5/20/2015. Your Money, Your Plan, Your Future. TCDRS Does Retirement Right. One of the best-funded plans in the country

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1 Your Money, Your Plan, Your Future Ralph Wallace May 7 th, 2015 TCDRS Does Retirement Right One of the best-funded plans in the country Built-in features keep us financially strong Savings-based benefits Responsible plan funding Flexibility and local control Benefits Texas Estimated $971 million in benefits paid in 2013 Supports: $1.4 billion total economic output 11,340 jobs created $838 million added to Texas GDP 1

2 How Your Retirement Plan Works Employees Save for Own Retirement 4%-7% is deposited into your TCDRS account and earns 7% annually. Employees Earn a Lifetime Benefit Your final account balance is matched 100% - 250% at retirement. 2

3 Life Events and Your TCDRS Account Naming a Beneficiary Your beneficiaries can be: One individual Multiple individuals Minor children Estate Charity or other organization If you pass away before retirement and we have no beneficiary on file, we will Pay the benefit to your spouse (if you are married) Pay the benefit to your estate (if you are not married) Survivor Benefit When you have four or more years of service, your beneficiary is eligible for a benefit should you pass away before you retire. Your beneficiary can choose one of two options: Lifetime monthly benefit that includes employer matching Withdrawal of account balance (does not include employer matching) You may remove the withdrawal option. This benefit is not tied to employment. 3

4 Group Term Life Group Term Life is an optional life insurance benefit in which your employer has chosen to participate. Coverage provides a single payment equal to your yearly salary. This benefit is tied to employment. Your employer has also chosen to cover retirees. When a covered retiree passes away, his or her beneficiary receives a single payment of $5,000. Leaving Employment Option 1: Keep money with TCDRS Account continues to earn 7% interest Lifetime monthly benefit with employer matching (when vested and eligible to retire) Option 2: Rollover Forfeit a lifetime monthly benefit and lose employer matching Avoid paying tax penalties Option 3: Withdraw Forfeit a lifetime monthly benefit and lose employer matching Significant tax consequences (20% federal withholdings and possible 10% early withdrawal penalty if under age 59 ½) Understanding Your Eligibility 4

5 Vesting Your employer chooses the vesting level for your plan (5, 8 or 10 years of service). You earn one month of service time for each month you make a TCDRS deposit. When you reach this milestone, you earn the right to receive a lifetime monthly benefit when you become eligible and choose to retire. Retirement Eligibility AGE SERVICE Age 60 and 5, 8 or 10 years of service Age plus years of service* = 75 or 80 Any age and 20 or 30 years of service *Must be vested Other Ways to Earn Service Time Multiple TCDRS Accounts Proportionate Retirement Program ERS (State of Texas) JRS (Courts) TRS (Schools) TMRS (Select Cities) COA (City of Austin) Military or USERRA 5

6 Sources of Retirement Income Personal Savings Social Security Part-Time Work Ready to Retire! How Your Benefit is Calculated Your account balance + Employer matching =Total Retirement Funds Note: If you withdraw before retirement, you forfeit employer matching. Fixed Monthly Benefit Based on: Age Benefit payment option 6

7 Benefit Payment Options 7 options to choose from at retirement. All options provide a lifetime monthly benefit. The difference in the monthly amounts reflects possible payments to a beneficiary. Consider if someone else will be dependent on your benefit after you pass away. Benefit Payment Options Single Life Highest monthly payment amount All payments stop when retiree passes away Guaranteed Term (10 or 15 years) Retiree receives lifetime monthly benefit If retiree passes away before the end of term, beneficiary receives benefit for remainder of term Term begins on retirement date Benefit Payment Options Dual Life Can select 100%, 75% or 50% of payment amount to continue for beneficiary s lifetime after you pass away Variation: 100% to Beneficiary With Pop-Up option If your beneficiary passes away before you do, the monthly payment amount pops up to the Single Life monthly payment amount. You can select only one beneficiary and cannot change beneficiaries at a later date. 7

8 Estimate Example Member DOB: September 1952 Beneficiary DOB (spouse): November 1955 Retirement Date: Oct. 31, 2015 Monthly Benefit Amounts Single Life Options Member Beneficiary Single Life $2,000 for life $ 0 10-Year Guaranteed Term $1,950 for life $1,950 through 10/ Year Guaranteed Term $1,900 for life $1,900 through 10/2030 Dual Life Options 50% to Beneficiary $1,850 for life $ 925 for life 75% to Beneficiary $1,800 for life $1,350 for life 100% to Beneficiary $1,750 for life $1,750 for life 100% to Beneficiary with Pop-up $1,700 for life $1,700 for life Retirement Application Retirement forms located on TCDRS-22 TCDRS-23 TCDRS-70 TCDRS-73 Provide proof of identity Retirement Date and Payment Selecting a date You can retire on the last day of any month (interest is prorated) Receiving payment Direct deposit the last business day of the following month Benefit is subject to income taxes 8

9 Taxes and Your TCDRS Benefit At retirement, you can specify your withholding. Three options to choose from: Follow the IRS tax tables Withhold a flat dollar amount No taxes withheld Withholding can be changed at any time. Retirees will receive an IRS 1099-R form from TCDRS to file taxes. Rules for Returning to Work If your previous employer considers rehiring you: 1) You cannot have a prior agreement that you will be rehired. It must be a bona fide separation. 2) You must have a break in service of one full calendar month. Not complying results in suspension of benefit and you will have to repay the money you ve already received from TCDRS. Using the TCDRS Website 9

10 '7> 5/20/2015 "Like" your retirement.. on Facebook! EMPLOYERS JOIN US.ACCOUNT SUMMARY Hazzard County IWamt To.. Jesse Duko Account #: MoonshineDrive Annual nterest Rat.e: 7% Update: Hazzard, GA99999 Employee Depos Rate: 7% Employer Matching Rate: 225% Brth Date: OS My Personal Servicelime: 30 years 3 months Information Account Activity asof My Beneficiaries Your employer reports your dep os s to us bythe 15th of the fol owing m onth. TotalInterest 1::1Total Deposits Calculate: SWitch to tabla view 6m I ly HEWS& ALERTS Soe all Update Your Beneficiary on TCDRS.orgl y Es'timated Ben:! > Vlew/IDownload: My Personal Plan Summary My Account Summary My Beneficiaries SignIn to view your annual statoments FORMS N....,;.. co Retlroment Application TCDRS 22 N ' a; a; c c BGneflclary Designation TCDRS-06.,_....,_... ).. ApplicationforMllltaryServiceCrodlt Soo all Mar Apr May Jun Jul Aug Sep Oct Hov Dec Jan Feb Under USERRA TCDRS PUBLICATIONS Soo all Benefit Miiestones Switch to l ist view }- Hor z,ons Fal l 2013 YOUARE }- TCDRSVesting HERE Jb. TCDRS Guido to Mombor Bonoflts Start Date 6 Survivor Benefit Vesbng 6 Retirement Rebtemcnt 6 Eil91billy 6 Eligibility 6 J Congretu atlona on reaching your retirement eligibilty. Run an estimate to start planning for your future. If you are currently working for a TCDRS employer. these milestone dates assume that you cont nue to work and deposit moneyintoyour retirement accounl ESTIMATE YOUR RETIREMENT BENEFIT. CLOSE x Overview 1.Work Details 2. Benefit Needs 3. Benefit Payment Summary Summary Your Retirement Benefit Estimate This page summar zes theinformation you provided and the estimate of your ret rement benefits. based on that information. You can save this estimate tor future reference, and print a copy for your personal records. He lp 6 Name: Jesse Duke Plan: Hazzard County Account Number: Account Balance: $118, Annual nterest Rate: 7% Employee Deposit Rate: 7% Employer Matching Rate: 225% Serv ce Time: 30 years 3 months Eligible to Retire : Mar 2014 TCDRS Phone Numbers Toll Free: Fax: (512) Estimated Value at Retirement Account Balance: $121,425 Employer Matching: $ Total Value: $46S..635 Benefit Details Current Annual Pay: Estimated Annual SalaryIncrease: 2.00 % Last Date of Emp loyment: Retirement Date: Mar 2014 Payment Option: Single Life If you wait t o r et ire... The graph shows what your estimated benefit would beif youwaited to retire untilalater date. Switch to table view Estimated Monthly Benefit Based on: S ingle Life For You $3,376 Monthly Benefit for fife Lump Sum N/A One-time Payment c:> ',.. _ N,.._...; "...'; '.....'".;...;. c,. :.>_ Mar Sep Mar Sep Mar Sep Mar Assumptions The estimate of your benefit is an approximat on for your general use TCDRS Member Services Contact information Phone: Hours: Website: Mailing Address: Connect with us Monday Friday, 7:30 a.m. 6 p.m. memberservices@tcdrs.org P.O. Box 2034, Austin, TX