into any one of these links to get started; it’s easier than you might think: Plan guides Calculators Videos Podcast – Fund Your Future with DRS Webinars Seminar – Nearing Retirement There’s also a handy quick reference retirement checklist that highlights the timeline and the tasks that lead up to a great retirement. Check it out! Retirement prep to-do list Sign up for DRS news articles and stay in touch with what’s happening in the world of retirement. When that email shows up in your inbox, follow the link. And while you’re on the website, take in the view, log into your account and then sit back and relax, knowing you’re on top of your future retirement. Be sure to keep your contact information and beneficiaries up to date, even if you separate from service. You can do this instantly through your online account.Review your service credit to make sure it matches your records Do an estimate – or several, with different retirement scenarios

Once you’ve reached the required age and years of service for your plan, you can apply for your pension retirement through DRS. We have a complete retirement checklist as well as live and recorded seminars to guide you through the retirement process, but basically it goes like this: 1. Make sure you qualify for retirement. Do you meet the age requirements? Do you have the number of service years needed for your plan? See your plan page for age and service requirements. This is also a great time to run a quick estimate of the retirement income you’ll receive by using the benefit estimator tool in your online account. 2. Request an official benefit estimate from DRS 3 to 12 months prior to your retirement date. Make this request through your online account or by contacting us. In most cases, we will provide your estimate 5 to 8 weeks before your retirement date. If you haven’t received your requested estimate within 5 weeks of your retirement date, contact us. Estimates are prioritized by retirement date, which allows DRS to use the most recent information available for you and gives you ample time to submit your retirement application. An official benefit estimate is not the same as the benefit estimator tool available to all customers. However, the dollar amounts you preview in both estimates will likely be similar. Use the benefit estimator tool through your online account to assist your retirement planning any time before or after requesting your official benefit. 3. Complete a retirement application We recommend you apply at least 3-5 weeks from the date you intend to retire (once you receive your official estimate). If you can’t make this timeline, contact us right away so we can help keep your retirement on track. Complete the application online or request a paper form. For a preview of the questions you’ll answer while retiring, as well as a checklist of information to gather, see this example retirement application. At any point in your retirement journey, you are welcome to attend a free nearing retirement seminar, hosted by DRS. The following video offers a preview of the online DRS retirement application: Are you in more than one plan? If you are a member of more than one Washington state retirement system, you are a dual member. You can combine service credit earned in all dual member systems to become eligible for retirement. However, being a dual member does require more attention than a single-plan retirement. For example, you’ll need to apply for your pension using a paper retirement application. Visit this section for members of multiple plans to find out more. Consider your DCP income If you have a DCP account, you can access these funds separately anytime after you leave employment. You can complete this withdrawal online or contact the DRS record keeper, Voya Financial at 888-327-5596. See DCP withdrawals for more. If your employer offers DCP, and provides compensation for unused leave, consider deferring these cash-outs into DCP to maximize your savings at retirement. Find out more about leave deferrals. Plan 3 has two separate parts If you are in Plan 3 you have two sources of retirement income: The investment account you contribute to throughout your career. Your employer-funded pension account. Plan 3 members access these income sources separately. This means you will submit two separate requests for collecting the funds in retirement. You’ll have your pension retirement application you complete with DRS (step 3 above), and you’ll set up withdrawal for your investment funds. Access your investment funds through the DRS record keeper, Voya Financial. Here’s the convenience of having two parts to your Plan 3 account – You don’t have to collect this retirement income at the same time. You can choose to postpone receiving either. When you reach age 73, the IRS requires you to begin withdrawing funds from your investment account—otherwise, the timeline is up to you. Customers sometimes access retirement contributions from their investment account and delay submitting for the pension retirement—usually to start the pension income when they reach full retirement age, or to start an early retirement with an unreduced pension. See this two-minute video about delaying retirement. Plan 3 customers also have the option to purchase the TAP Annuity using their Plan 3 investment account. The time it takes to access your Plan 3 investment money can vary depending on where your contributions are invested. Find out more about withdrawing from your plan on your plan page. Separation Date - the last day you're paid for employment. Typically, your last day in public service. Retirement Date - the first day of the month AFTER your separation date and you've applied to retire.