Chapter 2 - Glossary Of Terms Flashcards
(22 cards)
AFC
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.
Beneficiary
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.
COLA
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.
Defined Benefit
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.
Defined Contribution
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.
Domestic partner
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.
Dual Member
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.
Early Retirement
Retiring before age 65
The 3 Stages of Membership Status
1) Active
2) Inactive
3) Withdrawn
Reduced benefit
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).
Service Credit
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.
Survivor
The individual you choose when picking options 2,3, or 4 at retirement to receive benefit payments after your death.
System/Plan
The retirement system and plan you are a member.
Vested
You have earned the right to receive a retirement benefit once you reach an eligible age
What 4 Things Are Required for Retirement
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
Effective retirement date is when?
The first day of the month following the month in which you left employment
How soon can a retiree return to work
30 consecutive days after your effective retirement date.
What if a retiree returns to work before their effective retirement date?
Their application for retirement will be cancelled.
What should a retiree do before they return to work.
They must notify the employer that they are a retiree.
How many hours can a retiree work each year and still receive their benefit?
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
What happens if a retiree works more than the annual limit?
Your monthly benefit will be suspended for the remainder of the calendar year or until you terminate your employment.
Which hours count toward the annual limit?
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.
