Transcript MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM WELCOME TO THE RETIREMENT

MILWAUKEE COUNTY
EMPLOYEES’ RETIREMENT
SYSTEM
WELCOME TO THE RETIREMENT
INFORMATION SESSION
JULY 12, 2007
WELCOME
MR. JACK L. HOHREIN
EMPLOYEES’ RETIREMENT
SYSTEM MANAGER
INFORMATION SESSION
AGENDA
12:30 – 1:15
PENSION BENEFITS
Milwaukee County Retirement Staff
1:15 – 1:30
QUESTIONS
1:30 – 2:15
HEALTH, DENTAL AND LIFE INSURANCE
Thomas MacAlpine, Cambridge Advisory Group
2:15 – 2:30
BREAK
2:30 – 3:00
SOCIAL SECURITY AND MEDICARE
Karyl Richson, Social Security Administration
3:00 – 3:30
DEFERRED COMPENSATION
Marco Gruchalski, Great West Retirement Services
3:30 – 4:30
QUESTIONS
OVERVIEW OF ERS
PRESENTATION
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ERS Staff
Pension Board Members and ERS
History
Membership in ERS
Reciprocity
Funding
ERS Benefits
ERS Distributions and Forms of Payment
Backdrop
Pension Calculation
Retirement Process
MILWAUKEE COUNTY
EMPLOYEES’ RETIREMENT
SYSTEM
WHO WORKS IN RETIREMENT
AND WHAT DO THEY DO?
MILWAUKEE COUNTY
RETIREMENT STAFF
Jack Hohrein
Retirement System
Manager/Pension
Board Secretary
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Gordon Mueller
Fiscal Officer
Veronica Britt
Retirement System
Coordinator
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Administrative
Specialists
 Vivian Aikin
 Robert Shupe
 Denise McCaskill
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Clerical Specialists
 Tracy Jackson
MILWAUKEE COUNTY
EMPLOYEES’ RETIREMENT
SYSTEM
WHAT IS THE HISTORY AND
STRUCTURE OF MILWAUKEE
COUNTY’S ERS?
PENSION BOARD MEMBERS
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5 Citizen Members
 Linda Bedford
 Donald Cohen
 Michael Ostermeyer
 Sarah Peck
 Thomas Weber
3 Employee Members
 Dean Roepke (Chairman)
 John Martin
 John Parish
1 Member Elected by Retirees
 Marilyn Mayr
ROLE OF THE PENSION BOARD
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Monitor Investment of Funds
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General Administration
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Proper Operation of ERS
MILWAUKEE COUNTY
RETIREMENT SYSTEM HISTORY
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ERS (Employee Retirement System)
Established in 1937
OBRA (Omnibus Budget Reconciliation Act)
Established in 1992
Pension Board established in 1937
Milwaukee County General Ordinance
Chapters 201 and 203
Milwaukee County Retirement Rules
“Appendix B and B1”
MILWAUKEE COUNTY
EMPLOYEES’ RETIREMENT
SYSTEM
HOW DO I BECOME A
MEMBER OF THE ERS?
MEMBERSHIP
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ERS is Milwaukee County’s primary
retirement system
ERS participation is automatic with
the exception of:
 Excluded employees (i.e., board and
commission members)
 Optional employees
 Seasonal employees
These employees participate in OBRA and can contact
ERS at 414-278-4143 for details
MILWAUKEE COUNTY EMPLOYEES’
RETIREMENT SYSTEM
WHAT IS RECIPROCITY AND
WHO IS ELIGIBLE?
RECIPROCITY
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Special provisions are available for individuals
who have participated in either of these
systems:
 State of Wisconsin Retirement System
 City of Milwaukee Employees’ Retirement
System (City/County Transfer)
Pension credits in one or more of these
systems may increase your total benefits
payable from Milwaukee County
Members with credits in either of these
systems should contact Milwaukee County ERS
at 414-278-4143 for additional information
MILWAUKEE COUNTY EMPLOYEES’
RETIRMENT SYSTEM
IF I GET LAID OFF HOW DOES
IT AFFECT MY RETIREMENT?
LAY-OFFS
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If eligible for retirement contact ERS
immediately for retirement date
planning
Retirement applications must be
completed while in active employment
status
Deferred Retirements non-eligible for:
 Backdrop
 Rule of 75
MILWAUKEE COUNTY
EMPLOYEES’ RETIREMENT
SYSTEM
HOW IS THE ERS FUNDED?
FINANICAL INFORMATION
MILWAUKEE COUNTY EMPLOYEES' RETIREMENT SYSTEM
Retirement System's Changes In Net Assets
2005
2004
2003
Additions
Member contributions
Employer contributions
Investment income (loss)
Total additions
361
$35,415
124,391
160,167
712
$35,143
184,521
220,376
705
$33,980
288,872
323,557
Deductions
Benefit payments
Administrative expenses
Withdrawals
Total deductions
(148,307)
(2,157)
(37)
(150,501)
(161,369)
(2,190)
(155)
(163,714)
(111,110)
(1,865)
(13)
(112,988)
9,666
56,662
210,569
1,550,112
$1,559,778
1,493,450
$1,550,112
1,282,881
$1,493,450
Total changes in net assets
Net assets held in trust for pension benefits:
Beginning of year
End of year
CUSTODIAN
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Pension Board has the authority to
select a custodian
Pension Board had delegated
custody to Mellon Trust
ERISA
EMPLOYEE RETIREMENT INCOME
SECURITY ACT
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ERISA imposes funding, vesting disclosure
and fiduciary requirements on certain
pension plans
ERISA does not apply to governmental plans
(i.e., ERS and OBRA)
ERISA guidance may be helpful in some
contexts
TAX QUALIFICATION
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One of the IRS requirements is Code 415
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Favorable determination letter
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Internal Revenue Code (“The Code”) and
Treasury Regulations contain requirements
for tax qualification
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Importance of tax qualified status
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IRS tax ID Number 39-6146761
FINANICAL SUMMARY
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Healthy Plan
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High Quality Custodian
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Tax Qualified
MILWAUKEE COUNTY
EMPLOYEES’ RETIREMENT
SYSTEM
WHAT BENEFITS ARE
OFFERED BY THE ERS?
ERS BENEFITS
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Death Benefit
 Payable upon death of an active
employee
Disability Benefits
 Accidental (injury on the job at
specific time and place
 Ordinary (mentally or physically
incapacitated for duty)
*Special provisions apply for Deputy Sheriffs killed in the line of
duty
ERS BENEFITS CONT’D
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Separation Benefits
 Withdrawal of contributions (prior to
1971)
 Deferred vested benefits status
Monthly Annuity Benefit (normal
retirement allowance)
MILWAUKEE COUNTY
EMPLOYEES’ RETIREMENT
SYSTEM
HOW DO I BECOME ELIGIBLE
FOR RETIREMENT AND WHAT
TYPE OF PENSION BENEFIT
WILL I RECEIVE?
PENSION BENEFITS
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Normal retirement pension
 Employment terminates on or after age 55
and 30 years of service
 Employment terminates on or after age 60
 Rule of 75 (special rules apply for
reciprocity)
Early retirement pension
 Employment terminates on or after age 55
and 15 years of service
 Reduced monthly benefits
PENSION BENEFITS (CONT’D)
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Deferred vested retirement pension
 Eligibility requirements
 May begin at normal retirement age or, if
earlier, at age 55, if member has 15 years of
service
Accidental disability retirement
 Disabled as the result of a work-related
injury
 Other eligibility requirements apply
 Payable at 60% or 75% of FAS (Final
Average Salary) unless normal pension is
greater
PENSION BENEFITS (CONT’D)
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Ordinary disability retirement
 Disabled as the result of a non-workrelated injury or illness
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Other eligibility requirements apply
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15 years of service credit
Payable at 25% of FAS unless normal
pension is greater
PENSION BENEFITS (CONT’D)
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Survivor benefits (Spouse and children)
 Sheriff’s
 Others
MILWAUKEE COUNTY
EMPLOYEES’ RETIREMENT
SYSTEM
WHAT ARE THE FORMS OF
DISTRIBUTION AND WHAT
OPTIONS DO I HAVE?
ERS FORMS OF DISTRIBUTION
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Normal form of benefit is an
annuity for the member’s lifetime
Before benefits begin, a member
may select a form of payment
under ERS
FORMS OF PAYMENT
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Maximum Benefit
 This is the maximum benefit allowed
 No beneficiary is designed when the
maximum is chosen
Option 1: Reduced monthly benefit for
life of member; upon members death
beneficiary gets any amount remaining
in member’s membership account
FORMS OF PAYMENT CONT’D
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Option 2: 50% joint and survivor
annuity
Option 3: 100% joint and survivor
annuity
Option 4: 25% joint and survivor
annuity
Option 5: 75% joint and survivor
annuity
FORMS OF PAYMENT (CONT’D)
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Option 6: 10 year certain annuity
Option 7: A member can apply to
receive benefits in any other form
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Subject to Pension Board’s approval
Rule 1013 describes process
The Pension Board has restricted lump sum
requests and joint surviors options less than
25%
Members will incur fees for option 7 request
that require actuarial calculations
MILWAUKEE COUNTY
EMPLOYEES’ RETIREMENT
SYSTEM
WHAT IS A BACKDROP AND
WHO IS ELIGIBLE FOR IT?
BACK DROP BENEFIT
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Eligibility Requirement
 Must be eligible for an early or normal
retirement
 Eligibility dates are determined by union
contract agreements
 Must work one year beyond eligibility date
 Special rules for represented employees
2-Part Benefit
 Lump sum DROP benefit
 Monthly DROP benefit
MILWAUKEE COUNTY
EMPLOYEES’ RETIREMENT
SYSTEM
HOW IS MY PENSION
CALCULATED?
ERS PENSION CALCULATION
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Calculation of Normal Pension Benefit
(General Formula)
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General formula takes into account
FAS, years of service and multiplier
(i.e, 1.5% of FAS x years of service)
Other Factors Include
 80% of FAS maximum
 Post retirement adjustments
ERS PENSION CALCULATION
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Calculation of Normal Pension Benefit
(Recruitment and Retention Incentives)
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Recruitment and retention incentives may
increase Normal Pension Benefit
Recruitment and retention incentives
include
 Pension benefit multiplier
 Bonus to FAS
 Backdrop
PENSION BENEFIT MULTIPLIER
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Eligibility Requirements
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General eligibility rule –initial ERS
membership began on or after 1/1/82
Special eligibility rules for represented
employees, non-represented deputy sheriffs
and elected officials
Pension multiplier is credited with an
additional .5% of member’s FAS
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Only applies to certain years of service
credit
80% of FAS limit applies
FAS “BONUS”
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Eligibility Requirements
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General eligibility rule – initial ERS
membership began prior to 1/1/82
Special eligibility rules for represented
employees and non-represented deputy
sheriffs
FAS is increased by 7.5% for each year
of pension service earned after 1/1/01
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Maximum of 25% of pre-bonus FAS
80% of FAS limit applies
MILWAUKEE COUNTY
EMPLOYEES’ RETIREMENT
SYSTEM
WHAT STEPS DO I TAKE IF I
AM THINKING ABOUT
RETIREMENT?
RETIREMENT CALCULATOR
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Milwaukee County Intranet Site
(http://172.31.1.4/MCnet)
Fields to be entered:
 Social Security Number
 Last Day of Pay
 Backdrop Date (Optional)
 Beneficiary Birth Date
REQUESTING AN ESTIMATE
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Estimate Request Provided
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Contact ERS
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Within six months of anticipated retirement
date
Request mailed to your home within three
to four weeks of your request
Phone (414-278-4143), letter or email
Information Needed
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Social Security Number
Estimated date of retirement
Beneficiary Date of Birth
Contact Information
SICK ALLOWANCE
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In accordance with current union contracts
and ordinances
Exception for deputy sheriffs
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Separate lump sum check less taxes
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Pension service credit
Taxed at 39.15%
Sick pay cannot be rolled over into an IRA
Eligible employees who die (while working)
their sick allowance is paid in a lump sum to
the spouse/designated beneficiary
VACATION TIME
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Vacation Time
Personal Time
Accrued Overtime
Accrued Holiday
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May be run out in bi-weekly payments
Paid in lump sum less taxes (39.15%)
End of year retirements do not require you to
work into the new year
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If you have full pay up to the end of year, vacation
time, three personal days, and holidays (up to
retirement date) will be granted for the new year
(If bi-weekly payments were chosen)
ERS INDIVIDUAL RETIREMENT
SESSION
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Scheduled 2nd Tuesday of each month
Sick Allowance/Vacation Payout (if
applicable)
Retirement Option Chosen
Beneficiary Designation
Official Retirement Date
Federal and State Withholdings (W4P)
Direct Deposit
Date of 1st Pension Check
Date of Backdrop Check (if applicable)
PENSION CHECK
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The 1st retirement check is mailed the
the 3rd week of the following month in
which you retire
Checks are mailed one day before the
last business day of each month
Direct deposits are deposited on the last
business day of each month. Effective
July 1, 2007, all retirees were required
to have their checks directly deposited
Annual Increase (2% of your original
pension amount on the anniversary of
your retirement)
THANK YOU
ERS STAFF
QUESTIONS