The WWU Supplemental Retirement Plan (WWUSRP) is available only to those who were active participants in the WWU Retirement Plan (URP) on June 30, 2011. It is closed to URP participants who were not active participants on the date it closed or who enrolled in the URP on or after July 1, 2011.
Most WWU Retirement Plan participants know that by contributing to their retirement plan, WWU matches employee contributions 100 percent and the employee invests total contributions into URP-approved funds. Not everyone realizes that there is a second part to the WWU Retirement Plan called the WWU Supplemental Retirement Plan (WWUSRP).
In 2009, Western Washington University split the WWU Retirement Plan (URP) into two separate parts in order to meet new Internal Revenue Code (IRC) requirements. The two parts of the plan are:
- URP–Defined Contribution where the employee contribution and matching WWU contribution is invested by the employee. This part falls under IRC Section 403(b).
- WWUSRP–Defined Benefit, (as defined on this page) is a defined or formula-driven benefit that is calculated based on age and years of service. This part of the plan falls under IRC Section 401(a).
The URP functions as a “defined contribution” plan throughout a participant’s career, with the amounts the participant contributes (matched 100% by WWU) defined in the plan as 5%, 7.5%, and 10%, depending on age.
The URP contribution rates and the 100% employer match provide for excellent retirement savings rates, and make the URP one of the most attractive retirement plans among our peer institutions.
By contrast, the WWUSRP is a “defined benefit,” or formula-driven lifetime income benefit. In the case of WWUSRP, you will need to qualify for this benefit as described in the “Eligibility Age and Service Requirements” section below. This benefit was designed to act as a "floor" to ensure that participants achieve at least a basic level of retirement income.
The WWUSRP Benefit is defined under Washington state law (RCW 28B.10 Sections 400 - 480). Specific information about the benefit can be found in the WWUSRP Plan Document. WWUSRP benefits are funded by the Western Washington University; no employee contributions are required.
The WWUSRP calculation is complex and will be performed once for each qualifying retiree, and only at the effective date of retirement. This calculation requires the assistance of a professional actuary, and is based on both historical rates of return to the date of retirement and the current interest and mortality rates in effect at the time of the actual date of retirement. As a result, WWU will not provide projected calculations. Once calculated as of the effective date of retirement, there are no future re-calculations.
The WWUSRP benefit is based on the following:
- Eligibility for the calculation of WWUSRP based on age and years of service.
- The definition and calculation of “Goal Income.”
- The definition and calculation of “Assumed Income.”
- How the Goal Income and the Assumed Income are used to determine the amount of WWUSRP that is paid to the retiree, if any.
Note: The retiree’s actual URP 403(b) account balances, investment returns, or elected distribution options have no effect on the calculation of the WWUSRP benefit. However, your URP contribution history is an important factor in the WWUSRP calculation. (See Service Factor section below.)
Any WWUSRP benefit amount due to a retiree is paid by WWU regardless of, and in addition to, any URP account balances the retiree holds. Division of URP assets due to a divorce does not impact the WWUSRP benefit because the benefit is based upon formulas, not on actual account balances.
To be eligible for the calculation of the WWUSRP at the time you retire under the URP, you must meet one of the following minimum eligibility requirement categories:
Full Benefit Eligibility
- Age 65 or better, and
- have a minimum of 10 eligible years of participation in URP
Reduced Benefit Eligibility
- Age 62 or better, and
- have a minimum of 10 eligible years of participation in URP
- Meet special URP/WWUSRP disability retirement provisions at any age.
After you retire, (assuming you have met one of the eligibility requirements described in the proceeding section) the Benefits Office will automatically generate a WWUSRP calculation. The benefit calculation, described below, compares the results of two hypothetical retirement incomes: "Goal Income" and "Assumed Income." Generally, the results are provided within three to four months after your retirement effective date.
- Goal Income is based on salary and years of Plan participation.
- Assumed Income is the theoretical investment of your actual contributions using an investment allocation defined in state law.
If an eligible participant’s resulting Goal Income is greater than his/her calculated Assumed Income, a "WWUSRP benefit" is paid. If the Goal Income is less than the Assumed Income, there is no WWUSRP benefit. Both the Goal Income and the Assumed Income are calculated as required by law, and described below.
“Goal Income” is defined by state law and is calculated as follows:
Goal Income = (Average Monthly Compensation) X (Eligible Years of Participation) X (Service Factor)
Average Monthly Compensation is calculated using URP-eligible salary for the highest 24 consecutive months of service in a URP-eligible position.
Eligible Years of Participation includes all continuous years of participation in the URP up to a maximum of 25 years. If you participated in both URP and a Department of Retirement Systems (DRS) plan (e.g., PERS 1, 2, or 3), your years of participation are included in the goal income calculation if:
- You transferred directly from the DRS plan to the URP while at WWU and there was no break in service; and,
- Your DRS contributions were not withdrawn prior to retirement from URP/WWUSRP.
(Note: Withdrawals include beginning a retirement income from a DRS plan prior to your URP retirement.)
If you were on an approved leave of absence(s) without pay, you can recover up to two years of service if:
- you paid both the employer and employee contributions on return from the authorized leave of absence, and
- you returned to employment with the university immediately following the leave of absence for a period of not less than two years.
Service Factor, as used in the calculation above, is 2% if at age 50 you elect to increase your URP retirement plan contribution to the optional 10% amount. As of July 1, 1974 the service credit factor is only 1.5% for any months or years of service in which you did not participate at the 10% contribution rate.
"Assumed Income" is a theoretical amount of monthly income from an annuity that your actual employee and employer retirement contributions would have generated if they had been allocated equally between a fixed dollar and a variable dollar annuity. (This assumed allocation split is required by state law.) Professional actuaries who are not University employees perform this calculation.
If applicable, DRS retirement plan income will be an offset from the calculated assumed income. Former DRS plan participants are required to provide WWU official documentation of the DRS calculation of their DRS plan’s single life income option before WWU can perform the URP WWUSRP calculation. Failure to provide WWU authorization to obtain this information will result in a WWUSRP Calculation based only on URP service time.
Participants are only eligible to receive a WWUSRP monthly benefit payment if the calculated Goal Income is greater than the amount of the calculated Assumed Income.
The payment is reduced by 0.5% times the number of full calendar months that benefit payments begin prior to age 65, unless the retirement was due to disability.
If you are qualified to receive WWUSRP income, you currently have the following four income options:
1. Single Life Supplemental Payment: The retiree receives the full payment as a lifetime income with payments stopping upon death. This provides the highest monthly payment to the retiree during his/her lifetime.
Survivor options offered below provide a lower initial payment amount than that calculated for the Single Life payment. However the options below provide an ongoing income to the survivor.
2. One-Half (1/2) Supplemental Payment to Survivor: Retiree receives this reduced monthly payment for his/her lifetime relative to option 1. Upon death of the retiree, surviving spouse/beneficiary will receive ½ of the original benefit amount. If spouse/beneficiary passes away before retiree, retiree continues to receive the original benefit amount for his/her lifetime with no reduction.
3. Two-Thirds (2/3) Supplemental Payment to Survivor: The retiree receives a reduced monthly payment for his/her lifetime relative to options 1 or 2. At the death of either the retiree or death of the spouse/beneficiary, the monthly payment amount drops to 2/3 of the original benefit amount.
4. Full Supplemental Payment to Survivor: The retiree receives a reduced monthly payment for his/her lifetime relative to 1, 2, or 3. Upon the death of either the retiree or spouse/beneficiary, the payments continue unchanged to the survivor for life.
The survivor options require that the designated beneficiary be the retiree's surviving spouse; or with the written consent of the spouse (or if no spouse) such other person who has an insurable interest in the retiree's life. This insurable interest must be documented and filed by the retiree with the WWU Benefits Office prior to the start of any supplemental income. The retiree will receive income quotes from WWU using the actual dates of birth for the participant and the survivor. You will make your election from benefit options provided.
The WWUSRP benefit is taxable income to the retiree or surviving spouse/partner.
If you are an active URP/WWUSRP participant eligible to retire and eligible for a WWUSRP calculation, but die prior to retirement, the Plan will perform a calculation as if you retired on the date of death. If the results are positive, and you had previously designated a beneficiary for the WWUSRP, we will calculate the survivor benefit for that individual. If you had not previously designated a beneficiary under the WWUSRP, WWU will assume a 2/3 benefit to your spouse, or registered domestic partner, if any.
To be considered a retiree of the URP/WWUSRP requires application for retirement while an active participant in the URP. If you separate WWU employment or otherwise lose eligibility and cease active participation in URP prior to achieving eligibility to retire, no WWUSRP Benefit will be calculated or due.
- WWU Retirement Plan Document
- WWU Supplemental Retirement Plan Document
- Revised Code of Washington (RCW)
- Department of Retirement Systems (DRS)