Plan Choice Compare
Plan Structure
Plan 2
The pension benefit in Plan 2 is based on the length of time you’ve worked, your pay and your age at retirement. You’ll receive a benefit for the rest of your life. The payments are guaranteed by the state of Washington. Both you and your employer contribute to your plan.
Plan 3
Pension benefit: This part of the benefit in Plan 3 is based on the length of time you’ve worked, your pay and your age at retirement. You’ll receive a benefit for the rest of your life. The payments are guaranteed by the state of Washington. Your employer contributes this part of your plan.
Investment contribution: This part of the benefit is based on what you contribute to the plan and how the investments you select perform.
Benefit calculation
Plan 2
2% x service credit years x Average Final Compensation = monthly benefit
Plan 3
Pension benefit: 1% x service credit years x Average Final Compensation = monthly benefit
Investment contribution: The calculation is determined by your contributions, investment performance and withdrawal choices.
Contribution rates
Plan 2
The Plan 2 contribution rate is adjusted every two years based on the funding needs of the plan.
Public Employees: 6.36%
School Employees: 7.76%
Teachers: 8.05%
See Contribution Rates.
Plan 3
The Plan 3 contribution rate is fixed. Once you choose a rate, or range of rates (option B or C), your rate is locked in. Pension benefit: Your employer contributes this part of your benefit; you do not. Investment contribution: You select your rate. You cannot change your rate unless you change employers.
- Option A 5% all ages
- Option B 5% up to age 35, 6% ages 35-44, 7.5% ages 45 and older
- Option C 6% up to age 35, 7.5% ages 35-44, 8.5% ages 45 and older
- Option D 7% all ages
- Option E 10% all ages
- Option F 15% all ages
The role of investments
Plan 2
Your contributions are invested by the Washington State Investment Board (WSIB). Your benefit is guaranteed and is not dependent on investment performance.
Plan 3
Pension benefit: Your employer contributes this part of your benefit. Those contributions are invested by the WSIB. Your benefit is guaranteed and is not dependent on investment performance.
Investment contribution: You choose how your contributions will be invested from a range of options provided by the WSIB. The amount of your benefit depends on the amount you contribute and the performance of your investments.
Vesting
Plan 2
You earn the right to a monthly benefit in retirement when you have 5 years of service credit.
Plan 3
Pension benefit: You earn the right to a monthly benefit in retirement after 10 years of service credit in most cases, or after 5 years of service credit with at least 12 months earned after age 44.
Investment contribution: Vesting does not apply to this part of your benefit. You may withdraw the account balance if you leave employment or you may leave it in until you reach retirement.
Eligibility for normal retirement
Plan 2
Age 65 or older with at least 5 service credit years.
Plan 3
Pension benefit: Age 65 or older with at least 10 service credit years, or age 65 or older with at least five service credit years if at least 12 of those months were earned after age 44.
Investment contribution: There is no specific age requirement for this part of your benefit. You may access your money at any time after you leave employment.
Eligibility for early retirement with a reduced benefit
Plan 2
Age 55 or older with at least 20 service credit years. There is less of a reduction to your benefit if you have at least 30 service credit years.
If you are age 55 with 30 years of service credit, your benefit reduction is 5% for each year (prorated monthly) before you turn age 65.
Plan 3
Pension benefit: Age 55 or older with at least 10 service credit years. There is less of a reduction to your benefit if you have at least 30 service credit years.
If you are age 55 with 30 years of service credit, your benefit reduction is 5% for each year (prorated monthly) before you turn age 65.
Investment contribution: There is no age requirement for this part of your benefit. You may withdraw your money at any time after you leave employment.
Leaving employment before you’re eligible to retire
Plan 2
Your money can remain in the plan or you can withdraw your contributions and the interest they’ve earned. However, if you withdraw, you give up your right to a future retirement benefit.
Plan 3
Pension benefit: You don’t contribute to the pension benefit part of your plan. Your employer makes those contributions, and you cannot withdraw them.
Investment contribution: Your money can remain in the plan, or you can access your contributions and investment earnings. A variety of distribution options are available.
Cost-of-Living Adjustments (COLAs)
Plan 2
On July 1 of every year after your first full year of retirement, your monthly benefit will be adjusted by the percentage change in the Consumer Price Index, up to a maximum of 3% per year.
Plan 3
Pension benefit: On July 1 of every year after your first full year of retirement, your monthly benefit will be adjusted by the percentage change in the Consumer Price Index, up to a maximum of 3% per year.
Investment contribution: There are no Cost-of-Living Adjustments for the investment contribution part of your benefit. If you choose to purchase an annuity using your investment contribution funds, some annuity options include a COLA.
Health care coverage in retirement (PEBB)
Note: Employees receiving health insurance through the Public Employees Benefits Board (PEBB) or the School Employees Benefits Board (SEBB) are eligible to receive health care coverage in retirement from PEBB. Not all DRS employers participate in PEBB/SEBB – contact your employer to verify your health insurance provider. PEBB coverage is managed by Health Care Authority.
Plan 2
To qualify, you must elect coverage within 60 days of termination. As long as you meet the age and service requirements for an early retirement (age 55 or older with 20 or more years of service credit), you can delay receiving your retirement benefit and still be eligible for PEBB coverage.
Plan 3
Pension benefit: To qualify, you must elect coverage within 60 days of termination. As long as you meet the age and service requirements for an early retirement (age 55 or older with 10 or more years of service credit), you can delay receiving your retirement benefit and still be eligible for PEBB coverage.
Investment contribution: Leaving your contributions in the plan or starting to draw them does not impact your eligibility for health care coverage under PEBB.
