Pension Workshop. Ft Myers General Employees Pension Fund

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2 Pension Workshop Ft Myers General Employees Pension Fund

3 Disclaimer This seminar 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.

4 Pension Workshop Overview of Prior Benefits Current Plan Changes Tier Election by Members

5 Pension Overview

6 Pension Benefits Defined Benefit Plan Retirement Benefit Normal Retirement Benefit Optional Forms Payment DROP Plan Disability Retirement Benefit Survivor Benefit

7 Current Plan (Prior 09/17/12) Funded by City Contributions + Employee Contributions Vesting with 7 Years Service Average Final Compensation Salary Includes Total W-2 Compensation Average Consists of Highest 5 Years in Last 10 Years Service

8 Eligibility for Retirement Normal Retirement Age 62 with 5 Years Service 30 Years Service Regardless of Age Rule of 80 (Age + Service > 80) Early Retirement Age 55 with 7 years of service Age 60 with 5 years of service Benefit Reduced 4% Per Year Vested Deferred Retirement Benefits Commence at Otherwise Normal Retirement Date

9 Optional Benefit Tiers Tier 1: Base Pension Plan Members Contribute 3.1% Salary Tier 2: $200 Monthly Supplement Members Contribute 6.6% Salary Lifetime Benefit Option Only Vested Deferred Members Not Eligible Tier 3: 2.5% COLA (October 1 Ea Yr) Members Contribute 8.5% Salary Tier 4: $200 Supplement + 2.5% COLA Members Contribute 12.8% Salary Vested Deferred Members Not Eligible for $200 Supplement

10 Optional Benefit Tiers Irrevocable Election Actuary Updates Member Contribution Rate Every 3 Years Eligibility Members Must Contribute to Benefit Tier for at Least 3 Years Contributions Refunded Without Interest $200 Supplement (Tier 2 & Tier 4) Member Must Retire from Service Contributions for Supplement Refunded Without Interest If Member Not Eligible

11 Benefit Formula Pension Formula: (Final Average Salary) x (Number Years Of Service) x Multiplier% Service Includes Years, Months and Days Multiplier: (Service prior 04/02/98) 2.1% per year service (Service after 04/02/98) 3% per year service

12 Distribution Options for the Defined Benefit Normal Form: Lifetime of member Available Optional Forms Include Additional Survivor Options Joint 100% Survivor Joint 66-2/3% Survivor Joint 50% Survivor 10 Years Certain (120 Payments Guaranteed) Member May Change Joint Annuitant Following Retirement (restrictions apply) Deferred Retirement Option Plan (DROP) Partial Lump-Sum Option (10%, 15%, 20%, 25% of Benefit)

13 Service Purchase (Buyback) Members Must Elect Benefit Tier Member Pays Full Actuarial Cost Prior Military Service Credit Up to 4 Years Does Not Count for Vesting or Disability Prior Government Service Credit Member Can Purchase Any Amount Does Not Count for Disability Air Time (Members With 5 Years Service) Up to 5 Years Does Not Count for Vesting or Disability

14 Refunds of Contributions 3.75% Interest Credited Each October 1 Buyback Contributions Refunded Without Interest Members Ineligible for Optional Benefit Tiers Refunded Without Interest Disability Benefits Member Must Have 5 Years Service Member Receives Accrued Benefit Benefit Commences on Board Approval Payable for Life Optional Forms Benefit Payment

15 Survivor Benefits Non-Vested Member: Refund Contributions Prior to Retirement Beneficiary Receives Accrued Benefit Payable for 10 Years Commencement at Normal Retirement Reduced Immediate Benefit Available Member Eligible to Retire Beneficiary Receives Accrued Benefit Payable for 10 Years

16 DROP Plan Members Eligible for Normal Retirement - DROP for up to 5 Years Application Filed 15 Days in Advance Options for Investment Actual net return on plan assets Fixed Rate 3% Compounded Monthly One Change Allowed Balances Distributed After Separation

17 Plan Changes

18 Benefit Changes Definition Pensionable Wages W-2 Pay Changes to Base Compensation Overtime Up to 300 Hours Sick and Vacation Banks Capped at 9/17/12 level Member Contributions on Base Pay Multiplier Decreases from 3% to 1.8% (Future Service) Changes Effective 09/17/12

19 New Benefit Rates Option to Keep 3% Multiplier: Benefit Prior Rate Must Stay in Current Benefit Tier Projected Contribution Rate Subject to Change in 2014 Rate A 1.8% Mult. Rate B 3% Mult. Tier 1 3.1% 0.7% 4.6% Tier 2 6.6% 4.0% 7.9% Tier 3 8.5% 6.3% 11.0% Tier % 9.4% 14.1%

20 Election Period 45 Day Election Period Starts September 18, Ends November 2 Members Default to 1.8% Multiplier on September 17 Ordinance Date Pension Deductions for B Rates Begin November 21 All Forms Returned to Debra Emerson by 4 PM November 2; October 5 for continuous 3% multiplier (no 1.8% gap )

21 Election Period Effective Dates of Benefit Changes September 17 Ordinance Date Members Electing by 4 PM Friday, October 5 Continue 3.0% Without Interruption New Deductions Begin Current Pay Period Elections Made After 4 PM October 5 Take Effect on November 2 Forms Returned to Debra Emerson by 4 PM Friday, October 5 for continuous 3% multiplier

22 A and B Rates Election Normally Irrevocable Existing Members Get One Additional Election Period, 09/01/14 09/30/14 Contribution percentage for B Rate Subject to Revision Following each Election Period Contribution percentage for each Rate Subject to Change Every 3 Years

23 Election Form

24 Benefit Statements

25 Retirement Procedures

26 Application Procedures for Retirement Application filed with Pension Resource Center 30 days in advance Pension Resource Center provides estimate of benefit PRC completes final estimate of benefit following retirement date Actuary reviews and certifies final calculation

27 Application Procedures for Retirement Participant elects form of benefit payment Board approves benefit Administrator pays benefit to retired members

28 Application Procedures for Retirement Application: 30 Days Prior To Retirement Final Calculation: 1 Week Following Receipt of Final Payroll Benefit Calculation & Forms Sent to Member Member: 1-2 Weeks to Respond Simultaneous Review By Actuary Board Approval of Benefit Set Up Pension Payment: 1 Week Actual Receipt First Check: Additional Mail Time

29 Application Procedures for Retirement Required Forms Application for Retirement Tax Withholding Form (W-4P) Benefit Election Form Copy Birth Certificate or Driver s License Optional Forms Direct Deposit Form Beneficiary Designation

30 Pension Board and Service Providers

31 Trustees: Administer Plan Two Union Trustees o Barbara Carlson, Chair o Tom O Malley, Union President Council Appointment: Dennis Pearlman Two Trustees Selected by Board o Richard Griep, Secretary o Eloise Pennington, Vice-Chair Non-Union Trustee: Donna Lovejoy City Manager: William Mitchell

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

33 Service Providers Administrator: Pension Resource Center Attorney: Christiansen & Dehner Actuary: Foster & Foster Custodian: Comerica Bank Investment Manager: Galliard Capital Management Lateef Investment Management Manning & Napier Moody Aldrich Partners Morgan Stanley Real Estate Polaris Capital Management Wells Capital Management Investment Consultant: Bogdahn Consulting

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

36 Online Benefit Calculation System Select City of Ft Myers General EE Click on the Benefit Calculator Icon For Pension Benefit Projections

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