Chapter 2 - Glossary Of Terms

Question 1

AFC

Answer 1

Average Final Compensation (AFC): The monthly average of your 60 consecutive highest paid service credit months. Your AFC is used in determining your monthly benefit.

Question 2

Beneficiary

Answer 2

The person(s), estate, organization or trust you have designated to receive any benefit payable upon your death. Your beneficiary must have a federal tax identification number or a Social Security number.

Question 3

COLA

Answer 3

Cost-of-Living Adjustment (COLA): On July 1 of every year following your first full year of retirement, your monthly benefit will be adjusted to reflect the percentage change in the Consumer Price Index — to a maximum of
3% per year.

Question 4

Defined Benefit

Answer 4

A retirement plan in which your benefit is based on a formula rather than an account balance. The formula provides a monthly benefit based on your years of service and your AFC.

Question 5

Defined Contribution

Answer 5

A component of plan 3 only. A benefit that consists solely of the money you contribute and any investment gains, losses or expenses applied to your account.

Question 6

Domestic partner

Answer 6

Domestic partner: In a registered domestic partnership, both individuals have met the state’s legal requirements and registered their partnership with the Secretary of State’s Of ce or another jurisdiction.

Question 7

Dual Member

Answer 7

You are a dual member if you have established membership in more than one WA state retirement system, including First Class City retirement systems for Seattle, Spokane, and Tacoma. Excluding LEOFF-1.

Question 8

Early Retirement

Answer 8

Retiring before age 65

Question 9

The 3 Stages of Membership Status

Answer 9

1) Active
2) Inactive
3) Withdrawn

Question 10

Reduced benefit

Answer 10

A benefit that has been decreased by a factor provided by the Office of the State Actuary. A benefit is reduced in two situations: when you retire early or you retire and select a Survivor Option (which pays a benefit to your survivor after your death).

Question 11

Service Credit

Answer 11

The credit you receive each month for working in a position covered by one of the state retirement systems. Service credit is used to determine your eligibility for retirement and your benefit amount.

Question 12

Survivor

Answer 12

The individual you choose when picking options 2,3, or 4 at retirement to receive benefit payments after your death.

Question 13

System/Plan

Answer 13

The retirement system and plan you are a member.

Question 14

Vested

Answer 14

You have earned the right to receive a retirement benefit once you reach an eligible age

Question 15

What 4 Things Are Required for Retirement

Answer 15

1) meet age and service requirements
2) file an application for retirement with DRS
3) Terminate all employment with any DRS-covered employer
4) sever all contractual agreements (written or verbal) for future employment with your DRS-covered employer

Question 16

Effective retirement date is when?

Answer 16

The first day of the month following the month in which you left employment

Question 17

How soon can a retiree return to work

Answer 17

30 consecutive days after your effective retirement date.

Question 18

What if a retiree returns to work before their effective retirement date?

Answer 18

Their application for retirement will be cancelled.

Question 19

What should a retiree do before they return to work.

Answer 19

They must notify the employer that they are a retiree.

Question 20

How many hours can a retiree work each year and still receive their benefit?

Answer 20

1) 867 in DRS eligible positions
2) no restriction in non-eligible positions
3) as a substitute for a school employer
4) as a contractor with a DRS employer

Question 21

What happens if a retiree works more than the annual limit?

Answer 21

Your monthly benefit will be suspended for the remainder of the calendar year or until you terminate your employment.

Question 22

Which hours count toward the annual limit?

Answer 22

All hours for which you receive compensation count toward the annual limit. This includes paid holidays or compensatory time, sick leave, and annual leave taken in place of normal work hours.