PERS Education and Retirement Planning

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PERS One-Year Group

Updated: 2/13/2012

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

Fee for additional verification

Data verification not an estimate Only provides verification for what

will ultimately determine the actual benefit

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 $ 2,966.64

Full Formula $ 2,329.10

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: 1/30/2012

PERS ID:

Member Date of Birth: 8/6/1953

Retirement Date: 7/1/2012

Last Day of Service: 6/30/2012

Termination Date: 6/30/2012

Retirement Age: 58 yrs 10 mos

The Retirement Estimate: Page TwoBeneficiary and Service Time

Beneficiary: Olov Year of Birth: 1953

Creditable Service Time: 26 yrs 0 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:

$1,188.61

Total Creditable Service with Purchase(s): 26 yrs 6 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*

2009 $65,938.58 2012 6$31,530.72

2008 $67,530.11 2011 12$62,244.97

2006 $62,307.32 2010 12$61,865.12

$195,776.01 2009 6 $34,507.78

$190,148.59

*includes projected salaries

Average monthly salary: $5,438.22

The Retirement EstimatePage Three: Account Information

Regular Variable Total

Current account balance: $139,709.23 $25,850.46$165,559.69

Projected accountbalance at retirement: $156,841.63 $29,031.28 $185,872.91

The Retirement EstimatePage Three: Benefit Options and Amounts

Option 1 Calculation Method Comparison:

$2,966.64 Money Match

$2,329.10 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 $3,048.14 $3,055.64

Refund Annuity $3,013.13 $3,020.55

Option 15 C $2,956.85 $2,964.13

Option 2 $2,767.71 $2,774.52

Option 2A $2,737.24 $2,743.97

Option 3 $2,901.84 $2,908.97

Option 3A $2,883.54 $2,890.63

The Retirement Estimate: Page ThreeLump Sum Benefit Options and Amounts

No Purchase With Purchase

Lump Sum Option 1 $1,466.58 $1,484.36

Lump Sum Option 2 $1,331.65 $1,347.81

Lump Sum Option 2A $1,316.99 $1,332.95

Lump Sum Option 3 $1,396.18 $1,413.12

Lump Sum Option 3A $1,387.38 $1,404.21

Total Lump Sum $381,921.38 $382,898.19

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: PERS

PO Box 2127Portland, OR 97208-2127

Purchase Documents Waiting 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 - $100,000Account Balance - $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