{"id":224,"date":"2016-04-14T23:10:07","date_gmt":"2016-04-15T06:10:07","guid":{"rendered":"http:\/\/hr.uw.edu\/benefits\/?page_id=224"},"modified":"2024-12-22T17:47:34","modified_gmt":"2024-12-23T01:47:34","slug":"trs-3-retirement-plan","status":"publish","type":"page","link":"https:\/\/hr.uw.edu\/benefits\/retirement-plans\/trs-3-retirement-plan\/","title":{"rendered":"TRS 3 retirement plan"},"content":{"rendered":"<p>At UW, the Teachers\u2019 Retirement System (TRS) 3 retirement plan is generally available only to teaching faculty. For other employees, the equivalent is the\u00a0<a href=\"https:\/\/hr.uw.edu\/benefits\/retirement-plans\/pers-3-retirement-plan\/\">PERS 3 retirement plan<\/a>.<\/p>\n<p>TRS 3 is a two-part, hybrid retirement plan that combines a traditional pension plan, where you receive a defined benefit at retirement, with investment options that work like a typical retirement plan, such as a 401(k).<\/p>\n<p>Both parts of the TRS 3 retirement plan play a significant role in your income at retirement.<\/p>\n<p>With the defined benefit part of the plan, you\u2019re guaranteed a monthly benefit for the rest of your life once you meet the plan requirements and retire.<\/p>\n<p>With the defined contribution part of the plan, you invest part of each paycheck into a retirement fund. When you retire, the amount you earn depends on the performance of your investments.<\/p>\n<h4>Enroll in TRS 3<\/h4>\n<p>If you are newly eligible to participate in TRS 3, retirement elections can be made in Workday. For step-by-step instructions on making retirement plan elections, reference this <a href=\"https:\/\/isc.uw.edu\/user-guides\/benefits_enrollment_retirement_faculty_prostaff\/\">Benefits Enrollment \u2013 Retirement \u2013 Faculty and Professional Staff<\/a> user guide. If you are eligible to change retirement elections because of a change in employment, UW Benefits will contact you directly.<\/p>\n<p>The deadline for selecting a retirement plan for newly eligible employees will depend on your retirement plan options:<\/p>\n<ul>\n<li>UWRP or TRS 3 \u2013 30 days<\/li>\n<li>TRS 3 only \u2013 90 days<\/li>\n<\/ul>\n<p>If you are a prior TRS 3 participant, you will be placed in the TRS 3 with a 90-day window to elect a rate option.<\/p>\n<h4>Part 1: Your defined benefit<\/h4>\n<p>At retirement, your defined benefit makes up part of the income you receive from TRS 3. This income is guaranteed for the rest of your life. The formula for calculating your monthly retirement benefit is:<\/p>\n<p style=\"text-align: center\"><b>1% x service credit years x average final compensation<\/b><\/p>\n<p>While this income is guaranteed, you\u2019re not eligible to receive it until you\u2019ve worked long enough to become vested.<\/p>\n<h5>When you become vested<\/h5>\n<p>Your defined benefit funds are fully vested once any of the following apply:<\/p>\n<ul>\n<li>You have 10 years of service credit<\/li>\n<li>You have five years of service credit, and you earned at least 12 months of that service credit after age 44<\/li>\n<li>You earned five years of service credit\u00a0before July 1, 1996<\/li>\n<\/ul>\n<p>The vesting period only applies to the defined benefit part of TRS 3. You always have access to your defined contributions.<\/p>\n<h5>Service credit<\/h5>\n<p>Service credit is based on the number of hours you work each month and how long you have participated in the retirement plan. The UW reports your hours and earnings to the Washington state Department of Retirement Systems (DRS) every payday.<\/p>\n<p>There\u2019s no limit to the amount of service credit that you can earn. Plus, you keep your service credit if you leave your job. That way, you can continue to build your service credit should you return to work at UW or another state agency.<\/p>\n<p>You earn service credit on a monthly basis. Generally, you need to work at least 90 hours per month to earn one month of credit. Twelve months of service credit equal a service credit year. In some cases, you can earn a service credit year for working a minimum number of hours during a nine-month-long \u201cschool year.\u201d<\/p>\n<h5>Average final compensation<\/h5>\n<p>This is your average monthly salary calculated over the 60 consecutive months (five years) where your salary was the highest. In most cases, this is your final five years before retiring; though, some people may have higher salaries during other points in their career.<\/p>\n<h5>Example<\/h5>\n<p>Suppose you\u2019re 65 years old, and in 2025 after working at UW for 32 years, you\u2019re retiring. This is what you would need to know to calculate your TRS 3 retirement income:<\/p>\n<table class=\"table table-striped table-sm\">\n<thead>\n<tr>\n<th>Years of service credit:<\/th>\n<td>32<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<th width=\"30%\">Five consecutive years where your salary was highest:<\/th>\n<td>2020 salary: $52,000 ($4,333.33 per month)<br \/>\n2021 salary: $52,000 ($4,333.33 per month)<br \/>\n2022 salary: $57,000 ($4,750 per month)<br \/>\n2023 salary: $60,000 ($5,000 per month)<br \/>\n2024 salary: $60,000 ($5,000 per month)<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Average final compensation:<\/th>\n<td>$4683.33 per month<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Defined benefit retirement income:<\/th>\n<td>$1,498.67 per month (0.01 x 32 x $4,683.33)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h4>Part 2: Your defined contribution<\/h4>\n<p>At retirement, part of your TRS 3 income comes from your defined benefit. The other part comes from your defined contribution. The amount you receive from this part depends on two factors: how much you\u2019ve contributed over the years and how well your investments have performed.<\/p>\n<h5>Contribution options<\/h5>\n<p>You\u2019re required to contribute a portion of your salary to your TRS 3 plan. When enrolling, you must choose from among six contribution options. Choose carefully, though, because once you enroll you can\u2019t change your contribution percentage.<\/p>\n<p>These contributions are automatically taken out of your paycheck on a pretax basis. This lowers your taxable income, which in turn lowers the amount of taxes your pay. Your contributions are then invested in your retirement fund.<\/p>\n<div class=\"table=responsive\"><\/div>\n<table class=\"table table-striped table-sm\">\n<tbody>\n<tr>\n<th style=\"text-align: center\">Options<\/th>\n<th style=\"text-align: center\">You contribute from your paycheck:<\/th>\n<\/tr>\n<tr>\n<td style=\"text-align: center\">A<\/td>\n<td style=\"text-align: center\">5% always<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center\">B<\/td>\n<td style=\"text-align: center\">5% to age 35<br \/>\n6% ages 35 &#8211; 44<br \/>\n7.5% age 45 and older<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center\">C<\/td>\n<td style=\"text-align: center\">6% to age 35<br \/>\n7.5% ages 35 &#8211; 44<br \/>\n8.5% age 45 and older<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center\">D<\/td>\n<td style=\"text-align: center\">7% always<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center\">E<\/td>\n<td style=\"text-align: center\">10% always<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center\">F<\/td>\n<td style=\"text-align: center\">15% always<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h5>Investment options<\/h5>\n<p>What\u2019s your approach to investing for retirement? Whether you\u2019re a hands-on investor or prefer a simpler target-date fund, you\u2019ve got several options for investing your TRS 3 defined contribution.<\/p>\n<p>For help determining which investing approach is best for you, visit the <a href=\"https:\/\/savewithwa.voya.com\/einfo\/pdfs\/forms\/wshdrs\/Plan3SELF.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">TRS Plan 3 investment page<\/a>, which contains investment guides, fund descriptions, quarterly reports, and other retirement planning tips.<\/p>\n<h4>Leaving UW before you\u2019re vested<\/h4>\n<p>Leaving your job at the UW before you\u2019re vested affects each part of your TRS 3 plan differently.<\/p>\n<h5>Defined benefit funds<\/h5>\n<p>If you aren\u2019t vested and you leave your job at UW, then you won\u2019t be eligible to receive any portion of your TRS 3 defined benefit. You do, however, maintain the service credit that you\u2019ve earned, which you can later use should you go back to work for UW or for another state agency.<\/p>\n<h5>Defined contribution funds<\/h5>\n<p>Once you leave your job at UW, you can either withdraw the funds from your TRS 3 investment account or leave them in the account.<\/p>\n<p>There are <a href=\"https:\/\/www.irs.gov\/Retirement-Plans\/Hardships-Early-Withdrawals-and-Loans\" target=\"_blank\" rel=\"noopener noreferrer\">IRS tax implications to withdrawing<\/a> your contributions, so check with a tax advisor before withdrawing. In most cases, you can transfer your funds to a qualified retirement account, such as an IRA, without facing a tax penalty.<\/p>\n<h4>Early retirement<\/h4>\n<p>If you\u2019re vested, you\u2019re eligible to retire at age 65. You also have the option to retire earlier, but your defined benefit will be reduced. To retire early, you must be at least 55 and have 10 or more years of service credit. For full details about early retirement, read the <a href=\"https:\/\/www.drs.wa.gov\/plan\/trs3\/\" target=\"_blank\" rel=\"noopener noreferrer\">TRS Plan 3 Handbook<\/a>.<\/p>\n<p>If you\u2019re ready to start planning your retirement from UW, see <a href=\"http:\/\/hr.uw.edu\/benefits\/retirement-and-savings\/nearing-retirement\/trs-3-preparing-to-retire\/\">preparing to retire with TRS 3<\/a>.<\/p>\n<h4>Retirement plan loans<\/h4>\n<p>You can\u2019t take out a loan from your TRS 3 funds or otherwise access your funds while you\u2019re working at UW. You can only access your funds\u00a0after you&#8217;ve left\u00a0your job at UW or have retired\u00a0from UW.<\/p>\n<h4>Retirement Savings Education &amp; Resources<\/h4>\n<p>The Department of Retirement Systems (DRS) offers a wide range of resources to help you understand your retirement plan and meet your retirement savings goals. Visit <a href=\"https:\/\/www.drs.wa.gov\/life\/new\/\">DRS Education<\/a> to find webinars, seminars, calculators and more.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Learn about Teachers\u2019 Retirement System Plan 3 (TRS 3), how to enroll, calculate your retirement benefit, vesting, investment options, and other details<\/p>\n","protected":false},"author":9,"featured_media":0,"parent":131,"menu_order":40,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"class_list":["post-224","page","type-page","status-publish","format-standard","hentry","search_bucket-contact-benefits","search_bucket-page","keyword-trs-3"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>TRS 3 retirement plan - Benefits<\/title>\n<meta name=\"description\" content=\"At UW, the Teachers\u2019 Retirement System (TRS) 3 retirement plan is generally available only to teaching faculty.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/hr.uw.edu\/benefits\/retirement-plans\/trs-3-retirement-plan\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"TRS 3 retirement plan - 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