retirement countdown: 1 year - washington county, oregon · 2012. 5. 14. · retirement countdown:...

Retirement Countdown: 1 YearPre-Retirement Sessions for County Employees considering retirement in the next year.

Retirement Countdown: 1 Year

Today’s agenda will include the following: A presentation by PERS regarding your

retirement plan A presentation by Great West/ICMA-RC

representatives regarding options for your deferred compensation account

A presentation by Washington County Employees Benefits Team regarding post-employment insurance options

PERS Education and Retirement Planning

Welcome !

PERS One-Year Group

Updated: 5/14/2012

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 Can use pre-tax dollars from 457 deferred

compensation plan, or a 403(b) tax-sheltered annuity

Time limit on purchases 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

Data verification not an estimate Once verified, data is used in future

estimates and final benefit calculation Suggest requesting two years prior to

retirement date

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

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

PERS Retirement Eligibility

The Calculation Factors

Age Service time Final Average Salary Account Balance

Calculation Methods

Full Formula Service time x final average salary x .0167

(P&F .0200)

Money Match 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 ComparisonOption 1 Calculation Method Comparison

Money Match $ 3,717.08

Full Formula $ 3,540.79

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: 5/11/2012

PERS ID:

Member Date of Birth: 9/15/1952

Retirement Date: 7/1/2013

Last Day of Service: 6/30/2013

Termination Date: 6/30/2013

Retirement Age: 60 yrs 9 mos

The Retirement Estimate: Page TwoBeneficiary and Service Time

Beneficiary: Olov Year of Birth: 1955

Creditable Service Time: 30 yrs 6 mos

Granted Service (disability only): 0 yrs 0 mos

The Retirement Estimate: Page TwoService Time; Member Cost

Service Purchases: Prior Service Time: 0 yrsWaiting Time: 0 yrs 6 mos Sick Leave Hours: 0Forfeited Time: 0 yrs 0 mos Vacation Hours: 0Full Cost: 0 yrs 0 mos Contract Salary: $0.00Miscellaneous: 0 yrs 0 mos Contract Hours: 0

Estimated Member Cost: $723.78

Total Creditable Service with Purchase(s): 31 yrs 0 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*

2010 $90,172.59 2013 6 $35,742.00

2009 $83,040.15 2012 12 $71,513.59

2008 $78,050.27 2011 12 $66,929.60

$251,263.01 2010 6 $49,660.33

$223,845.52

*includes projected salaries

Average monthly salary: $6,979.53

The Retirement EstimatePage Three: Account Information

Regular Variable Total

Current account balance: $187,339.04 $15,364.23 $202,703.27

Projected accountbalance at retirement: $210,310.77 $17,251.12 $227,561.89

The Retirement EstimatePage Three: Benefit Options and Amounts

Option 1 Calculation Method Comparison:

$3,717.08 Money Match

$3,540.79 Full Formula

Formula + Annuity

Tax RemedyHB3349 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 ThreeBenefit Options and Amounts

No Purchase With Purchase

Option 1 $3,861.04 $3,865.76

Refund Annuity $3,805.34 $3,810.01

Option 15 C $3,714.23 $3,718.77

Option 2 $3,405.45 $3,409.63

Option 2A $3,366.80 $3,370.92

Option 3 $3,617.81 $3,622.23

Option 3A $3,594.64 $3,599.04

The Retirement Estimate: Page ThreeLump Sum Benefit Options and Amounts

No Purchase With Purchase

Lump Sum Option 1 $2,213.91 $2,250.20

Lump Sum Option 2 $1,952.66 $1,984.67

Lump Sum Option 2A $1,930.52 $1,962.17

Lump Sum Option 3 $2,074.43 $2,108.44

Lump Sum Option 3A $2,061.14 $2,094.93

Total Lump Sum $472,728.95 $473,328.73

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 FourAssumptions used in Projection

Account Balance: Regular Projected at 8% Variable Projected at 8%

Job Classification: Retirement Job Class 01

Salary Projections: Salary Projected to increase 0% annually

Time Limit on Purchase(s) During the 90 days before retirement Not on or after retirement date

Mail purchases to:PERSPO Box 2127Portland, OR 97208-2127

Purchase DocumentsWaiting Time and Forfeited Time

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 1st of any month Based on age or service time

Submit the retirement forms 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 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

InitialBenefit

$1,000+ 500+ 500

$2,000

Account Balance Account Balance -- $100,000$100,000

$50,000-R $50,000-V

VariableAnnuity

$500 $500

FixedAnnuity

Variable Annuity Example

$100,000

FixedPension

$1,000

VARIABLE ANNUITY EXAMPLEVARIABLE ANNUITY EXAMPLE

Year 2: 11/1-10/31 - Variable = 18%

Variable Per Cent = 18% Variable Per Cent = 18% -- 8% = = 10%10%

Var. Change = $500 x Var. Change = $500 x (10%) = = $50

Benefit = $1000 + $500 + $Benefit = $1000 + $500 + $550 = = $2050$2050

VARIABLE ANNUITY EXAMPLEVARIABLE ANNUITY EXAMPLE

Year 3: 11/1-10/31 - Variable = 0%

Variable Per Cent = 0% Variable Per Cent = 0% -- 8% = = -- 8%8%

Var. Change = $550 x Var. Change = $550 x (-8%) = = - $44

Benefit = $1000 + $500 + Benefit = $1000 + $500 + 506 = = $2006$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

1-888-320-7377 or 503-598-7377 PERS Insurance

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!

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

Police and Fire Units

Benefit 25% of Refund Annuity benefit

OR 25% of Option 1 benefit (Lump Sum)

Beneficiary Surviving spouse

OR Dependent children under 18

Surviving Spouse Benefit - P&F

457b Deferred CompensationMark Becker, Retirement Plans Specialist – ICMASarah Wood-Snapp, Retirement Plan Counselor – Great West

Retirement Services Importance of contributing to deferred compensation plan

• Best to start early but never too late! Annual Maximum

• 2013 standard maximum contribution: $17,500 Contribution catch-up provisions

• An additional $5,500 for participants aged 50+ for a maximum of $23,000

• In some cases a participant may defer up to $35,000 a year in the final three years before retirement.

Beneficiary changes


457b Deferred Compensation cont. Distribution Options

• Most common are monthly installments, partial, or total lump sum

• Know the tax implications of withdrawals

Changing Contribution Amounts• Must allow at least 1 month lead time in order to have

any funds from final check diverted to Deferred Comp Plan (i.e. vacation pay-out)

PERS is now requiring you to do something with your IAP account at retirement. This can easily be rolled into the Deferred Compensation and will not be a taxable event.

Individual Meetings• Each 457 Plan Provider are available to work with

employees on their individual situations• Schedule appointments by calling HR at x 8606.


457b Deferred CompensationMark Becker, Retirement Plans Specialist – ICMASarah Wood-Snapp, Retirement Plan Counselor – Great West

Retirement Services Importance of contributing to deferred compensation plan

• Best to start early but never too late! Annual Maximum

• 2013 standard maximum contribution: $17,500 Contribution catch-up provisions

• An additional $5,500 for participants aged 50+ for a maximum of $23,000

• In some cases a participant may defer up to $35,000 a year in the final three years before retirement.

Beneficiary changes


457b Deferred Compensation cont. Distribution Options

• Most common are monthly installments, partial, or total lump sum

• Know the tax implications of withdrawals

Changing Contribution Amounts• Must allow at least 1 month lead time in order to have

any funds from final check diverted to Deferred Comp Plan (i.e. vacation pay-out)

PERS is now requiring you to do something with your IAP account at retirement. This can easily be rolled into the Deferred Compensation and will not be a taxable event.

Individual Meetings• Each 457 Plan Provider are available to work with

employees on their individual situations• Schedule appointments by calling HR at x 8606.


Retirement Healthcare


Washington County Retiree/COBRA End of Active Employee Coverage:

• Your healthcare coverage through Washington County will end on the last day of the month in which you end employment.

• Example: Retire date is July 15, your healthcare coverage terminates on July 31.

Continuation available for Medical, Dental, Vision, EAP, and Health Flexible Spending Account

Retiree or COBRA coverage available through Washington County.

Retiree/COBRA coverage is identical to active employee healthcare plans.


Federal COBRA statute requires continuation coverage to be offered to covered employees, their spouses, their former spouses, and their dependent children when group health coverage would otherwise belost due to certain specific events.

Oregon state law requires continuation coverage to be offered toPERS eligible retirees, their spouses, their former spouses, and their dependent children (Retiree coverage).

The main differences between COBRA and Retiree coverage are outlined below:


Retiree COBRAEligibility Eligible for PERS

retirementLoss of coverage due to qualifying event

Length Until Medicare eligibility at age 65

Generally 18 months

Cost 100% of premium 100% of premium + 2% admin fee


You are responsible for monthly premiums to continue your coverage for yourself and/or dependents on County Retiree/COBRA coverage.• You may “separate” the healthcare options, and pay for only what

you need. Upon separation, and if you elect to continue with WA County

coverage, you can continue with your currently selected carriers(Providence/Kaiser).• Just as an active employee, retiree members have the opportunity to

change plans with the annual Open Enrollment period. Retiree Rates and Plans for Plan Year 2012 - 2013 are as follows:

Rates are subject to change

$839.05$822.60Individual + Child(ren)

Kaiser

$883.23$865.91Individual + Child(ren)Providence

Providers

Level of Coverage Retiree Premium Amounts

COBRA Premium Amounts

Individual $481.05 $490.67

Individual + Spouse $962.12 $981.36

Individual + Family $1,443.19 $1,472.05

Individual $457.00 $466.14

Individual + Spouse $914.00 $932.28

Individual + Family $1,371.00 $1,398.42



$8.94$8.76IndividualODS Vision

$17.87$17.52Individual + Spouse


$26.81$26.28Individual + Family

COBRA Premium Amounts

Retiree Premium AmountsLevel of Coverage

Providers




$36.67$35.95IndividualWillamette Dental




$51.92$50.90Individual

ODS Dental

If you choose not to accept Retiree/COBRA coverage through Washington County, you forfeit any future opportunity to enroll with Washington County’s coverage. • In addition, if you withdraw/discontinue or are dropped

due to non-payment, you cannot re-enroll at a later date.

Be sure to investigate various healthcare plans and options available to you.


Additional Healthcare Options & Resources

PERS Health Insurance Program PERS offers various healthcare plans to all PERS retirees and

their dependents who meet the eligibility criteria. PERS offers a variety of Medicare plans, both pre-Medicare enrollment and Medicare supplement plans

A subsidy through PERS may be available for Medicare eligible retirees towards their monthly premiums.

For further information, you may contact the PERS Health Insurance Program at: (800) 768-7377 or visit their website: http://www.pershealth.com/


Medicare For information regarding registering for Medicare (upon

reaching age 65), please dial 800-633-4227 – Centers for Medicare/Medicaid Services (CMS) or go to their website: http://www.medicare.gov/

Healthcare Option - Enrolling onto spouse’s plan You may wish to consider enrolling onto your spouse’s healthcare

coverage. Be aware of “Enrollment Windows” when attempting to enroll

onto spouse’s coverage. Many plans allow for a short period of time for enrollment (usually 30 – 31 days) due to a Qualifying Event. If you miss this period, you risk losing your enrollmentrights.


Healthcare Option - Private Coverage

Many healthcare insurance carriers (i.e. Providence, Kaiser, Blue Cross Blue Shield, etc.) offer a variety of individual plans. Be sure to closely evaluate various coverage's in order to assure benefits and services are appropriate for your needs.

As an active employee, be sure to allow enough time for proper enrollment process with private coverage (registering, review ofmedical records, etc.) and receive written approval from privateinsurance carrier before your Retiree/COBRA election window lapses.

A HIPAA Creditable Coverage Certification from current healthcare insurance carrier may be required by new carrier in order to successfully enroll. This document comes directly fromthe carrier.


Additional Resources - Senior Health Insurance Benefits Assistance Program (SHIBA)

SHIBA is a state volunteer network which can provide all Oregonians education and assistance regarding Medicare and Medicare supplement plans.

There is no charge for these services.

To receive assistance you may contact SHIBA at 800-722-4134 or you may go to their website:

www.oregonshiba.org


Life Insurance Coverage

It is important to review your current coverage level prior to separation, and then determine your “need amount”upon retirement.

The life insurance coverage provided by Washington County will terminate at the end of the month in which you separate from Washington County.

County-paid life insurance coverage may be converted to an individual policy. There are strict deadlines which apply when requesting conversion of coverage. You have 31 days from date of termination of coverage to apply for Conversion Coverage.• Application for Conversion Coverage is mailed with

Retiree/COBRA materials upon separation.


Life Insurance Coverage, con’t.

• Conversion coverage allows you the option to “convert”your current employer-paid group coverage to an individual life policy.

Voluntary life insurance coverage (employee-paid premiums) for yourself and your dependents, may continued as an individual policy (Portability) as well.• Portability can be defined as the opportunity to purchase up

to the current amount of voluntary life insurance at current group rates.

• Rates are still subject to age-band increases


Life Insurance Coverage, con’t. Please be aware that all life insurance policies through

Washington County have a Life Reduction clause. Benefits are reduced once a certain age threshold has been reached. Please see the Washington County website, under Human Resources to view each Group Insurance Certificate for each employee group.

Age Percentage In-Force

70 - 74 65%

75 - 79 45%

80 - 84 30%

85 - 89 20%

90 - 94 15%

95 or over 10%


Benefit Team ContactsBenefits Information Line – x8686

Kimberly Trask, Benefits Supervisorx3740

Tracy Kittler, Benefits Specialistx4523

Lee Lamirault, Benefits Specialistx8285


Retirement means no pressure, no stress, no heartache... unless you

play golf. ~ Gene Perret
