Welcome! Milwaukee Public Schools Pre-Retirement Seminar For MPS Teachers

Transcription

1 Welcome! Milwaukee Public Schools Pre-Retirement Seminar For MPS Teachers DATE: October 30, 2012

2 Today we are going to cover: MPS Retiree Health Insurance Benefits MPS Retiree Life Insurance MPS Accumulated Leave Program (formerly known as Severance Pay) Highlights of July 1, 2013 benefit changes How to access more information 2

3 MPS Retiree Health Insurance Eligibility Requirements - Teachers For self-paid coverage: Age 55 or older at time of retirement and 15 years of MPS service. For Board-paid coverage: Age 55 or older at time of retirement and 15 years of MPS service and 70% of 1,160 maximum full pay sick leave hours for 10 mo. employees (e.g. 812 full-pay hours). (Note: Half-pay hours convert to full-pay sick leave hours for meeting retiree health eligibility requirements.) 3

4 MPS Retiree Health Insurance Eligibility Requirements - Teachers The Board Credit is: Board s share of the PPO/Indemnity Health Plan premium rate for an active employee in effect as of the date of retirement provided you have the required sick leave balance (70% of your maximum accrued sick leave) as of your retirement date. 4

5 MPS Retiree Health Insurance Eligibility Requirements - Teachers After your retirement date, you are responsible for paying all future premium increases when the premium for the plan you are enrolled in is greater than the Board Credit as explained. Self-paid by you if you do not have the required sick leave balance as of your retirement date but you meet the age and service requirements. 5

6 MPS Retiree Health Insurance Premiums Paid by 2004 Retirees - Example (for current design without 7/1/13 plan changes) Date Of Retirement 2004 Plan Monthly Board-Paid 2004 Subsidy/Credit based on PPO Plan 2012 Monthly Premium Rates 2012 Monthly Amount Paid By Retiree PPO/Indemnity Retiree Single non-medicare $ $ $ Retiree Family non-medicare $1, $1, $ Retiree Single w/medicare $ $ Retiree Couple 1 w/medicare $1, $1, Retiree Couple 2 w/medicare $1, $ EPO Retiree Single non-medicare $ $ Retiree Family non-medicare $1, $1, $ Retiree Single w/medicare $ $ Retiree Couple 1 w/medicare $1, $ Retiree Couple 2 w/medicare $1, $

7 MPS Retiree Health Insurance For Surviving Spouse of Certificated Employees If the employee dies while in active service and has met the eligibility requirements of 15 or more required years of service: MPS will provide family or single health plan coverage and pay its share of the premium at the rate in existence for an active employee for the plan the deceased employee and spouse are enrolled in at time of death for the surviving spouse of an employee who dies in active service until the surviving spouse remarries (cannot add new dependents not covered as of the employee s date of death); AND When the surviving spouse turns age 60, he/she will be covered as a surviving spouse of an employee who retired that year which means: o The Board Credit will be the Board s share of the single premium rate for an active employee (PPO/Indemnity Plan) in effect as of this date if the employee had the required 70% of maximum sick leave balance as of the employee s date of death. Thereafter, the surviving spouse will be required to pay all future premium increases. o If the employee did not have the 70% of maximum sick leave, coverage for the surviving spouse will be self-paid. o Coverage will be single and any covered dependents can elect to continue coverage on a self-paid basis for up to 36 months under COBRA. 7

8 MPS Retiree Health Insurance For Surviving Spouse of Certificated Employees If the employee who dies in active service did NOT meet the eligibility requirements: The surviving spouse and eligible dependents can elect to continue coverage on a self-paid basis for up to 36 months under COBRA. If the employee dies after retirement: The surviving spouse can continue coverage under the MPS retiree health insurance until the spouse remarries or is otherwise covered by another group health insurance plan (Note: otherwise covered does not mean Medicare). The eligible dependents covered at the time of the retiree s death can elect to continue coverage on a self-paid basis for up to 36 months under COBRA. The Board Credit will be adjusted to the Board s share of the single premium rate for an active employee (PPO/Indemnity Health Plan) in effect as of the deceased s retirement date. (Effective September 1, 2010, for Building Trades employees and August 1, 2011 for sub-teachers, the Board Credit is Board s share of the EPO Health Plan rate for an active employee.) Surviving spouse will be required to pay all future premium increases. 8

9 MPS Retiree Health Insurance Important Points to Remember! You must be enrolled in an MPS health insurance plan, as the subscriber on your date of retirement. For example, if you opted out of MPS health insurance or if your spouse was enrolled as the subscriber, you should plan to switch during the Open Enrollment period prior to your retirement date. You cannot enroll outside normal enrollment periods while working or enroll after your retirement date. If you are enrolled in the EPO Health Plan as of your retirement date, your Board Credit will be based on the PPO/Indemnity Health Plan premium rate for an active employee in effect as of your retirement date. (Exception: Building Trades employees who retire on or after September 1, 2010 or Sub Teachers who retire on or after August 1, 2011, Board Credit is Board s share of the EPO Health Plan premium rate for an active employee.) You do not have to draw your pension in order to retire from MPS for retiree health insurance purposes provided you meet the above eligibility requirements. For example, if you are eligible, you can retire from MPS at age 55 and start your retiree health insurance and wait to start your pension at the normal retirement age (without penalty) at age 60. You must advise us in writing that you are resigning to retire but deferring your pension. 9

10 MPS Retiree Health Insurance Important Points to Remember! Once you disenroll from the MPS retiree health insurance coverage or you let your premium payment lapse, you cannot later get your MPS retiree health insurance plan back. The annual open enrollment in September with an effective date of November 1 is available for retirees to switch health plans and to update your MPS insurance information including your other insurance coverage. Open and read and keep your MPS Open Enrollment booklet every year because it contains important information that may affect you! Your MPS retiree health insurance premium will be deducted from your WRS pension check and you will need to sign the necessary MPS authorization forms before you retire. MPS will bill you monthly for your retiree health insurance premium if you have no pension to collect it from OR if the amount of your pension is less than the amount of the health premium you owe MPS. 10

11 MPS Retiree Health Insurance Important Points to Remember! If you quit MPS before age 55 but have met all of the other requirements (i.e., sick leave and years of service) you cannot later enroll for MPS retiree health insurance. You can track your sick leave balance on your paycheck stub that you can access online thru MPS employee self-service. The following days/time are counted when determining the required sick leave balance to be eligible for Board-paid retiree health coverage: Incentive days Half-pay sick leave balances If you remarry or marry after your retirement, your new spouse is not eligible to be added to your MPS retiree health insurance plan. Your vision coverage (through National Vision Administrators) terminates upon your retirement. Retirees can reduce coverage from family to single but cannot change from single to family coverage after retirement. 11

12 MPS Retiree Health Insurance Important Points to Remember! When you and/or your spouse (or disabled dependent) become eligible for Medicare: Enrollment in Medicare A & B is mandatory and important, even if you choose not to collect your eligible Social Security benefits, as the MPS plan will become secondary the first of the month you/your spouse turn age 65 or the first of the month following your retirement (if already 65 or older at retirement), or if you or your spouse are disabled and eligible for Medicare upon retirement. The MPS retiree health plan benefits will be processed as if you have Medicare Part A and Part B. Some retirees get Part A & Part B automatically If you are already getting your Social Security benefit, you receive Medicare A & B automatically You will get your red, white and blue Medicare card in the mail 3 months before your 65 th birthday You must carry Medicare A & B so do not opt out of this coverage Some retirees need to sign up for Part A & Part B If you are NOT getting Social Security benefits or if you qualify for Medicare because you have End-Stage Renal Disease (ESRD) You need to sign up for Part A & Part B by applying online at Social Security or at a local Social Security Office or by phone at You should sign up for Part A & Part B within 90 days before your 65 th birthday 12

13 MPS Retiree Health Insurance Important Points to Remember! The premium for Medicare B will be deducted from your Social Security check or billed directly to you (if not collecting Social Security). As long as your Board Credit is greater than the premium for the MPS Medicare health plan you are enrolled in, you will receive reimbursement for all or a portion of your Medicare B premium (this feature is not available to any spouse including surviving spouses it applies only to the MPS retiree). Once enrolled in Medicare, please remember to provide MPS a copy of your Medicare identification card. 13

14 MPS Retiree Health Insurance Important Points to Remember! The UnitedHealthcare EPO Health Plan was modified in 2006 to become a national network and coverage is no longer limited to out-of-state emergencies. This plan may now meet your needs if you move out of Wisconsin after retirement. Check out the providers in the network in the area where you reside. The UnitedHealthcare EPO Choice network is the same as the PPO Choice Plus network. Medicare Prescription Drug Coverage once you reach Medicare Eligibility For now, MPS and its unions have agreed that Medicare retirees do not need to separately purchase Medicare D coverage. The MPS health plan for now will continue to provide prescription drug coverage and the Board will file for the Federal Subsidy. You must keep the MPS Office of Human Resources, Benefits and Insurance Services, advised of your address changes and other events such as death, divorce, etc. after you retire because we will be mailing you important information about your benefits. Please do NOT report these changes to the health plan you are enrolled in; they are not authorized to change your address or other information ONLY MPS CAN DO THIS. 14

15 MPS Retiree Health Insurance Important Points to Remember! Contact information for MPS Benefits is as follows. You should call an MPS representative within 60 days prior to your retirement to schedule an appointment to come in and complete the necessary paperwork for your retiree health and life insurance benefits and pension deduction authorization forms. You will need to complete an MPS authorization and election form for your retiree health and life insurance benefits. Your MPS Representative for health benefits is assigned based on: Employee last name beginning A-K: Employee last name beginning L-Z: MPS Representative for Life Insurance: MPS does not provide retiree dental benefits. You can continue your dental coverage through MPS up to 18 months self-paid under COBRA continuation. If you are not eligible for MPS retiree health insurance, you can continue your health coverage through MPS up to 18 months self-paid under COBRA continuation. 15

16 MPS Retiree Life Insurance Eligibility for Teachers The eligibility for MPS group retiree life insurance is: Age 55 or older at retirement AND 15 years or more of MPS service. The premium before age 65 will be: Self-paid by you. Board-paid up to $50,000 if you have 30 or more years of MPS service you pay premium amount above $50,000. Premium is based on the current group rate of $.35 per $1,000 coverage (monthly). Premium will be deducted from your WRS pension monthly or billed to you if you defer your pension. The premium after age 65 will be fully Board-paid. 16

17 MPS Retiree Life Insurance Eligibility for Teachers The amount of life insurance upon your retirement: 1 times your annual salary rounded to the next higher $1,000 (Note: Annual salary does not include overtime and secondary jobs.) 17

18 MPS Retiree Life Insurance Eligibility for Teachers Your retiree life insurance benefit will be reduced as follows as of the March 1 st that falls on or next follows your birthday: Age % of amount in force at your retirement date 65 75% 66 50% 67 25% Remember to check your beneficiary and keep it current. You can do this by calling Trustmark at to obtain the MPS Group Life Insurance Beneficiary Change Form. (MPS does not have this information on file.) If you do not keep your life insurance premiums current, your coverage will lapse and you will not be eligible to re-enroll. 18

19 MPS 403(b) Accumulated Leave Program (Formerly known as the MPS Severance Benefit) The MPS 403(b) Accumulated Leave Program: Provides payment of up to 40 days full-pay sick leave hours in excess of 70% maximum accumulation This payment will be made by MPS upon your retirement as a mandatory (non-elective) employer contribution to your 403(b) Accumulated Leave Program account Both you and MPS are able to take advantage and benefit by the following features under this program: You enjoy a higher overall limit for all contributions to your tax sheltered annuity and you no longer have to use your individual employee limit to tax shelter the payout of your accumulated sick leave The calendar year Internal Revenue System (IRS) limits are: Employee limit is $17,000 for 2012 ($17,500 for 2013) Employer limit is $50,000 for 2012 ($51,000 for 2013) less employee contributions The overall limit is the lesser of 100% of your includible compensation (determined over the most recent year of service) or $50,000 for 2012 ($51,000 for 2013) You avoid paying the (current) 5.65% employee Social Security and Medicare tax MPS avoids paying the 7.65% employer Social Security and Medicare tax 19

20 MPS 403(b) Accumulated Leave Program (Formerly known as the MPS Severance Benefit) Upon your retirement from MPS, your benefit under the MPS 403(b) Accumulated Leave Program will: Be deposited within 4-6 weeks after your retirement in a fixed interest bearing account with either ING, MetLife, TIAA-CREF or WEA Trust based upon your current 403(b) election and you will receive written notification by either ING, MetLife. TIAA-CREF or WEA Trust when they receive the money and your MPS pay stub will reflect the amount of the contribution made by MPS. (Note: If you do not have a current 403(b) election, it will automatically be deposited with ING.) Not be subject to a penalty upon withdrawal. You only pay the same state and federal taxes as those that apply to employee contributions when they are withdrawn. Be available for withdrawal by you without a tax penalty within about 5-10 working days after you sign the necessary paperwork with your 403(b) vendor. 20

21 MPS 403(b) Accumulated Leave Program (Formerly known as the MPS Severance Benefit) Upon your retirement from MPS, your benefit under the MPS 403(b) Accumulated Leave Program will: Have the following options: Leave the funds in the account Withdraw all or a portion of the funds Transfer the funds to a different 403(b) vendor Invest the funds in the same or different manner as your regular 403(b) funds 21

22 MPS 403(b) Accumulated Leave Program (Formerly known as the MPS Severance Benefit) Some additional points to be aware of: Participation in the program is mandatory for all exempt/nonrepresented employees and those represented employees where this program has been included in their collective bargaining agreement (individuals cannot opt out because the IRS will not permit this). This program only includes accumulated sick leave and NOT vacation, floating holidays, and compensatory time. You cannot convert half-pay sick leave hours. 22

23 MPS 403(b) Plan and the Wisconsin Deferred Compensation 457 Plan 403(b) PLAN A 403(b) plan is a retirement plan known as a tax-sheltered annuity (TSA) available for employees of public schools and other tax exempt organizations. Similar to a 401(k) plan, a 403(b) plan allows you to make voluntary pre-tax contributions from your salary to a plan available under the MPS program. You may also contribute on an after-tax basis to a ROTH 403(b) plan. When you enroll, individual accounts are opened in a 403(b) plan in either of the following two types; (a) an annuity contract, which is provided through an insurance company under 403(b) or (b) custodial account which is invested in mutual funds under 403(b)(7). Vendors typically offer both arrangements as you may sometimes see the terms 403(b) and 403(b)(7) used together so remember that one uses individual annuity type contracts and the other uses custodial mutual funds type arrangements. You can select either or both arrangements for your individual account. 457 PROGRAM Effective October 1, 2010 Milwaukee Public Schools employees are eligible to enroll in Wisconsin Deferred Compensation 457 Program (WDC). Under this Program you are entitled to make before-tax voluntary contributions. The earnings on such contributions are also tax deferred. Upon withdrawal the contributions and earnings are subject to ordinary federal and state income taxes. WDC program is administered by and funds are held in trust by the State of Wisconsin -Employee Trust Funds (ETF). Great-West Retirement Services is the ETF appointed service provider for the WDC Program. 23

24 Next we will review the Highlights of the July 1, 2013 Benefit Changes New health plan design for everyone including existing and future retirees New employee premium contributions (before-tax) as a percentage of premium (not as a % of pay) New eligibility requirements for retiree health and life insurance for dates of retirement on/after July 1,

25 Next we will review the Highlights of the July 1, 2013 Benefit Changes New payout limit (10 days) for Accumulated Leave Benefit for dates of retirement on/after July 1, 2013 New Board-paid subsidy (e.g. Board-credit ) and selfpaid premium methodology for retiree health for future retirees for dates of retirement on/after July 1,

26 Highlights of July 1, 2013 Benefit Changes Retiree Health Eligibility Requirements Anyone retiring on or after July 1, 2013 will need: to be age 60 with 20 or more years of service at the date of retirement to qualify for MPS retiree health and life insurance eligibility and have 90% sick leave balance in order to qualify for Board-paid retiree health benefits. Self-pay retiree health eligibility requires age 60 and 20 years service Note there is a special sunset provision allows employees age 55 or older with 30 or more years service to retire before age 60 (prior to July 1, 2015) with retiree health benefits. (See tri-fold brochure and note sunset requires new 90% sick leave amount for Board-paid coverage for retirements on or after July 1, 2013.) Accumulated Leave Program payout changes from 40 days to 10 days of amount in excess of 90% sick leave balance (full-pay hours). 26

27 Highlights of July 1, 2013 Benefit Changes Retiree Health Insurance Eligibility Please note: Half-pay sick leave hours convert to full-pay sick leave hours for purposes of meeting retiree health benefit eligibility requirements. 27

28 Highlights of July 1, 2013 Benefit Changes New Plan Design EPO Health Plan 28

29 Highlights of July 1, 2013 Benefit Changes New Plan Design PPO Health Plan 29

30 Highlights of July 1, 2013 Benefit Changes Employee Health Premium Contributions 30

31 Highlights of July 1, 2013 Benefit Changes New Board Paid Health Premium Subsidy The new Board-paid retiree health subsidy (e.g. Boardcredit) for dates of retirement on/after July 1, 2013 will be: The Board s share of the average of the PPO/Indemnity and EPO premium rates*, and then Reduced to reflect coordination with Medicare upon reaching Medicare eligibility (currently age 65). *Note: Building Trades subsidy is based on Board s share of EPO premium rate. 31

32 Highlights of July 1, 2013 Benefit Changes New Premium Methodology New pre-medicare retiree health premium methodology for future retirees for dates of retirement on/after July 1, 2013: No longer blended with actives for rating purposes. A new pre-medicare only retiree rating will be established. 32

33 Highlights of July 1, 2013 Benefit Changes It is important to note that these changes to the eligibility requirements for MPS retiree health and life insurance do NOT affect your MPS, City (ERS) or State (WRS) pension benefits. 33

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37 MPS Pre-Retirement Seminar For MPS Teachers The information in this handout describes MPS retiree health and life insurance benefits for MPS Teachers, and the MPS 403(b) and 457 Programs in general terms only, as of the date of this seminar. It is not intended to be a complete description of benefits. Your MPS benefits are governed by the terms and conditions of the plan documents, collective bargaining agreements, Board policy and practices, federal/state statute, and Internal Revenue Code and Regulations. Date of Seminar: October 30,

38 Milwaukee Public Schools Pre-Retirement Seminar For MPS Teachers October 30, 2012 MPS Board of School Directors Dr. Michael Bonds, President Larry Miller, Vice President Mark Sain, District 1 Jeff Spence, District 2 Annie Woodward, District 4 Dr. Peter Blewett, District 6 David Voeltner, District 7 Meagan Holman, District 8 Terrence Falk, At-Large Senior Team Dr. Gregory Thornton, Superintendent Naomi Gubernick, Chief of Staff Darienne Driver, Chief Innovation Officer Tina Flood, Interim Chief Academic Officer Dr. Karen Jackson, Chief Human Resources Officer Michelle Nate, Chief Operations Officer Gerald Pace, Esq., Chief Financial Officer Anita Pietrykowski, Director, School Administration Denise Callaway, Communications & Partnerships Patricia Gill, Executive Director, Family Services Sue Saller, Coordinator to the Superintendent