City of Sunrise Firefighters Retirement Plan Pension Workshop THE RESOURCE CENTERS

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2 City of Sunrise Firefighters Retirement Plan Pension Workshop THE RESOURCE CENTERS

3 Introductions

4 Disclaimer This workshop is designed to be educational in nature and is not intended to provide investment, tax, or legal advice. You should consult with your own tax, legal, accounting professionals or any other advisors for advice on the implementation of any plan of action in your particular situation.

5 Pension Workshop Overview of Benefits Processing of Applications Description of Pension Board Roles of Service Providers

6 Pension Overview

7 Pension Benefits Defined Benefit Plan Montlhy Pension Benefit DROP Account Commence Benefit Payments Prior Separation Service Retirement Benefit Normal Retirement Benefit Optional Forms Payment Disability Retirement Survivor Benefit

8 Defined Pension Benefit All full-time firefighters (except chief) must participate Vesting upon completion of 10 years service Funded by combination employer + employee contributions Members contribute 10.63% of covered payroll City must keep plan actuarially sound

9 Eligibility for Retirement Normal Retirement (Hire before 09/25/12) Age 47 with 25 years of service Age 48 with 21 years of service Age 50 with 10 years of service Normal Retirement (Hire after 09/25/12) Age 55 with 10 years of service Age 52 with 25 years of service Vested deferred benefit payable at normal retirement date

10 Early Retirement Members hired before 09/25/12 Age 47 with 10 years of service Benefit reduced by 3% for each year member age precedes normal retirement age Members hired after 09/25/12 Age 50 with 10 years of service Benefit reduced by 3% for each year member age precedes age 55

11 Benefit Formula Pension Formula: (Average Final Compensation) x (Credited Service) x Multiplier Multiplier (Hire before 09/25/12) 3% for first 15 years of service 3.5% per year after 15 years of service Multiplier (Hire after 09/25/12) 3% for first 25 years of service 1% per year after 25 years of service

12 Benefit Formula Credited Service: Years and completed months of service Maximum benefit cannot exceed 80% of final average salary Normal form paid ten years certain and life (120 payments guaranteed) Benefits commence on 1 st of month coinciding or next following retirement

13 Average Final Compensation Final Average Salary: 3 highest consecutive years of earnings Highest 5 years in last 10 years of service Definition of Earnings Regular pay Overtime up to 300 hours (10/01/12) Holiday pay Other payroll cash incentives General monthly expense allowance Earnings exclude accrued leave on termination, outside duty detail, auto allowance, uniform allowance, mileage and travel reimbursements

14 Optional Forms of Benefit Payment Normal Form: 10 Years Certain and Life Optional Forms: Joint and Survivor Straight Life Annuity Joint and 100% Survivor Joint and 75% Survivor Joint and 66-2/3% Survivor Joint and 50% Survivor Pop-up Option Available for Joint & Survivor Options Members may change joint annuitant twice during retirement

15 Additional Provisions

16 Buy-Back Provisions Members must return previously refunded contributions with interest within 90 days of employment to restore prior service credit Prior qualifying fire service: Member contributes full actuarial cost Members returning to service within 12 months of active military duty receive full service credit

17 Disability Benefits Members disabled in line of duty receive 75% of salary as of disability Benefit offsets for other disability benefits, workers comp, or other employment income Minimum benefit of 42% after any applicable offsets Member must apply for benefit within 6 months of disability

18 Disability Benefits Non-Duty Disability Benefits Members eligible after vesting Benefit equal to greater of accrued benefit or 25% of average final compensation Benefits commence 1 st of month after disability or 90 days after application Members continuing contributions to Plan may convert to normal retirement benefit

19 Pre-Retirement Death Benefit Beneficiary of a non-vested member receives refund of contributions without interest Beneficiary of a vested member receives accrued benefit for 10 years at otherwise normal retirement date Designated joint beneficiary of vested member receives benefit form payable at otherwise normal retirement date Beneficiary of member eligible for retirement receives highest optional form amount UPDATE beneficiaries regularly!

20 Supplemental Benefit Monthly supplement of $25 per year of service up to $500 Benefit payable following separation from employment Benefit reduces to $15 per year service up to $300 at age 65

21 Cola Increases Members retiring after 10/01/10: 1% Cola for 1 st 5 years 2% Cola in year 6 2.5% Cola thereafter Members with disability retirement not eligible for Cola Members in DROP do get Cola

22 Separation Before Retirement Non-vested members receive a refund of contributions without interest Benefits for vested members commence at normal or early retirement date

23 DROP Plan Members eligible for normal retirement Maximum DROP up to 84 months but not past 144 months from earliest normal retirement date DROP period may include up to 24 months Bac-DROP DROP Accounts earn 6% fixed rate Members must take distribution following separation from service

24 Pension Forfeiture Pension Forfeiture Members convicted of a public entity crime subject to forfeiture of all pension benefits Member receives a refund of contributions JUST DON T DO IT

25 Retirement Procedures

26 Application Procedures for Retirement Application filed with plan administrator City determines final average salary, administrator reviews estimate with member Actuary calculates final benefit and optional forms of payment Member elects form of benefit payment Custodian pays benefits to retired participants Benefit commences on first day of month

27 Application Procedures for Retirement Application: 1-2 Weeks Prior To Retirement Benefit Calculation: 1 Week Following Receipt of Final Payroll Review By Actuary: 1-2 Weeks Benefit Calculation & Forms Mailed to Member Member: 1-2 Weeks to Respond Set Up Pension Payment: Days Receipt First Check: Additional Mail Time

28 Application Procedures for Retirement Required Forms Application for Retirement Tax Withholding Form (W-4P) Benefit Election Form Proof of Age Additional Forms Direct Deposit Form & VOID Check Beneficiary Designation

29 Forms at DROP Forms by City DROP Election Irrevocable Letter Resignation Forms by Administrator Retirement Application Cola Election Form

30 Forms at Retirement Forms Processed by City Continuation of Benefits Payments of Accrued Leave Forms by Administrator Direct Deposit Tax Withholding DROP Transfer

31 Pension Board and Service Providers

32 Trustees: Administer Plan Two Trustees elected by participants Two year terms Elections in March of even years Two appointments by City Two year terms Current or former Plan members Appointments in March of odd years Fifth Trustee selected by vote of other four Trustees

33 Board of Trustees Two Trustees elected by participants: Scott McGary, Chairman Frank Cagan Two Trustees appointed by City: Norman Rynning John McNamara Fifth Trustee: Carl Hochrein, Secretary

34 Pension Board and Service Providers Trustees Actuary Attorney Administrator Auditor Investment Monitor Custodian Investment Managers

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36 Virtual Pension Office Pension plan documents Ordinance Summary Plan Description Board approved minutes Forms & applications Recent Plan investment performance Links to other service providers Plan box: Online benefit calculation system

37 Online Benefit Calculation System Sunrise Firefighter s Retirement Plan Click on the Benefit Calculator Icon For Pension Benefit Projections

38 Time To Answer Questions...

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