CalPERS from Hire to Retire

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1 California School Employees Association Debb Jachens Member Benefits Coordinator ext 1309 Goal To Educate Para Educators about ALL CalPERS benefits proper reporting how to preserve benefits if becoming certificated employee 5 year conversion how to maximize benefits calculation of benefits 1

2 About CalPERS Largest and most successful public pension system in United States Investment portfolio Governed by 13 member board six elected members seven appointed members Pension Reform Classic Members. 55. Highest 12 months New Employees hired January 1, 2013 or new to CalPERS 62 and Highest 36 months Changing School Districts in California Contacts in publication 907 page 39 Seminar dates CSEA website Names of Pre-retirement committee members CSEA web site Nadine Franklin s phone number ext 1205 Debb Jachens phone number ext 1309 CalPERS phone number CalPERS web site forms Publications 2

3 Return on Your CalPERS Contributions Defined benefit = Lifetime income No borrowing CalPERS Eligibility 1000 hours in a year Four (4) hours or more per day 20 hours per week All Hours Membership all hours count Summer School Extra Hours The law Gov t Code

4 Conversion Rule Age 50 with five years of Service Credit Five Year Consecutive Years Government Code May retire younger if disabled Factors That Determine Retirement Income retirement Total CalPERS Service Credit Final Compensation Choosing a Retirement Date Consider birthday Quarter System December Rule 4

5 CalPERS on-line mycalpers Log on It s a members actual information Live with payroll employer reports/account updates Can set appointments Contact CalPERS send message See annual statement See service credit See payrate Great resource Let s go online 5

6 Ask payroll Take your HOURLY payrate X X number of months you work divided by 12. How to figure your Gross monthly pay for the best on line estimate 6

7 CalPERS on-line Tips for the calculator Members need to know their gross pay (before taxes and all deductions) Accurate estimates if the member log s into mycalpers Everyone who works under 12 months marks part-time on the calculator (even if they are 8 hours a day) Do several estimates and save them in your on-line account Annual Member Statement Why mycalpers? Live payroll figures Your information monitored by you Estimates Classes Forms and Publications Appointments 7

8 Purchasing Service Credit Purchasing Service Credit is time either as a substitute or low hour position CalPERS reporting buying service credit is taking UP TO a Year PRIOR to RETIREMENT Purchases should be done when first hired or early in the members career Early purchases are less expensive Newer employees should purchase service credit if available Evaluate if Purchasing Service Credit is worthwhile by doing an online estimate The sooner you purchase the service credit the less expensive it is Service Prior to membership and redeposit are the least expensive Other information Taxes all untaxed monies will be taxed - you choose method Taxable income Checks under $1,000 month work with IRS Deductions from monthly check Join the CSEA retiree unit Your next phase of CSEA membership Buy back Service Credit for substitute, short-term or less than 4 hours a day time. 8

9 Sick Leave Available if you retire within 120 days of separation from employer District reports number of days All unused sick leave converts to service credit Applying for Retirement Print an application or retire on line Do an estimate on line Paper estimate only within 12 months Choose Option Application to CalPERS 90 days prior to retirement date

10 Leaving Membership Leave funds on deposit At 50 or older MAY retire Roll over funds if not vested to avoid penalty A lump sum withdrawal is VERY COSTLY Lump Sum Withdrawal Very Costly Only employee account no employer funds Penalties Under Age 59 ½ = Penalty 32.5% Tax consequences Loss of guaranteed LIFETIME income If you become a teacher If becoming certificated employee -consider remaining with CalPERS continue contributing to Social Security higher formula with CalPERS after retirement cost of living adjustments are compounded with CalPERS - not with STRS 10

11 Disability Disability retirement if one cannot perform duties of the job because of an incapacity need not be a job related injury. Employer has obligation to apply on for an employee - Government Code Younger employees can apply if vested (5 years). CalPERS pays service or disability benefits, whichever is higher. Terminal Illness CalPERS comes directly to the employee and can help leave a lifetime income to the family of the member. Younger employees can apply for disability retirement for maximum benefit. Generally, employees apply for retirement Option 2W. 11

12 Fatality while Working Return of contributions plus up to six months of salary Return of contributions plus up to six months of salary Power of Attorney CalPERS has it s own form Protects the family and the member Enables someone to choose option or make other CalPERS related decisions CalPERS must stop checks if no one is designated and retiree incapacitated Form in the book Big Changes at CalPERS Option = a choice on how the payments come to the member and/or beneficiary. Options will change in New titles will be similar to Member Only Benefit Option 2w and 3w will be eliminated no longer available CalPERS board election. CSEA endorsed Michael Bilbrey. The election has changed with on line and phone voting. Voting has never been more important encourage your member to vote Taxes if the retirement check is under $1000 the member must file a special form to have taxes deducted. The income is taxable The form is available by calling CalPERS or check with your tax advisor Updates to CalPERS on line occur regularly 12

13 Health Benefits should be a consideration. Find out if your District offers health benefits for Retirees. All CalPERS Forms CalPERS home page Forms and Publications Center PRINT very simple Social Security SS coordinated with CalPERS Pay both collect both Benefits depending on age SS off set CalPERS not a Government Pension If issues with SS contact CSEA 13

14 After Retirement Death Benefit After retirement death benefit is $2000 Cost of Living Increases CalPERS Retirees receive up to 2% cost of living adjustments annually CPI does not always provide a COL May 1 of the second calendar year after retiring. Based on CPI Cost of Living increases compounded each year. Working After Retirement CalPERS Restrictions/Reinstating 960 hours per year temporary or substitute position ONLY for a CalPERS covered agency No limit outside CalPERS Agency You may reinstate - stop checks from CalPERS, earn 1 year of service credit, retire with higher pension 14

15 Call Center Reach out to CSEA first Nadine Franklin 1205 Debb Jachens THANK YOU Everyone should receive the best retirement the law provides! 15