Concerning the threshold for payment of a lump sum retirement allowance in lieu of a monthly benefit.

More lump-sum options for Washington retirees

Beginning June 11, 2026, the law raises the small-pension lump-sum threshold from $50 to $250 across five Washington public retirement systems. The director must increase the threshold each year. Only members or beneficiaries entitled to or receiving a qualifying service retirement or earned disability allowance can participate. When the initial monthly benefit is below the threshold, the director may pay a lump sum instead of monthly checks. The payout equals the greater of the monthly benefit's actuarial value or accumulated contributions plus interest. Retirees or beneficiaries with monthly benefits below $50 can request conversion in writing, subject to approval. That calculation uses their age when benefits first accrued and subtracts payments received since that date. Members receiving a lump-sum settlement count as retired from their system. Members returning to active service can restore all prior service by repaying the lump sum plus director-calculated interest. They must repay within two years of returning or before retiring again, whichever comes first. After that deadline, restoration requires payment under the separate statutory reinstatement formula. Under either method, the deposit excludes the accumulated value of regular payments the member otherwise would have received.