Source: https://www.drs.wa.gov/publications/member/trs/tree3/
Timestamp: 2020-07-08 23:05:06
Document Index: 592959315

Matched Legal Cases: ['art 1', 'art 2', 'art 1', 'art 2', 'art 1', 'art 2', 'art 1', 'art 2', 'art 2']

TRS Plan 3: Using Service Credit Earned Outside Washington State - Department of Retirement Systems
For members of the Teachers’ Retirement System (TRS) Plan 3
As a member of Plan 3 of the Teachers’ Retirement System in Washington state, you can use service credit you earned as an out-of-state teacher to qualify for retirement and/or increase your monthly benefit. Two programs are available to you, the Out-of-State Service Credit Program and the Public Education Experience Program.
When’s the soonest I can retire?
Request the form Application to Use Out-of-State Service Credit. Fill in the Member Information section. Then send the form to your previous retirement system(s). That system’s representative will need to fill in the Verification Information section and send the form to DRS.
The age at which you can retire with a full benefit. For TRS Plan 3, that’s age 65.
The credit you receive for working in a position one of the state retirement systems covers. For details about earning service credit, review “Earning service credit” in your member handbook.
You’ve earned enough service credit to be eligible for retirement once meeting the applicable age requirements. For TRS Plan 3, that’s 10 years or five years with at least 12 months of it earned after age 44.
If you choose this program, only your Washington state service credit will be used to calculate your monthly benefit. Your monthly benefit will be reduced for each year younger than age 65 you are. If you are seeking to reach 30 years of service credit, your monthly benefit will also be reduced for any out-of-state service credit used.
What if I’m already drawing on my out-of-state pension?
You can still use your out-of-state service credit to qualify for early retirement, or the 30-year ERFs, but you won’t be able to purchase the service using the Public Education Experience Program.
To reach 10 years: If you are already at least age 55 and have five or more years of service, you can use out-of-state credit to reach 10 years of service credit, making you eligible to retire. But it won’t change the Early Retirement Factor (ERF) used to calculate your benefit.
Let’s say you’re 57 years old and have 7 years of service credit in TRS Plan 3 in Washington state. Your Average Final Compensation (AFC) is $5,000. You also have three years of service credit in a different state’s retirement system. You want to retire now. You use your three years of out-of-state service credit and the Out-of-State Service Credit Program to qualify for early retirement.
Your monthly benefit is reduced based on your age (57) and the normal retirement age (65). An ERF of 0.463 is applied because you are eight years away from age 65. Even though your out-of-state credit helps you qualify for retirement, your monthly benefit is calculated using only the 7 years of Washington state service credit. Here’s your monthly benefit calculation:
To find out whether it’ll help you, ask yourself: Will the difference between my age at my desired retirement date and age 65 be greater than the number of years needed to reach 30 years of service credit? If the answer is yes, using out-of-state service credit should benefit you.
Let’s say you are age 60 and have 20 years of service credit. Your AFC is $5,000, and you want to retire now.
Find the age difference: 65 – 60 = 5 years
Years needed to reach 30: 30 – 20 = 10 years
Since your age difference from 65 is less than the years needed to reach 30, using out-of-state service won’t increase your benefit.
Let’s say you are age 61 and have 28 years of service credit. Your AFC is $5,000, and you want to retire now.
Find the age difference: 65 – 61 = 4 years
Years needed to reach 30: 30 – 28 = 2 years
Here’s why: Without using out-of-state service credit, your monthly benefit is reduced based on your age (61) and the normal retirement age (65). An ERF of 0.672 is applied because you are four years away from age 65. Even though your out-of-state credit helps you qualify for retirement, your monthly benefit is calculated using only the 28 years of Washington state service credit.
Here’s your monthly benefit calculation without the out-of-state service credit:
Here’s how to calculate the reduction:
The ERFs are subject to change based on State Actuary figures. The administrative factors used in the table above are for illustrative purposes only. To review the factors, visit the complete table online.
If you choose this program, your Washington state service credit as well as your purchased service credit will be used to calculate your monthly benefit. To estimate the cost, use the Buy Back calculator for Public Education Experience.
You may purchase up to seven years of service credit as long as you have at least that much in out-of-state service credit available. Purchases must be made in whole-month increments. Multiple purchases aren’t allowed. For example, if you buy four years of public education experience now, you won’t be able to make another purchase later.
You can’t be retired from the out-of-state system
You can’t be eligible for an unreduced benefit from the out-of-state system
You must pay the amount needed in today’s dollars to pay for the increase in your monthly benefit over your lifetime.
Example 1 Paying for the benefit increase Let’s say you are an active TRS Plan 3 member, and you are 49 years old. You currently have 17 years of service and you want to purchase three years of out-of-state service credit to reach 20 years. Your annual average salary is $50,000. Here’s how to calculate the cost of your purchase: Part 1: Annual average salary x service credit years to purchase x Factor 1 Part 2: Annual average salary x current service credit years x (Factor 1 – Factor 2) Total Cost: Part 1 cost + Part 2 cost Part 1: 50,000 x 3 x 0.1995* = $29,925 Part 2: 50,000 x 17 x (0.1995 – 0.1772*) = $18,955 Total Cost: 29,925 + 18,955 = $48,880
* These factors are for illustrative purposes only. Please see the DRS website for current factors. Part 1 pays for the added value of the service credit you plan to purchase. Part 2 pays for the increased value of your current service credit. The value of your current service credit might increase with this purchase because you might be eligible for earlier retirement, better ERFs or both. In some situations, Part 2 could cost $0.
If you are drawing a pension from your out-of-state system, you aren’t eligible to participate in the Public Education Experience Program.
DRS can accept only full lump sum payments. You can make that payment with either a personal or cashier’s check. In many cases, you can transfer funds from another eligible retirement account to pay your bill as well. However, DRS can’t accept funds in excess of the cost to make your purchase. To learn more about whether you can make such a transfer, contact your account’s administrator. The Internal Revenue Service classifies DRS as a 401(a) account.
After DRS receives your form requesting to buy out-of-state service credit, we will send you a bill to make the purchase. You have 90 days from the bill’s issue date to pay it. If you don’t pay it within that time frame, you will need to request a new bill be sent to you.
Withdrawing your contributions won’t impact your defined benefit, which funds your monthly payment in retirement, because your employer’s contributions pay for that portion of your retirement plan.