Get set for retirement

Transcription

1 Be aware and prepare Get Set for Retirement For employees within a few years of retirement Get set for retirement Are you ready? A sure way to an unsure future is to put off planning for retirement. 2 Get set for retirement Important retirement decisions in front of you Our goal is to help you get set Be aware and prepare so you can make the right decisions for you and your retirement A sure way to an unsure future is to put off planning for retirement Are you set for retirement? Learn the PEBA administered retirement plan eligibility rules Estimate your PEBA benefit Understand the payment plan options Know the application requirements 3 4 Are you set for retirement? Understand the return to work rules for retirees Learn about the retiree incidental death benefit Consider the emotional aspects of retirement Stay connected with PEBA Before you retire Purchasing service and active member death benefits 5 6 1

2 Types of service purchase Public service Educational service State ORP service Military service Employer approved leave of absence Non qualified service Workers compensation Previously withdrawn service Transfer from SCRS to PORS Service purchase requirements Must be an active contributing member No duplication of benefits in another defined benefit plan (excludes military) or overlapping service credit Must have five years of earned service to purchase non qualified time All service purchases must be completed before you submit your retirement application Cost estimates and purchase requests may be made through Member Access 7 8 Service purchase cost Actuarially neutral cost based on member s age, service credit, and current or career highest fiscal year salary Cost will not be less than 35 percent per year for nonqualified service Cost will not be less than 16 percent per year for most other types of service Actuarially neutral payment requirement does not apply to re establishment of withdrawn service, transfers or supplementals Service purchase payment options Personal check or money order Roll money over from your 401(k), 401(a), 403(b), 457, or IRA Service Purchase Installment Program: Tax deferred or after tax 5.50 percent interest rate for any installment purchase activated during FY17 (July 1, 2016 June 30, 2017) Payments may be spread out for twice the amount of years/months purchased Purchase must be completed before your date of retirement 9 10 SCRS in-service death benefit If you die in service as an active member, your beneficiary may be entitled to receive: A refund of your contributions plus the interest earned on your account, or A monthly annuity: If Class Two with at least five years of earned service credit and either have at least 15 years of total service credit or are at least age 60 at time of death If Class Three with at least eight years of earned service credit and either have at least 15 years of total service credit or are at least age 60 at time of death PORS in-service death benefit If you die in service as an active member, your beneficiary may be entitled to receive: A refund of your contributions plus the interest earned on your account, or A monthly annuity: If Class Two with at least 5 years of earned service credit and either have at least 15 years of total service credit or are at least age 55 at time of death If Class Three with at least 8 years of earned service credit and either have at least 15 years of total service credit or are at least age 55 at time of death

3 State ORP in-service death benefit If you die in service as an active State ORP participant, your beneficiary may be entitled to receive: The cash value of your account through annuities, lumpsum distributions, or periodic withdrawals Active member incidental death benefit Must have at least one year of earned service unless death results from job related injury A payment equal to your current annual earnable compensation will be paid to your designated beneficiary Payments to beneficiaries are subject to state and federal taxes PORS Accidental Death Program Provides a survivor annuity if employer is covered and your death is result of a job related injury Paid monthly to surviving beneficiary Payments are subject to state and federal taxes Retirement eligibility Learn the rules for your PEBAadministered retirement plan Retirement eligibility Defined benefit plans: South Carolina Retirement System (SCRS) Police Officers Retirement System (PORS) Defined contribution plan: State Optional Retirement Program (State ORP) Retirement eligibility Class Two members Date of membership prior to July 1, 2012 Class Three members Date of membership July 1, 2012 and after

4 Retirement eligibility SCRS Class Two Normal retirement (unreduced benefit) 28 years of service credit with at least five years of earned service, or Age 65 on date of retirement with at least five years of earned service Retirement eligibility SCRS Class Two Early retirement (reduced benefit) Age 60 or older on the date of retirement with five years of earned service, or 5 percent reduction for each year member retires before age 65 Age 55 on date of retirement and at least 25 years of service credit, including at least five years of earned service Benefit permanently reduced 4 percent for each year of service less than 28 years Retirement eligibility SCRS Class Three Normal retirement (unreduced benefit) Age 65 with at least eight years of earned service, or Rule of 90 (age and years of service must add up to 90) with eight years of earned service Example: 56 year old member with at least 34 years of service, would be eligible for retirement ( = 90) Retirement eligibility SCRS Class Three Early retirement (reduced benefit) Age 60 or older on the date of retirement with eight years of earned service 5 percent reduction for each year member retires before age Retirement eligibility PORS Class Two At least 5 years of earned service; and At least 25 years of credited service or at least age 55 Retirement eligibility PORS Class Three At least 8 years of earned service; and At least 27 years of credited service or at least age

5 Retirement eligibility State ORP There is no minimum age or years of service required for State ORP retirement Request distribution of account balance at termination of employment or age 59 ½ Leave your balance on deposit to accumulate taxdeferred earnings until you elect to receive them IRS required minimum distribution age of 70 ½ Retirement eligibility SCRS and PORS disability retirement Must be in service with a participating employer Class Two members must have at least five years of earned service unless job related injury Class Three members must have eight years of earned service unless job related injury Retirement eligibility SCRS disability retirement Must apply within 90 days of date of termination from covered employer Must be approved for Social Security disability benefits to be approved for SCRS disability retirement benefits Submit approval letter from Social Security Administration (but do not wait to file SCRS application until after SSA approval) Benefit based on average final compensation and service credit at time of retirement (no projection of service credit) Retirement eligibility PORS disability retirement Must be permanently incapacitated from the further performance of your job duties Initial claim reviewed by Medical Board of three physicians Disability benefit calculated with a projection of service credit to age 55 or 25 years of service credit, whichever is less PEBA benefit PEBA benefit Estimate your PEBA benefit and possible adjustments State ORP Retirement benefit is accumulated account balance Any fees, distributions, and investment gains or losses will affect this balance Early withdrawal penalties for distribution prior to age 59 ½

6 PEBA benefit SCRS and PORS Benefit based on a formula that includes: Your average final compensation (AFC) Your service credit, and A benefit multiplier PEBA benefit Average final compensation (AFC) Three highest consecutive years of earnable compensation for Class Two members divided by 3 Five highest consecutive years of earnable compensation for Class Three members divided by 5 Earnable compensation does not include pay for overtime not mandated by the employer for SCRS Class Two and Three members. This does not apply to PORS members PEBA benefit Estimate your SCRS or PORS benefit 1. Calculate your AFC 2. Multiply your AFC by 1.82 percent (SCRS members) or by 2.14 percent (PORS members) 3. Multiply your result by the number of years of your service credit 4. Divide your result by 12 to arrive at your monthly annuity PEBA benefit Maximum payment plan Option A example: Early retirement penalties and/or reductions may apply Reduction factors will apply to members who select a joint retiree/survivor payment plan PEBA benefit Unused leave at retirement Class Two members: Up to 45 days pay for unused annual leave from your last termination payment included in AFC May receive service credit for up to 90 days of unused sick leave from last employer PEBA benefit Unused leave at retirement Class Three members: Unused sick leave not included in service credit Annual leave payouts not included in AFC

7 PEBA benefit SCRS disability retirement Under continuing review until age 65: Must provide evidence of continued receipt of Social Security disability benefits to PEBA each year Also subject to disability retiree earnings limitation PEBA benefit PORS disability retirement Under continuing review until age 55: May be scheduled for continuing disability reviews Subject to disability retiree earnings limitation PEBA benefit SCRS and PORS benefit estimates You can get a benefit estimate from your employer or by contacting PEBA by phone or e mail You may also use the benefit calculators on the PEBA website Use your benefit estimate to help select your retirement date and decide if you want to provide a survivor benefit to your beneficiary PEBA benefit Benefit adjustments For SCRS and PORS Members: Each July 1, current law provides for a 1 percent benefit adjustment up to an annual maximum of $ Payment options Payment options Understand the monthly annuity payment options Option A Maximum retiree only monthly benefit Option B 100% 100% joint retiree survivor monthly benefit (non spousal restrictions may apply) Option C 100% 50% joint retiree survivor monthly benefit

8 Post-retirement payment option changes If you choose Options B or C and all of your beneficiaries predecease you, your benefit will revert to Option A effective on the date the last beneficiary died You must notify PEBA of the death of your beneficiary Post-retirement payment option changes If you have a change in marital status, you may change your payment option within five years of the qualifying event You can only change your payment option twice regardless of the number of qualifying events that may occur Ready to start the process? Applying for retirement Understand the process How to apply: Call or Customer Contact Center for an application package; Visit our office and meet with a benefits counselor; Submit a service retirement application online; or, Download the forms from our website. Apply within six months before your date of retirement Retiring member s service application checklist What to include with your application Copy of your birth certificate; Copy of your driver s license or state issued identification card; and Copy of birth certificate for each beneficiary, if you are selecting a survivor option Important Deadlines Apply as early as six months prior to your date of retirement Apply no later than 90 days after your date of retirement Contact PEBA if you do not receive notification of receipt of your application within 10 days after submission Do not terminate employment until you receive official notice of your retirement eligibility

9 Returning to covered employment after retirement Return-to-work Understand the return-to-work rules for retirees A complete, bona fide severance or termination of employment is required After thirty days of retirement, you may be hired by a participating employer (TERI exclusion) Contribute the same percentage of earnable compensation as active members Employment status Returning to covered employment after retirement SCRS & PORS Class Two and Three members: $10,000 per year earnings limitation Earnings limitation does not apply to: members who retire after age 62 (SCRS) or age 57 (PORS); members who retired prior to January 2, 2013; members in elected and certain appointed positions; or participants in the TERI Program during the period they participate in the Program. Incidental Death Benefit Learn about the retiree incidental death benefit Incidental Death Benefit TERI participants and working retirees: If your employer provides incidental death benefit coverage and you die in service, a payment equal to your current annual earnable compensation will be paid to your designated beneficiary Incidental Death Benefit Non working retired members: SCRS Service Credit Benefit PORS Service Credit years $2, years years $4, or more years $6, years Class Two years Class Three 25 or more years Class Two 27 or more years Class Three Your employer immediately prior to retirement must offer the incidental death benefit for your beneficiary to receive this benefit

10 Emotional preparedness Emotional preparedness Are you emotionally ready? Well being encompasses three fundamental, yet distinct human goals: Prosperity economic well being Health physical wellbeing Happiness pleasure and satisfaction Nelson, J.E.. (2015). Retirement Well Being. Retrieved from Emotional preparedness Prosperity Plan now for your financial future Reduce future financial stress Health Take advantage of PEBA s wellness initiatives Happiness Think about what retirement means to you Ask yourself what you hope to do in retirement Emotional preparedness 1. Continuers keep using existing skills and interests 2. Adventurers start entirely new endeavors 3. Searchers explore new options through trial and error 4. Easy gliders enjoy unscheduled time and let each day unfold 5. Involved spectators care deeply about the world but engage in less active ways 6. Retreaters take time out or disengage from life Schlossberg, N. K. (2009). Revitalizing retirement: Reshaping your identity, relationships, and purpose. Washington, DC: American Psychological Association Member Access Stay connected Are you enrolled in Member Access? SCRS and PORS active members Access your retirement account Print a member statement Update your address View your beneficiaries and service credit Apply for service retirement View the status of your service retirement application Inactive members can also view and print a member statement and update their address

11 Member Access State ORP active members Link to your State ORP vendor information View your PEBA incidental death beneficiaries Update your address with PEBA Receive messages regarding State ORP open enrollment (January 1 to March 1) Change your State ORP vendor Irrevocable election to SCRS (if eligible) Member Access Retired members Print a 1099 R form Update your tax withholding Update your address Print an annuity verification letter View your current payment method Modify an existing direct deposit account or add an additional direct deposit account Member Access To register for Member Access, you will need the following: Last name Social Security number Date of birth A valid address If retired the net or gross amount of one of your most recent monthly annuity payments Stay connected be aware and prepare educational series Contact us at , , or cs@peba.sc.gov Visit us at 202 Arbor Lake Drive, Columbia SC Social Media Facebook, Twitter, PEBA TV (YouTube) Are you set for retirement? Do you understand the retirement eligibility rules? What income will your PEBA administered retirement plan provide? What is the best payment option for you? Do you understand the application requirements? Do you know the rules for returning to work? Have you considered the emotional impact of retirement? Are you connected? PEBA Serving those who serve South Carolina

12 Disclaimer This presentation does not constitute a comprehensive or binding representation regarding the employee benefits offered by the South Carolina Public Employee Benefit Authority (PEBA). The terms and conditions of the retirement and insurance benefit plans offered by PEBA are set out in the applicable statutes and plan documents and are subject to change. Please contact PEBA for the most current information. The language used in this presentation does not create any contractual rights or entitlements for any person

13 Important information 2017 Preretirement Insurance Education This overview is not meant to serve as a comprehensive description of the benefits offered by the South Carolina Public Employee Benefit Authority. For detailed information, refer to the Insurance Benefits Guide, available at South Carolina Public Employee Benefit Authority 2 Retirement Systems legislation TERI participants and working retirees In accordance with laws, effective January 2, 2013, a retired member who has been retired for at least 30 consecutive calendar days may be rehired and return to employment covered by the system Exceptions include Participation in the Teacher and Employee Retention Incentive (TERI) program 30 days on TERI is required Elected officials Retirement benefits are suspended for retired members in violation of the 30 day break in service requirement 3 4 TERI participants Remain covered as active employee until last day of permanent, full time employment Must apply for retiree coverage within 31 days of leaving employment and terminating TERI Working retirees 30 day break in service required if returning to work for a PEBA covered employer 30 days on TERI satisfies this requirement If eligible for Medicare, enroll in active group coverage If not eligible for Medicare, may elect to remain on retiree coverage Complete the Active Group Benefits Refusal form 5 6 1

14 All participants Eligibility for employees Hired before May 2, 2008 Regardless of how or when an employee qualifies for retirement, to qualify for the group insurance program, his last five years must be served consecutively in a full time, permanent position with an employer participating in the state insurance program 7 8 SCRS and State ORP participants Retirement eligibility 28 years of established service OR age 60+ OR approved for disability PEBA insuranceearned 1 service credit 10+ years 100% employer share (funded) 5+ years No contribution (non funded) Employer pays 2 Retiree pays 2 100% retiree share (funded) 100% employer share PLUS 100% retiree share (non funded) 1 Last five years of service must be full time, permanent and consecutive. Periods of non qualified service, federal service, military service and out of state public service purchased in the retirement systems, as well as credit for unused sick leave at retirement and service with employers that do not participate in the state insurance program do not count toward earned service. State ORP participants cannot purchase time. 2 Local subdivisions determine the division of their premiums. 55/25 year rule SCRS participants Retirement eligibility 25 years established service and age 55+ PEBA insuranceearned 1 service credit 10+ years 5+ years Until age 60 or until employee would have had 28 years retiree pays 2 100% employer share 100% retiree share (non funded) 100% employer share 100% retiree share (non funded) At age 60 or when employee would have had 28 years retiree pays 2 100% retiree share (funded) 100% employer share 100% retiree share (non funded) 1 Last five years of service must be full time, permanent and consecutive. Periods of non qualified service, federal service, military service and outof state public service purchased in the retirement systems as well as credit for unused sick leave at retirement and service with employers that do not participate in the state insurance program, do not count toward earned service. State ORP participants cannot purchase time. 2 Local subdivisions determine the division of their premiums All participants Left employment before eligible to retire Have at least 20 years of earned service 1 credit established with an employer participating in the state insurance program May enroll in funded retiree coverage at age 60 (SCRS) or age 55 (PORS) 1 Last five years of service must be full time, permanent and consecutive. Periods of non qualified service, federal service, military service and out of state public service purchased in the retirement systems, as well as credit for unused sick leave at retirement and service with employers that do not participate in the state insurance programs, do not count toward earned service. PORS participants Retirement eligibility 25 years established service OR age 55+ OR approved for Disability PEBA insuranceearned 1 service credit 10+ years 5+ years Employer pays 2 Retiree pays 2 100% employer share (funded) No contribution (non funded) 100% retiree share (funded) 100% employer share PLUS 100% retiree share (non funded) 1 Last five years of service must be full time, permanent and consecutive. Periods of non qualified service, federal service, military service and out of state public service purchased in the retirement systems, as well as credit for unused sick leave at retirement and service with employers that do not participate in the state insurance program, do not count toward earned service. 2 Local subdivisions determine the division of their premiums

15 Retirement Eligibility for employees Hired on or after May 2, 2008, but before July 1, 2012 Established by Section (B) of the S.C. Code of Laws Applies to new employees hired on or after May 2, 2008, with no previous service in a benefits eligible position with a state insurance participating employer All participants All participants Regardless of how or when an employee qualifies for retirement, to qualify for the group insurance program, his last five years must be served consecutively in a full time, permanent position with an employer participating in the state insurance program Retirement eligibility 28 years established service for SCRS/ORP (25 for PORS) OR age 60+ (55+ for PORS) OR approved for Disability PEBA insuranceearned 1 service credit 25 years 15 years 5years Employer pays 2 Retiree pays 2 100% employer share (funded) 50% employer share (partially funded) no contribution (non funded) 100% retiree share (funded) 50% employer share PLUS 100% retiree share (partially funded) 100% employer share PLUS 100% retiree share (non funded) 1 Last five years of service must be full time, permanent and consecutive. Periods of non qualified service, federal service, military service and out of state public service purchased in the retirement systems as well as credit for unused sick leave at retirement and service with employers that do not participate in the state insurance program, do not count toward earned service. 2 Local subdivisions determine the division of their premiums /25 year rule SCRS participants All participants PEBA insurance earned 1 Service Credit 25 years 15 but fewer than 25 years 5 but fewer than 15 years Until age 60 or until employee would have 28 years retiree pays 2 100% employer share 100% retiree share (non funded) 100% employer share 100% retiree share (non funded) 100% employer share 100% retiree share (non funded) At age 60 or when employee would have 28 years retiree pays 100% retiree share (funded) 50% employer share PLUS 100% retiree share (partially funded) 100% employer share 100% retiree share (non funded) 20 year rule Left employment before eligible to retire Have at least 20 years of earned 1 service credit established with employer participating in the state insurance program May enroll in retiree coverage at age 60 (SCRS) or age 55 (PORS) 1 Last five years of service must be full time, permanent and consecutive. Periods of non qualified service, federal service, military service and out of state public service purchased in the retirement systems as well as credit for unused sick leave at retirement and service with employers that do not participate in the state insurance program, do not count toward earned service. State ORP Participants not eligible to participate in the 55/25 rule. 2 Local subdivisions determine the division of their premiums Last five years of service must be full time, permanent and consecutive. Periods of non qualified service, federal service, military service and out of state public service purchased in the retirement systems, as well as credit for unused sick leave at retirement and service with employers that do not participate in the state insurance program, do not count toward earned service. 18 3

16 20-year rule PEBA insurance earned 1 service credit When eligible to retire Retiree pays 2 20 but fewer than 25 years 50% employer share PLUS 100% retiree share (partially funded) 25 years 100% retiree share (funded) 1 Last five years of service must be full time, permanent and consecutive. Periods of non qualified service, federal service, military service and out of state public service purchased in the retirement systems, as well as credit for unused sick leave at retirement and service with employers that do not participate in the state insurance program, do not count toward earned service. 2 Local subdivisions determine the division of their premiums. Eligibility for employees Hired on or after July 1, Retirement Established by Act No. 278 Applies to new employees hired on or after July 1, 2012, with no previous service in a benefits eligible position with a state insurance participating employer All participants Last five years Regardless of how or when an employee qualifies for retirement, to qualify for the group insurance program, his last five years must be served consecutively in a full time, permanent position with an employer participating in the state insurance program All participants Retirement eligibility Rule of 90 for SCRS 28 years established service for ORP (27 for PORS) OR age 60+ (55 PORS) OR approved for disability PEBA insuranceearned 1 service credit 25 years 15 years 5 years Employer pays 2 Retiree pays 2 100% employer share (funded) 50% employer share (partially funded) No contribution (non funded) 100% retiree share (funded) 50% employer share PLUS 100% retiree share (partially funded) 100% employer share PLUS 100% retiree share (non funded) 1 Last five years of service must be full time, permanent and consecutive. Periods of non qualified service, federal service, military service and outof state public service purchased in the retirement systems, as well as credit for unused sick leave at retirement and service with employers that do not participate in the state insurance program, do not count toward earned service. 2 Local subdivisions determine the division of their premiums. 20-year rule PEBA insurance earned 1 service credit When eligible to retire Retiree pays 2 20 but fewer than 25 years 50% employer share PLUS 100% retiree share (partially funded) 25 years 100% retiree share (funded) 1 Last five years of service must be full time, permanent and consecutive. Periods of non qualified service, federal service, military service and out of state public service purchased in the retirement systems, as well as credit for unused sick leave at retirement and service with employers that do not participate in the state insurance program, do not count toward earned service. 2 Local subdivisions determine the division of their premiums

17 Retiree enrollment Retiree enrollment and eligible dependents Within 31 days of retirement, you must complete: Retiree Notice of Election (RNOE) Employment Verification Record Forms are available from your benefits office, PEBA or online at Eligible dependents Spouse* Either current or former spouse (if court ordered to cover) Cannot cover spouse if the spouse is eligible for coverage as an employee or state funded retiree *Documentation required at time of enrollment for all dependents Eligible dependents Child* Natural, adopted, foster or step child Child placed for adoption Child for whom subscriber has legal custody or is court ordered to provide insurance A child who is under age 26 and employed with a participating employer may: Enroll as an active employee; or Enroll as dependent child Beyond age 26 if incapacitated *Documentation required at time of enrollment for all dependents Coverage Surviving spouse or child may be eligible for survivor coverage as long as he: was covered as dependent at time of subscriber s death; remains an eligible dependent; and pays the premium Survivors

18 Premiums* Survivors of active employees, partially funded, and state funded retirees: State Health Plan premiums waived for one year Then survivor pays full premium Survivors of non funded retirees pay full cost of premiums Annual October open enrollment *Local subdivisions determine the division of their own premiums October enrollment Enroll in, cancel or switch health plans Enroll in or drop State Vision plan Add or drop dependents from health and vision In odd numbered years, you may also: Enroll in or drop State Dental Plan and/or Dental Plus Add or drop dependents from State Dental Plan and/or Dental Plus To enroll in Dental Plus, you must enroll in the State Dental Plan and cover the same family members under both plans Health plans For retired members Health plan options Standard Plan Savings Plan 1 GEA TRICARE Supplement 1 Medicare Supplemental Plan 2 Medicare-eligible retirees Medicare becomes primary in retirement Retiree may change health plans within 31 days of Medicare eligibility 1 If a retiree is eligible for and enrolled in Medicare, he cannot contribute to a Health Savings Account, which is typically associated with the Savings Plan. Medicare eligible retirees/dependents are not eligible for the TRICARE Supplement 2 Only available to Medicare eligible retirees/dependents

19 Turning 65 in retirement PEBA will notify the retiree three months before 65 birthday PEBA will automatically change Standard Plan and Savings Plan subscribers to Medicare Supplemental Plan Turning 65 in retirement If enrolled in Standard Plan, may keep Standard Plan If enrolled in TRICARE Supplement Plan, may cancel or switch health coverage TRICARE becomes TRICARE for Life, a Medicare supplement Should enroll in Medicare Part A and Part B Enrolling in Medicare Medicare enrollment period begins three months before an individual s 65 birthday Receiving Social Security: Retiree notified by Social Security and enrolled automatically Not receiving Social Security: Retiree must contact Social Security to enroll Medicare-eligible retirees before age 65 Must notify PEBA and provide copy of Medicare card Can change health plans within 31 days of Medicare eligibility Medicare benefits Parts A and B Medicare-eligible retirees Hospital benefits (A) $1,316 deductible per benefit period No monthly premium if enough work credits established Medical benefits (B) $183 annual deductible $134 (average monthly premium for those who enroll in Part B in 2017 as determined by Medicare) Plan pays 80 percent of approved charges Pays Medicare Part A deductible ($1,316) Pays Medicare Part B deductible ($183) Pays Medicare coinsurance, up to 100 percent of Medicare approved charges Includes prescription drug benefit Offers no coverage outside the U.S. Claims for non Medicare subscribers are processed under the Standard Plan Medicare Supplemental Plan Example: $ 7,500 Hospital bill 1,316 Medicare Part A deductible $ 6,184 Medicare pays 1,316 Balance bill for subscriber 1,316 Medicare Supplemental Plan pays Part A deductible $ 0 Retiree pays nothing No Medicare or Medicare Supplemental Plan coverage outside U.S. and U.S. territories

20 Medicare-eligible retirees Offers worldwide coverage Includes prescription drug benefit SHP allowed $ 7,500 Hospital bill 445 SHP deductible $ 7,055 SHP liability x 80% SHP coinsurance $ 5,644 SHP without Medicare SHP Standard Plan with Medicare Uses carve out method: You pay SHP deductible and coinsurance or the balance of the bill, whichever is less Example of carve out method Medicare primary $ 7,500 Hospital bill 1,316 Medicare deductible $ 6,184 Medicare Pays SHP pays nothing because Medicare paid more than SHP would have paid in the absence of Medicare SHP with carve out $ 5,644 SHP without Medicare 6,184 Medicare pays 0 SHP pays $ 1,316 Retiree pays Medicare Part D drug program Most subscribers covered by PEBA should remain enrolled in Express Scripts Medicare, the SHP s Medicare Part D drug program Subscribers may only have one Part D plan, therefore members will lose prescription benefits through PEBA if they enroll in a separate Part D program For more information, see the Insurance Benefits Guide or contact Express Scripts Inc., the SHP pharmacy benefits manager SHP prescription drug benefits Medicare Supplemental and Standard plans Participating pharmacy 31 day supply: $ 9 Tier 1 generic $ 38 Tier 2 brand $ 63 Tier 3 non preferred brand Mail order pharmacy 90 day supply: $ 22 Tier 1 generic $ 95 Tier 2 brand $ 158 Tier 3 non preferred brand Copayment maximum $2,500 per person, then plan pays 100 percent until end of calendar year. Dental For retired members State Dental Plan and Dental Plus Enroll within 31 days of retirement or special eligibility situation Enroll during open enrollment in odd numbered years Once enrolled, must remain enrolled until next oddnumbered year open enrollment period or within 31 days of a special eligibility situation State Vision Plan For retired members

21 State Vision Plan Enroll within 31 days of retirement or special eligibility situation May enroll in or drop yearly during open enrollment Life insurance For retired members $3,000 basic life insurance Must have been enrolled in a health plan offered through PEBA or at time of retirement Can convert within 31 days of retirement date Retiree should contact Securian for conversion brochure at Pay premiums to Securian Optional life insurance Can convert or continue existing coverage Within 31 days of retirement In $10,000 increments Retiree should contact Securian at for conversion and continuation brochure Premiums quoted and billed by Securian Dependent life insurance Can convert within 31 days of retirement Submit PEBA Coverage Verification of Notice of Group Life Insurance Premiums are based on dependent s age and paid directly to Securian Disability insurance For retired members

22 Basic Long Term Disability Available only to active employees enrolled in the State Health Plan Ends at retirement Cannot be converted to individual policy Supplemental Long Term Disability (SLTD) Available only to active employees Ends at retirement MoneyPlus Not available in retirement Retirees not eligible for Medicare may continue HSA contributions, but not through MoneyPlus MoneyPlus For retired members MyBenefits MyBenefits Available 24/7 to all subscribers with internet access Review benefits statement Change contact information Make changes during October enrollment periods

23 MyBenefits To use MyBenefits you will need your: Benefits Identification Number (BIN) Social Security number (SSN) Date of birth (DOB) Benefits review For retired members Benefit options Health, dental and vision Optional Life insurance (continue or convert) $3,000 Basic Life insurance (convert) Dependent Life insurance (convert) Your benefits office in retirement State agency, school district and higher education retirees: PEBA will become your Benefits Administrator, and premiums may be deducted from your retirement check Local subdivision retirees: Your former employer will remain your Benefits Administrator, and premiums will be paid to your former employer Reminders You are responsible for your benefits Enrollment is not automatic Complete and submit Retiree Notice of Election Employment Verification Record Enroll within 31 days of retirement, when TERI ends, or when approved for disability Contact Information By phone: (toll free) Online: In person: 202 Arbor Lake Drive, Columbia, SC

24 Disclaimer This presentation does not constitute a comprehensive or binding representation regarding the employee benefits offered by the South Carolina Public Employee Benefit Authority (PEBA). The terms and conditions of the retirement and insurance benefit plans offered by PEBA are set out in the applicable statutes and plan documents and are subject to change. Please contact PEBA for the most current information. The language used in this presentation does not create any contractual rights or entitlements for any person

25 Your Journey to Retirement Month/Day, Empower Retirement Serves nearly 7.6 million retirement plan participant accounts 1 Administers more than $429.8 billion in retirement plan assets 1 The second-largest recordkeeper of retirement plans by participants in the U.S. 1 Chosen by Public Employee Benefit Authority (PEBA) to provide administrative, education and communication services Fully staffed local office and representatives for the Program 2 1 As of 12/31/15. Information refers to all retirement business of Great-West Life & Annuity Insurance Company and its subsidiaries. 2 Representatives of GWFS Equities, Inc. cannot offer investment, fiduciary, financial, legal or tax advice. Please consult with your financial planner, attorney and/or tax advisor as needed.

26 3 About the Program Full/part-time employees are eligible to enroll at any time Two plans are available: 401(k) and 457(b) Before-tax (traditional) and after-tax (Roth) contributions Minimum contribution amount: $10 per pay period Teacher and Employee Retention Incentive Program (TERI) rollover monies accepted in the 401(k) Annual Leave Payout contributions accepted: 401(k) and 457(b) You can keep the money in the Program after termination of service Low administrative fee of 0.10 percent per year, deducted from your account quarterly 4 A plan comparison: 401(k) vs. 457(b) PROVISION 401(k) 457(b) Maximum contribution of $18,000 per year in 2016 (up to age 50) X X In-service distributions allowed at age 59½ X No 10 percent premature penalty on distributions prior to age 59½ after separation from service from a participating employer X Pre-tax contributions X X After-tax (Roth) contributions X X Special Three-Year 457(b) Catch-Up 1 X Age 50+ Catch-Up 1 X X Rollovers allowed from other qualified plans, including the TERI plan 2, State ORP and non-roth IRAs 3 X 1 You cannot use both the Age 50+ Catch-Up and the Special Three-Year Catch-Up in the same calendar year. 2 Teacher and Employee Retention Incentive Program. 3 You are encouraged to discuss rolling money from one account to another with your financial advisor/planner, considering any potential fees and/or limitation of investment options.

27 5 A plan comparison: 401(k) vs. 457(b) PROVISION 401(k) 457(b) Rollovers only from other 457 plans 3 X In-service transfers to purchase service credit X X Loans X X Saver s Tax Credit qualification X X Financial hardship withdrawals X Unforeseeable emergency withdrawals X Annual leave payout up to the annual contribution limit X X 3 You are encouraged to discuss rolling money from one account to another with your financial advisor/planner, considering any potential fees and/or limitation of investment options. 6 Roth vs. traditional After-tax Roth account Locks in today s tax rates on all contributions Any earnings are tax-free if you take a qualified distribution Suitable for higher tax bracket at retirement Employer-matching contributions are treated as before-tax contributions (even if your contributions are after-tax) and may be subject to income taxes upon distribution Before-tax traditional account Contributions and any earnings on contributions are tax-deferred until you take a distribution Suitable for lower tax bracket at retirement

28 7 How much can you contribute in 2016? Minimum contribution: $10 per pay period Maximum contribution: 401(k) and Roth 401(k): $18,000 1 Age 50+ Catch-Up: additional $6, (b) and Roth 457(b): $18,000 1 Special Three-Year Catch-Up: up to $36,000 2 Age 50+ Catch-Up: additional $6,000 2 Contributions to both the 457(b) and 401(k) Plans Contribution changes: All changes can be made via the website or Voice Response System (VRS) 3 Changes can be made effective via automatic payroll deduction Changes can be made at any time 1 Traditional and Roth contributions are combined to meet annual limit. 2 You may not use the Special Three-Year Catch-Up provision and the Age 50+ Catch-Up provision in the same calendar year. 3 Access to VRS and/or any website may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance or other reasons. 8 Access your benefits You may access your benefits under the following circumstances: 1 Qualification Tax implications if qualifications not met 401(k) Retirement, permanent disability, separation from service the year you turn 55, attainment of age 59½, death 10 percent tax penalty plus ordinary income tax 457(b) Retirement, unforeseeable emergency, separation from service, attainment of age 70½ if still employed, death Ordinary income tax 1 Representatives of GWFS Equities, Inc. cannot offer investment, fiduciary, financial, legal or tax advice. Please consult with your financial planner, attorney and/or tax advisor as needed.

29 9 Access your benefits Qualification Tax implications if qualifications not met Roth 401(k) Five years after Roth account has been established and one of the following: age 59½, death, or disability 10 percent tax penalty plus ordinary income tax Roth 457(b) Five years after Roth account has been established and one of the following: age 59½ and separated from service, death or disability Ordinary income tax on any earnings 10 Build and monitor your own portfolio Select your own mix of individual investment options Get assistance with Empower Retirement Advisory Services (Advisory Services), a suite of services offered by Advised Assets Group, LLC, a federally registered investment adviser Online Investment Guidance» Provides some general guidelines for investing Online Investment Advice» Provides specific portfolio information for you Managed Accounts Service» Provides a professional investment strategy tailored to your specific financial situation There is no guarantee that participation in Empower Retirement Advisory Services will result in a profit or that your account will outperform a self-managed portfolio.

30 Save enough to afford retirement 11 Most financial advisors say you will need about 70 percent of your pre-retirement earnings to comfortably maintain your pre-retirement standard of living. 1 Many people are living longer and healthier lives than ever before. 2 Social Security may not be enough. Do not forget about inflation. Item Typical Cost in 2015 Could Cost in 2035 New American home $322,800 3 $583,012 Gallon of gasoline $ $5.74 In-state tuition per year (public four-year college or university) $9,139 5 $16,506 Pound of coffee $ $9.07 New vehicle $32,890 6 $59,403 FOR ILLUSTRATIVE PURPOSES ONLY. This hypothetical illustration assumes a 3 percent rate of inflation for 20 years. 1 Source: December Source: December Source: January Source: Source: 6 Source: January 2014 The Retirement Income Control Panel 12 The Retirement Income Control Panel is provided as an educational tool for your private use to assist in analyzing the various impacts of your savings and investment decisions. It is not intended to provide financial planning or investment advice. All information provided by the Retirement Income Control Panel is hypothetical and for illustrative purposes only. The accuracy of the results or their applicability to your individual circumstances cannot be and is not guaranteed. The Retirement Income Control Panel is brought to you by Advised Assets Group, LLC, a registered investment adviser. All rights reserved.

31 13 Key features: Your projected amount Based on a formula using the following information: Account balance Annual salary Desired replacement income percentage Historical contributions Types of assets invested in Current age Desired retirement age Social Security status Market scenario assumptions Other retirement asset information FOR ILLUSTRATIVE PURPOSES ONLY. 14 Key features: Income sources FOR ILLUSTRATIVE PURPOSES ONLY. = Income source(s) used in the calculation

32 15 Key features: Variable inputs FOR ILLUSTRATIVE PURPOSES ONLY. Tailor the retirement information used: Annual salary Retirement age Replacement income Variable Fields Social Security status 16 Key features: Savings gap FOR ILLUSTRATIVE PURPOSES ONLY.

33 Key features: Contributions and asset allocation 1 17 FOR ILLUSTRATIVE PURPOSES ONLY. Adjust your contributions Adjust your asset allocation 1 Asset allocation does not ensure a profit and does not protect against loss in declining markets. 18 What is next? Get enrolled! Visit 1 to download an enrollment form One enrollment form per plan: 401(k) and 457(b) The payroll center is your employer on the form Questions? Contact your Retirement Plan Counselor Fax completed form to Once enrolled: Check if you are saving enough Check your diversification 2 Enroll in Advisory Services if you would like help Want to learn more? Go to 1 Or call Access to VRS and/or any website may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance or other reasons. 2 Diversification does not ensure a profit and does not protect against loss in declining markets.

34 19 How to enroll To start the enrollment process, go to 1 Click on Enroll Now. Complete the Enrollment Form and return it to the address indicated on the form. Your payroll office will automatically be notified to start the contributions. Your account will be opened and a Personal Identification Number 2 (PIN) will be mailed to you. To access your account online, go to On the right side of the screen under First Time Visiting?, click on Register Your Account. Follow the prompts. 1 Access to VRS and/or any website may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance or other reasons. 2 The account owner is responsible for keeping their PIN/Passcode confidential. Please contact Client Services immediately if you suspect any unauthorized use. 20 South Carolina territory map Retirement Plan Counselors 1 Brent Railey brent.railey@ empower-retirement.com To schedule an individual appointment or a group meeting, call VRS at , or the Retirement Plan Counselor assigned to your area. 1 Representatives of GWFS Equities, Inc. cannot offer investment, fiduciary, financial, legal or tax advice. Please consult with your financial planner, attorney and/or tax advisor as needed. Bill Poletti william.poletti@ empower-retirement.com Nancy Ornduff nancy.ornduff@ empower-retirement.com Paul Manville paul.manville@ empower-retirementcom Rachel Phillips rachel.phillips@ empower-retirement.com Jill Daybell jill.daybell@ empower.retirement.com

35 Keep track of your journey Manage your account, monitor your progress 1 21 Services available VRS Website southcarolinadcp.com Create your online passcode 2 Order or personalize your PIN 2 Check account balance, allocations and transactions 1 X X X X X Check investment performance Reallocate funds Use financial calculators and tools a customer service representative Talk with a customer service representative (9 a.m. to 8 p.m. Eastern time) 1 Access to VRS and/or any website may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance or other reasons. Transfer requests made via the website or VRS received on business days prior to close of the New York Stock Exchange (4 p.m. Eastern time or earlier on some holidays or other special circumstances) will be initiated at the close of business the same day the request was received. The actual effective date of your transaction may vary depending on the investment option selected. 2 The account owner is responsible for keeping their PIN/passcode confidential. Please contact Client Services immediately if you suspect any unauthorized use. X X X X X X X Stick with the Program 22 Reasons to leave your money in the Program: Low administrative fee, currently 0.10 percent Variety of investment options Investment advisory services offered by AAG Flexible distribution options Automated required minimum distribution process Access to a local representative