Immediate participation is required by all eligible employees. You will participate in Plan 2, or Plan 3 based on your initial eligible employment with any state agency, as indicated below, even if you withdrew prior contributions.
Service credit canceled by previous withdrawals may be restored by repayment of withdrawn contributions, plus interest within 5 calendar years of returning to a PERS eligible position or before retirement, whichever is first.
|Plan 2||Classified state employees hired on or after 10/1/1977, and if hired after 3/1/2002 must choose Plan 2 or 3 within 90 days of employment*||At age 65 with 5 years of service, or an actuarially reduced benefit at age 55 with 20 years of service.||2% of Average Final Compensation per year of service.|
|Plan 3||Same as PERS 2; if hired on or after 3/1/2002, must choose Plan 2 or 3 within 90 days of employment*||At age 65 if vested or an actuarially reduced benefit at age 55 with 10 years of service (defined benefit)||1% of Average Final Compensation per year of service (defined benefit)|
* Eligible employees will initially be enrolled in PERS Plan 2; however, failure to choose a plan within the 90-day enrollment period will result in a default to PERS Plan 3 with a 5% contribution rate, and the default investment option will be the retirement strategy fund with the retirement date closest to the retirement target date of the member (effective July 22, 2011). Prior to July 22, 2011, the default investment option was the Washington State Investment Board (WSIB).Key differences between PERS 2 and PERS 3 can be found here.
Federal Income Taxes
Federal income taxes will be calculated on your salary after the retirement deduction is made. Therefore, you will not pay federal income taxes on your retirement contribution. Federal income taxes will be due on retirement accumulations paid as retirement income or contributions withdrawn upon termination.
If you are a full-time WSU student or are the spouse of a full-time WSU Student, you may be eligible to waive participation. Contact Human Resource Services for additional information.
Upon termination of employment, your PERS 1 or 2 contributions and interest may be withdrawn by completing a Request for Withdrawal of Contributions. A 10% federal tax penalty is generally payable on these withdrawals (in addition to income tax withholding of 20%) when they are not rolled over into an individual retirement account (IRA). If you expect to have future State service or have contributed more that 5 years (60 months), you may prefer to maintain your membership and the credit for your service. In this case, no action is required upon termination, but you should notify Department of Retirement Systems of your address changes.
A check list to assist in planning and processing retirement forms can be found here.
The current health, dental and retiree life insurance rates and forms can be found on the PEBB website at www.pebb.hca.wa.gov
Voluntary Employees’ Benefit Association Medical Expense Plan (VEBA)
Find information on this post-retirement health reimbursement arrangement.
Planning for Retirement:
Free seminars and workshops are sponsored by the Department of Retirement Systems. Click here to view upcoming events.
A quarterly newsletter that provides valuable information on programs and services. Click here to view.
Senior Health Insurance Benefits Advisors, Washington 1-800-562-6900, Idaho 1-800-247-4422