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Retirees can use our new withholding calculator for help with their W-4P
Tax time is here once again and you may be considering whether or not you want to change your federal withholding for your pension. This year, we’ve developed a tool to assist you. It’s a convenient calculator on our website to help you determine your withholding tax.
If you determine you’d like to make updates, change your withholding by completing and sending us a new Form W-4P. Before you make a change, however, you might wish to talk with your tax advisor or the IRS.
You can also use the calculator to run different withholding scenarios to help you meet your retirement goals. It's important to plan ahead when thinking about how your federal tax withholding will affect your net monthly benefit.
Note: The calculator uses Microsoft Excel Version 97-2003 or later. If you don't have Excel, please call us and we'll run the calculations for you.
Update on gain sharing
Update posted Feb. 9, 2012
The recent court ruling on gain sharing replacement benefits has prompted questions to the state Department of Retirement Systems regarding next steps and the possibility of an appeal. DRS has received updated information on the process, including confirmation that the state intends to appeal the decision in Phase 1 of the litigation.
On Jan. 30, King County Superior Court Judge Richard Eadie issued a decision in the second phase of a complex lawsuit over the Legislature’s repeal of gain sharing benefits in 2007. In Phase 1 of the suit, Eadie overturned the repeal of gain sharing. In the recent Phase 2 decision, he ruled that the state will have the right to terminate other pension benefits that were made contingent on whether gain sharing is ultimately restored.
The contingent benefits, which include provisions for early retirement, will remain in place until there is legal certainty regarding all issues of the case. Legal certainty is not reached until the expiration of all opportunities for review by the Court of Appeals and/or the Supreme Court. Now that the judge has ruled in Phase 2, an additional order will need to be filed in the superior court to finalize all aspects of the proceeding. As soon as a final order is signed by the superior court, the parties will have 30 days to appeal. The state intends to appeal the court’s Phase 1 decision.
The litigation stems from legislation approved in 2007 which repealed gain sharing provisions that had allowed members of PERS and TRS Plans 1 and 3 and SERS Plan 3 to share in "extraordinary investment returns" under certain conditions. Language in the repealed statutes stipulated that gain sharing was not a contractual right and that the Legislature reserved the right to amend or repeal it.
The 2007 Legislature also provided certain benefits as a replacement for the repeal of gain sharing, including new provisions for early retirement. These early retirement reduction factors (known as ERFs) allow members of PERS, TRS and SERS Plan 2 and Plan 3 with at least 30 years of service to retire at age 62 (instead of 65) with no actuarial reduction in their benefit. The factors also allow these members to retire before age 62 with less of a benefit reduction than had previously been provided.
In approving the replacement benefits, the Legislature made them contingent on the successful repeal of gain sharing. The law requires that the replacement benefits be terminated if a final court of law determines that the repeal of gain sharing is invalid.
Members and retirees of Plans 1 and 3 challenged the repeal of gain sharing shortly after the law took effect in 2007. On September 9, 2010, Judge Eadie ruled in favor of the plaintiffs, finding that the repeal of gain sharing was invalid.
On Dec. 16, 2011, Eadie heard oral arguments in Phase 2 of the litigation, which focused on the termination of the replacement benefits. In the order issued Jan. 30, he ruled that if gain sharing were ultimately restored (after all appeals are final), then the replacement benefits will terminate, as the statute currently provides.
Automatic email notifications of DRS website updates
To help you stay connected to the latest retirement information available, we’re introducing a free digital subscription service. The service allows you to voluntarily opt in for automatic emails when items on the DRS website change or when new information becomes available. The only information that’s required from you is your email address. After you sign up, you can change your subscription details or cancel the service at any time.
How it worksEvery hour, the service checks the DRS website to see what’s been updated and sends emails to people who have signed up to receive notification (for example, an update to the PERS Plan 2 handbook or a new edition of the Outlook newsletter). As a subscriber, you can tailor the frequency you wish to receive notices: immediately upon posting, daily, weekly or monthly (please note that the page you select may not be updated at each of those intervals, depending upon the topic).
It’s easy to use – with just a few clicks you can sign up for updates on a variety of topics including, news and announcements, job openings and legislation impacting retirement. And as you browse our website, you’ll notice that individual articles also feature a link reading, “Email me when this page is updated.” Clicking on this link will enable you to subscribe for updates to that particular page and topic.
Subscribe nowIf you are interested in receiving updates from DRS, go to https://public.govdelivery.com/account/WADRS/subscribers/new and type in your email address to get started. You can also visit our homepage any time at www.drs.wa.gov and look for the link and envelope icon at the top of the page. Once you click on the link, you can start creating your personalized list of subscription options.
Subscription benefits- Quick email notification: Know as soon as a publication or news article becomes available or has been updated on the DRS website
- Individual: Sign up only IF you want to; cancel your subscription any time
- Customizable: Offers a list of our retirement plans, systems and topics to choose from at sign up that you can change any time
- Automatic: Once you establish a subscription profile, you will automatically receive updates without having to check the DRS website for changes
We value your privacy. Email updates are a free service provided by the Department of Retirement Systems. Your email address will only be used to deliver the information you have requested and allow you to access your account.
How do furloughs or temporary salary reductions affect my retirement benefit?
Several pieces of legislation have been passed in the last two years that address how furloughs or temporary salary reductions impact the calculation of your retirement benefit. Generally, as a result of recent legislation, the calculation of your benefit should not be impacted if your furlough or temporary salary reduction occurred as part of your employer’s salary reduction efforts.
However, there are different rules that may apply depending on the timeframe and the details of your furlough or temporary salary reduction. To help you better understand the rules that apply to you, we’ve created two Frequently Asked Questions (FAQ) documents: one that addresses furloughs that occurred during the 2009-2011 biennium; and a second one that addresses furloughs and Temporary Salary Reductions during the 2011-2013 biennium.
If you have questions after reading the FAQ below that applies to you, please contact DRS.
2009-2011 Furloughs FAQ
2011-2013 Furloughs and Temporary Salary Reduction FAQ
Public Pension Plans: In The News
Public pension plans across the country have been in the news recently. Have questions about the status of Washington's plans? Pension Plan Facts
PERS and SERS Plan 3 members ask about the possibility of contribution rate flexibility
We received several letters asking whether it might be possible for PERS and SERS Plan 3 members to have an annual opportunity to change their contribution rate. Our response explained that pension plan rate flexibility is governed entirely by federal regulation.