Washington Defined-Benefit Pension Plan and Trust Agreement

• Category: Trusts - Business
• State: Multi-State
• Control #: US-1073BG
• Format: Word; Rich Text

Description

A defined benefit pension plan is a type of pension plan in which an employer or sponsor promises a specified pension payment, lump-sum (or combination thereof) on retirement that is predetermined by a formula based on the employee's earnings history, tenure of service and age, rather than depending directly on individual investment returns. Traditionally, many governmental and public entities, as well as a large number of corporations, provided defined benefit plans, sometimes as a means of compensating workers in lieu of increased pay. A defined benefit plan is "defined" in the sense that the benefit formula is defined and known in advance. Conversely, for a "defined contribution retirement saving plan", the formula for computing the employer's and employee's contributions is defined and known in advance, but the benefit to be paid out is not known in advance.

The Washington Defined-Benefit Pension Plan and Trust Agreement is a comprehensive retirement benefit plan provided to employees in the state of Washington. This plan is designed to ensure financial security for employees during their retirement years by offering a predetermined monthly benefit payout based on a combination of factors such as years of service, average salary, and a specific formula outlined in the agreement. The Defined-Benefit Pension Plan in Washington is a type of retirement plan where employees receive a specific monthly payment upon retirement, which is calculated using a predefined formula mentioned in the trust agreement. This formula generally takes into account factors like years of service, age at retirement, and average salary. This type of plan is in contrast to Defined-Contribution plans where employees contribute a certain percentage of their income, and the eventual payout is dependent on the investment performance of the contributed funds. In Washington, there are multiple variations of the Defined-Benefit Pension Plan, tailored to different categories of public employees. These plans include: 1. Public Employee's Retirement System (PEERS): It covers a wide range of public employees, including state and local government workers, school district employees, and law enforcement personnel. PEERS provides a defined monthly benefit based on the employee's years of credited service, age, and average final salary. 2. Teachers' Retirement System (TRS): TRS is specifically designed for educators and school district employees. It provides a retirement benefit based on a formula that considers the employee's years of service, age, and average final salary. This plan aims to reward long-term commitment to the education system by offering substantial benefits to retiring teachers. 3. Law Enforcement Officers' and firefighters' Retirement System (GEOFF): GEOFF is exclusively dedicated to law enforcement officers and firefighters. This plan offers a defined monthly benefit based on the employee's years of service, age at retirement, and average final salary. Considering the risks and demands associated with these professions, GEOFF provides a robust retirement plan for the security of these individuals. The Washington Defined-Benefit Pension Plan and Trust Agreement is an integral part of the state's commitment to providing retirement stability and financial security to its public employees. It underscores the importance of honoring years of service and ensuring that retirees receive a reliable income stream throughout their retirement years. By offering various plan options tailored to different employee groups, Washington aims to provide comprehensive retirement benefits to its workforce.