As a new member of the retirement system for public employees (PERS), school employees (SERS) or teachers (TRS), you have a choice to make that will set the course for your future retirement benefits. The resources on this page can help you make this decision.
You have 90 days to choose between two plans offered in PERS, SERS and TRS—Plan 2 or Plan 3. Carefully consider your options. Your plan choice is permanent. If you don’t choose a plan within 90 days of becoming a public employee, you will automatically be placed in Plan 3, and you cannot later decide to become a member of Plan 2.
We understand you are busy in your new job with many decisions and responsibilities. Even so, we encourage you to take time to think about your retirement goals, compare features and make benefit projections. Then, select the plan that best fits your circumstances.
You will default to Plan 3 after 90 days if you don’t make a plan choice. Once you choose or default into a plan, the placement is permanent.
There are a number of things to consider when choosing between Plan 2 and Plan 3. Both plans offer a path to a successful retirement, but each is designed to meet different needs.
Do you envision a lifetime career with an employer in the state retirement systems, or will you eventually be working in the private sector or in another state? These questions are important as you consider whether benefits will go with you to a new job.
The two plans have different requirements for how long you have to work to be eligible for a benefit and how soon you can retire or access your funds. Consider these provisions as you think about how much time you have until your planned retirement date.
What is your risk tolerance? Are you comfortable making and managing investment selections, or would you prefer having those decisions made by investment professionals?
Plan 2 and Plan 3 have different approaches to your retirement contributions. Think about whether you want to select how much comes out of your paycheck or if you want that amount to be determined and adjusted based on what is needed to fund your plan.
Use the Plan Choice Calculator
A standard practice for estimating retirement income needs is to base it on 80% of your income five to 10 years before you retire. As you evaluate Plans 2 and 3, use the Plan Choice Calculator to compare retirement income projections with this standard, or with your own goal. The tool will generate projections based on plan selection and other variables, including your salary, when you plan to stop working and when you plan to start collecting retirement benefits.
It’s also important to consider other sources of retirement income as you calculate a projected monthly retirement benefit. Do you qualify for Social Security benefits? Do you have savings in other retirement plans from past employers? Do you have an IRA? These should be considered as you decide whether to join Plan 2 or Plan 3.
If you discover in your projections that you’ll need more income in retirement, consider joining a supplemental savings program offered by or through your employer. The Washington State Deferred Compensation Program (DCP) is such a program, giving you an opportunity to invest additional money for your retirement while lowering your taxable income while you work. Administered by DRS, DCP is offered through many public employers in the state. Signup is easy and you can start by contributing as little as $30 per month. Visit DCP.