TRS and Plan 3 Separation and Retirement
Separation Planning
At the end of your employment with WSU, you will have options as to what you can do with your retirement accumulations in TRS or PERS Plan 3. This includes 1) the contributions you made to the Defined Contribution portion of the account, plus any earnings those contributions may have earned; and 2) the contributions made on behalf by WSU into the Defined Benefit portion of the account.
Defined Contribution Portion of Plan:
You have been making contributions to this account on a tax-deferred basis. Upon end of employment with WSU, you can:
- Maintain all of your accumulations with the plan administrator, Voya Financial; or
- Lump-sum or partial cash distributions, in accordance with the Department of Retirement Systems (DRS) and Voya Financial distribution rules; or
- Rollover your contributions to another retirement plan or Individual Retirement Account (IRA), in accordance with the university and TIAA distribution rules; or
- Schedule installment payments of an annuity payment; or
- Do a possible combination thereof.
- For information on accessing your defined contribution, visit the DRS webpage for Plan 3 member investment withdrawals.
- Note: Taking payment of your defined contributions funds does not affect your eligibility for the Defined Benefit.
If you retain your Plan 3 Defined Contributions with Voya after the end of employment:
- The accumulations continue to earn dividends and participate in investment returns.
- If you go to another Washington State Institution with Plan 3, you may have the ability to have contributions applied to the same contract.
- The contract provides a death benefit to your beneficiary.
- You may begin to draw monthly annuity benefits at any age with the amount determined by your age, the option selected, and the total accumulation.
If you access your funds following end of employment:
- You may cash out up to your entire accumulation but there are usually tax penalties for doing so.
- Rollovers to an IRA are available without tax consequences.
WSU recommends that you seek the advice of a financial or tax consultant to ensure you understand the impact of your decision.
Defined Benefit Portion of Plan:
You do not have the option to withdraw the contributions that WSU has made on your behalf into this plan. If you are vested in the plan at the time of the end of your employment, but are not yet eligible to retire, you would be able to draw a retirement benefit at a future date.
If you have at least 20 years of service at the end of your employment, the Defined Benefit will continue to increase by approximately 3 percent for each year you delay receiving the benefit, up until age 65.
What you do with the Defined Contribution portion of your account upon end of employment will not have an impact of a possible future Defined Benefit payment.
Additional valuable benefit separation information can be found under Separating Employee Information.
Retirement Planning
Retirement To Do List:
HRS has provided a DRS retirement checklist to assist in planning and processing retirement forms. Employees are encouraged to work with HRS-Pullman when retiring from the university. Please refer to the schedule of Pre-Retirement Seminars for further information.
Retirement Eligibility:
Under TRS and PERS Plan 3, please be aware of the following eligibility criteria:
Defined Benefit
- Establishing a pension benefit from the Defined Benefit portion of the Plan will establish retirement status at WSU.
- To be eligible for a pension benefit you must be vested, and be at least age 65. You are eligible for an early retirement benefit at age 55 or later, with at least 10 years of service, but your benefit will be actuarially reduced.
- The Defined Benefit is calculated by the following formula:
- 1% x service credit years x average final compensation (AFC)
- AFC is the average of the 60 consecutive highest paid service credit months
- Survivor Options will be available, reducing the benefit accordingly
- Work with DRS to pursue the pension benefit.
- Contact Human Resource Services-Pullman with any questions.
Defined Contribution
- Drawing funds from the Defined Contribution portion of your account will not establish retirement status at WSU.
- To access the Defined Contribution Funds: Allowed at any age, but subject to Internal Revenue Code regulations. There are numerous ways in which you may access your funds. For an overview of available income options, consult with a Voya representative at 888-327-5596.
- Contact Human Resource Services-Pullman with any questions.
Retiree Health:
Retirees or eligible separating employees have the option of continue with the same insurance coverage options they have had as an active employee.
- Eligibility for the PEBB Retiree Medical/Dental Insurance: At age 55 with at least 10 years of service; meet this criteria at the end of a period of COBRA coverage. For information regarding this coverage, including premium rates, click on the Retiree Enrollment Guide.
- If the retiree has a spouse or partner who is also a WSU employee, please contact HRS-Pullman to determine if transferring coverage to the remaining active employee and deferring the retiree coverage may be an attractive option. There is also the ability to transfer life insurance coverage, if applicable.
- Watch: HCA Retiree Medical Plan Comparison Presentation
Leave Cashout:
Depending on employment type, and whether the appointment is permanent or temporary, some employees may be eligible for annual leave cash out, and sick leave incentives. Eligible employees who meet retirement eligibility may be eligible to establish a VEBA Medical Expense Plan.
Contact Human Resource Services to determine if you are eligible.
SHIBA (Senior Health Insurance Benefit Advisors)
A non-profit advisory service provided to assist senior citizens and retirees with Medicare and Insurance questions and enrollment. SHIBA Advisors can be reached at: Washington 1-800-562-6900 Idaho 1-800-247-4422
Other Retirement Resources: