Public Employees’ Retirement System (PERS)
Separation and Retirement Information
Upon termination of employment, you have the following options for addressing your PERS accounts.
PERS 1 & 2:
- You may leave the retirement contributions in the account, especially if you are vested or expect to have future State service resulting in a future benefit from the accounts. In this case, no action is required upon termination, other than ensuring your address is up-to-date with the Department of Retirement Systems.
- You could request to rollover or withdraw your portion of the PERS 1 or 2 contributions and interest by completing a Request for Withdrawal of Contributions. For withdrawals, a 10% federal tax penalty is generally applicable, in addition to income tax withholding of 20%. (Depending on your tax-bracket, you may owe more or receive a refund of the income tax withholding when you file your annual income taxes.) If you roll funds over to another eligible retirement plan or individual retirement account (IRA), there would be no tax implications. This option will result in no future pension benefit from the PERS 1 or 2 plan.
- You also can do a combination of the above options.
PERS 3: You have two separate accounts established with your PERS 3 account.
Defined Contribution Portion of Plan: This is the portion of the account funded by the employee via pre-tax contributions.
- PERS 3 members have the option to leave the funds in the account, roll them over to another eligible retirement account, withdraw them, or a do a combination thereof. Vesting in the account is not required for this portion of your PERS 3 account.
- You may also begin drawing a monthly annuity or systematic withdrawals. Drawing from your defined contribution portion of the plan does not constitute “retirement” from the state of Washington or WSU.
- Additional information about these options is addressed on the PERS 3 Withdrawal website.
Defined Benefit Portion of Plan: this is the portion of the account funded by the employer.
- The defined benefit portion of PERS 3, if vested, will result in a future benefit once retirement eligibility criterion is met, even if the monies in the defined contribution portion were cashed out or rolled over to another eligible retirement plan.
Planning for Retirement
Retirement Eligibility:
PERS 1
PERS 2
PERS 3
Any age with at least 30 years of service
Age 60 with at least 5 years of service
Age 55 with at least 25 years of service
No reduction for early retirement under any of these options
Age 65 with at least 5 years of service
Age 55 with at least 20 years of service, with a reduced early retirement benefit
Age 65 with at least 5-10 years of service, depending on when service is earned
Age 55 with at least 10 years of service, with a reduced early retirement benefit
Drawing from the Defined Contribution portion of PERS 3 does not constitute as “retirement”
Run a retirement benefit estimate on the Department of Retirement Systems website under the “Your Retirement Account” link. Through this site you also can start your online retirement application, or by calling them at 1-800-547-6657.
Retirement To Do List – A comprehensive list of items to be thinking about leading up to retirement.
Retiree Health Insurance Options: Eligible retirees can continue their state-sponsored medical and dental insurance in retirement, or defer the retiree coverage if covered under another employer plan or an ACA marketplace plan. In both cases, a form needs to be completed to exercise these options. Failure to do so will result in not being able to pick up this coverage in the future.
Current information, including forms and premiums, can be found on the PEBB website and the Retiree Enrollment Guide.
Leave Cashout:
Annual Leave: Employees on permanent appointments that accrue annual leave will have the full balance of the annual leave cashed out, following a leave audit by HRS. Individuals on temporary appointments are not normally eligible for the cashout.
Sick Leave/VEBA: Classified Staff and Administrative Professional employees who retire from WSU are eligible to have 25% of the value of their eligible sick leave balance deposited into a VEBA Medical Expense Plan (MEP), a post-retirement health reimbursement plan. More details available at Voluntary Employees’ Benefit Association Medical Expense Plan (VEBA). Faculty, specifically faculty with any level of teaching or research duties, are not eligible.
VEBA Medical Expense Plan (VEBA MEP) Retirement Ready Webinar Recording
Pre-Retirement Webinars and Workshops: Department of Retirement Systems offers frequent webinars and workshops throughout the year on retirement planning. View upcoming events at the DRS Retirement Planning site.
Human Resource Services offers Pre-Retirement seminars on a monthly basis, covering topics such as retiree health insurance and how it works with Medicare, WSU retirement processes, and sick leave cash out information. The schedule is available at the HRS Retirement Information page under “Upcoming Events”.
TIAA is available to provide assistance with withdrawal options from optional TIAA accounts, financial planning, and retirement planning. Log into your TIAA account to schedule an appointment.
Retirement Outlook: A quarterly newsletter that provides valuable information on programs and services. Retirement Outlook Newsletter
SHIBA: Sponsored by the Office of Insurance Commissioner, Senior Health Insurance Benefits Advisors (SHIBA) volunteers are available to assist you with enrolling in Medicare, learning more about Medicare options, and finding Medicare supplement and Part D Plans. They can be reached at 1-800-562-6900 in Washington or 1-800-247-4422 in Idaho, or at the SHIBA website.
Links to other Sources: