retirement issues related to leaving...

1State Retirement Agency of Maryland

Leaving Employment Leaving Employment

SeminarSeminar


OverviewOverviewThere are three groups that will be There are three groups that will be

covered during this seminar:covered during this seminar:

Group 1: Members currently Group 1: Members currently eligible for a retirement allowanceeligible for a retirement allowance

Group 2: Vested members who are Group 2: Vested members who are eligible for a future monthly allowanceeligible for a future monthly allowance

Group 3: NonGroup 3: Non--vested members who are vested members who are ineligibleineligible for a future monthly allowancefor a future monthly allowance


Eligibility RequirementsEligibility RequirementsPension SystemPension System

Service Retirement (full benefit)Service Retirement (full benefit)Age 62 with at least 5 years of eligibility Age 62 with at least 5 years of eligibility service service oror30 years of eligibility service regardless of 30 years of eligibility service regardless of ageage

Early Retirement (reduced benefit)Early Retirement (reduced benefit)Age 55 with at least 15 years of eligibility Age 55 with at least 15 years of eligibility serviceserviceGreatest reduction is 42%Greatest reduction is 42%


Eligibility RequirementsEligibility RequirementsRetirement SystemRetirement System

Service Retirement (full benefit)Service Retirement (full benefit)Age 60 Age 60 oror30 years of service regardless of age30 years of service regardless of age

Early Retirement (reduced benefit)Early Retirement (reduced benefit)25 years of service regardless of age25 years of service regardless of ageGreatest reduction is 30%Greatest reduction is 30%


Purchase of ServicePurchase of ServiceNormal CostNormal Cost

Missed contributions plus interest to date of Missed contributions plus interest to date of purchasepurchaseMay be purchased at any time during May be purchased at any time during membershipmembership

Must be on active payroll or SRA Approved Leave Must be on active payroll or SRA Approved Leave of Absence of Absence

Submit Form 26Submit Form 26Example:Example:

SRA Approved Leave of Absence (Same System)SRA Approved Leave of Absence (Same System)


Purchase ServicePurchase ServiceFull CostFull Cost

You pay the cost to fund the benefit your additional You pay the cost to fund the benefit your additional purchased service will provide.purchased service will provide.Submit Form 26 and Form 9 when you are within 12 Submit Form 26 and Form 9 when you are within 12 months of retirementmonths of retirement

Must be on active payroll to purchase service creditMust be on active payroll to purchase service creditMay purchase a minimum of 1 month and a maximum May purchase a minimum of 1 month and a maximum of 10 years of service creditof 10 years of service creditExamples:Examples:

Federal GovernmentFederal GovernmentPublic, Private or Parochial School TeachingPublic, Private or Parochial School TeachingMunicipal EmploymentMunicipal EmploymentPrior State service for which you are not receiving creditPrior State service for which you are not receiving credit


Purchase of ServicePurchase of Service

Members may use funds from 457(b), Members may use funds from 457(b), 403(b), 401(k) or IRA for purchasing 403(b), 401(k) or IRA for purchasing service credit. Member must complete service credit. Member must complete Form SRAForm SRA--192 Prior to Retirement.192 Prior to Retirement.


Military CreditMilitary CreditMust have 10 years of creditable serviceMust have 10 years of creditable serviceMay receive up to 5 years additional credit May receive up to 5 years additional credit Form 43 with military documentation Form 43 with military documentation verifying serviceverifying serviceTypes of Military ServiceTypes of Military Service

Active dutyActive dutyReservesReservesNational GuardNational Guard


Monthly Option SelectionMonthly Option SelectionBasic Allowance (Maximum)Basic Allowance (Maximum)

Largest monthly allowanceLargest monthly allowanceNo protection to beneficiary(ies)No protection to beneficiary(ies)Benefits cease at deathBenefits cease at death

Single Life AnnuitiesSingle Life AnnuitiesLifetime monthly benefit to retiree and may Lifetime monthly benefit to retiree and may provide single payment to beneficiary(ies) at provide single payment to beneficiary(ies) at retireeretiree’’s deaths death

Dual Life AnnuityDual Life AnnuityProvides a continued monthly benefit to a Provides a continued monthly benefit to a surviving beneficiarysurviving beneficiary


Single Life Annuities:Single Life Annuities:Option 1Option 1

Lifetime monthly benefit to the retireeLifetime monthly benefit to the retiree

Guarantees the full return of the present value of the retireeGuarantees the full return of the present value of the retiree’’s s Basic Allowance computed at the time of retirement. If the Basic Allowance computed at the time of retirement. If the retiree dies before receiving the full guaranteed amount, the retiree dies before receiving the full guaranteed amount, the remainder, if any, is paid in a lumpremainder, if any, is paid in a lump--sum payment to the sum payment to the designated designated beneficiary(iesbeneficiary(ies). ). Example: Monthly for the remainder of your life $1,800. The Example: Monthly for the remainder of your life $1,800. The Present Value is $250,000. If you die before receiving the full Present Value is $250,000. If you die before receiving the full guaranteed present value at the monthly rate of $1,800, your guaranteed present value at the monthly rate of $1,800, your beneficiaries will be paid the balance in a lumpbeneficiaries will be paid the balance in a lump--sum payment.sum payment.


Single Life Annuities:Single Life Annuities:Option 4Option 4

Lifetime monthly benefit to the retireeLifetime monthly benefit to the retiree

Provides a return of the value of the memberProvides a return of the value of the member’’s accumulated s accumulated contributions (employee contributions and interest). If the contributions (employee contributions and interest). If the retiree dies before receiving the full guaranteed amount, the retiree dies before receiving the full guaranteed amount, the remainder is paid in a single sum to the retireeremainder is paid in a single sum to the retiree’’s s beneficiary(iesbeneficiary(ies). ). Example: Monthly for the remainder of your life $1,900. The Example: Monthly for the remainder of your life $1,900. The value of your accumulated contributions and interest is value of your accumulated contributions and interest is $10,500. If you die before receiving the total accumulated $10,500. If you die before receiving the total accumulated contributions and interest at the monthly rate of $75, your contributions and interest at the monthly rate of $75, your beneficiaries will be paid the balance in a lumpbeneficiaries will be paid the balance in a lump--sum paymentsum payment


Dual Life AnnuitiesDual Life Annuities

Provides a monthly benefit throughout the Provides a monthly benefit throughout the life of the retiree and then provides a life of the retiree and then provides a continued lifetime monthly benefit to a continued lifetime monthly benefit to a sole surviving beneficiary. sole surviving beneficiary.

Option 2Option 2100% survivorship 100% survivorship -- Same lifetime monthly benefit Same lifetime monthly benefit to beneficiary to beneficiary

Option 3Option 350% survivorship 50% survivorship -- 1/2 lifetime monthly benefit to 1/2 lifetime monthly benefit to beneficiarybeneficiary


Dual Life AnnuitiesDual Life Annuities

Option 5Option 5100% survivorship (with 100% survivorship (with ““poppop--upup”” provision) provision) -- Same Same lifetime monthly benefit to beneficiarylifetime monthly benefit to beneficiary

Option 6Option 650% survivorship (with 50% survivorship (with ““poppop--upup”” provision) provision) -- 1/2 1/2 lifetime monthly benefit to beneficiarylifetime monthly benefit to beneficiary

“Pop-Up” provision - If beneficiary dies before the retiree, the retiree’s monthly benefit “pops-up”to the Basic Allowance unless the retiree renames another beneficiary


Naming a Beneficiary Under Options 2 Naming a Beneficiary Under Options 2 and 5and 5

You cannot designate a beneficiary who is You cannot designate a beneficiary who is more than 10 years younger than you unless more than 10 years younger than you unless the beneficiary is your spouse or disabled the beneficiary is your spouse or disabled child.child.


Unused Sick LeaveUnused Sick LeaveMust retire within 30 days of terminating Must retire within 30 days of terminating employmentemploymentIncreases monthly benefitIncreases monthly benefitCannot be used to qualify for a benefitCannot be used to qualify for a benefitAmount of days verified by employer at time of Amount of days verified by employer at time of retirementretirement22 days of unused sick leave equal one month (if 11 22 days of unused sick leave equal one month (if 11 or more days remaining, an additional month is or more days remaining, an additional month is credited)credited)Maximum of 15 sick days per year of service may be Maximum of 15 sick days per year of service may be creditedcredited


Vested BenefitsVested BenefitsFive years Five years == VestedVested

Member retains accrued benefit Member retains accrued benefit as long as no withdrawal of contributionsas long as no withdrawal of contributions

Vested Allowance payable in futureVested Allowance payable in futurePension SystemPension System

Age 62, Age 62, ororAge 55 with 15 years of serviceAge 55 with 15 years of service

Retirement SystemRetirement SystemAge 60Age 60


Vested BenefitsVested BenefitsKeep your last Personal Statement of Benefits Keep your last Personal Statement of Benefits (PSB)(PSB)Inform Retirement Agency of address changesInform Retirement Agency of address changesContact the Retirement Agency when you become Contact the Retirement Agency when you become eligibleeligibleKeep beneficiaries currentKeep beneficiaries current

SurvivorsSurvivors’’ payment prior to retirement will payment prior to retirement will consist of vested memberconsist of vested member’’s accumulated s accumulated contributionscontributions


Inside Your PSBInside Your PSB

$ 720


Withdrawal of ContributionsWithdrawal of Contributions

Withdraw contributions = forfeit benefitsWithdraw contributions = forfeit benefitsRefund may be rolled into qualified plan, Refund may be rolled into qualified plan, IRA or annuityIRA or annuityReturn to Active Employment Return to Active Employment in Alternate Contributory Pension System in Alternate Contributory Pension System -- may redeposit contributions and interest to may redeposit contributions and interest to regain serviceregain service


Non Vested Members:Non Vested Members:

Four years to return to ACPS membership and Four years to return to ACPS membership and retain nonretain non--vested service vested service OROR withdraw withdraw contributionscontributionsWithdrawn contributions Withdrawn contributions -- eligible for rollover eligible for rollover into qualified plan, IRA or annuityinto qualified plan, IRA or annuityReturn to membership may request to redeposit Return to membership may request to redeposit contributions and restored prior servicecontributions and restored prior serviceForfeit unused sick leave at termination of paid Forfeit unused sick leave at termination of paid employmentemployment

Less than 5 years of eligibility service:Less than 5 years of eligibility service:


Termination of MembershipTermination of MembershipMembership in Alternate Contributory Pension Membership in Alternate Contributory Pension System (System (ACPS)ACPS) terminates four years after paid terminates four years after paid employment ends. Member may no longer apply employment ends. Member may no longer apply for disability retirementfor disability retirementMember returns to active employment with a Member returns to active employment with a participating employer in ACPS, may be eligible participating employer in ACPS, may be eligible to combine vested and current serviceto combine vested and current serviceForfeit unused sick leave at termination of paid Forfeit unused sick leave at termination of paid employmentemployment


Title 37 TransferTitle 37 TransferTwo Types:Two Types:

Transfer from one SRPS systemTransfer from one SRPS systemto another SRPS systemto another SRPS system

Transfer from SRPS to anotherTransfer from SRPS to anotherMaryland Municipal systemMaryland Municipal system

Transfers are permitted if:Transfers are permitted if:No break in employment No break in employment (less than 30 days)(less than 30 days)Must be completed within 1 yearMust be completed within 1 yearof transferring to the new systemof transferring to the new system

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Sources of InformationSources of InformationTelephoneTelephone410410--625625--5555 or5555 ortolltoll--free 1free 1--800800--492492--59095909

Mail/Office VisitsMail/Office VisitsState Retirement Agency of MDState Retirement Agency of MD120 East Baltimore St., 14th Fl.120 East Baltimore St., 14th Fl.Baltimore, MD 21202Baltimore, MD 21202--67006700

Internet Web SiteInternet Web Sitewww.sra.state.md.uswww.sra.state.md.us

[email protected]@sra.state.md.us

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