james r. wilbanks, ph.d. executive secretary

James R. Wilbanks, Ph.D.James R. Wilbanks, Ph.D.

Executive SecretaryExecutive Secretary

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Retirement System Retirement System OverviewOverview

Complex SystemComplex System

Funding StatusFunding Status 50.5% Actuarially Funded50.5% Actuarially Funded

2008 Investment Returns2008 Investment Returns -26.0%-26.0%

Is your retirement safe?Is your retirement safe? Absolutely!Absolutely!

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OutlineOutline ContributionsContributions Retirement EligibilityRetirement Eligibility Retirement Benefit FormulaRetirement Benefit Formula Education Employees Service Incentive Education Employees Service Incentive

PlanPlan Retirement PlansRetirement Plans Partial Lump Sum OptionPartial Lump Sum Option Preparing for RetirementPreparing for Retirement Post-Retirement EmploymentPost-Retirement Employment Retiree Health InsuranceRetiree Health Insurance QuestionsQuestions

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ContributionsContributions

Account:Account:Funding Source:Funding Source:

Retirement Benefit Retirement Benefit FundFund

Employer ContributionsEmployer Contributions

Dedicated State RevenueDedicated State Revenue

Investment IncomeInvestment Income

Client AccountClient AccountClient ContributionsClient Contributions

(7% of Total (7% of Total Compensation)Compensation)

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Retirement EligibilityRetirement Eligibility

Rule of 80Rule of 80 Rule of 90Rule of 90

Entry DateEntry Date Up to June 30, Up to June 30, 19921992

After July 1, After July 1, 19921992

EligibilityEligibility

Age + Service Age + Service = 80= 80or or

Age 62 + 5 Age 62 + 5 YearsYears

Age + Service Age + Service = 90= 90or or

Age 62 + 5 Age 62 + 5 YearsYears

Final Final Average Average SalarySalary

Highest 3 Highest 3 YearsYears

Highest 5 Highest 5 Consecutive Consecutive

YearsYears

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Retirement EligibilityRetirement Eligibility

Early RetirementEarly Retirement Ages 55 – 61Ages 55 – 61 Must be vested in SystemMust be vested in System 5 Years contributory Oklahoma service5 Years contributory Oklahoma service NOTNOT eligible under rule of 80 or 90eligible under rule of 80 or 90

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Retirement EligibilityRetirement EligibilityEarly Retirement Adjustment FactorsEarly Retirement Adjustment Factors

AgeAge PercentPercent

5555 61.8961.89

5656 65.9565.95

5757 70.3870.38

5858 75.2375.23

5959 80.0080.00

6060 86.6686.66

6161 93.3393.33

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Retirement Benefit Retirement Benefit FormulaFormula

Basic FormulaBasic Formula Final Average Salary x 2% x Years of Final Average Salary x 2% x Years of

ServiceService Prior to July 1, 1995Prior to July 1, 1995

Contributions were paid on either Contributions were paid on either $25,000 or $40,000$25,000 or $40,000

Those years are cappedThose years are capped Results in a Two-Tiered SystemResults in a Two-Tiered System

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Retirement FormulaRetirement FormulaBenefit TiersBenefit Tiers

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YearsYears To June 30, To June 30, 19951995

Since July 1, Since July 1, 19951995

Salary Salary BaseBase

Up to $25,000 Up to $25,000 or $40,000or $40,000

Total Total CompensationCompensation

BenefitBenefit

FAS x 2% x FAS x 2% x Years of Service Years of Service

through June through June 30, 199530, 1995

FAS x 2% x FAS x 2% x Years of Service Years of Service

sincesinceJuly 1, 1995July 1, 1995

Add Tier 1 and 2 to determine Total Add Tier 1 and 2 to determine Total Annual BenefitAnnual Benefit

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Education Employees Education Employees Service Incentive Plan Service Incentive Plan

(EESIP)(EESIP) EESIP also known as Wear-AwayEESIP also known as Wear-Away Converts Tier 1 Service to Tier 2Converts Tier 1 Service to Tier 2

Must reach full retirement eligibilityMust reach full retirement eligibility Rule of 80 or 90Rule of 80 or 90

Each year of additional serviceEach year of additional service Moves 2 years from Tier 1 to Tier 2Moves 2 years from Tier 1 to Tier 2

EESIP can increase benefit EESIP can increase benefit significantlysignificantly

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Retirement PlansRetirement Plans

5 Retirement Plans5 Retirement Plans Maximum Retirement PlanMaximum Retirement Plan

Lifetime Benefit for ClientLifetime Benefit for Client $5,000 Death Benefit to Beneficiary(ies)$5,000 Death Benefit to Beneficiary(ies) Highest Monthly Benefit AmountHighest Monthly Benefit Amount Any Balance in Client Account upon Client’s Any Balance in Client Account upon Client’s

death is paid to Beneficiary(ies) or Estatedeath is paid to Beneficiary(ies) or Estate

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5 Retirement Plans5 Retirement Plans Retirement Option 1Retirement Option 1

Lifetime Benefit for ClientLifetime Benefit for Client $5,000 Death Benefit to Beneficiary(ies)$5,000 Death Benefit to Beneficiary(ies) 99.8% of Maximum Benefit99.8% of Maximum Benefit Slower use of Client Account to pay benefitsSlower use of Client Account to pay benefits Any Balance in Client Account upon Client’s Any Balance in Client Account upon Client’s

death is paid to Beneficiary(ies) or Estatedeath is paid to Beneficiary(ies) or Estate

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Lifetime Benefit for ClientLifetime Benefit for Client $5,000 Death Benefit to Beneficiary(ies)$5,000 Death Benefit to Beneficiary(ies) Client designates Joint Annuitant at Client designates Joint Annuitant at

retirementretirement After Client’s death Joint Annuitant After Client’s death Joint Annuitant

continues to receive same benefit as Clientcontinues to receive same benefit as Client 93.2% of Maximum Benefit93.2% of Maximum Benefit Pop-up ProvisionPop-up Provision

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Lifetime Benefit for ClientLifetime Benefit for Client $5,000 Death Benefit to Beneficiary(ies)$5,000 Death Benefit to Beneficiary(ies) Client designates Joint Annuitant at Client designates Joint Annuitant at

retirementretirement After Client’s death Joint Annuitant continues After Client’s death Joint Annuitant continues

to receive one-half the Client’s benefit to receive one-half the Client’s benefit 96.5% of Maximum Benefit96.5% of Maximum Benefit Pop-up ProvisionPop-up Provision

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Lifetime Benefit for ClientLifetime Benefit for Client $5,000 Death Benefit to Beneficiary(ies)$5,000 Death Benefit to Beneficiary(ies) Guarantees Client’s full benefit for 120 Guarantees Client’s full benefit for 120

monthsmonths If Client dies within 120 month of retirement, If Client dies within 120 month of retirement,

Beneficiary continues to receive the Client’s full Beneficiary continues to receive the Client’s full benefit until the 120benefit until the 120thth month after retirement month after retirement

Only option where a child may receive a Client’s Only option where a child may receive a Client’s monthly benefitmonthly benefit

99.0% of Maximum Benefit99.0% of Maximum Benefit

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Partial Lump Sum OptionPartial Lump Sum Option

Client may elect at retirementClient may elect at retirement Also known as PLSOAlso known as PLSO

Equal to 12, 24, or 36 months of Equal to 12, 24, or 36 months of Retirement BenefitRetirement Benefit

Reduces the Retirement Benefit Reduces the Retirement Benefit associated with the 5 Retirement Plansassociated with the 5 Retirement Plans Reduction based on Age and months in PLSOReduction based on Age and months in PLSO

Must have 30 Years of Service to QualifyMust have 30 Years of Service to Qualify

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Partial Lump Sum OptionPartial Lump Sum Option

Partial Lump Sum Option Adjustment Partial Lump Sum Option Adjustment FactorsFactors

AgeAge 12 12 MonthsMonths

24 24 MonthsMonths

36 36 MonthsMonths

5050 91.31%91.31% 82.61%82.61% 73.92%73.92%

5555 90.91%90.91% 81.82%81.82% 72.73%72.73%

6060 90.34%90.34% 80.68%80.68% 71.02%71.02%

6565 89.50%89.50% 78.99%78.99% 68.49%68.49%

7070 88.25%88.25% 76.51%76.51% 64.76%64.76%

7575 86.44%86.44% 72.89%72.89% 59.33%59.33%

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Preparing for RetirementPreparing for Retirement

Step 1 - Request your Benefit Step 1 - Request your Benefit EstimateEstimate Contact the Oklahoma Teachers Contact the Oklahoma Teachers

Retirement SystemRetirement System 405.521.2387405.521.2387 1.877.738.63651.877.738.6365 [email protected]@trs.state.ok.us

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Step 1 - Request your Benefit EstimateStep 1 - Request your Benefit Estimate The Following Information is RequiredThe Following Information is Required

Your name and complete mailing addressYour name and complete mailing address Your Social Security NumberYour Social Security Number Your Date of BirthYour Date of Birth Retirement DateRetirement Date Joint Annuitant’s Date of Birth (if necessary)Joint Annuitant’s Date of Birth (if necessary) Expected Number of Unused Sick Days at Expected Number of Unused Sick Days at

RetirementRetirement Your Estimate will arrive in 2 – 4 weeks Your Estimate will arrive in 2 – 4 weeks

via U.S. mailvia U.S. mail

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Step 2 – Review the Retirement Step 2 – Review the Retirement EstimateEstimate Decide which Retirement Plan is best Decide which Retirement Plan is best

for youfor you Sign and DateSign and Date Return to the Oklahoma Teachers Return to the Oklahoma Teachers

Retirement System between 60 and 90 Retirement System between 60 and 90 days before your retirementdays before your retirement

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Step 2 – Step 2 – Review the Review the EstimateEstimate

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Step 3 – Final Retirement ContractStep 3 – Final Retirement Contract A Final Retirement Contract will be A Final Retirement Contract will be

sentsent Sign, date and have it notarizedSign, date and have it notarized Return the Contract at least 30 days Return the Contract at least 30 days

prior to your retirementprior to your retirement Your Contract must be received at least 30 Your Contract must be received at least 30

days prior to your retirementdays prior to your retirement

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Step 3 – Final Retirement ContractStep 3 – Final Retirement Contract Retirement Timeline ExampleRetirement Timeline Example

Submit Final ContractSubmit Final Contract May 1May 1

Retirement DateRetirement Date June 1June 1

First Retirement CheckFirst Retirement Check July 1July 1

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Step 4 – Relax and Enjoy a Well Step 4 – Relax and Enjoy a Well Earned Earned RetirementRetirement

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Post-Retirement Post-Retirement EmploymentEmployment

Limits apply to Oklahoma Teachers Limits apply to Oklahoma Teachers Retirement System Contributory Retirement System Contributory Employment:Employment: Oklahoma Public SchoolsOklahoma Public Schools Other Reporting EntitiesOther Reporting Entities

Oklahoma State Department of EducationOklahoma State Department of Education Oklahoma Regents for Higher EducationOklahoma Regents for Higher Education Oklahoma Teachers Retirement SystemOklahoma Teachers Retirement System

Must be Retired for at least 60 Calendar Must be Retired for at least 60 Calendar DaysDays

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If Retired Less than 36 Months:If Retired Less than 36 Months: Prior to Age 62Prior to Age 62

Lesser of $15,000 or One-half of Final Lesser of $15,000 or One-half of Final Average SalaryAverage Salary

Ages 62 to less than 70Ages 62 to less than 70 Lesser of $30,000 or One-half of Final Lesser of $30,000 or One-half of Final

Average SalaryAverage Salary Age 70 and OverAge 70 and Over

One-half of Final Average SalaryOne-half of Final Average Salary

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If Retired More than 36 Months:If Retired More than 36 Months: No Earnings LimitNo Earnings Limit

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Retiree Health InsuranceRetiree Health Insurance

Oklahoma Teachers Retirement Oklahoma Teachers Retirement System pays between $101 and $105 System pays between $101 and $105 toward the Insurance Plan offered by toward the Insurance Plan offered by your schoolyour school The amount paid depends on your years The amount paid depends on your years

of service and average salary at of service and average salary at retirement.retirement.

This is a fixed dollar amountThis is a fixed dollar amount

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QuestionsQuestions

I may not know the answer – and I I may not know the answer – and I will tell you when that is the case!will tell you when that is the case!

James R. Wilbanks, Ph.D.James R. Wilbanks, Ph.D.

Executive SecretaryExecutive Secretary

james r. wilbanks, ph.d. executive secretary

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