Last Updated: July 2008
Note: The 2008 Early Retirement Factors (ERF) detailed in this publication are available beginning 7/1/2008 (PERS), 9/1/2008 (SERS and TRS), and were established by legislation which ended gain sharing. If a court of law decides the repeal of gain sharing is invalid, the factors and return to work rules in place before passage of the law will apply.
As a Plan 2 or 3 member of PERS, SERS or TRS, you have the option to retire early and begin receiving a retirement benefit once you meet the minimum service requirements. This publication provides information about some of the things to consider before deciding if early retirement is right for you.
If you are a Plan 2 member, you are eligible for normal retirement at age 65 if you have at least five service credit years.
If you are a Plan 3 member, you are eligible for normal retirement at age 65 if you have at least:
If you are a Plan 2 member, you can retire as early as age 55 with a reduced benefit if you have at least 20 service credit years.
If you are a Plan 3 member, you can retire as early as age 55 with a reduced benefit if you have at least 10 service credit years.
Plan 2 and Plan 3 members: In some cases you can retire at age 62 with an unreduced benefit. Retirement before age 65 is considered an early retirement.
While you are able to begin receiving a retirement benefit when you retire early, your benefit is affected because you will begin receiving it before age 65. The amount of the impact depends on your service credit, the date you retire, your age and the early retirement factor used.
If you retire with at least 20 but less than 30 service credit years (Plan 2), or you retire with at least 10 but less than 30 service credit years (Plan 3):
If you retire before July 1, 2008 (PERS) or September 1, 2008 (TRS and SERS) and have 30 years or more of service credit:
If you retire on or after July 1, 2008 (PERS) or September 1, 2008 (TRS and SERS) and have 30 years or more of service credit, you can choose either:
The 2007 Legislature established new early retirement factors and return to work rules for Plan 2 and 3 members who retire with 30 years or more of service credit. The new law takes effect July 1, 2008 for PERS members and September 1, 2008 for SERS and TRS members. If you retire before that date, you are covered under the three percent ERF rule described above. If you retire on or after that date, you have the choice of either the three percent or 2008 ERF.
If you retire before age 65, your benefit is reduced to reflect the fact that you will receive it over a longer period of time. The amount of the reduction depends on how much younger than age 65 you are when you retire and the amount of service credit you have. The table below shows the early retirement factors used (see Washington Administrative Code 415-02-320 for details).
| Early Retirement Factors Table | |||
|---|---|---|---|
| Retirement Age | At least 10 or 20 years service | 30 years or more service | |
3% ERF |
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| 55 | 0.37 | 0.70 |
0.80 |
| 56 | 0.40 | 0.73 |
0.83 |
| 57 | 0.43 | 0.76 |
0.86 |
| 58 | 0.49 | 0.79 |
0.89 |
| 59 | 0.55 | 0.82 |
0.92 |
| 60 | 0.61 | 0.85 |
0.95 |
| 61 | 0.67 | 0.88 |
0.98 |
| 62 | 0.73 | 0.91 |
1.00 |
| 63 | 0.82 | 0.94 |
1.00 |
| 64 | 0.91 | 0.97 |
1.00 |
Plan 3 members must have at least 10 years of service. Plan 2 members must have at least 20 years of service. The 2008 Early Retirement Factors (ERF) are available beginning 7/1/2008 (PERS), 9/1/2008 (SERS and TRS), and were established by legislation which ended gain sharing. If a court of law decides the repeal of gain sharing is invalid, the factors and return to work rules in place before passage of the law will apply. |
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2% x Service Credit Years x Average Final Compensation x ERF = Monthly Benefit
1% x Service Credit Years x Average Final Compensation x ERF = Monthly Benefit
You retire on March 1, 2008 at age 55 with 22 years of service credit. Your average final compensation is $3,600. You are retiring early so your benefit is 37% of what it would be at age 65. Your monthly benefit is calculated as follows:
= 2% x 22 years x $3,600 x 37%
= .02 x 22 x $3,600 x .37
= $586
= 1% x 22 years x $3,600 x 37%
= .01 x 22 x $3,600 x .37
= $293
You retire on March 1, 2008 at age 60 with 30 years of service credit. Your average final compensation is $4,000. You are retiring early so your benefit is 85% of what it would be at age 65. Your monthly benefit is calculated as follows.
= 2% x 30 years x $4,000 x 85%
= .02 x 30 x $4,000 x .85
= $2,040
= 1% x 30 years x $4,000 x 85%
= .01 x 30 x $4,000 x .85
= $1,020
You retire on October 1, 2008 at age 62 with 30 years of service credit. Your average final compensation is $4,400. If you choose the three percent ERF, your monthly benefit is calculated as follows:
= 2% x 30 years x $4,400 x 91%
= .02 x 30 x $4,400 x .91
= $2,402
= 1% x 30 years x $4,400 x 91%
= .01 x 30 x $4,400 x .91
= $1,201
If you choose to retire under the 2008 ERF, your benefit is unreduced but you have stricter return to work rules. Your monthly benefit is calculated as follows:
= 2% x 30 years x $4,400 x 100%
= .02 x 30 x $4,400 x 1.00
= $2,640
= 1% x 30 years x $4,400 x 100%
= .01 x 30 x $4,400 x 1.00
= $1,320
Your benefit is not impacted if you return to work for an employer not covered by a Washington state retirement system.
If you retire with less than 30 years of service credit or you retire under the three percent ERF, and wait at least 30 calendar days after retirement before returning to work, you can work:
If you retire using the 2008 ERF, and have not reached age 65, you cannot work:
You cannot earn compensation from a DRS-covered employer for services performed as a contractor, or as the result of service performed by those in your employ, and continue to receive a monthly benefit.
For more information, refer to the DRS publication Thinking About Working After Retirement?
If you have questions about retiring early that are not covered in this publication, please contact DRS. Be prepared to provide your name, Social Security number, and retirement system and plan.
