Operating under IRC Section 401(a), PERS 3 is a hybrid plan, having components of a Defined Benefit and Defined Contribution Plan. Find more information in the PERS 3 Handbook.
If you elect PERS 3 for your retirement plan, participation is mandatory from the date of initial eligibility; retroactive contributions may be required. You have 30 days from the date you receive the notice of eligibility to make this one-time, irrevocable decision between SBRP and PERS Plan 3.
The defined benefit portion of the plan is funded by employer contributions. Based on the plan's formula, it provides a specific lifetime monthly pension amount when you retire. The formula takes into account your Washington state public employee years of service and salary history. Vesting generally requires 10 years of full-time equivalent service.
The defined contribution portion of the plan is funded through mandatory deductions from an employee’s salary, called “Employee Pick-up Contributions.” An employee elects one of six contribution options. This is a one-time election and cannot be changed during the duration of employment with a participating employer. You are responsible for investing your contributions. You can choose to invest in either the Washington State Investment Board (WSIB) Investment Program or the Self-Directed Investment Program.
The State Legislature provides 30 days for employees to make this election. (Don’t confuse this 30-day choice period with the 90-day time period provided to employees making the choice between PERS 2 and PERS 3.)
Employees who do not make a choice within 30 calendar days of hire will be defaulted into the SBRP. Employee choice or default cannot be changed at any time during your ongoing employment with an SBRP-participating employer.
Participating employers will notify eligible employees of their options and deadline for election. You’ll be asked to complete and sign a Notice of Eligibility/Election form. This Election Notice describes various employment situations and provides the relevant retirement plan options. If you are a new retirement-eligible employee and have not yet received this notice, contact your benefits office as soon as possible to review your eligibility. Remember, you have 30 days from the notice date to decide between SBRP and PERS Plan 3.
Because this is a one-time irrevocable decision, we encourage you to make time during the 30-day election period to familiarize yourself with both plans, talk with your spouse or partner, and seek the assistance of a financial counselor. The deadline will not be extended.
SBRP Election: Electing SBRP for your retirement plan is not the same as enrolling in the plan. To enroll, you must contact TIAA (Teachers Insurance and Annuity Association) directly. Employer and employee contributions begin at the start of the payroll period in which your election is made.
PERS 3 Election: Electing PERS 3 for your retirement plan requires enrolling in the Plan immediately from the date of eligibility. Enrollment means the employee contributions and the employer matching contributions will be made to the state. If your PERS 3 election is received after your payroll has begun, retroactive deductions will be taken to ensure that all of your PERS 3-eligible employment is covered and you start earning service credit.
No Election: If you do not respond to the Election Notice within the 30-day period, you have, in effect, made a choice and will be defaulted to the SBRP, with no future opportunity to change plans. Your employer will confirm your SBRP default and contributions will be made from your paycheck and matched by your employer. Contributions will be defaulted into a Lifecycle fund that best matches your projected retirement date.
Should you wish to increase your retirement savings contributions, consider one or both of the following optional pre-tax retirement savings programs:
Disclaimer: If there are any discrepancies between this information and the provisions of the SBRP Plan Document or PERS regulations, the Plan Document or regulations will prevail.
Last Modified: 12/7/18 10:56 AM