Retirement
Compare the Plans: URP and PERS Plan 3

 

 

 


You Have a Deadline

Faculty and professional staff who are eligible for the WWU Retirement Plan (URP) on or after July 1, 2011 have a choice of participating in one of two retirement plans. You have 30 days from the date the Benefits Office notifies you of your option to elect between URP or the Public Employees’ Retirement System (PERS) Plan 3 administered by the Department of Retirement System (DRS).

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Retirement Plan Election Notice

The Benefits Office sends eligible employees a Notice of Eligibility/Election to their home address of record. This Election Notice indicates you have a choice of which plan you wish to participate in (URP or PERS 3) and a deadline in which to make a plan election. If you are a new retirement-eligible employee and you have not yet received this notice, email the Benefits Office as soon as possible to review your eligibility.

You have 30 days from the notice date to decide between URP and PERS 3.

Use the side-by-side comparison chart below to help you decide on the retirement plan that is right for you. Because this is a one-time irrevocable decision, we encourage you to make time during the 30-day election period to familiarize yourself with both plans, talk with your spouse or partner, and seek the assistance of a financial counselor if the choice is too overwhelming. If you have a legal spouse, note that he/she will also be required to give "spousal consent" to your choice of plans. The deadline will not be extended so be sure you make time to evaluate this important decision.

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Things to Know

Before electing a plan, it is important to know the following:

  • URP Election: Electing URP for your retirement plan is not the same as enrolling in the plan. When you elect the URP, the Plan allows you to be in a "2-Year Optional Period" during which time you are not required to make contributions. You can enroll in the URP at any time during the “2-Year Optional Period,” however, enrollment will be prospective only—no retroactive employee or employer contributions can be made. After the “2-Year Optional Period,” enrollment is mandatory and a condition of continued employment.
    Note: Once you enroll in the URP to begin contributions during the optional 2-year period, you cannot later stop the contributions. Your URP enrollment is irrevocable.
  • PERS 3 Election: Electing PERS 3 requires that enrollment in the Plan begin immediately from the date of eligibility. Enrollment means that the employee contributions and the employer matching contributions will be made to the State. If your PERS 3 election is received after your payroll has begun, retroactive deductions will be taken to ensure that all of your PERS 3-eligible WWU employment is covered.
  • No Election: If you do not respond to the Election Notice within the 30-day period, you have in effect made a choice and will be defaulted to the URP 2-year Optional Period with no future opportunity to change plans.

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What is the URP?

URP is a Defined Contribution (DC) Plan under Internal Revenue Code (IRC) Section 403(b). The employee defers a defined percent of wages to a retirement account before federal withholding tax is calculated, and WWU matches 100% of those contributions. Both the employee contributions and the employer match are invested and managed by the employee. Any earnings grow on a tax-deferred basis. Vesting is immediate, meaning that the account, including the employee and employer contributions and earnings, is fully portable and is yours whenever you separate from WWU. Authorized URP funds for your investments are available through Fidelity Investments, WWU’s master administrator.

Enrollment Reminder: If you elect WWURP for your retirement plan, you have up to two years from the date of your initial eligibility or "2-year Optional Period" to enroll and begin contributions.

For more information about this plan, see the comparison chart below and/or visit the URP website.

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What is PERS Plan 3?

PERS Plan 3 is a hybrid Defined Benefit (DB) and Defined Contribution (DC) Plan retirement plan under IRC Section 401(a):

Defined Benefit (DB) Plan

The DB portion of the plan is only funded by employer contributions. Based on the plan's formula, it provides a specific lifetime monthly pension amount when you retire. The formula takes into account your Washington State public employee years of service and salary history. Vesting generally requires 10 years of full-time equivalent service.

Defined Contribution (DC) Plan

The DC portion of the plan is only funded by tax-deferred employee contributions. An employee elects one of six contribution options. This is a one-time election and cannot be changed during the duration of WWU employment. You are responsible for directing where your contributions are invested. You can choose to invest in either the Washington State Investment Board (WSIB) Investment Program or the Self-Directed Investment Program.

Enrollment Reminder: If you elect PERS 3 for your retirement plan, participation is mandatory from the date of initial eligibility—retroactive contributions may be required.

For more information about this plan, see the comparison chart below and/or visit the PERS 3 website.

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Plan Comparison Chart

WWU Retirement Plan

PERS 3 – hybrid plan

Employer Contributions

Employee Contributions

IRS Qualification

403(b) Defined Contribution Plan 401(a) Defined Benefit Plan 401(a) Defined Contribution Plan

Employee Tax Deferred Contributions

Percent of gross salary:
5% - under age 35
7.5% - age 35 & older
10% - age 50 & older

You are responsible for your investment selection.

You elect your contribution rate from a list of six options.

You are responsible for your investment selection.

WWU Employer Contributions

100% match
Percent of gross salary:
5% - under age 35
7.5% - age 35 & older
10% - age 50 & older

You are responsible for your investment selection.

Employer contributions fund the defined benefit only and are unavailable to participants who leave the plan prior to retiring.

Vesting

Definitions:
URP: When a participant gains ownership in the employer contributions.
PERS 3: When a participant becomes eligible for the employer-paid defined benefit.

Vesting is immediate: 100% of employee and employer contributions and any investment returns are yours upon separation.

After 10 service credit years, you have a vested right to the employer-paid defined benefit retirement when you meet the Plan’s age requirement, even if you leave employment. Or, after 5 years of service credit, depending on your age and when your service credit was earned. Refer to the PERS 3 Handbook or contact the DRS for more information.

Vesting is immediate. 100% of employee contributions and any investment returns are yours upon separation.

Portability

Definition:
The accrued benefits that can be transferred or accessed when a participant leaves WWU employment.

100% portable.

Both employee and employer contributions, and any investment returns can be rolled over upon separation of all WWU employment.

Not portable.
Employer contributions made on behalf of the employee remain with the Plan to fund the defined benefit (vested or not) and are not portable.

100% portable.

May be rolled over to another qualified plan or IRA. You lose any Washington state service credit if you withdraw.

Retirement Benefits

The amount of your retirement income will be based on the balance of your URP account when you retire. There are a wide variety of income options available at separation or retirement. These include lifetime annuity for you and/or an annuity partner, cash withdrawal, roll over to IRA, interest only withdrawals, minimum distribution required by the IRS and others.

Formula-driven, lifetime monthly pension, if funds are vested and participant meets retirement eligibility rules. The formula is 1% x average final compensation x years of service. Other Plan information is available in the PERS 3 Member Handbook.

The amount of your benefit will depend on the amount you contribute and the performance of your investments. A variety of distribution options are available. Contact DRS for more information.

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Summary

Your decision regarding these two plans will depend greatly upon your career goals and whether or not you intend long term service with Western Washington University and/or the state of Washington. The URP is portable, flexible, and requires you to take responsibility for making investment decisions best suited to your risk tolerance and long term retirement savings goals. PERS 3 is best suited to those who anticipate long-term employment with the state of Washington and prefer the security of the defined benefit as a baseline income in retirement.

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First-time Enrollment

Once you have elected your retirement plan, click on the appropriate link to begin enrollment:

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Additional Information

Should you wish to increase your retirement savings contributions, consider one or both of the following optional pre-tax retirement savings programs:

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Page Updated 12.05.2013