Washington State
Department of
Retirement Systems
Defined Contribution Component
| TRS Plan 3 |
|---|
| Defined Contribution Benefit amount varies based on contribution and investment earnings |
What does the Defined Contribution component of TRS Plan 3 provide?
The ultimate value of the Defined Contribution benefit is based on the amount you contributed and the performance of the investments chosen. Investment returns (both gains and losses) are credited to the Defined Contribution account. The choice of funds will determine the investment risk and return members can expect.
Who contributes to the Defined Contribution component of TRS Plan 3?
The Defined Contribution component of TRS Plan 3 is funded entirely by member contributions. As with TRS Plan 2, member contributions are mandatory. Unlike TRS Plan 2, which has a single contribution rate (which is currently 4.26 percent, as of September 2008), with TRS Plan 3 you choose how much to contribute from one of six rate options:
| Option | Contribution Rate | |
|---|---|---|
| A | 5% - Fixed rate for all ages | |
| B | 5% | up to age 35 |
| 6% | ages 35 – 44 | |
| 7.5% | age 45 and older | |
| C | 6% | up to age 35 |
| 7.5% | ages 35 – 44 | |
| 8.5% | age 45 and older | |
| D | 7% – Fixed rate for all ages | |
| E | 10% – Fixed rate for all ages | |
| F | 15% – Fixed rate for all ages | |
Once you choose your contribution rate, you cannot change it unless you change employers or during contribution rate flexibility periods each January as permitted by the Internal Revenue Service (IRS).
If you do not choose your contribution rate, you will default to Option A (5%).
When can I withdraw my Defined Contribution money?
Remember that your Defined Contribution account is a major component of your retirement benefit, however, you may withdraw your Defined Contribution money when you separate from service. You can also leave it in the Plan. If you withdraw any portion before retirement, it will not be available as part of your TRS benefit when you retire. Several payment options are available including lump sum cash distribution, direct rollover, scheduled payments, annuity purchases or a personalized payment schedule. To learn more about your withdrawal options, obtain the TRS Plan 3 Request for Payment of Defined Contribution Funds brochure from your employer, from this Web site, or call
Withdrawing money from your Defined Contribution component of TRS Plan 3 has no effect on your Defined Benefit component. Once you meet TRS Plan 3’s service credit and age requirements, you are eligible for a monthly benefit payment regardless of whether or not you have withdrawn money from your Defined Contribution account.