Washington State
Department of
Retirement Systems
Defined Benefit Component
| SERS Plan 3 |
|---|
| Defined Benefit 1% × SCY × AFC Guaranteed Lifetime Benefit |
What does the Defined Benefit Component of Plan 3 provide?
The Defined Benefit component of SERS Plan 3 is similar to SERS Plan 2. It provides a guaranteed lifetime monthly retirement benefit based on your years of service and your level of compensation. However, the percentage used for computing your benefit at retirement in Plan 3 is 1 percent instead of the 2 percent in Plan 2:
1% × Service Credit Years (SCY) × Average Final Compensation (AFC)
Like SERS Plan 2, once you begin receiving benefits, your monthly benefit amount is increased every July 1, after one year, based on the increase in the cost of living, up to a maximum of 3 percent per year.
SERS Plan 3 also provides a feature that is not available in SERS Plan 2. If you have at least 20 service credit years and separate from service, your pension benefit will be increased 0.25 percent per month, or approximately 3 percent for each year you delay receiving benefits (until age 65). This is separate from the annual cost of living adjustment that will begin when you begin collecting benefits. (You can also delay receiving your benefit under SERS Plan 2. However, your pension benefit will not increase during that time.)
Who contributes to the Defined Benefit Component of Plan 3?
The Defined Benefit Component of Plan 3 is funded entirely by employer contributions. Employer contributions are the same for SERS Plan 2 and SERS Plan 3, but contribution rates vary over time.
When am I eligible for retirement under the Defined Benefit Component of Plan 3?
Under SERS Plan 3 you are eligible to retire at age:
- 65 with at least 10 service credit years;
-or- - 65 with five service credit years, including 12 service credit months that were earned after age 44;
-or- - 65 with five service credit years that were earned under SERS Plan 2 before September 1, 2000 and transferred to SERS Plan 3;
-or- - 62 with 30 service credit years with an unreduced benefit*
-or- - 55 with 10 service credit years with a reduced benefit
* This early retirement benefit is effective September 1, 2008. If a court of law decides the repeal of gain sharing is invalid, the reductions for early retirement that were in place before passage of the new law will apply. See Gain Sharing.