Pension benefit: The defined benefit funded by your employer. You must have enough service years to qualify for the pension (10 years or 5 if at least one year is earned over age 44). Once you qualify, you are guaranteed a lifetime benefit at retirement. See the “Pension benefit” section below for more information about this part of your retirement.
Investment contribution: The defined contribution funded by you. You chose or defaulted into a contribution rate when you began service in Plan 3. Contributions to your retirement plan are mandatory and are deducted from your gross salary. The money is invested into the investment fund(s) you choose; change your investment selections at any time. Once chosen, your contribution rate is permanent unless you change public sector employers.
You can withdraw your investment contribution funds any time after leaving DRS-covered employment. Early withdrawals are subject to the additional 10% federal withholding tax. See the “Your contributions” section below for more information about this part of your retirement.
As a Plan 3 member, you belong to one of three systems. Your public service employment determines which system you are in. Each system has different member guidelines. For more information about your plan, select from the following:
Not sure which system you are in?
Talk to your payroll office or log in to your online account to find out if you are a PERS, SERS or TRS member.
Your Plan 3 investment account contributions are tax-deferred and you can access them any time after you separate from employment. Early withdrawal (before age 59½) might have tax consequences. The amount of retirement income you generate from your investment account depends on how much you contribute and how well the investment(s) you select do in the market.
|Option A:||5% all ages|
|Option B:||5% up to age 35 6% ages 35 through 44 7.5% age 45 and older|
|Option C:||6% up to age 35 7.5% ages 35 through 44 8.5% age 45 and older|
|Option D:||7% all ages|
|Option E:||10% all ages|
|Option F:||15% all ages|
Finding your contribution rate: The monthly dollar figure is on your paycheck, your statement and in your online account (under Plan Summary). You can do a quick calculation to find the percentage rate or contact your employer’s payroll/benefits office.
Changing your contribution rate: Once you choose or are defaulted to a rate, you can change it only when you change public sector employers. Changing employers means working for a different public sector employer, not another division or department where you currently work.
High income limitations for annual contributions: Plan 3 is a 401(a) program. If you are participating in tax-deferred plans in addition to Plan 3, such as a tax-sheltered annuity 403(b), be aware that your total tax-deferred contributions are limited based on your annual taxable income. Note this does not affect limits for your DCP savings. Consult the IRS and/or a tax advisor for detailed information. See more IRS information.
Can I roll money from my former employer’s retirement plan into Plan 3?
No, Plan 3 does not accept money from rollovers. However, if eligible, you might be able to use the money in your former employer’s retirement account to purchase out-of-state or additional service credit. Another option would be to roll the money into a DCP account. Call a Retirement Specialist at 800-547-6657 to discuss your options.
Money from other types of plans or accounts that are rolled over into a governmental 457 plan might still be subject to the 10% federal early withdrawal penalty prior to age 59½ upon payment from the 457 account. Talk with your financial advisor/planner about rolling money from one account to another, considering any potential fees and limitation of investment options.
If I don’t qualify for the defined benefit, do I lose all of my Plan 3 contributions?
No, your contributions stay in your account and continue to be invested. You can leave your balance in your account and maintain control over your investment choices, or choose one of the payout options available upon leaving service.
Do I get a Cost-of-Living Adjustment (COLA) on my defined contribution account?
No, the defined contribution part of your Plan 3 account is funded by you. Cost-of-Living Adjustments do not apply to this variable rate contribution. However, you can use your defined contribution account balance to purchase a TAP annuity, which does have an automatic 3% annual COLA.
Once you meet age and service requirements and you’ve applied for retirement, you will receive a guaranteed monthly benefit for your lifetime. Your benefit is based on your years of service credit and the pay you’ve earned.
Service credit years (SCY) The number of years you are credited for working.
Average Final Compensation (AFC) The average of your highest consecutive 60 months earnings, wherever they are in your service.
The formula used to calculate your pension benefit retirement is:
If you worked full time every month for 15 years and your average monthly pay for your highest consecutive five years was $4,000, your monthly benefit would be $600.
Retirement with a full benefit: Age 65. If you have at least 10 years of service credit and you’re age 65, you can retire with a full benefit. If you have at least five years of service credit, you can retire at age 65 with a full benefit if you earned at least one of your five years of service credit after age 44.
If you transferred from Plan 2, your requirements might vary. See Plan 3 January Transfer Opportunity.
Early retirement with a reduced benefit: Ages 55 to 64 with at least 10 years of service credit. If you retire early, your monthly benefit is reduced to reflect that you will receive it for a longer period of time. The earlier you retire, the larger the reduction.
The amount of your reduction depends on the amount of service credit you have AND how much younger than 65 you are when you retire.
There is less of a benefit reduction for early retirement if you have 30 or more years of service credit and you’re age 62 to 64. Your benefit will be reduced by 5% for each year (prorated monthly) before you turn age 65. Again, the earlier you retire, the larger the reduction.
For more information about early retirement, see Thinking About Retiring Early?
Plan 3 Defined Contribution Disbursement Schedule Create an estimate of Plan 3 deferred compensation payments following separation from service that considers various payout options and assumed rates of investment return.
Plan 3 TAP Annuity Estimator Calculate the fixed payment stream you can receive through the TAP annuity program offered by the state of Washington. You must have a minimum of $25,000 in your Plan 3 account for the TAP annuity program. Easily determine your monthly retirement benefit from the WSIB TAP annuity.
Plan 3 Take Home Pay Calculator See how the net effect on your take-home pay will be impacted when considering the various Plan 3 contribution rate options.
Plan 3 Retirement Savings Calculate the monthly savings you should be setting aside today to reach your retirement income goals.
Life Expectancy Approximate your life expectancy based upon a given age. This tool uses data from the IRS.
Retirement Planner Within a few minutes of using this tool, you can determine if you’re on track to fund the expenses you think you’ll have in retirement.
More calculators Gain access to additional calculators when you log on using your DRS online account access.
The Plan 3 withdrawals section contains information on withdrawing Plan 3 funds before, during and after retirement. Discover opportunities to increase your payment at retirement. See your installment and survivorship options. go there
An annuity provides a guaranteed payment for the rest of your life, regardless of stock market performance. Plan 3 has unique annuity opportunities with a range of options for you to choose from. go there
There are two ways to access your Plan 3 investment account information (also known as your defined contribution). Through your DRS online account and through the record keeper site. DRS recommends you use online account access because this gives you access to account information from both parts of your Plan 3 account, including the defined benefit pension portion, where you can view information like your service credit history. To find out more about the difference, visit the log in page to see your options.
How do I change my address?
Retirees, inactive members, beneficiaries and legal-order payees: You can update your address from your online retirement account. Just select “Address” from the welcome screen. If you do not have an online account, or you need to update your name, fill out and send in a printed form as well as a copy of documentation showing the change.
Update your name or address through your employer. That new information will soon appear in your online retirement account.
How do I change my name in my account?
Before you retire, be sure to change your name through your employer and complete the Name/Address Change form. If you are already retired, you only need to fill out the form.
You’ll receive a quarterly statement with performance information for your investment account. Your statements will be available through your online account unless you opt into mailed statements through the record keeper.
Quarters are divided into the following months:
Your statement could include information for more than one plan, depending on your situation. Quarterly statements are released within two months of the quarter-end.