Transcript cms.cityoftacoma.org

TACOMA EMPLOYES'
RETIREMENT SYSTEM
Orientation Outline
I
II
Sources of Retirement Income
How the Plan Is Funded and
Managed
III Service Retirement Benefits
IV Benefits Other Than Service
Retirement
V
Recent Plan Enhancements
VI Calculating Your Retirement Benefit
VII Deferred Compensation
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Sources of Retirement Income
• RETIREMENT SYSTEM ANNUITY
• SOCIAL SECURITY
• DEFERRED COMPENSATION
• PERSONAL SAVINGS & INVESTMENTS
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What is the Tacoma Employes’
Retirement System?
The Tacoma Employes’ Retirement
System is a defined benefit plan funded
by employee contributions and
employer contributions which are tax
deferred, as well as investment return.
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Who is responsible for the
administration of the
Retirement Fund?
The Retirement Office is responsible
for the administration of the
Retirement Fund as directed by the
Retirement Board.
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Who are the members of the
Board of Administration?
William Baarsma Mayor and Chairman
Robert Biles
Director of Finance
Secretary of the Board
Rey Arellano
Designee of the City Manager
Tim Ross
Designee of the Public Utilities
Director
Diane Wetzel
Employee Representative
Samuel Benscoter Employee Representative
James Curley
Employee Representative
David Peterson
Retired Representative
Chris Webster
Citizen Representative
Kenneth Turner Alternate Board Member
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When does the Retirement
Board meet?
The Board of Administration conducts
its monthly Retirement Board meetings
on the second Thursday of the month.
These Retirement Board meetings are
held at 1:00 p.m. in Conference Room
LT1 on the 3rd floor of Tacoma Public
Utilities Administration Building North
and are open to the public.
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Plan Funding
• Employer Contributions – 8.64% of salary
(effective the 1st day of the 1st full pay period
in February 2009)
• Employee Contributions – 7.36% of salary
(effective the 1st day of the 1st full pay period
in February 2009)
• Investment Earnings
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Service Retirement Eligibility
• AGE 60, ANY NUMBER OF YEARS OF
SERVICE
• AGE 55 OR OLDER, 10 YEARS OF
SERVICE (reduced)
• AGE 40 OR OLDER, 20 YEARS OF
SERVICE (reduced)
• ANY AGE, 30 YEARS OF SERVICE
• RULE OF 80
(AGE & YEARS OF SERVICE = 80)
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Determining Benefit Amount
• AVERAGE SALARY
• YEARS OF SERVICE
• UNREDUCED BENEFIT - 30 YEARS OF SERVICE
- AGE 60
- RULE OF 80
(AGE & SERVICE = 80 or MORE)
• REDUCED BENEFIT
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Twice the Value
• Effective on and after January 1, 1997, a
service pension shall not be less than the
actuarial equivalent of twice the value of the
individual’s contributions & interest.
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Death Benefit
LUMP SUM OF CONTRIBUTIONS
PLUS INTEREST (less than 5 years)
or
LUMP SUM & INTEREST OR
MONTHLY PAYMENT FOR 10 YEARS
HAVING 2 X VALUE OF LUMP SUM
(5 years or more of service)
or
IF ELIGIBLE FOR SERVICE
RETIREMENT AND SPOUSE AS BENEFICIARY,
RETIREMENT BENEFIT OVER SPOUSES LIFE
EQUAL TO OPTION E
or
DEFERRED DEATH BENEFIT
(5 years or more of service)
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Disability Benefits
1.5% of AVERAGE SALARY X
YEARS OF SERVICE
MINIMUM BENEFIT = $1OO/MONTH
DISABILITY INSURANCE AVAILABLE
THROUGH HUMAN RESOURCES
SERVICE ALLOWANCE OPTIONS
1/1/2001
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(Continued)
• Effective January 1, 2001, upon the death of any
member who has not retired but who, as of the
date of his or her death, had five years’
creditable service, in lieu of the death benefit
provided,the spouse may elect to defer payment
of a death benefit, leaving the member’s
accumulated contributions with interest, not
including contributions on overtime with
interest, in the Retirement Fund until a deferral
date.
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Termination of Employment
LUMP SUM EQUAL TO
REFUND OF CONTRIBUTIONS
PLUS INTEREST (less than 5 years)
or
LUMP SUM EQUAL TO
150% OF CONTRIBUTIONS
PLUS INTEREST (5 years or more)
Both are taxable unless rolled directly to an
Individual Retirement Account.
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Calculating Your Retirement
Benefit
• Retirement Options
• Purchase of Time
• Portability
• Pension Calculator
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Unmodified Option
The maximum allowance you can receive
is the unmodified monthly form of
payment.
The Unmodified Option provides a
guaranteed pension for life, but makes no
provision for a beneficiary after your
death.
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Option A
Provides that at your death, your estate or
beneficiary will receive a lump sum refund of
the difference between your total accumulated
contributions and interest at the date of
retirement and the annuity payments you have
received since retirement.
Annuity payment refers to that portion of the
retirement benefit that is considered payable
from the member’s accumulated
contributions.
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Option B
Provides that at your death your estate or
beneficiary will continue to receive monthly
annuity payments until the total of them
equals your total accumulated contributions
and interest at the date of retirement.
Annuity payment refers to that portion of the
retirement benefit that is considered payable
from the member’s accumulated
contributions.
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Option C
Provides for the payment of a retirement
allowance for a guaranteed period of years.
If you live beyond the guaranteed period,
the allowance is continued to you for life,
but if you die before the expiration of the
period, the allowance will be continued to
your estate or beneficiary for the balance of
the time. You have an option of five or ten
years for the guaranteed period.
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Option D
Provides a modified monthly allowance for
life and after your death your spouse, at the
time of retirement, will receive one-half of
this amount each month for life. (See Pop-Up
Provision & Divorce Pop-Up provision).
Option E
Provides a modified monthly allowance for
life and after your death your spouse, at the
time of retirement, will receive the same
monthly allowance for life. (See Pop-Up
Provision & Divorce Pop-Up provision).
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Option F
If a member at the time of retirement has no
spouse, a modified monthly allowance for life
is provided and after death, the beneficiary
will receive one-half of this amount each
month for life or will receive the same
monthly allowance for life. (See Pop-Up
Provision).
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Pop-Up Provision
Provides for those members retiring on or
after January 1, 1999, and selecting a joint
and survivor Option D or E, or Option F, to
have a pop-up when the spouse of the
member (Option D or E) or the named
beneficiary (Option F) predeceases the
member subsequent to the members
retirement. The benefit is increased to the
Unmodified retirement allowance calculated
under Sections 1.30.580 through 1.30.620.
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Divorce Pop-Up Provision
A member retiring on or after January 1, 2008,
selecting Option D or E and divorced thereafter
and have satisfied Section 1.30.690.C of the
Tacoma Municipal Code, the benefit payable to the
member effective as of the first day of the month
following the entry of the Order, shall be increased
to the Unmodified retirement allowance. Provided
further, that in the event the member is divorced
and later remarries, within three months of
remarriage the member will have the option to
irrevocably designate the member’s new spouse as
the wife or husband under Options D or E, subject
to the same conditions as provided in Options D or
E for a member who remarries after the death of a
husband or wife.
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Social Security Modification
• A member retiring from service, who has not
reached the age of 62, may elect to receive an
additional pension allowance that will continue
until he or she reaches the age of 62.
• At age 62, the member’s pension will be
permanently reduced by an amount that is the
actuarial equivalent of the additional pension
paid the member.
• If the member dies leaving a beneficiary entitled
to an allowance, the allowance shall be the same
as the beneficiary would have received had the
member not selected this modification.
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Purchase of Time
Individuals may purchase up to 5 years of service
effective January 1, 2002 and may also transfer
money from a 457 or 403 (b).
Effective September 1, 2002, repayment may also
be made by a direct rollover to the Retirement
Fund from an IRA qualified under Internal
Revenue Code Section 408.
Purchase of time must be made at the time of
retirement or to become eligible for retirement.
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Portability
SYSTEMS INCLUDED:
TRS PERS SERS SCERS WSPRS LEOFF II
SEATTLE, SPOKANE & TACOMA
• SERVICE REQUIREMENT
(Must be met for each system)
• AVERAGE FINAL SALARY
(Highest base salary will be used for all calculations)
• 2/1/97 Years of Service under Portability are
used for purposes of eligibility and benefit
formula
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Retiree Benefits
•
The Cost of Living Adjustment for retirees
increased from 2% to 2. 125% (effective
1/1/01).
•
The Cost of Living Adjustment to receive a
50% of original purchasing power.
•
Lump sum of overtime contributions equal
to 150% overtime contributions and
interest.
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Pension Calculator
The pension calculator will allow you to
calculate retirement benefits or allow you to
calculate the purchase of time.
The pension calculator is located at:
• www.TacomaEmployesRetirement.com under
Member Tools/Benefit Calculator on the
internet and intranet.
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PORTABILITY with 2 x Value and no Pro-Ration
(If Combined 30 Years or > may = Proration)
Member Information
PORTABILITY with 2 x
Value and no Pro-ration
PORTABILITY with 2 x Value and no Pro-Ration
Combined 30 Years or > may = Proration)
Calculation
(If
PORTABILITY with 2 x Value and no Pro-Ration
Combined 30 Years or > may = Proration)
Options
(If
Deferred Compensation
• Tax-deferred – current tax deduction for
contribution and tax-deferred growth
• Several investment options
• Upon separation from service, funds can remain
in deferred compensation or transferred to
another employer-sponsored salary deferral plan
(401(k) or deferred comp) and an IRA, without
income tax.
• Funds can be withdrawn at separation from
service without tax penalty. Ordinary income tax
will be paid whenever funds are withdrawn.
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Web Sites
• Located at
www.TacomaEmployesRetirement.com on the
internet and intranet are the Retirement
Booklet; Commonly Asked Retirement
Questions; Standard Forms for both Active &
Retired Members; Annual Report/Summary
Annual Report; and the Retirement Board
packets, including the minutes and agendas.
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