please help me understand the retirement plan option for my new job!?

Question

I just started a new job and got a crapload of paperwork.

the retirement form says:

"All full-time regular employees are required to participate in the Washington State Employees' Retirement System. Both the employee and (insert company name here) pay for retirement benefits. (insert company name here) pays an amount equaling approximately 9% of the gross salary and the employee's contribution is approximately 4.92% for Plan 1, which is handled through payroll deduction. For Plan 2, the employee chooses the percentage rate they wish to contribute . Employees are 100% vested in their chosen plan after 5 years of service."

So, does this mean that they will contribute 9 percent on the condition that I also contribute 9 percent? or can I choose to only contribute 2% of my gross income and they will still contribute 9%?

how does it work? I don't get it.

Answer 1

The plan you designate as Plan 1 is actually Plan 2 for new employees have a retirement benefit of 2% times your years of service times your compensation. For the plan you designate as Plan 2 is actually Plan 3 and have a retirement of 1% times your years of service times your compensation plus an investment account benefit that you fully fund.



The 9% from your employer funds the guaranteed benefit levels of either 2% or 1% part of the plans. Your contribution of 4.92% makes up the difference between the two.



In Plan 3 the investment account and how much is the retirement benefit is totally dependent on how much you want to contribute which is then added to the 1% state benefit.



If you are knowledgeable about investments and can do better than the state's investment manager, you may want to consider the second of your plan choices.



If you don't want to be burdened with evaluating and monitoring your funds' performances you may want to consider the first of your plan choices.

Answer 2

something is not adding up, you need to speak with the personnel department

plan 1 - unusual that you would get 9% for only contribution 4.92%

plan 2 - review it again, it does not make sense what was written, that you would contribute any amount (and not get the company addition?)

Answer 3

you should probably ask someone who's more qualified and experienced

Just to be safe