The UW Supplemental Retirement Plan (UWSRP) is available only to those who were active participants in the UW Retirement Plan (UWRP) on February 28, 2011. It is closed to UWRP participants who were not active participants on the date it closed or who enrolled in the UWRP on or after March 1, 2011.
Most UW Retirement Plan participants know that by contributing to their retirement plan, the UW matches employee contributions 100 percent and the employee invests total contributions into UWRP-approved funds. Not everyone realizes that there is a second part to the UW Retirement Plan called the UW Supplemental Retirement Plan (UWSRP).
In 2009, the UW split the University of Washington Retirement Plan (UWRP) into two separate parts in order to meet new Internal Revenue Code (IRC) requirements. The two parts of the plan are:
The UWRP functions as a “defined contribution” plan throughout a participant’s career, with the amounts the participant contributes (matched 100% by the UW) defined in the plan as 5%, 7.5%, and 10%, depending on age.
The UWRP contribution rates and the 100% employer match provide for excellent retirement savings rates, and make the UWRP one of the most attractive retirement plans among our peer institutions.
By contrast, the UWSRP is a “defined benefit,” or formula-driven lifetime income benefit. In the case of UWSRP, 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 UWSRP Benefit is defined under Washington state law (RCW 28B.10 Sections 400 - 480). Specific information about the benefit can be found in the UWSRP Plan Document. UWSRP benefits are funded by the University of Washington; no employee contributions are required.
The UWSRP 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, the UW will not provide projected calculations. Once calculated as of the effective date of retirement, there are no future re-calculations.
The UWSRP benefit is based on the following:
Note: The retiree’s actual UWRP 403(b) account balances, investment returns, or elected distribution options have no effect on the calculation of the UWSRP benefit. However, your UWRP contribution history is an important factor in the UWSRP calculation. (See Service Factor section below.)
Any UWSRP benefit amount due to a retiree is paid by the UW regardless of, and in addition to, any UWRP account balances the retiree holds. Division of UWRP assets due to a divorce does not impact the UWSRP benefit because the benefit is based upon formulas, not on actual account balances.
To be eligible for the calculation of the UWSRP at the time you retire under the UWRP, you must meet one of the following minimum eligibility requirement categories:
After you retire, (assuming you have met one of the eligibility requirements described in the proceeding section) the Benefits Office will automatically generate a UWSRP 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.
If an eligible participant’s resulting Goal Income is greater than his/her calculated Assumed Income, a "UWSRP benefit" is paid. If the Goal Income is less than the Assumed Income, there is no UWSRP 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 UWRP-eligible salary for the highest 24 consecutive months of service in a UWRP-eligible position.
Eligible Years of Participation includes all continuous years of participation in the UWRP up to a maximum of 25 years. If you participated in both UWRP 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 UWRP while at the UW and there was no break in service; and,
- Your DRS contributions were not withdrawn prior to retirement from UWRP/UWSRP.
(Note: Withdrawals include beginning a retirement income from a DRS plan prior to your UWRP 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 UWRP 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 the UW official documentation of the DRS calculation of their DRS plan’s single life income option before UW can perform the UWRP UWSRP calculation. Failure to provide UW authorization to obtain this information will result in a UWSRP Calculation based only on UWRP service time.
Participants are only eligible to receive a UWSRP 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. A sample calculation worksheet and results are available for you to review.
If you are qualified to receive UWSRP 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 UW Benefits Office prior to the start of any supplemental income. The retiree will receive income quotes from the UW using the actual dates of birth for the participant and the survivor. You will make your election from benefit options provided.
The UWSRP benefit is taxable income to the retiree or surviving spouse/partner.
If you are an active UWRP/UWSRP participant eligible to retire and eligible for a UWSRP 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 UWSRP, we will calculate the survivor benefit for that individual. If you had not previously designated a beneficiary under the UWSRP, the UW will assume a 2/3 benefit to your spouse, or registered domestic partner, if any.
To be considered a retiree of the UWRP/UWSRP requires application for retirement while an active participant in the UWRP. If you separate UW employment or otherwise lose eligibility and cease active participation in UWRP prior to achieving eligibility to retire, no UWSRP Benefit will be calculated or due.
Disclaimer: If there are any discrepancies between this website and the provisions of the UWRP or UWSRP Plan Documents, the Plan Documents will prevail.