Transcript PERS Education and Retirement Planning

PERS Education and
Retirement Planning
Welcome !
PERS One-Year Group
Updated: 2/13/2012
Disclaimer

Information may change as the result of
administrative, legislative or judicial
decisions.
Agenda





Individual Account Program
Retirement Eligibility
Calculation Factors and Methods
Review of Estimate of Benefits
PERS Retirement Processes




Health insurance; COLA
Variable after retirement
Working in retirement; Taxes
Review Retirement Forms
Individual Account Program





Effective January 1, 2004
Member contributions to Individual Account
Program (IAP)
No contributions to PERS member account
after this date
Retirement forms for IAP and separate
retirement forms for PERS
Retirement benefit from IAP and separate
retirement benefit from PERS
IAP Retirement


When retire from PERS, must retire from IAP
Retirement date



1st day of any month
Submit retirement forms within the 90 day period
prior to your retirement date
First payment due

Within 120 days of retirement date
IAP Distributions

IAP retirement benefit choices





Lump sum (mailed direct to member)
Installments over 5-10-15-20 year periods, or
Anticipated Life Span Option
Can receive IAP distributions only after
separation from PERS covered employment
IAP cannot be used for Trustee to Trustee
Transfers
PERS Trustee to Trustee
Transfer for Purchases

If eligible to purchase service time


Time limit on purchases


Can use pre-tax dollars from 457 deferred
compensation plan, or a 403(b) taxsheltered annuity
Within the 90 days before retirement date
Transfer form required

PERS: http://oregon.gov/PERS
PERS Data Verification
Requests


Must be within two years of
earliest service retirement age
Will cover following data elements





Employment/Salary details
Service time
Regular and variable account balances
Final average salary
Unused sick leave (beginning July 1, 2012)
PERS Data Verification
Requests

Form required


PERS: http://oregon.gov/PERS
First verification free



Fee for additional verification
Data verification not an estimate
Only provides verification for what will
ultimately determine the actual benefit
Online Member Services





You can:
Access your account information
Perform activities related to your
account
Produce your own estimate
Link directly to the PERS web site to
view FAQs, forms and other information

http://oregon.gov/PERS
PERS Retirement Eligibility

30 years PERS Total Creditable Service Time
OR

Age

Normal retirement




58 – Tier One
60 – Tier Two
55, or 50 + 25 years total service – P&F
Early retirement


55
50 – P&F
The Calculation Factors
 Age
 Service time
 Final Average Salary
 Account Balance
Calculation Methods

Full Formula

Service time x final average salary x .0167


Money Match


(P&F .0200)
Age factor x account balance x 2
Formula + Annuity (8/21/81)

Service time x final average salary x .01

(P&F .0135)
+
Age factor x account balance
Option 1 Calculation Method
Comparison

Money Match
$ 2,966.64

Full Formula
$ 2,329.10

Formula + Annuity
(Contributions prior to 8/21/81)
The Retirement Estimate: Age and
Retirement Data
IMA PERSSON
1234 ANNUITY AVE
GOLD HILL, OR 97000
Date:
1/30/2012
PERS ID:
Member Date of Birth:
8/6/1953
Retirement Date:
7/1/2012
Last Day of Service:
6/30/2012
Termination Date:
6/30/2012
Retirement Age:
58 yrs 10 mos
The Retirement Estimate: Page Two
Beneficiary and Service Time
Beneficiary: Olov
Year of Birth: 1953
Creditable Service Time: 26 yrs 0 mos
Granted Service (disability only): 0 yrs 0 mos
The Retirement Estimate: Page Two
Service Time; Member Cost
Service Purchases:
Waiting Time:
0 yrs 6 mos
Forfeited Time: 0 yrs 0 mos
Full Cost:
0 yrs 0 mos
Miscellaneous: 0 yrs 0 mos
Prior Service Time: 0 yrs
Sick Leave Hours: 0
Vacation Hours: 0
Contract Salary: $0.00
Contract Hours: 0
Estimated Member Cost: $1,188.61
Total Creditable Service with Purchase(s): 26 yrs 6 mos
Full-Cost Purchases



Senate Bill 711 – military service
Senate Bill 665 – teaching time
Costs


Present cost of future benefits
Provides service time at high average cost
Member Cost



After-tax contributions in member
account
1099 R
Member cost is not taxed again in
retirement
The Retirement Estimate: Page Two
Salaries
High 3 Years
Last 36 Months
Year
Salaries
Year
Months Salaries*
2009
$65,938.58
2012
6
$31,530.72
2008
$67,530.11
2011
12
$62,244.97
2006
$62,307.32
2010
12
$61,865.12
$195,776.01
2009
6
$34,507.78
$190,148.59
*includes projected salaries
Average monthly salary: $5,438.22
The Retirement Estimate
Page Three: Account Information
Regular
Variable
Total
Current account
balance:
$139,709.23
$25,850.46
$165,559.69
Projected account
balance at retirement:
$156,841.63
$29,031.28
$185,872.91
The Retirement Estimate
Page Three: Benefit Options and Amounts
Option 1 Calculation Method Comparison:
$2,966.64
Money Match
$2,329.10
Full Formula
Formula + Annuity
Tax Remedy
HB3349 or SB656


The greater of either...
HB 3349



Benefit increase
Based on service time prior to October 1, 1991
SB 656


Based on service time if hired prior to July 14,
1995
Maximum 4% increase
Retirement Benefit Options


First twelve options pay member
lifetime monthly benefit unless the
Option 1 benefit is $200 month or less.
If Option 1 benefit is $200 month or
less


No monthly benefit
Lump sum payment equal to actuarial value of
benefit
The Retirement Estimate: Page Three
Benefit Options and Amounts
No Purchase
With Purchase
Option 1
$3,048.14
$3,055.64
Refund Annuity
$3,013.13
$3,020.55
Option 15 C
$2,956.85
$2,964.13
Option 2
$2,767.71
$2,774.52
Option 2A
$2,737.24
$2,743.97
Option 3
$2,901.84
$2,908.97
Option 3A
$2,883.54
$2,890.63
The Retirement Estimate: Page Three
Lump Sum Benefit Options and Amounts
No Purchase
With Purchase
Lump Sum Option 1
$1,466.58
$1,484.36
Lump Sum Option 2
$1,331.65
$1,347.81
Lump Sum Option 2A
$1,316.99
$1,332.95
Lump Sum Option 3
$1,396.18
$1,413.12
Lump Sum Option 3A
$1,387.38
$1,404.21
Total Lump Sum
$381,921.38
$382,898.19
Retirement Option Choices

Option 1



Maximum monthly benefit
No beneficiary
Refund Annuity and 15 Year Certain


Member may choose multiple beneficiaries and change
them at any time
Beneficiary benefits are limited


Refund Annuity: Nine – Eleven years
15 Year Certain
Retirement Option Choices

Joint Survivorship Options

One beneficiary
60 days to change the beneficiary

Options 2 and 2A




Full survivorship options
With 2 and 2A, and a non-spousal beneficiary, see the PERS
website for possible benefit adjustments.
Options 3 and 3A

Half survivorship options
Lump Sum Options




Projected account balance
One through five annual installments
Interest credited on unpaid balance
Options 1, 2, 2A, 3 and 3A provide
lifetime monthly benefit
Total Lump Sum




Distribution of your PERS account with
employer match
No monthly benefit paid
One through five annual installments
Interest credited on unpaid balance
The Retirement Estimate: Page Four
Assumptions used in Projection

Account Balance:



Job Classification:


Regular Projected at 8%
Variable Projected at 8%
Retirement Job Class 01
Salary Projections:

Salary Projected to increase 0% annually
Purchase Documents
Waiting Time and Forfeited Time


Time Limit on Purchase(s)
 During the 90 days before retirement
 Not on or after retirement date
Mail purchases to:
PERS
PO Box 2127
Portland, OR 97208-2127
Health Insurance and
Retirement

Enrollment opportunities for PERS Sponsored
Health insurance




At retirement
At Medicare enrollment
Any time, with at least 24 months of continuous
employer group coverage
Other options




Employer sponsored plans (ORS 243.303)
COBRA
Portability and individual plans
Spouse’s employer plan
PERS Sponsored Health
Insurance: Additional points

Eligibility


Retirees
Spouses and dependents



Of current or deceased retirees
Of deceased member eligible to retire
Subsidies may be available



RHIA: At Medicare eligibility
RHIPA: State of Oregon employees
Requirements for subsidy eligibility


Total PERS-covered service time
PERS group health insurance program
Retirement: Date; Forms; and
Your Employer

Retirement date



Submit the retirement forms


1st of any month
Based on age or service time
Within the 90 day period prior to your
retirement date
Resign all PERS-covered positions

Employer provides information to PERS
Retirement Forms
 Call PERS Customer Service for a
retirement package or download the
forms from PERS website
 PERS mails you notice soon after
receipt of your retirement forms
First Monthly Check Issued



Within 92 days of retirement date
Estimated payment or actual payment
Retroactive
Notice of Entitlement

Notice of Entitlement


Option changes possible within 60 days of first
benefit check or receipt of NOE, whichever is
later
Dispute Notice

240 days from the later of:


Date first actual payment is made
Date Notice of Entitlement is provided to the
member
Cost of Living Adjustment
(COLA)


An annual adjustment payable August
1st
Up to 2% of the July gross benefit


2% is the maximum increase
July 1st retirement

Last date to retire in any year, and receive the
COLA for that year
Variable Annuity
•
•
•
Variable Dollars At Retirement
• Number of units
Variable Annuity Unit Value
• Set annually (11/1 - 10/31)
Variable Annuity Income
• Part of benefit
• Based on unit value
Variable Annuity Example
Account Balance - $100,000
$50,000-R
$50,000-V
Fixed
Annuity
Variable
Annuity
$100,000
Initial
Benefit
Fixed
Pension
$1,000
+ 500
+ 500
$500
$500
$1,000
$2,000
VARIABLE ANNUITY
EXAMPLE
Year 2: 11/1-10/31 - Variable = 18%
Variable Per Cent = 18% - 8% = 10%
Var. Change = $500 x (10%) = $50
Benefit = $1000 + $500 + $550 = $2050
VARIABLE ANNUITY
EXAMPLE
Year 3: 11/1-10/31 - Variable = 0%
Variable Per Cent = 0% - 8% = - 8%
Var. Change = $550 x (-8%) = - $44
Benefit = $1000 + $500 + 506 = $2006
Working after PERS
Retirement

For a Private-sector employer


No employment limit
For Oregon PERS-participating Employers


1039 hours/calendar year limit
Exceptions exist



Only for normal retirement (age or service time)
Review exceptions on http://oregon.gov/PERS
PERS and Social Security benefit:

Higher of 1039 hrs/calendar year or Social Security
limit.
Tax Considerations

Monthly benefit


Subject to state and federal taxes
Oregon residents


Subject to Oregon and federal tax
Non-Oregon residents


Federal tax only; no Oregon tax
No withholding for any other state
Member Resources


Websites and E-mail link for PERS website
 PERS: http://oregon.gov/PERS
 PERS Insurance: http://pershealth.com
 IAP account: https://iap.csplans.com
Toll-free telephone number
 PERS


PERS Insurance


1-888-320-7377 or 503-598-7377
1-800-768-7377 or 503-224-7377
PERS and financial education
 http://oregon.gov/PERS
More Resources

Attend additional PERS presentations


PERS: http://oregon.gov/PERS
Individual meeting




Retirement Application Assistance Session
Within 90 days of retirement
PERS: http://oregon.gov/PERS
1-888-320-7377 or 503-598-7377
Thank you for attending this
presentation!
Police and Fire Units



Background
Purchase (8 Units)
 Read Pre-Retirement Guide
 Employee cost = $4,000
 Employer match = $4,000
Benefits
 $160 per month from age 60-65
 Less if over more than 60 months
 No COLA increases
 Separate unit application forms
Surviving Spouse Benefit - P&F


Benefit
 25% of Refund Annuity benefit
OR
 25% of Option 1 benefit (Lump Sum)
Beneficiary
 Surviving spouse
OR
 Dependent children under 18