Public Employees Retirement Association of Minnesota

Public Employees Retirement Association of Minnesota Serving Minnesota’s public

Serving Minnesota’s Public Employees for Over 80 Years

Public Employees Retirement Association of Minnesota

Statistical Data

2,100 Employers

Public Employees Retirement Association of Minnesota

Statistical Data

Active Members General 143,385 Vested Deferred Members* 48,548 Benefit Recipients 86,911 Total 279,844 Grand Total

* Includes approximately 5,000 members now in other PERA plans, including most Correctional members. PERA also administers a Defined Contribution Plan with approximately 6,200 members.

P&F 10,879 1,481 10,039 22,399 Correctional 3,603 2,380 769 6,752 308,995

Source: 7-1-2014 Financial Report

Public Employees Retirement Association of Minnesota

Types of Retirement Plans

Traditional Pension Plan

(Defined Benefit Plan)

Individual Account Plan

(Defined Contribution Plan)

Public Employees Retirement Association of Minnesota

DC Plans: Your Individual Investments

What’s the bottom line?

Public Employees Retirement Association of Minnesota

DB Plans: What’s defined is the benefit

What’s the bottom line?

Public Employees Retirement Association of Minnesota

Contributions

Coordinated Correctional Police & Fire Ee:

6.50%

Ee:

5.83%

Ee:

10.8%

Er:

7.50%

Er:

8.75%

Er:

16.2%

+ Social Security

Ee: Er:

7.45% 7.65%

+ Medicare

(If hired after 3/31/86)

Ee:

1.45%

Er:

1.45%

Public Employees Retirement Association of Minnesota

SBI – Diversified for the Long Term

Bonds 18% Alternative Assets 20% Cash 2% International Stocks 15%

* Source: 2013 Annual Financial Report

Domestic Stocks 45%

SBI Investment Returns FY 2014 --------------------- Domestic Stocks 25.9% International Stocks 21.4% Bonds 5.0% Alternative Investments 18.9% ---------------------------------------- Total Combined Funds 18.6%

Public Employees Retirement Association of Minnesota

Revenues (1995-2014)

16¢ Employers 13¢ Employees 71¢ Investment Earnings

* Revenue last 20 years for 3 statewide plans (Source: Annual Financial Reports)

Public Employees Retirement Association of Minnesota

Expenses (1995-2014)

95.6¢ Benefits 3.3¢ Refunds 1.1¢ Admin.

Public Employees Retirement Association of Minnesota

What’s the payback?

2-3 years 5-7 years Remainder of your life

All your contributions All your contributions + all your employer’s contributions Paid by PERA investments

Public Employees Retirement Association of Minnesota

Life Expectancy (Current PERA Tables)

Present Life Expectancy Age Males Females 60 61 62 63 64 50 51 52 53 54 55 56 57 58 59 82.2

82.4

82.5

82.6

82.8

82.9

83.0

83.1

83.2

83.4

83.5

83.6

83.7

83.9

84.0

84.5

84.6

84.7

84.7

84.8

84.9

85.0

85.1

85.2

85.3

85.5

85.6

85.7

85.9

86.0

Present Life Expectancy Age Males Females 65 66 67 68 69 70 71 72 73 74 84.2

84.4

84.6

84.8

85.0

85.3

85.5

85.8

86.0

86.3

86.2

86.4

86.6

86.8

87.0

87.2

87.5

87.7

88.0

88.3

75 86.6

88.6

Public Employees Retirement Association of Minnesota

Building Your Pension

Your pension is built on a formula using:

 Age at Retirement  Years of Service  High-5 Average Salary

Public Employees Retirement Association of Minnesota

Combined Service

Service in your PERA plan can be combined with service under 14 other MN plans

 Pension from PERA  Pension from other retirement plan  Both benefits based on high-5 salary

(no matter when credit earned)

Public Employees Retirement Association of Minnesota

Benefit Options

Single-life 25% 50% 75% 100% % of Single-life

100% 97% 94%

Member (63) Survivor (61)

$1,079 $ 0 $1,047 $262 $1,014 $507 92% $ 993 $745 89% $ 960 $960 * If other than spouse, survivor may not be more than 10 years younger for the 100% or 19 years younger for the 75% option

Public Employees Retirement Association of Minnesota

Decisions . . . Decisions

Public Employees Retirement Association of Minnesota

Your Options

What if you leave public service before retirement?

Public Employees Retirement Association of Minnesota

Refunds

Take the $ and run!

Contributions + 4% Interest - 20% Federal Withholding - 10% Federal Penalty

(until age 59½ if leave before 55)

Refund

Public Employees Retirement Association of Minnesota

Refunds

Rollover You do it

 20% Federal Withholding

Direct Rollover We do it

 No Withholding  No Penalty

Public Employees Retirement Association of Minnesota

Deferred Pension

 If vested, you qualify for a pension any time after age 55  The longer you defer, the larger the monthly benefit until full retirement age  You may not defer past age 70½

Public Employees Retirement Association of Minnesota

Repaying a Refund *

Total Repayment (Lump sum)

  Must return to public service minimum 6 mos. Refund + 8.5% interest compounded annually

Partial Repayment

   Must be active public employee Refund must cover at least 2 yrs. service Repayment must be at least 1/3 of refund you received (Total refund + interest) x Service wish restored Total service lost

* You may roll over tax-deferred investments, like deferred comp., to repay a refund

Public Employees Retirement Association of Minnesota

Other Benefits

Disability Survivor

Public Employees Retirement Association of Minnesota

Disability Benefits (Qualification)

Coordinated

Total and Permanent (At least one year)

P&F and Correctional

Unable to perform duties of your position

Common to All Plans

 Active public employee when disabled

(Must apply w/in 18 months of leaving)

   May not be collecting a retirement benefit Less than age 65 (Age 55 for P&F & Correctional) Must supply medical evidence of disability

Public Employees Retirement Association of Minnesota

Survivor Benefits (Coordinated/Correctional)

Must be vested for a future benefit



100% option pension



Term-certain spouse benefits

- 10 years - 15 years - 20 years 

If no spouse, term-certain benefits for dependent children



Refund of member deductions plus interest

Public Employees Retirement Association of Minnesota

Survivor Benefits (P&F)

Benefits:

  

50% of average salary of last six months for spouse and 10% for

each child (60% if death result of hazardous duty)

or 100% option pension payable to spouse if member reaches age 50 with 3 or more years of service or any age with 30 years of service or Refund of member deductions plus interest

(Maximum monthly family benefit is 70% of average salary / 80% if result of hazardous duty /Minimum benefit 50% & 60%)

Public Employees Retirement Association of Minnesota

Pension Increases?

Benefits will increase by 1% every January until plans are 90% funded for 2 years, and then at 2.5%

Public Employees Retirement Association of Minnesota

Applying for Retirement

• •

Know Your Pension Options Review pension estimates Make sure all your questions are answered

• •

Termination Verification Sent to member before retirement Filled out by employer

• •

Apply for Retirement Choose option Signed by member & spouse Retirement effective first of month following termination

• •

Required Documents Proof of age* Proof of name change*

* If choosing survivor option, PERA needs same info.

for survivor

Public Employees Retirement Association of Minnesota

You Must Really Retire!

Requirements

 Resignation or dismissal  Not just a leave of absence  No prior agreement, written or verbal, to be rehired in any capacity  30 day break in service  This includes work as an independent contractor or consultant  Does not apply to elected service

Public Employees Retirement Association of Minnesota Member Information, Marital Information, and Direct Deposit

Public Employees Retirement Association of Minnesota

Benefit Selection & Notarized Signatures

Public Employees Retirement Association of Minnesota

Federal & State Tax Withholding

Public Employees Retirement Association of Minnesota

Termination Verification Form

Public Employees Retirement Association of Minnesota

Birth and Marriage Documents / Passport

Public Employees Retirement Association of Minnesota

Earnings limits only apply if you return to PERA-covered employment

Earnings Limit Timeline (2015)*

Annual Limit Jan. 1 year you reach full S.S.

Month you reach full retirement age S.S. retirement age $15,720 $41,880 No limit Reduction* $1 for every $2 over or suspension of benefit

* Reduction placed in escrow.

Available one year after leaving job.

If work extends past end of year, available one year later.

Public Employees Retirement Association of Minnesota

Taxes

Most, if not all, of your PERA pension is taxable income

 If you were hired after Dec. 31, 1982, your entire benefit is taxable  If you were a member prior to 1983, you will receive your after-tax contributions back over your estimated lifetime, or the estimated lifetime of both you and your survivor

Public Employees Retirement Association of Minnesota

PERA Office

Retirement Systems of Minnesota Building 60 Empire Drive St. Paul, Minnesota

Public Employees Retirement Association of Minnesota

On-line Resources

Public Employees Retirement Association of Minnesota

9 0

Public Employees Retirement Association of Minnesota

MY PERA

Public Employees Retirement Association of Minnesota

Our newest feature

Public Employees Retirement Association of Minnesota

And now a word from our attorneys . . .

This presentation is intended to provide general information; the rights and obligations of PERA members are governed by state and federal laws, rules and regulations. The Minnesota Legislature or

the federal government may change the statutes, rules and regulations governing PERA at any time. If there is a discrepancy between the law governing PERA and the information contained in this presentation, the statutes and regulations shall govern.