FCERA PRE-RETIREMENT SEMINAR

January 17, 2013

January 17, 20132

PRESENTATION TOPICS

How will PEPRA affect me? What is a Defined Benefit plan? Membership Other Service Eligibility Types of Retirement Choosing Best Retirement Date Retirement Options Retirement Timeline

January 17, 20133

HOW WILL PEPRA AFFECT ME?

Majority of changes affect Tier V members only Tiers I – IV - Benefit calculations have not

changed Normal cost of contributions will increase for

active members at some point between now and 2018

Four earn codes that are no longer pensionable as of 1/1/13– Cell Phone, Car Allowance, Uniform Allowance and

out-of-town allowances

January 17, 20134

DEFINED BENEFIT PLAN

Defined Benefit Plan– Lifetime benefit– Based on formula using:

Age at retirement Years of serviceFinal average compensation earnable

– Tiers I – III, Annual Cost of Living – Up to 3% annually

– Not based on contributions

January 17, 20135

MEMBERSHIP

Safety – Tier I, II, IV, V– Sheriff’s Officers– Correctional Officers– DA Investigators– Firefighters

General – Tier I, II, III, IV, V– All others

January 17, 20136

ELIGIBILITY SERVICE

Eligibility Service– Years of credited service earned by the member which we

use to determine the member’s qualification to service retire.

Service from date of membership to date of termination, excluding breaks in service

Prior county service purchased Leaves of absence purchased Reciprocal service Deferred service

Reciprocity Purchase Service Credit

January 17, 20137

RECIPROCITY

Must have left contributions in reciprocal agency’s plan

Use your entry age from reciprocal agency – (Tiers I - IV only - incoming reciprocity)

Years of service from reciprocal agency added to years of service at FCERA to determine retirement eligibility

Highest compensation earned from FCERA or reciprocal agency will be used in benefit calculation (generally)

Must retire concurrently from all systems to receive benefits from reciprocity

January 17, 20138

CONSEQUENCES OF BREAKING RECIPROCITY

Tiers I, II, III, IV –– Age at which contributions are calculated may be

impacted Tier V –

– Contributions are not age based Tiers I, II, III, IV, V –

– Years of eligibility service for retirement may be impacted

January 17, 20139

PURCHASE SERVICE CREDIT

You may purchase:– Prior County Service

Extra help New hire period Redeposit previously withdrawn contributions

– Medical Leave of Absence– Military Leave of Absence– Prior Public Service (recalculation only)

Time that cannot be purchased– Personal Leave of Absence– Educational Leave of Absence

January 17, 201310

TYPES OF RETIREMENT

Service Retirement

Service Connected Disability (SCD)

Non-Service Connected Disability (NSCD)

January 17, 201311

SAFETY MEMBER - Tiers I - IV

10+ years of retirement service eligibility– At least 50 years of age

20+ years of retirement service eligibility– No minimum age required

January 17, 201312

GENERAL MEMBER - Tiers I - IV

10+ years of retirement service eligibility– At least 50 years of age

30+ years of retirement service eligibility– No minimum age requirement

Age 70, regardless of service eligibility

January 17, 201313

SAFETY and GENERAL MEMBERS - Tier V

Safety Member– 5+ years of service – At least 50 years of age

General Member– 5+ years of service – At least 52 years of age

January 17, 201314

SERVICE RETIREMENT

Age at retirement

Final average compensation earnable– Tiers I and II – Highest consecutive 365 days = 1 year– Tiers III and IV – Average of 3 highest individual years– Tier V – Average of 3 highest consecutive years

Total years of service– Earned plus purchased service credit

January 17, 201315

SERVICE CONNECTED DISABILITY

Unable to work due to injury or illness related to your specific job duties

No minimum service requirement

Pays up to 50% of final average compensation or Service Retirement, whichever is greater

January 17, 201316

NON-SERVICE CONNECTED DISABILITY

Unable to work due to injury or illness not related to your specific job duties

Must have minimum 5 years service credit

Benefit varies depending on age and years of service. Contact a retirement coordinator for more information

January 17, 201317

CHOOSE THE BEST RETIREMENT DATE

Each ¼ year of age increases benefit

Tiers I – III - Up to 3% Cost of Living Adjustment (COLA) paid each April (in general)

Tiers IV and V – no annual cost of living adjustment

January 17, 201318

RETIREMENT OPTIONS

Unmodified Option

Option #1

Option #2

Option #3

Option #4

January 17, 201319

Unmodified Option

Highest monthly benefit

60% continuance to eligible beneficiary– May change beneficiary after retirement

Eligible Beneficiary– Married/registered partnership for at least 1 year prior to

retirement, or

– Married/registered partnership for at least 2 years at member’s death AND spouse/partner is at least age 55 at member’s death

– Minor child/children

January 17, 201320

Option #1

No survivor continuance

Slightly reduced monthly benefit– Upon death, beneficiary receives lump sum payment

of remaining contributions and interest

– Uses your actual contributions at a slower rate

May change beneficiary after retirement

January 17, 201321

Option #2

A reduced monthly allowance based on age of beneficiary

100% continuance to beneficiary– Does not have to be eligible spouse– Cannot change beneficiary for any reason

January 17, 201322

Option #3

A reduced monthly allowance based on age of beneficiary– 50% continuance to beneficiary– Does not have to be an eligible spouse– Cannot change beneficiary for any reason

January 17, 201323

Option #4

Customized actuarial calculation based on specific instructions– Used to comply with Marital Settlement Agreement

due to divorce– Allows customization of retirement for multiple

beneficiaries– Cannot change beneficiaries for any reason

January 17, 201324

TEMPORARY ANNUITY OPTION (TAO)

Advance benefit based on Social Security Estimate Higher allowance to retirees under age 62

– FCERA allowance is increased until age 62, then decreased until death

– Cost of living reduced at age 62 on TAO portion of COL

Levels out retirement income with Social Security

Does not affect future social security benefits

Does not affect survivor continuance

Only available for Service Retirement

January 17, 201325

TAO COMPARISON

General member Age 50

Social Security estimate $600.00

Modification factor 0.3302

Advanced by FCERA $198.00

January 17, 201326

PENSION WITH TAO

Base retirement $1500.00 Temporary Annuity Option 198.00 Total pension (payable to age 62) $1698.00

Social Security reduction (600.00) Total FCERA pension (payable at age 62) $1098.00 Social Security (payable at age 62) 600.00

Combined pensions (at age 62) $1698.00

January 17, 201327

PENSION WITHOUT TAO

Base retirement for life $1500.00 Social Security (payable at age 62) 600.00 Combined pension (at age 62) $2100.00

January 17, 201328

With TAO (Provides a level income until member's death)

$0.00

$500.00

$1,000.00

$1,500.00

$2,000.00

$2,500.00

48 50 52 54 56 58 60 62 64 66 68 70 72 74

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TAO CHART – WITH TAO

Selection of a retirement benefit with the TAO will provide a level income until the member’s death provided the member elects to begin receiving Social Security benefits at age 62

January 17, 201329

Without TAO (Provides increased income with Social Security)

$0.00

$500.00

$1,000.00

$1,500.00

$2,000.00

$2,500.00

48 50 52 54 56 58 60 62 64 66 68 70 72 74Age

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TAO CHART – WITHOUT TAO

Selecting Retirement Option without the TAO will allow for increased retirement income when Social Security benefit begins

January 17, 201330

HEALTH BENEFIT ALLOWANCE

Provides an additional cash benefit to retirees– Tiers I, II, III (General and Safety) and Tier IV Safety

- Settlement Health Benefit provides an ongoing amount based on years of service (permanent benefit)

– Tiers I, II, III, IV, V (General and Safety) Non-vested Health Benefit amount based on years of service (may be modified or eliminated by the Board of Retirement at any time – currently scheduled to end in calendar year 2016)

January 17, 201331

REQUIRED DOCUMENTS FOR RETIREMENT

Required Documents:– Member’s birth certificate

– Beneficiary’s birth certificate/s

– Marriage Certificate/Certificate of Registered Domestic Partnership (if applicable)

– Dissolution of Marriage documents (if applicable)Judgment, (Status Only – not acceptable)DRO/Marital Settlement Agreement

– Social security estimate (if choosing TAO)

January 17, 201332

RETIREMENT TIMELINE

5 years from retirement – Provide required documents

Birth/Marriage Certificates, Divorce documents

– Purchase available service credit– Attend FCERA retirement planning seminar

3 years from retirement– Review retirement calculator – www.fcera.org

January 17, 201333

RETIREMENT TIMELINE

1 year from retirement– Target possible Retirement date

– Contact a FCERA retirement coordinator to schedule a pre-retirement counseling session

– Contact reciprocal agency if applicable Must retire from FCERA and all reciprocal agencies on

the same day

January 17, 201334

RETIREMENT TIMELINE

3 months from retirement date– Schedule counseling session with Retirement

Coordinator

– Obtain Social Security Estimate if electing the TAO

January 17, 201335

RETIREMENT TIMELINE

1 month prior to retirement date– Contact Personnel Services regarding accrued leave

– Contact your bank of choice and make alternate arrangements for any payroll deductions now in place

– Resolve any retirement questions with your FCERA Retirement Coordinator

– Finalize details regarding Health Insurance and Deferred Compensation

– Notify your department of your retirement date. FCERA must have a copy of an accepted letter of resignation.

January 17, 201336

RETIREMENT PAYROLL DEDUCTIONS

FCERA withholds specific deductions from retirement checks

Taxes

Health insurance payments

REFCO dues

Garnishments as required by law

January 17, 201337

WORKING AFTER RETIREMENT

You may work a maximum of 960 hours per year with a FCERA Plan Sponsor

You may not return to work as a full-time employee

You may work in a extra-help, contractual or temporary service position

Mandatory 180 day break between retirement and date of rehire

You may have not received unemployment benefits within one year prior to returning to work in these capacities

January 17, 201338

FCERA CONTACTS

Mailing address– 1111 H Street Fresno, CA 93721

Call FCERA at (559) 457-0681

Questions or appointments– A Retirement Coordinator will assist you

Website – www.fcera.org

Comments on service – Email us using “FCERAwebmail” or from our website

January 17, 201339

HAPPY RETIREMENT

The decisions you make as you plan for your retirement benefits with Fresno County Employees’ Retirement Association will affect the rest of your life. We look forward to meeting you and working with you as we guide you through the retirement process.