Retirement Badge #01: Introduction to Retirement-Retirement Badge #01

Retirement Badge #01 - PowerPoint

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This document introduces Washington State public retirement systems for school employers (WASBO Retirement Badge #1). It defines retirement as the point when the Department of Retirement Systems (DRS) begins paying a pension, distinguishing it from simply separating from employment. It explains key acronyms (e.g., DRS, PERS, TRS, SERS, DCP, WAC, RCW, WSIB, AFC) and outlines DRS’s role: collecting contributions, maintaining member records (potentially up to 80 years), verifying employer data, communicating benefits, and paying pensions.<br /><br />Washington administers eight public retirement systems with 15 plans, serving over 900,000 current and former employees and paying more than $8 billion annually. School district employees primarily use TRS, SERS, and sometimes PERS (though PERS Plans 2 and 3 are closed to school employees as of Sept. 1, 2000). Plans 1 and 2 are defined benefit (DB) plans that provide a lifetime monthly benefit based on a formula: Average Final Compensation (AFC) × service credit × a multiplier (commonly 1% or 2%). Plan 3 (TRS/SERS/PERS) is a hybrid combining DB with a defined contribution (DC) account based on member contributions and investment performance; Plan 3 contribution rates generally can’t be changed unless the member changes employers. Deferred Compensation (DCP) is noted as an optional pre-tax savings plan.<br /><br />Governance is shared among multiple entities: the Legislature sets policy and contribution rates; the Select Committee on Pension Policy studies issues; the Office of the State Actuary (OSA) performs biennial valuations and recommends rates; the Pension Funding Council adopts most rates (LEOFF Plan 2 rates are set by its board); and WSIB invests pension trust assets.<br /><br />Funding is primarily prefunded through employee/employer contributions and investment earnings. The document also references the governing laws in RCW and WAC Title 415 and includes knowledge checks, a glossary, and an 80% passing requirement for the final assessment.

Keywords

Washington State public retirement systems

Department of Retirement Systems (DRS)

Teachers' Retirement System (TRS)

School Employees' Retirement System (SERS)

Public Employees' Retirement System (PERS)

Defined benefit (DB) pension formula

Plan 3 hybrid defined benefit/defined contribution

Average Final Compensation (AFC)

Deferred Compensation Program (DCP)

Pension governance and funding (Legislature, OSA, WSIB)