Annuity Purchase Window Offered for LEOFF, WSPRS Retirees Who Missed Out

Re-posted from the Department of Retirement Systems

LEOFF and WSPRS retirees who retired before having an opportunity to buy a state-offered annuity are being provided a special window to do so.

The purchase option, which will be available between Jan. 1 and June 1, 2017, applies to specified retirees of the Law Enforcement Officers’ and Fire Fighters’ (LEOFF) Retirement System and the Washington State Patrol Retirement System (WSPRS). Retirees who can purchase the annuity are:

  • LEOFF Plan 2 members who retired before June 1, 2014
  • WSPRS members who retired before July 24, 2015
  • LEOFF Plan 1 members who retired before June 9, 2016

The minimum purchase amount is $25,000 and must be made by rolling over funds from an eligible retirement plan. An eligible plan is a tax qualified plan, like a deferred compensation or retirement plan, offered through employment with a city, county, state or federal government agency. The annuity is available through the state Department of Retirement Systems (DRS).

Active members of LEOFF and WSPRS can purchase an annuity at retirement. Earlier this year, the Legislature decided to open a special purchase window for LEOFF and WSPRS retirees who retired before an annuity option became available in their respective plans. The window was approved through the passage of Substitute Senate Bill 6264.

An annuity purchase is a way to convert a lump sum of money to a guaranteed income stream. For more information on this annuity purchase and the window of opportunity, see the frequently asked questions from DRS. Starting in January, a calculator will be available in online account access that will help users project how much their benefit could be increased by an annuity purchase.

2 comments

  1. Message
    Why is it limited to a qualified government plan. I pulled money out of my 457 as soon as I retired and put it into a IRA. The reason for that was the poor quality of the investments offered with the plan. The prudent financial move was to do that and I think it’s unfair to limit it to a government plan.

    1. Thank you for your question. The reason it is limited is due to taxation laws set forth by the IRS. Many non-qualified plans do not qualify for the tax benefits afforded to qualified plans. We have heard of individuals rolling their IRAs into a qualified plan and then purchasing an annuity. This may be an option for you if you are interested. Contact the Department of Retirement Systems at 1-800-547-6657 for more information. IRS publications that may also be helpful are: https://www.irs.gov/pub/irs-pdf/p575.pdf and https://www.irs.gov/publications/p939/ar02.html.

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