If you’re in Plan 3 through PERS, TRS, or SERS, part of your retirement is a defined contribution account that you actually get to manage yourself. A lot of Plan 3 members log into their account once, see a wall of buttons, and never touch it again.
That’s a missed opportunity, because how that account is invested and rebalanced over time can make a real difference to your retirement. This article walks through what each of the account management tools inside your Plan 3 or DCP account actually does, so you know exactly what you’re looking at the next time you log in.
A Quick Refresher: WSIB vs Self-Directed
Plan 3’s investment account gives you two basic paths for your money. The first is the WSIB option, short for Washington State Investment Board, where your contributions go into a professionally managed commingled trust fund alongside pension assets from across the state system. You don’t pick individual investments here. The state handles it. The second path is self-directed, where you choose from a menu of individual funds yourself, things like large-cap stock funds, bond funds, and short-term or cash-equivalent funds, and decide how to split your balance across them.
When you log into your account, you’ll see a pie chart showing how your balance is currently split. If it’s one solid color, your money is entirely in the WSIB fund. If it shows multiple colors, some or all of your balance is in the self-directed option, split across different fund types.
The Four Account Management Tools, Explained
Once you click into “manage my investments,” you’ll see several different options that all sound similar but do very different things. Mixing them up is the most common mistake Plan 3 members make, so it’s worth understanding each one clearly before you touch anything.
Investment Elections
This tells the system where your future contributions should go, meaning the money that comes out of your next paycheck and every paycheck after that. Changing this does nothing to the money already sitting in your account. It only controls new money going forward.
Fund Transfers
This is what you use to move money between the WSIB fund and the self-directed side of the account. If your balance is entirely in WSIB and you want to start choosing your own investments, a fund transfer is the tool that moves it over.
Reallocate Balances
Once you’re on the self-directed side, this is how you move your existing balance between the different fund options, say from a large-cap stock fund into a bond fund. This changes where the money you already have is invested, not your future contributions.
Rebalancing
Over time, whichever fund performs better naturally grows into a bigger share of your account than you originally intended, quietly shifting your risk level higher or lower without you doing anything. Turning on rebalancing tells the system to automatically reset your account back to your original target mix, either annually, semi-annually, or quarterly, depending on what you choose.
Here’s a simple table to keep these four tools straight.
| Tool | What It Changes |
|---|---|
| Investment Elections | Where future contributions go |
| Fund Transfers | Money moving between WSIB and self-directed |
| Reallocate Balances | Where your current self-directed balance sits |
| Rebalancing | Automatically resets your mix on a schedule |
What Kinds of Funds Are Usually Available
The self-directed fund menu typically includes a handful of broad categories rather than an overwhelming list of choices. You’ll usually see something like a large-cap or broad U.S. stock index fund, a bond fund, and a short-term or money market style fund for cash-equivalent holdings. Some plans also offer international stock exposure or a target-date style fund that automatically shifts toward a more conservative mix as you approach retirement.
The exact lineup can change over time, so it’s worth reviewing the current fund list and each fund’s fact sheet directly inside your account rather than assuming it matches what a friend or coworker has. Fees, historical performance, and the underlying index or strategy can all differ even between funds with similar-sounding names.
Why Rebalancing Frequency Matters
Picture starting the year with your self-directed balance split 60% stock fund and 40% bond fund. If stocks have a strong year and bonds are flat, that mix can drift to something like 68% stock and 32% bond without you doing anything at all. Your account has quietly taken on more risk than you originally chose, simply because one piece grew faster than the other.
Turning on automatic rebalancing on an annual, semi-annual, or quarterly basis fixes this by selling off some of whatever grew the most and buying back into whatever fell behind, resetting you to your original target. Without it, your risk level can drift steadily higher over several years without any single moment where it feels like a decision was made. That slow drift is exactly the kind of thing that’s easy to miss unless you’re checking in periodically or have rebalancing automated for you.
A Mistake That Trips Up a Lot of Members
Here’s something worth knowing before you start clicking around. If you place a reallocation or transfer request and then immediately try to place another one the same day, the system will often reject it with an error message saying a trade has already been placed. This isn’t a sign anything went wrong. It’s just the system’s way of making sure your first instruction fully processes before layering another change on top of it.
If you’re planning to make several changes at once, like moving money out of WSIB and also rebalancing your self-directed funds, it’s usually smoother to space those actions out by a day rather than trying to do everything in one sitting. Most changes take about a day to process before you’ll see them reflected in your account.
Don’t Forget Your Future Contributions
This is the step people skip most often. Say you rebalance your current self-directed balance to a new mix you’re happy with. If you don’t also update your investment elections, every new contribution from your next paycheck can keep flowing into your old mix, or even default back into the WSIB fund, undoing the work you just did. Always check both your current balance and your future contribution elections match the mix you actually want.
Remember, This Is Only Half of Your Plan 3 Benefit
It’s easy to get absorbed in fund choices and rebalancing schedules and lose sight of the bigger picture. Plan 3 is actually two benefits bundled together. There’s the defined benefit portion, a pension calculated off your years of service and salary, funded entirely by your employer. Then there’s the defined contribution portion, the account this article is about, funded by your own contributions and whatever you decide to invest them in.
The pension side runs on autopilot. You don’t manage it, and no investment decision you make changes what it pays out. The defined contribution side is the opposite. Every choice you make about WSIB versus self-directed, your fund mix, and your rebalancing schedule directly affects how much that portion is worth when you retire. That’s exactly why it’s worth understanding these tools instead of leaving the account exactly as it was set up on your first day of employment.
A Simple Checklist for Your Next Login
Next time you log into your DRS account, it’s worth working through a short checklist rather than just glancing at the balance and logging back out.
- Check your pie chart to see whether your balance is in WSIB, self-directed, or a mix of both.
- If you’re self-directed, confirm your current fund mix still matches the risk level you actually want.
- Check whether rebalancing is turned on, and if so, how often it runs.
- Confirm your investment elections for future contributions match your current target mix.
- Review the fund menu for any changes since the last time you checked.
None of these steps take more than a few minutes, but skipping them for years at a time is exactly how members end up with a mix they never actually chose.
Should You Use WSIB or Go Self-Directed?
There’s no universal right answer here. The WSIB option is simple, professionally managed, and requires no ongoing decisions from you. The self-directed option gives you more control and potentially lower fees on certain funds, but it also puts the responsibility for choosing an appropriate mix, and rebalancing it over time, squarely on you.
If you’re not confident deciding how to split your balance across large-cap, bond, and cash-equivalent funds, or how often to rebalance, that’s a completely reasonable thing to get help with rather than guessing. Your ideal mix also isn’t fixed forever. It should generally shift as you move closer to retirement, so what made sense at 35 may not make sense at 55. If you’d like a second opinion on how your Plan 3 or DCP account is currently invested, you can schedule a personal meeting here and we’ll go through your specific account together.
Frequently Asked Questions
What’s the difference between reallocating balances and changing investment elections?
Reallocating balances moves the money you already have between funds. Changing investment elections only affects where your future contributions go. You typically need to update both to fully change your investment mix.
How do I move money from WSIB into self-directed funds?
Use the fund transfer tool inside your account’s investment management screen. This is specifically designed to move balances between the WSIB commingled fund and the self-directed fund menu.
What does rebalancing actually do?
It automatically resets your self-directed balance back to your original target mix on a schedule you choose, correcting for the natural drift that happens as different funds grow at different rates.
Why did I get an error saying a trade was already placed?
This happens when you try to place a second reallocation or transfer before your first one has finished processing, which usually takes about a day. Wait for the first change to process, then place the next one.
How often should I check or adjust my Plan 3 investments?
There’s no single right frequency, but checking in at least once or twice a year, especially if you haven’t turned on automatic rebalancing, helps make sure your account still matches your intended risk level.
P.S. If your Plan 3 or DCP account still shows one solid color on that pie chart and you’re not sure whether that’s right for you, that’s exactly the kind of question we help people work through inside the free community below.
