Retirement Workshop (PERF & TRF)

Transcription

1 Retirement Workshop (PERF & TRF)

2 Workshop Objectives Session I To understand your retirement benefit plan. To understand your retirement benefit options. Session II (Optional) Step by step completion of the Retirement Application.

3 The Milestones and Your INPRS Retirement Benefit Plan The Milestones PERF & TRF Vesting Early Retirement w/ a reduced benefit Normal Retirement w/ a full benefit Survivor Benefit Disability Benefit Two-part Retirement Benefit Plan Defined Benefit (Pension) Defined Contribution (Annuity Savings Account)

4 INPRS Retirement Benefit Plan (PERF & TRF) Annuity Savings Account (ASA) Defined Benefit (monthly pension payments)

5 What Are My Benefits? (PERF & TRF) Defined Benefit (Pension) Lifetime benefit - must meet eligibility Funded by employers Contributions not held in an individual account Formula calculation used to determine benefit Benefit determined by age, salary, service, and retirement option chosen Annuity Savings Account (ASA) Mandatory 3% contribution Always belongs to you / fully vested No loan or hardship withdrawals available

6 When Am I Eligible? (PERF & TRF) Normal Retirement Eligibility 1. Age 65 with 10 or more years of creditable service; 2. Age 60 with 15 or more years of creditable service; 3. Rule of 85: Minimum age 55, age plus years of service must equal 85 or more. For example: age yrs= 85; or age yrs= 87.

7 Early Retirement with a Reduced Pension A member who has 15 or more years of creditable service, and, is between the ages of 50 and 59 can retire with a reduced pension Retirement Age Percentage of Pension 50 44% 59 89% (Percentage increases 5% per year between ages 50-59) Please note that if you choose to take early retirement, your pension benefits will remain at a reduced level even after you reach 60 years of age.

8 Collect Your Retirement Benefit While Continuing to Work 1. Millie Morgan: Minimum age 70 with 20 or more years of creditable service (while working in a PERF or TRF covered position); 2. Elected officials: Minimum age 55 with 20 or more years of creditable service (while serving in their elected position). If the member is younger than age 60, a reduced benefit would apply unless you meet the Rule of 85.

9 Defined Benefit Formula The monthly Pension formula is defined by state law (Final Average Salary x Creditable Service x 1.1%) divided by 12 Examples ($30,000 x 20 yrs x.011)/12 = $550/month (before taxes) ($30,000 x 25 yrs x.011)/12 = $688/Month (before taxes) ($35,000 x 30 yrs x.011)/12 = $963/Month (before taxes)

10 Final Average Salary x Creditable Service x 1.1% PERF Final Average Salary-20 highest quarters in groups of 4 consecutive quarters over your entire PERF career TRF Final Average Salary-5 highest contract years over your entire TRF career Creditable Service-Continuous periods of employment in a PERF/TRF-covered position. Benefit Multiplier: 1.1% (.011)

11 Additional Creditable Service Approved paid/unpaid leave Military service leave Other service (call for eligibility) Note: Any service previously lost, in taking an ASA distribution prior to retiring from a PERF/TRF covered position, is automatically reinstated six months after taking another PERF/TRF position.

12 Purchased Service Out of State Service Must have at least one year of PERF or TRF service, and Not eligible to claim a retirement benefit from any other retirement system or fund. Prior Military Service Must have at least one year of PERF or TRF service. Must have served on active duty in military for at least 6 months and received an honorable discharge. Must be able to provide a DD Form 214, Certificate of Release or Discharge. Only 2 years of service may be purchased. Additional Service Credit 1 year for every 5 actual years Available to vested members only. * Must be currently employed in a PERF/TRF covered position to purchase any type of service.

13 Working After Retirement *Effective July 1, 2013 Members can no longer start a second retirement under PERF. *To reemploy with a PERF or TRF covered employer: 30 day mandatory separation from retirement date is required to continue receiving PERF or TRF retirement benefits No additional service credit is earned No contributions made to ASA No earnings limitation *Member s application for retirement benefits is void if the member has an agreement, prior to their retirement, with a covered employer to become re-employed. *To reemploy in the private sector: Employable immediately No earnings limitation

14 Retirement Benefit Options One of the most important decisions you will make is choosing your Defined Benefit (pension) payment option. Remember You will receive a monthly benefit for the rest of your life. Before choosing an option, ask yourself the following questions: How much monthly income will I need after retirement? Do I need to plan for a beneficiary? If yes, how much income will my beneficiary require? How long will my beneficiary require this income?

15 Retirement Benefit Options Limited Beneficiary Options 5-year Certain & Life Straight Life Cash Refund + 5-year Certain & Life Survivorship Options 100% Survivorship 66 2/3% Survivorship 50% Survivorship Additional Option Social Security Integration

16 Retirement Benefit Options 1. Deferral of Payment 2. Annuitization 3. Lump Sum Distribution 4. Rollover or Partial Rollover

17 PERF Benefit Estimator

18 PERF Benefit Estimator Details Information at retirement Average salary $23, Creditable service Annuity Contribution $27, Members age 67 Years 1 Month(s) Beneficiary age 60

19 PERF Benefit Estimator Description Five Year Guaranteed Survivor Benefit (Option 10): You will receive a monthly benefit for the rest of your life. If you die before receiving benefit payments for five years, your beneficiary will receive that monthly benefit for the remainder of those five years OR a lump sum distribution equal to the present value of those remaining payments. After five years, there are no payments available to the beneficiary. Estimate monthly benefits Without ASA With ASA Beneficiary s estimated monthly benefit (after your death) Without ASA $ $ N/A N/A With ASA Benefit with No Guarantee (Option 20): You will receive a monthly benefit for life, but there are no monthly payments to anyone after your death. However, the balance of your Annuity Savings Account will be refunded to your beneficiary or estate if it is larger than the payments previously made to you. Joint with Full Survivor Benefits (Option 30): You will be paid a monthly benefit for life. After you die, the same monthly benefit will be paid to your survivor for his/her lifetime. If your survivor is NOT your spouse, please contact PERF to make sure you are eligible to select this option. $ $ N/A N/A $ $ $ $610.23

20 PERF Benefit Estimator Description Joint with 2/3 Survivor Benefits (Option 40): You will be paid a monthly benefit for life. After you die, two-thirds of your monthly benefit will be paid to your survivor for his/her lifetime. If your survivor is NOT your spouse, please contact PERF to make sure you are eligible to select this option. Joint with 1/2 Survivor Benefits (Option 50): You will be paid a monthly benefit for life. After you die, one-half of your monthly benefit will be paid to your survivor for his/her lifetime. Cash refund Annuity (Option 71): In order to select this option you must choose to combine at least a portion of your ASA with your lifetime monthly pension benefit. If you select this option, you will receive a monthly benefit for the rest of your life. If you die before receiving payments for five years, your beneficiary will receive that monthly benefit for the remainder of those five years OR a lump sum equal to the present value of those remaining payments. Also, upon your death, whether you die before or after receiving five years of benefits), your beneficiary may receive any remaining balance of your Annuity Savings Account. Estimate monthly benefits Without ASA With ASA Beneficiary s estimated monthly benefit (after your death) Without ASA With ASA $ $ $ $ $ $ $ $ $ $ N/A N/A

21 PERF Benefit Estimator Social Security Statement required for a PERF Benefit Estimate including Option 61.

22 PERF Benefit Estimator Details Information at retirement Average salary $23, Creditable service Annuity Contribution $27, Tax Basis Account Balance $2, Members age 67 Years 1 Month(s) Beneficiary age 60

23 PERF Benefit Estimator Description Five Year Guaranteed Survivor Benefit (Option 10): You will receive a monthly benefit for the rest of your life. If you die before receiving benefit payments for five years, your beneficiary will receive that monthly benefit for the remainder of those five years OR a lump sum distribution equal to the present value of those remaining payments. After five years, there are no payments available to the beneficiary. Estimate monthly benefits Without ASA With ASA Beneficiary s estimated monthly benefit (after your death) Without ASA $ $ N/A N/A With ASA Benefit with No Guarantee (Option 20): You will receive a monthly benefit for life, but there are no monthly payments to anyone after your death. However, the balance of your Annuity Savings Account will be refunded to your survivor or estate if it is larger than the payments previously made to you. Joint with Full Survivor Benefits (Option 30): You will be paid a monthly benefit for life. After you die, the same monthly benefit will be paid to your survivor for his/her lifetime. If your survivor is NOT your spouse, please contact PERF to make sure you are eligible to select this option. $ $ N/A N/A $ $ $ $610.23

24 PERF Benefit Estimator Description Joint with 2/3 Survivor Benefits (Option 40): You will be paid a monthly benefit for life. After you die, two-thirds of your monthly benefit will be paid to your survivor for his/her lifetime. If your survivor is NOT your spouse, please contact PERF to make sure you are eligible to select this option. Joint with 1/2 Survivor Benefits (Option 50): You will be paid a monthly benefit for life. After you die, one-half of your monthly benefit will be paid to your survivor for his/her lifetime. Cash refund Annuity (Option 71): In order to select this option you must choose to combine at least a portion of your ASA with your lifetime monthly pension benefit. If you select this option, you will receive a monthly benefit for the rest of your life. If you die before receiving payments for five years, your beneficiary will receive that monthly benefit for the remainder of those five years OR a lump sum equal to the present value of those remaining payments. Also, upon your death, whether you die before or after receiving five years of benefits), your beneficiary may receive any remaining balance of your Annuity Savings Account. Estimate monthly benefits Without ASA With ASA Beneficiary s estimated monthly benefit (after your death) Without ASA With ASA $ $ $ $ $ $ $ $ $ $ N/A N/A

25 TRF Benefit Estimator

26 TRF Benefit Estimator MEMBER INFORMATION TRF Number: Home Telephone Number: Other Telephone Number: Date of Birth: 05/04/1957 Member Age: 57 Retirement Date: 07/01/2014 SURVIVOR INFORMATION Name: Relationship: Date of Birth: Survivor's Age: 55 NOTICE TO MEMBERS This estimate is based on uncertified data and does not warrant accuracy. Actual benefits are computed using certified data and laws in effect at the time of your retirement. Ten years of Indiana teaching service are required for retirement eligibility. For survivorship options, use your primary beneficiary's date of birth, if available. Please be advised amounts are expressed in whole dollars, benefits are approximate and annual benefit payments are 95-99% taxable in the year received.

27 TRF Benefit Estimator ANNUAL-BENEFIT CALCULATION Average Salary $66, Pension Base Amount $ Years of Trf Service Credit Years of Perf Service Credit Annual Unreduced Benefit $20, Early Retirement Reduction Factor Annual State Pension Benefit $20, Annuity ( $71, X ) $6, Total Annual A-1 Benefit $26, Total Annual A-1 Benefit With Rollover Account $26,827.00

28 TRF Benefit Estimator ANNUITY ACCOUNT BALANCE ANNUITY ACCOUNT AMOUNT Member Contribution $4, Employer Pick-Up Contribution $31, Interest/Earnings $35, Account Balance $71, ROLLOVER ACCOUNT BALANCE ROLLOVER ACCOUNT AMOUNT Rollover Contribution $0.00 Interest/Earnings $0.00 Rollover Account Balance $0.00

29 TRF Benefit Estimator Pension Options A-1-5-year Certain & Life ASA 1 (Formerly Alt I) Member combines the Annuity Savings Account balance with monthly Pension Pension Amount Annuity Amount Monthly Total Before Age 62 After Age 62 $1, $ $2, $3, $1, Survivor Benefit A-2 - Straight Life $1, $ $2, $3, $1, A-3 - Cash Refund + 5-year Certain & Life B-1-100% Survivorship B /3% Survivorship B-3-50% Survivorship $1, $ $2, $3, $1, $1, $ $2, $3, $1, $2, $1, $ $2, $3, $1, $1, $1, $ $2, $3, $1, $1,062.00

30 TRF Benefit Estimator ASA 2 (Formerly Atl II-A), ASA 3 (Formerly Atl II-B), ASA 4 (Formerly Atl II-C) Member elects to withdraw the Annuity Savings Account Balance ASA 5 (Formerly Alt IV-A), ASA 6 (Formerly Alt IV-B) Member defers distribution of Annuity Savings Account Balance ASA Lump Sum Payment Amount (Withdrawal Only) = $71, Pension Options Pension Amount Annuity Amount Monthly Total Before Age 62 After Age 62 Survivor Benefit A-1-5-year Certain & Life $1, $1, $2, $1, A-2 - Straight Life $1, $1, $2, $1, B-1-100% Survivorship B /3% Survivorship B-3-50% Survivorship $1, $1, $2, $ $1, $1, $1, $2, $ $1, $1, $1, $2, $1, $812.00

31 TRF Benefit Estimator ASA 7 (Formerly Alt III) Member withdraws the 12/31/1986 Tax Basis and combines the remaining annuity Savings Account balance with the monthly pension Pre-86 Tax Basis Lump Sum Payment Amount = $1, Pension Options A-1-5-year Certain & Life A-2 - Straight Life A-3 - Cash Refund + 5-year Certain & Life B-1-100% Survivorship B /3% Survivorship B-3-50% Survivorship Pension Amount Annuity Amount Monthly Total Before Age 62 After Age 62 $1, $ $2, $3, $1, $1, $ $2, $3, $1, $1, $ $2, $3, $1, Survivor Benefit $1, $ $2, $3, $1, $2, $1, $ $2, $3, $1, $1, $1, $ $2, $3, $1, $1,057.00

32 HEA 1075 Annuity Savings Account Changes Oct. 1, 2014 to Sept. 30, 2015: Annuities will be calculated with a 5.75 * percent interest rate. Oct. 1, 2015 to Dec. 31, 2016: Annuities will be calculated at the market rate or 4.5 * percent, whichever is greater. After Dec. 31, 2016: Whenever the Board enters into an agreement with a third party provider, the interest rate will be market rate. * = Assumed rate of return on invested annuitized funds.

33 PERF/TRF Annuity Savings Account Changes to Payment Options (PERF) 7.5% (Pre 10/1/14) (TRF) 7.5% (Pre 10/1/14) (PERF & TRF) 5.75% (10/1/14) Annuitized Amount Monthly Monthly Monthly Age: 65 $ 10,000 $91.92 $82.30 $72.01 $ 20,000 $ $ $ $ 30,000 $ $ $ $ 40,000 $ $ $ $ 50,000 $ $ $ $ 60,000 $ $ $ $ 70,000 $ $ $ $ 80,000 $ $ $ $ 90,000 $ $ $ $ 100,000 $ $ $ Option: 5 year guaranteed benefits (PERF option 10 / TRF option A-1) This table illustrates the potential impact of annuitization changes. It is an estimate only for your general planning purposes. Your actual monthly annuity payment may vary from the data in this table.

34 PERF/TRF Annuity Savings Account Changes to Payment Options % of Annuitized Funds Paid Out Each Year Prior to 10/1/14 10/1/14-9/30/15 Age PERF TRF PERF & TRF % 8.6% 7.2% % 9.1% 7.8% % 10.0% 8.6% % 11.0% 9.8% % 12.3% 11.4% Option: 5 year guaranteed benefits (PERF option 10 / TRF option A-1) This table illustrates the potential impact of annuitization changes. It is an estimate only for your general planning purposes. Your actual monthly annuity payment may vary from the data in this table.

35 Tax Reporting

36 When you are ready What s Next? Discuss your plans with your family. Consult a financial planner, tax advisor or legal expert if you have concerns. Choose a retirement date that fits your goals. Begin collecting the documentation you ll need to submit with your retirement application. Submit your application to INPRS no later than 90 days prior to your retirement date.

37 Application Submission Dates Submit your retirement application no later than 90 days before your retirement date Retirement Date January 1 st February 1 st March 1 st April 1 st May 1 st June 1 st July 1 st August 1 st September 1 st October 1 st November 1 st December 1 st Submission Deadline October November December January February March April May June July August September

38 INPRS Contact Information Website: Phone: PERF TRF Mailing address: INPRS 1 North Capitol, Suite 001 Indianapolis, IN 46204

39 Application Completion Session II Immediately following all workshops: Retirement Application Completion Session (Most effective and efficient) Group Retirement Application Completion Session (GRACS) Individual Retirement Application Completion Sessions by request regionally (Limited availability) Submit online - secure, easy, quick

40 After break Retirement Application completion session

41 Thank you for attending the INPRS Retirement Workshop Please complete the survey form found in your packet