PERS2 versus PERS3

[Kennah]

I've been looking over everything between PERS2 and PERS3. Can anyone give me some input as to which I should choose? I'm 44, and I'm not going anywhere. Ageism in the job market is just too intense and real. Retirement or death, and perhaps they will be one and the same.

State seems like they are steering people towards PERS3, and I'm not sure if that's a good or bad indicator for PERS3.

Other savings, IRAs, etc.? Nothing. We're completely wiped out. Planning to walk away from our upside down mortgage, via deed in lieu, move to Olympia and be bicycling distance from work. With a little luck, we'll be able to get back into a house in a few years.

[yewberry]

1. I'm PERS 2.

A lot of people who begin WA state employment later in life join PERS 3. PERS 2 allows retirement after 20 years of service at age 55; PERS 3 allows retirement after 10 years of service at age 55.

However:
PERS 2 is a defined benefit system. Your retirement benefits are 2% X service years X average compensation. Period.

PERS 3 is partially defined benefit (1% X service years X average compensation) plus another section defined by your contribution and MARKET performance. Yes, you do get to decide on which kind of investment you make, but it IS dependent on market performance. No COLAs for the defined contribution.

The state wants people to choose PERS 3 because it saves the state money.

Here:
http://www.icmarc.org/xp/plan3/pers/planchoice/keydifferences.html