Washington Administrative Code › Title 415 - Retirement Systems, Department of › Chapter 415-02 - General provisions › GENERAL RULES AFFECTING MULTIPLE PLANS AND SYSTEMS › Section 415-02-178 - May I purchase an annuity?

Current through Register Vol. 24-14, July 15, 2024
(1)
Am I
				eligible to purchase an annuity?
You are eligible to purchase a defined
				benefit plan annuity at the time of retirement if you are a member of TRS
				(RCW
				41.32.067), WSPRS (RCW
				43.43.315), LEOFF Plan 1 (RCW
				41.26.105), LEOFF Plan 2 (RCW
				41.26.463), PERS (RCW
				41.40.131), SERS (RCW
				41.35.235), or PSERS Plan 2 (RCW
				41.37.295). This annuity provides a lifetime
				increase to your monthly benefit. (For purchasing an annuity from your Plan 3
				defined contribution account, refer to WAC
				415-111-320.)
(2)
Can I purchase an annuity if I take
				a lump sum payment?
You may not purchase an annuity if you elect a lump
				sum payment instead of a monthly benefit.
(3)
Are there limits to the annuity
				amount I may purchase?
There is no maximum limit on the purchase amount.
				If you are a LEOFF or WSPRS member the minimum purchase amount is $25,000. If
				you are a PERS, SERS, or PSERS member, the minimum purchase amount is $5,000.
				There is no minimum required for TRS members.
(4)
When can I apply to purchase an
				annuity?
You must submit your request to purchase an annuity to the
				department at the time you apply for retirement.
(5)
How much will my monthly benefit
				increase if I purchase an annuity?
The increase in your monthly benefit
				will be calculated using the following formula:
Purchase Annuity Amount x Annuity Factor = Increase to
				  Monthly Benefit
The annuity factor is determined by your age on the later of
				  your retirement date or the date your retirement application is submitted to
				  the department.
Example:
John is a member of LEOFF Plan 2. He
				  applies for retirement and requests to purchase an annuity for $45,000. For
				  illustration purposes in this example only, we will use 0.0051025 as the
				  corresponding annuity factor (factors change periodically). John's monthly
				  benefit will increase by $229.61 per month, calculated as follows:
Purchase Annuity Amount x Annuity Factor = Increase to
				  Monthly Benefit
$45,000 x 0.0051025 = $229.61
(6)
How and when do I pay for the
				annuity?
The department will generate a bill to you for the cost of the
				annuity after we receive your request to purchase.
(a) For all TRS members, payment may be made
				by making a one-time personal payment (however, IRS regulations limit the
				amount of aftertax dollars you may use); and you may roll over funds from
				another tax-deferred retirement account. To purchase the annuity with Roth
				dollars, you must request a distribution first, then pay the bill with a
				check.
(b) For LEOFF, WSPRS, PERS,
				SERS, and PSERS members, the annuity must be purchased by rolling over funds
				from an "eligible retirement plan" which is a tax qualified plan offered by a
				governmental employer (like the state of Washington's deferred compensation
				program) or rolling over tax-deferred funds that originated with a governmental
				employer. You cannot use a Roth balance (if applicable) for this payment. You
				can only use dollars from your pretax balance. The annuity payment is taxable
				income when you receive it.
(c) For
				PERS Plan 1 or TRS Plan 1 members, Post-30 year contributions withheld under
				the provisions of
				RCW
				41.40.191 or
				41.32.4986 respectively, may not
				be used to purchase the annuity.
(d) Payment must be made in full by 90 days
				after the later of your retirement date or bill issue date. Your annuity will
				begin once your payment is received and your retirement is processed. The
				effective date for the start of this benefit is the later of your retirement
				date or the payment in full date plus one day.