Updated October 7, 2026. Quick answer: Seattle City Employees’ Retirement System (SCERS) members choose among Options A through G, and the choice cannot be changed after the first pension payment. Option D pays a spouse or registered domestic partner one-half of the benefit and Option E pays the same amount. Option G pays a lump sum of 100% or 50% of contributions with interest at retirement and reduces the monthly benefit. Vesting takes five years of creditable service. A refund is paid directly (20% federal withholding) or moved to an IRA, and a withdrawal can be reversed within 30 days. The COLA is the higher of 1.5% compounding or 65% purchasing power.
Washington law enforcement officers and firefighters belong to a separate state system with its own rules: Washington LEOFF retirement decisions.
What this page covers and what it does not
This page works from one document: the Seattle City Employees’ Retirement System (SCERS) Member Handbook, updated May 2, 2025, together with two IRS topic pages on rollovers and early distributions. It covers the choices a member faces on leaving or retiring: which benefit option to elect, whether to take part of the account as a lump sum, whether to take a refund or leave the money in, whether to buy back withdrawn service, and how the cost-of-living adjustment works.
The handbook describes its own limits: “This handbook is a summary and is not a complete description of your retirement benefits under the Seattle City Employees’ Retirement System (SCERS) plan.” Every figure below is the handbook’s wording as of its May 2025 date, and a current SCERS statement decides any individual case.
SCERS has two plans: “SCERS has two retirement plans, SCERS Plan 1 and SCERS Plan 2.” Plan 1 members contribute 10.03% and Plan 2 members 7%. One Plan 1 formula is contribution based: “Two times the employee’s contribution with interest, in the form of a lifetime annuity.” The sections that follow give the options, refund, buyback and COLA text as the handbook states it, and the handbook does not split that text by plan, so this page does not either. For the state tax side, see Washington retirement taxes and does Washington tax pensions.
The election at retirement: Options A through G
Every retiring member picks how the benefit is paid. “All options provide a monthly benefit to the retiree for life.” “Options A through E provide a modified monthly benefit to provide for a beneficiary.” On timing: “Once you retire and receive your first payment, you cannot change your option.” Read the table with that finality in mind.
| Option | What the retiree receives | What a survivor receives |
|---|---|---|
| Straight (unmodified) benefit | The maximum monthly benefit for the member’s life | Nothing: any remaining balance in the account goes back to the Employees’ Retirement Fund |
| Option A | A slightly reduced monthly benefit for life | A lump sum refund of any remaining balance in the ACWI account (accumulated contributions with interest) |
| Option B | A slightly higher monthly benefit than Option A, for life | Monthly annuity payments until payments to the member and beneficiary together equal the contributions and interest at retirement |
| Option C (5, 10, 15 or 20 years) | A reduced monthly benefit for life | The same monthly payment for the remainder of the chosen term, if the member dies inside it; nothing after the term ends |
| Option D | A reduced monthly benefit for life | One-half of the member’s benefit each month for life, to the spouse or registered domestic partner designated at retirement |
| Option E | A reduced monthly benefit for life | The same monthly benefit for life, to the spouse or registered domestic partner |
| Option F (add-on) | Add-on: the pension is inflated until Social Security age, then reduced | Depends on the option it is combined with |
| Option G (add-on) | Add-on: a lump sum of 100% or 50% of contributions with interest, with a reduced monthly benefit | Depends on the option it is combined with |
The table carries no reduction factors because the handbook publishes none: how much each option cuts the monthly benefit is an individual calculation that SCERS runs for a member’s age and the beneficiary’s age. For the general trade between a larger single-life payment and a smaller joint one, see single-life versus joint-and-survivor pension.
The straight benefit and Options A and B
The starting point is the straight benefit. “This option is for the member only and does not provide for a beneficiary after your death.” “Any remaining balance in your account is forfeited and goes back to the Employees’ Retirement Fund.”
Options A and B keep a payment for the estate or beneficiary by trimming the monthly check. On Option A: “Provides a slightly reduced monthly benefit for the rest of your life.” “When you pass away, your beneficiary will receive a lump sum refund of any remaining balance in your ACWI account.” The monthly payment continues for life even if the account is exhausted.
Option B pays more per month than A, but the survivor receives the remainder in installments rather than at once. “This Option pays a slightly higher monthly benefit than Option A for the rest of your life.” “When you pass away, your beneficiary will receive monthly (annuity) payments until the total payments made to you and your beneficiary equals your total contributions/interest at the time of retirement.” Neither option gives a beneficiary a lifetime pension. Both return, at most, what is left of the member’s own money.
Option C: a guaranteed period
Option C is the term-certain choice. “You may select a term of five (5) years, ten (10) years, fifteen (15) years, or twenty (20) years.” The risk is spelled out: “However, if you live longer than the selected term-certain period, there will be no payments to your beneficiary.”
A computed example from an assumed $1,800 monthly benefit, not a SCERS figure: a member who chose C-20 and died 5 years after retiring would leave a beneficiary payments for 20 minus 5, a computed 15 years, and 12 payments a year at $1,800 for 15 years is a computed $324,000 in total.
Options D and E: a spouse or registered domestic partner
These are the two elections that give a spouse or registered domestic partner a lifetime income. On Option D: “After your death, your spouse or registered domestic partner will receive one-half of your benefit each month for life.” On Option E: “After your death, your spouse or registered domestic partner will receive the same monthly benefit for life.”
A computed example from an assumed $2,400 monthly benefit after the option reduction, not a SCERS figure: under Option D the surviving spouse or registered domestic partner would receive one-half, 2,400 divided by 2, or a computed $1,200 a month for life. Under Option E the same survivor would receive the full $2,400 a month. Both come out of a benefit already reduced for the election, by an amount the handbook does not state.
Both options include a protection if the spouse dies first: “If you retired on or after March 24, 1997 and your spouse or registered domestic partner dies before you, your monthly benefit will be adjusted to the original unmodified benefit (Straight Benefit) amount.” The handbook gives the same adjustment for Option E. It words the remarriage rules differently. For Option D: “Should you remarry after retirement, regardless of the reason, your new spouse or registered domestic partner is not eligible for this benefit.” For Option E: “Should you remarry after retirement, your former spouse/registered domestic partner, not your new spouse/registered domestic partner, is eligible for this benefit.” A member in either situation should ask SCERS how the rule applies before electing.
“If you are married, your spouse also needs to sign your retirement application.” “you will be required to bring in a copy of your Marriage License if you are married and select Option D or E.”
Option F: bridging to Social Security
Option F is an add-on, not a stand-alone choice. “Option F must be taken in combination with a Straight Benefit or one of the Standard Retirement Options (Option A-E).” It “is available to members who retire before they are eligible to receive Social Security benefits”. The cost shows up later: “When you reach your Social Security age your retirement benefit will be reduced by your full Social Security benefit.” The handbook warns: “Members might end up with a smaller monthly retirement benefit than anticipated.”
Option G: a partial lump sum at retirement
Option G pays part of the account in cash on the day of retirement. “Option G allows you to withdraw a lump sum payment at retirement which is equivalent to either 100% of your employee accumulated contributions with interest, or 50% of this amount.” Like Option F, it is not a stand-alone choice: “Option G must be taken in combination with a Straight Benefit or one of the Standard Retirement Options (Option A-E).” The price: “Your monthly benefit will be reduced by an amount to actuarially compensate for the annuity funds (your contributions plus interest) withdrawn.”
On tax: “Taxes will be withheld on the amount withdrawn unless the lump sum is rolled over into an eligible retirement plan.” “An eligible retirement plan includes an individual retirement account (IRA), Roth IRA, and an eligible governmental deferred compensation plan (457(b)).” For how the withholding works on a lump sum generally, see 20 percent withholding on a pension lump sum.
A computed example from an assumed $60,000 of accumulated contributions with interest, not a SCERS figure: choosing the 50% lump sum means 60,000 times 50 divided by 100, a computed $30,000. If that amount were paid directly to the member and the IRS 20% rate applied, withholding of 30,000 times 20 divided by 100 would be a computed $6,000, leaving a computed $24,000 in cash. A rollover into an eligible plan would avoid that withholding. The handbook does not give the size of the monthly reduction for this assumed amount, so no pension figure is computed here.
Deadlines before retiring
The process starts well before the retirement date. “Contact SCERS at least 60 days prior to your intended retirement date to schedule a one-on-one conference with one of our Retirement Specialists.” “Your retirement application must be signed and filed with SCERS at least 30 days prior to the date you wish to retire.”
Vesting and the choice to leave or take the money
Vesting decides which exits exist. “If you have a minimum of five (5) years of creditable service in SCERS or in combination with a system which has portability with SCERS, you are considered “vested” in SCERS”. The handbook gives this one rule without splitting it between Plan 1 and Plan 2. The handbook attaches costs to leaving the money in: “However, you will lose any accrued sick leave credit and you will not be eligible to participate in the Death Benefit Program and the City of Seattle’s retiree medical plan when you retire.”
A vested member is not locked in, but the price is high: “In removing your funds, however, you lose all rights in SCERS and your funds will be subject to any and all applicable Federal taxes.” The general trade is covered on pension refund versus leaving it.
Refund of contributions: two ways, notarized form, 30 days to change course
For members who leave without five years, the handbook is direct: “you are not eligible to “vest” and should withdraw your funds from SCERS.” “If you leave your contributions and interest in SCERS, you will cease earning interest on these funds two years from your date of separation.” “These funds will only include your contributions and interest; the City contributions will not be included.”
There are two ways to take a refund: “Receive your funds directly as an Electronic Funds Transfer” or “Transfer your funds to an Individual Retirement Account (IRA)”. The request needs paper: “To withdraw your contributions and interest, please submit a notarized withdrawal form to our office.”
The tax consequence follows the route. On a direct payment: “Federal law requires 20% of the taxable portion of your retirement funds be withheld for tax purposes”. The handbook adds that “a 10% penalty may be assessed by the Internal Revenue Service (IRS) against all taxable funds removed from SCERS that are not rolled into an IRA or other qualified plan.” On the other route: “If you opt to transfer your funds to an Individual Retirement Account (IRA) or other qualified plan, you will not be subject to taxes or penalties at the time of withdrawal.”
There is a safety valve: “You can change your mind about withdrawing your funds without penalty for 30 days following your application to withdraw.”
Credited interest on contributions
“Members earn interest at an annual rate of 5.75% on contributions made on or before December 31, 2011.” “The interest rate after December 31, 2011 varies each year and is set by the Board of Administration each summer for implementation the following January.” The 5.75% figure is as of the handbook date, May 2, 2025; the rate for later contributions is not given.
Buying back withdrawn service
A member who withdrew and later returns can recover the service credit. “you have two (2) years from your rehire date to exercise your option to re-deposit your withdrawn contributions with interest at the assumed rate of return on investment (currently 6.75% per year).” “By so doing, you will recover the service credit you had previously accumulated in SCERS.” Waiting costs more: “If you do not make a redeposit or enter into a purchase contract within two years, you may still recover your previous service time at a later date. However, this will be at a higher rate.”
Payment is flexible: “You can buy back your service credit through a lump sum payment, a rollover from deferred comp/IRA or by payroll deduction.” The limits are firm. “Buybacks using payroll deductions must be completed within a ten (10) year period”. “you will be charged a financing interest rate equivalent to the assumed rate of investment return (currently 6.75% per year) at the time the purchase contract is initiated.”
The deadline is the part members miss: “Buybacks must be paid in full to the retirement fund prior to the time of resignation from City service or retirement, whichever occurs first.” “Once you have separated or retired from the City, SCERS will not accept additional buyback funds or requests.” The 6.75% rate is the handbook’s, labeled there as current as of May 2, 2025, and it can change. To price a purchase, try the pension buyback calculator and then ask SCERS for the contract figures.
Cost-of-living adjustment
After retirement the benefit is adjusted once a year. “Each November, your monthly retirement benefit will be increased to provide the highest benefit calculated under one of the following cost-of-living adjustments”: a 1.5% annual compounding COLA, or “A COLA which would provide 65% of the purchasing power which the member’s original retirement allowance could purchase.” The higher of the two is the rule.
A computed example from an assumed $2,000 monthly benefit, not a SCERS figure: if only the 1.5% compounding prong applied for ten November increases, 2,000 times 1.015 to the tenth power is a computed $2,321 a month, an increase of a computed $321.
What the IRS adds on tax
A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of SCERS’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. The handbook says that a transfer to an IRA or other qualified plan avoids tax and penalties at the time of withdrawal. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.
On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and “Distributions made to a qualified public safety employee from a governmental plan” if the employee separated from service during or after the year they attained age 50 or 25 years of service under the plan, whichever is earlier. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.
What this page could not settle
- The handbook does not state the size of the reduction for any option, so the monthly cost of A through G is not stated.
- The handbook does not give the factors by which Option F inflates the pension or Option G reduces it.
- The pages read do not state the interest rate credited on contributions made after December 31, 2011, which varies each year.
- The pages read do not say whether a spouse must consent to a refund of contributions or to Option G.
- The handbook gives separate ages and benefit factors for Plan 1 and Plan 2, which this page does not reproduce, and it does not say whether the options differ by plan.
- No worked example of the 65% purchasing-power COLA prong appears in the pages read.
- The handbook is a May 2, 2025 summary and says the law governs in a conflict, so any figure may have changed.
Common mistakes
- Electing an option and planning to revisit it: the handbook calls the election irrevocable on receipt of the first pension payment.
- Choosing the straight benefit and assuming a spouse will be paid: the handbook says it does not provide for a beneficiary after death and any remaining balance goes back to the fund.
- Assuming a new spouse inherits an Option D benefit after remarriage: the handbook limits the benefit to the spouse or registered domestic partner designated at retirement, and words the remarriage rule differently for Option E.
- Taking a refund after vesting without realizing that, in the handbook’s words, removing the funds means losing all rights in SCERS.
- Waiting until after leaving City service to buy back service: SCERS will not accept buyback funds or requests once the member has separated or retired.
Related on this site: Washington retirement taxes, does Washington tax pensions, single-life versus joint-and-survivor pension, pension refund versus leaving it, pension buyback calculator, 20 percent withholding on a pension lump sum and public pension retirement decisions by system.
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Answer againSources
- Seattle City Employees’ Retirement System, Member Handbook (updated May 2, 2025): https://seattle.gov/documents/Departments/Retirement/Publications/MemberHandbookMay2025AC.pdf
- IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
- IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558
Sources: the primary documents linked above, read on October 7, 2026. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.