UNDERSTAND

Public Employees' Retirement System Plan 2 (PERS 2) is a defined benefit retirement plan that provides a secure income for retirement.

Each January, PERS 2 members enrolled prior to March 1, 2002 have the option to transfer to PERS 3.

Participation in the PERS 2 retirement plan starts on your first day of employment In an eligible position. In this 401(a) defined benefit plan, you and the University contribute money to the Retirement Trust Fund which pays your retirement benefit. Once you retire, you will receive your retirement benefit based on your service credit and average final compensation, not based on yours or the UW’s contributions. Here is how it works:

• You contribute 5.45% of your gross salary (as set by the legislature effective July 1, 2008). Your contributions are tax-deferred. Should you leave without retiring, you could withdraw your own contributions plus interest (as set by law).
• The UW contributes to your retirement savings too, with current employer contributions set at 8.31% of your gross salary. These monies are invested in the Retirement Trust Fund to fund future benefits, and cannot be withdrawn.
• There is no cap on the number of years of service credit you can earn.
• Your contributions along with the UW’s contributions are held in the Retirement Trust Fund and invested by the Washington State Investment Board.
• Your future retirement benefit is defined by the defined benefit formula used to calculate your benefit, and has no relationship at all to the amount that either you or the UW contributed to the plan.

Eligibility

PERS 2 is open to all eligible permanent or temporary contract classified, classified non-union and GCIU bargaining unit employees who work a minimum of 70 hours/month in any five months of a 12 month period.

If you are in a PERS-eligible position, but you were participating in an employer-matched, defined contribution, basic retirement plan with your prior employer, you may be eligible to participate in the University of Washington Retirement Plan (UWRP) instead of the Public Employees Retirement System (PERS). An employer-matched plan is one in which both you and your employer make contributions to your basic retirement plan, such as a 401(k) or 403(b) plan.
To be eligible for UWRP you must have:

• participated in the employer-matched, defined contribution plan for at least 2 full years and
• contributed immediately prior to coming to the UW (within 90 days),
• have become eligible for PERS immediately upon hire at UW;
• had this plan participation with one of the 3 UWRP fund sponsors: Fidelity, TIAA-CREF, or Vanguard, and
• the funds still in the account at one of the fund sponsors listed above.

If you believe you meet this exception criteria, email the Benefits & Work/Life Office to determine your retirement plan choices.

All UW employees participate in their applicable retirement plan from the beginning of employment. Retirement plan participation is a condition of employment.

Temporary Employees: If you are a temporary employee you may become eligible to participate in the Public Employees Retirement System (PERS) if:

• You are offered a work schedule in writing that requires five months of 70 or more work hours in a 12-month period. PERS eligibility will begin on your first day of assignment.
• You complete five months of 70 or more hours of work in a 12-month period enrollment in PERS occurs following the completion of the fifth month.

Newly Eligible Employees: If you participated in an employer-matched, defined contribution, basic retirement plan with your prior employer, you may be eligible to participate in the University of Washington Retirement Plan (UWRP) instead of the Public Employees Retirement System (PERS). Learn more.

Changing positions at the UW? If you move from a PERS-eligible position to a UWRP-eligible position or vice versa, email Benefits & Work/Life at benefits@u.washington.edu to determine your retirement plan choices.

Staff who are full-time UW students or the spouse of a full-time UW student: If you are a full-time UW student or the spouse of a full-time UW student, you may be eligible to exempt yourself from participation in PERS. However such exemption will not count toward future retirement service credits. Email Benefits & Work/Life at benefits@u.washington.edu to learn about exemptions from PERS participation.

PERS 2 Retirement Benefits

Monthly retirement income = 2% x service credit years x average monthly final compensation of your 60 consecutive highest-paid service credit months.

Example
Suppose you retire at age 65 with 32 service credit years. Your average final monthly compensation is $2083. Your monthly retirement benefit will be $1,327.

2% x 32 years x $2083 = $1,327.

This calculation results in the standard benefit. It will be lower if you choose to continue benefits to a survivor upon your death.

In addition:

• You are eligible for annual cost-of-living adjustments of up to 3%.
• There is no cap on the service credit you can earn.
• If you are a member of more than one State of Washington retirement plan, you may be able to combine service credit from all the plans to qualify for retirement.
• Temporary duty disability, disability retirement and survivor benefits are available if you meet the requirements. Contact Benefits & Work/Life for an individual consultation.

ACT

1. Review the benefits of the PERS 2 and PERS 3 plans and decide which is best for you.
2. Download the Member Information Form and Investment Choice forms. Both forms must be completed.
3. Print, sign, and send your enrollment form to Benefits & Work/Life: Campus Box 355660 or (US mail address) 3903 Brooklyn Ave NE, Seattle, WA 98105-6694
4. You can verify that your form has been received by checking your enrollment status in ESS approximately three to five business days after sending to the address above.

REMEMBER: Newly-eligible employees must make the PERS 2 versus PERS 3 choice within their first 90 days. If you take no action, after 90 days, state law requires that employees be permanently moved into PERS 3 with a 5% contribution rate. This cannot be changed at any time during your employment at UW.

Leaving the University Before Retirement

You can withdraw or transfer your employee contributions plus interest only if you completely separate from PERS employment. Processing a withdrawal is managed by the Department of Retirement Systems. Contact them directly for more information.

You cannot withdraw or transfer your employee contributions if you are moving directly to a PERS eligible position with another employer.

Your choices are:

• Withdraw your money plus interest. Withdrawals are subject to the IRS 20% withholding tax. The IRS may also require that you pay a 10% penalty.
• Transfer 100% or a designated amount of your money to a qualified retirement account. no withholding tax is required on funds that are directly transferred, nor does the 10% penalty apply.
• Leave your money in the retirement fund. Your service credit will be preserved for you in the event you return to State of Washington employment. When you have a minimum of five years of service credit, you have a vested right to a retirement benefit when you meet PERS 2 age requirements. Vesting means you have earned the right to a future benefit even if your covered employment ends. Your funds will also continue to accrue interest.

If you withdraw your contributions before retirement, you lose your right to future retirement benefits. You can restore your contributions and re-establish your benefits under certain circumstances. Explore the PERS website for more information including member publications.

LEARN MORE

Contact the Social Security Office periodically to review your file's accuracy.

Refer to the PERS Plan 2 Member Handbook.

See the Department of Retirement Systems Summary Annual Financial Report.

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