DRS Retirement & Retirement Planning

Welcome to Auburn School District!

One of the many great things about working for ASD is our retirement pension plan with the Department of Retirement Systems (DRS). To be eligible for DRS you must be hired into an eligible position. As a new hire, who is also a new member of DRS, you will have a choice to elect either plan 2 or plan 3. This election is irrevocable and will apply to your retirement under the DRS Systems. You have 90 days to make your choice, so take your time and research which plan is best for you! If you do not make a choice, you will default into the plan 2. If you have questions, please contact the Department of Retirement Systems (DRS) 1-800-547-6657.

Department of Retirement Systems

The DRS serves a diverse population of more than 330,000 Washington public employees, including firefighters, teachers and police officers. DRS also administers the Deferred Compensation Program (DCP).

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Plan Choice Video

A retirement plan is a mandatory benefit for working with a Washington public service. Both plans 2 and 3 offer a lifetime pension benefit. The amount of your pension will depend on how many years you work in a public service and your salary. Both plans offer an early retirement starting at age 55. Full retirement age for both plans is 65.

Enrolling Resources

Sick Leave Cashout at Retirement

Sick Leave Cash out at Retirement Form

When you retire, unused sick leave may be eligible for a cash-out benefit. This allows you to convert a portion of your unused sick leave into money or a tax-advantaged health benefit Veba account. You will want to submit your form to Payroll for review as soon as you officially notify the District of your intent to retire.

How Sick Leave Cash Out Works

At retirement, your unused sick leave hours are reviewed and prorated if necessary.
Under Washington State rules, eligible employees may cash out sick leave at a 4-to-1 ratio:
- For every 4 hours of sick leave, you can cash out 1 hour of pay at your final hourly rate.
Example: If you have 200 hours of unused sick leave, you can cash out 50 hours of pay.

What is VEBA?

VEBA (Voluntary Employees’ Beneficiary Association) is a tax-free account used to pay for eligible medical expenses in retirement.
Instead of receiving taxable cash, many districts deposit your sick leave cash-out into a VEBA account, where funds can be used for:
- Health insurance premiums (such as PEBB/SEBB retiree coverage)
- Medical, dental, or vision expenses
- IRS-approved out-of-pocket health costs for you, your spouse, and dependents

Key Benefits of VEBA

Tax-Free Savings – Contributions, investment earnings, and withdrawals for eligible expenses are all tax-free.
Flexibility – Funds can be used after retirement for a wide range of health-related expenses.
Peace of Mind – Helps reduce the cost of healthcare during retirement.

Important Notes

Sick leave cash-out eligibility and VEBA participation may depend on your collective bargaining agreement (CBA).
Once deposited into VEBA, funds cannot be withdrawn as cash — they are reserved for medical expenses.

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