The turbulence and uncertainty surrounding the COVID-19 pandemic can be unsettling whether you are currently retired, retiring soon, or even if retirement is years away. We understand your concern. Here are some things to know as we navigate through this current event.
For retirees: One of the Department of Retirement Systems’ core functions is to pay pension benefits to retirees and other annuitants, especially in times of emergencies. DRS operations are continuing in the “Stay Home, Stay Healthy” environment with most of our team members teleworking and a few onsite. The payment of pension benefits is an essential service and will continue as normal. As always, we recommend electronic deposit as the safest, most secure way of receiving your monthly benefit.
For active members: As you think about your retirement future, keep in mind that all members of the state’s retirement systems have a defined benefit in their retirement plan. Plans 1 and 2 are solely defined benefit; Plan 3 is part defined benefit and part investment earnings (more on that in a moment).
When you retire, your defined benefit is calculated based on how many years you have worked and how much you have earned in compensation – it is not based on investment performance. Defined benefit payments are guaranteed for your lifetime (and for your survivors if you have chosen a survivor option).
Defined benefits are paid from the state’s retirement trust funds, which are among the most well-funded in the nation. These funds are invested and managed by the Washington State Investment Board (WSIB), and we are confident that the WSIB is well positioned to continue to invest through the ups and downs of the market cycle, as it has done throughout its existence.
If you are in Plan 3 or the Deferred Compensation Program (or both), you are making regular contributions into the investment fund or funds you’ve selected. Or, you may be maintaining those funds in retirement or another job. Either way, you are undoubtedly concerned about the performance of your investments as the market continues to react to the pandemic.
In times like this, it helps to focus on the long term and be mindful that markets have bounced back after other severe shocks, most recently the 2007-08 global financial crisis. The important thing is to avoid over-reacting. If you have concerns about your investment lineup, it may be a good time to consult a financial advisor on strategies for the current environment and beyond.
We appreciate the trust you place in DRS for your retirement. As noted above, most of our team members are working remotely and continue to be available to serve you. Remember, your online account offers secure, convenient tools to prepare for and apply for retirement.
If you have questions or concerns, please contact us by phone or email. We will connect with you as soon as possible, and we appreciate your patience as we adjust to changing circumstances.