2018 RETIREMENT HANDBOOK

Transcription

1 2018 RETIREMENT HANDBOOK

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3 January 2018 Dear Retirement Plan Member: The Contra Costa Water District is pleased to present you with our Retirement Handbook. Your retirement is an important event and we urge you to take the time to become familiar with the District s retirement benefits. You may also wish to encourage your dependents and beneficiaries to become familiar with the plan. This booklet contains reference information only and is not intended to be used for official determination of your particular benefits. When you begin planning your retirement, the determination of benefits will be prepared by the District, consistent with the provisions of your Memorandum of Understanding (MOU) or Employment Agreement and the Retirement Trust Agreement provisions in effect on the date of your retirement. The information in this booklet is reviewed and updated on an annual basis by the Human Resources and Risk Division and is designed to provide you with important retirement benefits information in a user-friendly format. If you have any additional questions, please contact the Human Resources and Risk Division at for assistance. You are encouraged to plan ahead to make your retirement years the best they can be for you and your loved ones. Sincerely, Jerry Brown General Manager JB/SS:dh

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5 TABLE OF CONTENTS INTRODUCTION... 1 PLAN DESCRIPTION... 1 PLAN HISTORY... 1 MANAGEMENT AND ADMINISTRATION... 1 PURPOSE OF THE HANDBOOK... 1 PLAN MEMBERSHIP... 2 WHO IS ELIGIBLE?... 2 WHEN DOES PARTICIPATION BEGIN?... 2 IS PARTICIPATION MANDATORY?... 2 HOW DO I BECOME A MEMBER?... 2 Enrollment Form... 2 Membership Classifications... 2 Incoming Reciprocity... 2 Beneficiary Designation... 3 CONTRIBUTIONS TO THE PLAN... 4 WHAT ARE THE CONTRIBUTION RATES FOR THE PLAN?... 4 WHEN DO EMPLOYEE CONTRIBUTION RATES BEGIN?... 4 EMPLOYEE CONTRIBUTION RATES... 4 CAN MY CONTRIBUTION RATE CHANGE?... 4 DO MY CONTRIBUTIONS EARN INTEREST?... 4 HOW WILL I KNOW MY RETIREMENT CONTRIBUTION BALANCE?... 5 HOW DOES THE DISTRICT DETERMINE THAT THERE IS APPROPRIATE FUNDING FOR THE PLAN?... 5 VESTING... 6 WHAT DOES VESTING MEAN?... 6 WHEN IS AN EMPLOYEE VESTED IN THE DISTRICT S PLAN?... 6 WHAT HAPPENS IF I DON T VEST IN THE DISTRICT S PLAN?... 6 CCWD PENSION AND OPEB VESTING REQUIREMENTS... 7 SERVICE CREDIT... 8 WHAT IS SERVICE CREDIT AND HOW IS IT EARNED?... 8 BUYBACK SERVICE CREDIT TIME... 8 PURCHASE OF ADDITIONAL RETIREMENT SERVICE CREDIT... 8 TERMINATION OF EMPLOYMENT... 9 WHAT HAPPENS TO MY CONTRIBUTIONS IF I TERMINATE EMPLOYMENT BEFORE I RETIRE?... 9 You May Withdraw from the System... 9 Remain a Member of the CCWD Retirement Plan... 9 WHAT IF I DIE BEFORE I RETIRE? Distribution of Contributions Plus Interest Monthly Benefit for Classic Members Monthly Benefit for PEPRA Members Distribution of Contributions and a Reduced Monthly Benefit WHAT IF I BECOME DISABLED BEFORE I RETIRE? RETIREMENT ELIGIBILITY WHEN CAN I RETIRE? Date of Retirement HOW WILL HUMAN RESOURCES STAFF PROCESS MY RETIREMENT? Date of Payment January 1, 2018 Page i

6 TABLE OF CONTENTS PRE-RETIREMENT DECISIONS RETIREMENT CHECKLIST HOW DO I APPLY FOR RETIREMENT? WHAT IF I DIVORCE OR DISSOLVE MY DOMESTIC PARTNERSHIP PRIOR TO RETIREMENT? DETERMINING RETIREMENT BENEFITS RETIREMENT BENEFITS FOR EMPLOYEES Compensation Service Credit Age Retirement Benefit Limits WILL MY BENEFIT BE ADJUSTED FOR INFLATION? WILL SOCIAL SECURITY AFFECT MY PLAN BENEFIT? RETIREMENT BENEFIT FOR CLASSIC MEMBERS AGE RETIREMENT BENEFIT FOR PEPRA MEMBERS AGE PENSION BENEFIT OPTIONS WHAT ARE THE MONTHLY BENEFIT OPTIONS FOR ME AND MY SPOUSE/STATE OF CALIFORNIA REGISTER DOMESTIC PARTNER (RDP)? NORMAL FORM ( UNMODIFIED OPTION) JOINT ANNUITANT OPTIONS % Joint Annuitant Option % Joint Annuitant with Restoration Option % Joint Annuitant Option % Joint Annuitant with Restoration Option POST-RETIREMENT EMPLOYMENT IF I RETIRE FROM THE DISTRICT AND SUBSEQUENTLY BECOME REEMPLOYED BY THE DISTRICT, WHAT WILL HAPPEN TO MY RETIREMENT BENEFIT? IF I RETIRE FROM THE DISTRICT AND SUBSEQUENTLY SERVE ON A STATE BOARD OR COMMISSION WITH PAY, WHAT WILL HAPPEN TO MY RETIREMENT BENEFIT? FELONY CONVICTIONS IF I AM CONVICTED OF A JOB-RELATED FELONY WHILE ACTIVELY EMPLOYED, WHAT WILL HAPPEN TO MY RETIREMENT BENEFIT? GROUP BENEFITS AFTER RETIREMENT ELIGIBILITY FOR RETIREMENT MEDICAL WHAT HAPPENS TO MY MEDICAL INSURANCE ONCE I RETIRE? WHAT HAPPENS TO MY SPOUSE/STATE OF CALIFORNIA REGISTERED DOMESTIC PARTNER S (RDP) AND ELIGIBLE CHILDREN S (IF APPLICABLE) MEDICAL BENEFIT COVERAGE AFTER MY DEATH? CAN I CHANGE MY MEDICAL PLAN AFTER I RETIRE? NOTE: A NEW RETIREE MEDICAL BENEFIT WILL MOVING OUT OF THE AREA AFFECT MY MEDICAL PLAN COVERAGE? Moving Out of Selected Core Plan Service Area COVERED RETIREE MEDICAL BENEFITS Core Plan Selection Non-core Plan Selection Medicare Integration January 1, 2018 Page ii

7 TABLE OF CONTENTS Change in Medical Plan After Retirement within the Core Plans Change in Eligible Dependent(s) Status Retiree Pension Deduction Surviving Spousal Benefit DO I LOSE MY DENTAL, VISION, AND EMPLOYEE ASSISTANCE PROGRAM INSURANCE WHEN I RETIRE? WHAT ABOUT LIFE INSURANCE? WHAT HAPPENS TO MY SICK LEAVE WHEN I RETIRE? OTHER POST-EMPLOYMENT BENEFITS (OPEB) RETIREMENT BENEFIT FOR BOARD OF DIRECTORS (WHO TOOK OFFICE BEFORE JANUARY 1, 2013) CONTRIBUTION VESTING DATE OF RETIREMENT RETIREMENT BENEFIT DISABILITY RETIREMENT DATE OF PAYMENT WHAT IF I DIE BEFORE I RETIRE? Distribution of Contributions Plus Interest Monthly Benefit DEFERRED RETIREMENT TERMINATION PRIOR TO VESTING BENEFIT PAYMENT OPTIONS LUMP SUM BENEFIT NORMAL FORM ( UNMODIFIED OPTION) JOINT ANNUITANT OPTIONS % Joint Annuitant Option % Joint Annuitant with Restoration Option % Joint Annuitant Option % Joint Annuitant with Restoration Option RETIREMENT MEDICAL MEDICARE AND YOU DIRECTORS RETIREMENT BENEFIT FACTORS (WHO TAKE OFFICE BEFORE JANUARY 1, 2013) RETIREMENT BENEFIT FOR BOARD OF DIRECTORS (THOSE WHO TAKE OFFICE FOR THE FIRST TIME ON OR AFTER JANUARY 1, 2013) CONTRIBUTION VESTING DATE OF RETIREMENT DISABILITY RETIREMENT RETIREMENT BENEFIT DATE OF PAYMENT WHAT IF I DIE BEFORE I RETIRE? Distribution of Contributions Plus Interest Monthly Benefit DEFERRED RETIREMENT TERMINATION PRIOR TO VESTING BENEFIT PAYMENT OPTIONS LUMP SUM BENEFIT NORMAL FORM ( UNMODIFIED OPTION) JOINT ANNUITANT OPTIONS January 1, 2018 Page iii

8 TABLE OF CONTENTS 50% Joint Annuitant Option % Joint Annuitant with Restoration Option % Joint Annuitant Option % Joint Annuitant with Restoration Option RETIREMENT MEDICAL DIRECTORS RETIREMENT BENEFIT FACTORS (WHO TAKE OFFICE AFTER JANUARY 1, 2013) GLOSSARY OF TERMS January 1, 2018 Page iv

9 INTRODUCTION PLAN DESCRIPTION The Contra Costa Water District Retirement Plan is a defined benefit plan. This means that upon retirement, if eligible, you will receive a monthly pension benefit that is calculated using the following information: your age, years of service, the average of your highest 12- or 36- consecutive months of base salary compensation, and the applicable defined benefit formula. Refer to the Determining Retirement Benefits section (page 16) for additional details. PLAN HISTORY The Retirement Plan for the employees of Contra Costa Water District was established by the Trust Agreement made on February 17, 1962, and subsequently amended. On September 12, 2012, Governor Jerry Brown signed Assembly Bill 340 (Furutani), creating the Public Employees Pension Reform Act (PEPRA). This law applies to many public employers and public pension plans, including the Contra Costa Water District s Retirement Plan. Many provisions took effect January 1, As a result, the District s Board of Directors approved amendment (Appendix K) to the Retirement Trust Agreement to comply with the mandated changes as required by PEPRA. MANAGEMENT AND ADMINISTRATION A Plan Administrator appointed by the Contra Costa Water District Board of Directors administers the Retirement Plan consistent with the Retirement Plan Trust Agreement. The Plan Administrator seeks advice from the Retirement Committee on various Retirement Plan related matters. The Retirement Plan Committee is advisory and consists of six voting members, three appointed by the Clerical/Maintenance Bargaining Unit (Local 39), and three appointed by the Board of Directors. The Committee monitors and reviews the investment performance of the Plan funds. The Committee also reviews applications for disability benefits, disputes, and other special cases. All recommendations of the Committee are subject to review and approval by the Contra Costa Water District Board of Directors. PURPOSE OF THE HANDBOOK This Handbook is intended to acquaint you with the District's retirement benefits and to provide you with an easy reference to answer many of your questions or concerns. The Retirement Plan is governed by the Trust Agreement, which must be relied upon for detailed information on the defined benefit and all other details of the Plan. In every case concerning interpretation or implementation of the Plan, the Trust Agreement, as it may be amended from time to time, is the sole controlling document. This Handbook cannot be interpreted as adding to, subtracting from, or modifying any provision of the Trust Agreement. Any unanswered questions can be resolved by reference to the Trust Agreement or by contacting the District s Human Resources and Risk Division. January 1, 2018 Page 1

10 PLAN MEMBERSHIP WHO IS ELIGIBLE? Each permanent full-time employee and each project employee participates in the Plan. Part-time or temporary employees are not eligible to participate in the Plan. The Participant employee groups are: 1. Clerical/Maintenance 2. Professional/Supervisory 3. Confidential Unit 4. Unrepresented In addition, Board of Directors are also eligible for plan participation. Please refer to applicable sections within this Handbook for details pertaining specifically to Directors. WHEN DOES PARTICIPATION BEGIN? Participation begins on the first day of service as a full-time employee. IS PARTICIPATION MANDATORY? Yes, participation is mandatory for all eligible employees. HOW DO I BECOME A MEMBER? Enrollment Form At the time you are hired for an eligible position, you will be required to complete and submit a Retirement Plan Enrollment Form. This document identifies your years of service at a reciprocal agency, if applicable, for vesting purposes and your beneficiaries. Membership Classifications There are two types of membership classifications: 1. Classic Members Employees hired by the District on or before December 31, 2012, or individuals hired on or after January 1, 2013 who establish classic reciprocity with a public retirement system recognized by the Contra Costa Water District Retirement Plan (see Incoming Reciprocity below) from service prior to January 1, PEPRA Members Employees who first become a participant of the Contra Costa Water District Retirement Plan on or after January 1, 2013, and who were either: (a) not a member of any other public retirement system (as defined in Section of the California Government Code) prior to that date, or (b) a member of another public retirement system prior to that date, but not subject to reciprocity with that retirement system (Government Code ). Incoming Reciprocity Reciprocity is an agreement among certain public retirement systems allowing you to move from one public employer to another public employer without losing service credit for vesting purposes for retirement. January 1, 2018 Page 2

11 CCWD has established reciprocal agreements with the 1937 Retirement Act System ( 37 County Act), public employers participating in California Public Employees Retirement System (CalPERS) and all other public agencies maintaining reciprocity with CalPERS. You are eligible to establish reciprocity provided you left your accumulated contributions on deposit with your former reciprocal system and did not request to begin annuity benefits, and are subsequently employed by the District as a full-time or a project employee within six months of your separation date from your previous employer without overlapping service between the two agencies. To establish reciprocity, the Human Resources and Risk Division will contact your previous employer to verify your date of hire and years of service credit with that agency. Beneficiary Designation The enrollment form requires that you provide the name(s) and relationship(s) of the beneficiary/ beneficiaries you designate to receive your benefits in the event of your death. You should always keep your beneficiary designation up-to-date. Participants may change their beneficiary designations at any time prior to or after retirement by completing forms available in the Human Resources and Risk Division. Once completed and submitted, the most recent beneficiary designation will be used to distribute your benefits in the event of your death; therefore, it is very important that you periodically review and update your beneficiary designation, especially if you experience a life changing event such as a marriage, birth or adoption of a child, divorce, or death of a spouse or State of California Registered Domestic Partner (RDP). January 1, 2018 Page 3

12 CONTRIBUTIONS TO THE PLAN WHAT ARE THE CONTRIBUTION RATES FOR THE PLAN? The Plan is funded through a combination of employer contributions, employee contributions and investment earnings. All participating members are required to contribute to the Plan. Depending upon your employee group, the District picks-up a percentage of the employee s contribution for Classic Members. (See chart below for the employee contribution and employer pick-up that may apply to you.) The pretax employee contributions are made through payroll deductions each bi-weekly pay period and are made on base pay. Overtime, shift premium, call-out/standby and other irregular pay are not included in base pay. WHEN DO EMPLOYEE CONTRIBUTION RATES BEGIN? Probationary employees who do not have reciprocity begin making contributions after successfully passing their probationary period (normally after six months of service). Probationary employees who have incoming reciprocity (service credit from another reciprocal agency) begin making contributions immediately. EMPLOYEE CONTRIBUTION RATES The following employee contribution rates are in effect as of January 1, 2018: Classic Members Employee Employer Pick-Up Total Contributions Clerical/Maintenance 8% 1% 9% Professional/Supervisory 6.43% 3% 9.43% Confidential Unit 6.28% 3% 9.28% Unrepresented 4% - 6% (Depending on years of service) 2% - 0% (Depending on years of service) 6% PEPRA Members Employee Employer Pick-Up Total Contributions All 5.75% 0% 5.75% CAN MY CONTRIBUTION RATE CHANGE? Yes. The contribution rates described above are established in the Memoranda of Understanding or Employment Agreement for each employee group, which are negotiated with each respective employee group and in accordance with PEPRA provisions for New Members. DO MY CONTRIBUTIONS EARN INTEREST? Yes. Retirement contributions are tracked for each employee, and earn 5% interest compounded annually on all employee contributions, which includes the contributions made by the District on the participant s behalf (the employer pick-up, if applicable). Interest is applied once annually to the retirement contributions every July 1. The amount of an employee s contribution balance plus interest is relevant in either of the following situations: 1) an employee separates service from the January 1, 2018 Page 4

13 District and withdraws from the Plan; or 2) an employee predeceases retirement and the beneficiary(ies) elect a lump sum payout. HOW WILL I KNOW MY RETIREMENT CONTRIBUTION BALANCE? Each calendar year, in the first quarter, you will receive a statement showing the balance in your Plan account as of June 30, the end of the prior fiscal year. HOW DOES THE DISTRICT DETERMINE THAT THERE IS APPROPRIATE FUNDING FOR THE PLAN? An actuarial valuation of the Plan is performed annually. This actuarial valuation determines the present and future obligations of the Plan to pay benefits to its members and their beneficiaries, and determines the contributions, over and above investment earnings, required of the District and Plan participants to meet those present and future obligations. In addition to employee contributions and the employer pick-up, the District also contributes additional funds to the Retirement Plan (known as employer contribution). For 2018, the employer contribution rate is 22.41% of base pay. January 1, 2018 Page 5

14 VESTING WHAT DOES VESTING MEAN? Vesting means that you have satisfied the minimum requirements for a retirement benefit as prescribed in the Retirement Plan Trust Agreement. Please refer to CCWD Pension and OPEB Vesting Requirements chart on page 7 for additional details. WHEN IS AN EMPLOYEE VESTED IN THE DISTRICT S PLAN? An employee s service retirement benefits become vested upon: (a) (b) (c) (d) completing ten years of continuous service if you are a Classic Member in the Clerical/Maintenance representation unit; or five years of continuous service if you are in the Professional/Supervisory, Unrepresented, or Confidential Unit; or five years of continuous service if you became a PEPRA Member of the Retirement Plan on or after January 1, 2013, regardless of bargaining unit; or becoming totally and permanently disabled (100%) as verified by the Social Security Administration; or attaining age 62; or establishing reciprocity with a reciprocal agency, which in combination with District service, equates to five years total service or ten years for the Clerical/Maintenance bargaining unit for Classic Members in the Clerical/Maintenance bargaining unit. WHAT HAPPENS IF I DON T VEST IN THE DISTRICT S PLAN? If you separate from your employment with the District before meeting the vesting requirements described above, you will not be eligible for retirement benefits from the District. Please see Termination of Employment on page 9 for more information. January 1, 2018 Page 6

15 CCWD PENSION AND OPEB VESTING REQUIREMENTS Note: Retirement date must be within 120 days of separation from District employment to be eligible for OPEB Hired prior to 9/1/2011 Minimum age is 50 years-old Hired on or after 9/1/2011 through 12/31/2012 Minimum age is 50 years-old Hired on or after 1/1/2013 through 12/31/2015 Minimum age is: 50 years-old for Classic Members; 52 for PEPRA Members Hired on or after 1/1/2016 Minimum age is: 50 years-old for Classic Members; 52 for PEPRA Members PENSION L39: Employee must be a retiree with a minimum of 10 years total service which can include reciprocal service. All Others: Employee must be a retiree with a minimum of 5 years total service which can include reciprocal service. Per Retirement Plan Trust Agreement, Article V, Section 1(a). L39: Employee must be a retiree with a minimum of 10 years total service which can include reciprocal service. All Others: Employee must be a retiree with a minimum of 5 years total service which can include reciprocal service. Per Retirement Plan Trust Agreement, Article V, Section 1(a). L39 Classic Members: Employee must be a retiree with a minimum of 10 years total service which can include reciprocal service. All Other Classic Members: Employee must be a direct retiree with a minimum of 5 years total service which can include reciprocal service. ALL PEPRA Members: Employee must be a retiree with a minimum of 5 years total service which can include reciprocal service from 1/1/2013 forward. See Retirement Plan Trust Agreement, Amendment No. 3, Appendix K, Section 3(c) in the Retirement Trust. L39 Classic Members: Employee must be a retiree with a minimum of 10 years total service which can include reciprocal service. All Other Classic Members: Employee must be a retiree with a minimum of 5 years total service which can include reciprocal service. ALL PEPRA Members: Employee must be a retiree with a minimum of 5 years total service which can include reciprocal service from 1/1/2013 forward. See Retirement Plan Trust Agreement, Amendment No. 3, Appendix K, Section 3(c) in the Retirement Trust. OPEB (Retiree Medical Benefits) L39: Employee must be a retiree, therefore a minimum of 10 years total District service to receive the fully-paid medical plan premium benefit. All Others: Employee must be a retiree, therefore a minimum of 5 years total District service to receive the fully-paid medical plan premium benefit. For All Employee Groups: Employee must be a retiree with a minimum of 5 years District service in order to receive the fully-paid medical plan premium benefit. Per Code of Regulations Chapter For All Employee Groups: Employee must be a retiree with a minimum of 5 years District service in order to receive the fullypaid medical plan premium benefit. Employees with less than 5 years of District service are entitled to receive partially-paid benefits in accordance with PEMHCA. Per Code of Regulations Chapter For All Employee Groups: Employee must be a retiree with a minimum of 10 years District service in order to receive the fullypaid medical plan premium benefit. Employees with less than 10 years of District service are entitled to receive partially-paid benefits in accordance with PEMHCA. Per Code of Regulations Chapter January 1, 2018 Page 7

16 SERVICE CREDIT WHAT IS SERVICE CREDIT AND HOW IS IT EARNED? Service credit is credit for continuous service from the beginning of your most recent period of full-time employment with the District to termination, without a break other than a leave of absence granted by the District for military service or other approved reasons. You must return to the service of the District at the expiration of your leave without intervening employment other than that for which you were granted leave. BUYBACK SERVICE CREDIT TIME As a returning Plan participant, any time prior to applying for retirement, you may redeposit your previously withdrawn contributions. In addition, you would also be required to deposit additional funds to cover interest, which would have been credited to your account had you not withdrawn those funds and remained a member of the Plan. You would then be re-credited for service for the prior participation. You may redeposit your previously withdrawn contributions to the trust fund, in a lump sum or by equal installment payments for up to 36 months. Please note that the option to redeposit contributions is available only to employees who are rehired. If you leave the District s employment, withdraw your funds, and are not ever subsequently rehired by the District, you will no longer have any right to redeposit funds and resume participation in the Retirement Plan. This includes subsequently being hired by a reciprocal agency. Once contributions are withdrawn, service credit redeposit is only possible upon return to full-time or project employment with the District. Employees may redeposit funds using any qualified pretax funds (e.g. 457b, 401a, 403b, 408a), cash (up to IRS limitation rule for the year in which the purchase is made), or by installments using pretax payroll deductions. PURCHASE OF ADDITIONAL RETIREMENT SERVICE CREDIT An employee who had qualifying service with another public agency but is not eligible for retirement in that public agency s retirement system, may purchase (in whole month increments) no less than one year to a maximum of ten years of service credit in the CCWD Retirement Plan. The cost of the benefit is solely borne by the employee electing to purchase the service credit. Cost is based on the amount of whole months of retirement service credit to be purchased, the salary history during the period of service being purchased, the actuarial cost to fund the benefit using the benefit factors, and the actuarial assumptions used in the CCWD Retirement Plan valuation, which includes interest. An employee who would like to exercise this option must be a full-time or project District employee and be vested in the CCWD Retirement Plan. The following service qualifies for service credit purchase: federal or state employment, public school, college or university employment, county, city or special district employment, and military service including full-time National Guard service that is not otherwise counted toward retirement service time in any other retirement system. In addition, time worked for CCWD as a temporary employee may be eligible for purchase. The following service does not qualify for service credit purchase: service time included within the basis for a defined retirement benefit from another agency and service time considered for reciprocity with another CalPERS retirement system or other reciprocal system. Employees may purchase service credit using any qualified pretax funds (e.g. 457b, 401a, 403b, 408a), cash (up to IRS limitation rule for the year in which the purchase is made), or by installments using pretax payroll deductions. If you have questions regarding the purchase of retirement service credit, you should contact the Human Resources and Risk Division. January 1, 2018 Page 8

17 TERMINATION OF EMPLOYMENT WHAT HAPPENS TO MY CONTRIBUTIONS IF I TERMINATE EMPLOYMENT BEFORE I RETIRE? You have two options with regard to your contributions when you terminate employment with the District before you retire. You may withdraw from the system and take a distribution or you may leave your contributions on deposit, defer your retirement, and remain a member of the CCWD Retirement Plan. You May Withdraw from the System If you terminate employment, you may withdraw your contributions and the contributions that the District made on your behalf (employer pick-up) if applicable, plus accumulated interest. A Distribution Election Form must be completed to initiate this action. This means that you will no longer be a participant of the Plan, and will not be eligible for retirement benefits in the future. In addition, per IRS regulations, you will also be provided with a document entitled Special Tax Notice Regarding Plan Payments (often referred to as a 402(f) Notice) which fully explains rollover options and associated tax implications to help you make decisions. Withdrawing from the system creates potential tax implications. Depending on your employee group, you may have been contributing to the Plan on a pretax basis since: Unrepresented and Confidential Unit March 5, 1990 Clerical/Maintenance Employees April 16, 1990 Professional/Supervisory Employees June 11, 1990 Therefore, as you have not been paying income tax on your contributions or on the interest credited to your account from the above corresponding date forward, such pretax contributions and all interest will be subject to special income tax withholding rules. For rollover options, please refer to the Special Tax Notice Regarding Plan Payments document provided to you upon separation. If you have specific questions regarding the above, you should contact a qualified tax advisor (such as a Certified Public Accountant or an Enrolled Agent) or you may contact the Internal Revenue Service (IRS). Remain a Member of the CCWD Retirement Plan If you are fully vested (with at least 5 or 10 years of service depending on your bargaining unit or membership classification) or if you separate from the District and enter into a reciprocal retirement system, you can keep your funds on deposit and elect to receive retirement plan benefits in the future. This is called a deferred retirement. If you defer your retirement beyond 120 days of your District separation date (do not collect a pension upon separation and plan to receive your pension at a later date beyond the 120 days), you will not be eligible for retiree medical benefits. Retiree medical is only available to employees directly retiring from active service from the District within 120 days of District separation. For Classic Members: If you terminate your employment after you become vested, you may leave your contributions in the Plan and take a deferred retirement at any date after reaching age 50, but no later than age 70½. Your pension benefit will be computed based on your employee group vesting eligibility, the retirement factor in effect on the date of termination of employment, January 1, 2018 Page 9

18 your age when benefits begin, your years of continuous service, and your highest 12 consecutive months of base pay at the time of termination of employment. For PEPRA Members: If you terminate your employment after you become vested (with at least 5 years of service), you may leave your contributions in the Plan and take a deferred retirement at any date after reaching age 52, but no later than age 70½. Your pension benefit will be computed based on your vesting eligibility, the retirement factor in effect on the date of termination of employment, your age when benefits begin, your years of continuous service, and the average of your highest 36 consecutive months of base pay at the time of termination of employment. Maximum pensionable compensation will be capped at $121,388 (annually) effective January 1, The Plan Administrator will adjust the annual compensation limit following each actuarial valuation of the Plan based on changes to the Consumer Price Index for All Urban Consumers in accordance with (d) of the California Government Code. For All Members: Reciprocity is available if you leave the District and within six months take employment with a 1937 Retirement Act System ( 37 County Act), public employer participating in California Public Employees Retirement System (CalPERS), or other public agency maintaining a reciprocal system with CalPERS. Reciprocity provides the following key benefits: 1) Reciprocity allows an employee to combine service time from the District and reciprocal agencies for vesting purposes. 2) Reciprocal agencies will use a member s highest consecutive 12 or 36 months base salary when determining a retirement benefit. Note: An employee may not have concurrent service time with CCWD and a reciprocal agency. This means that you may not be on the payroll of two agencies at the same time. Concurrent service time will negate your reciprocity benefits. Also, you must retire concurrently (on the same date) from all reciprocal agencies in order to receive the benefits created by the reciprocity. For the purpose of reciprocity, your effective retirement date is typically the day after your final day on payroll. For example, if your final day on District payroll is December 30, then your CCWD retirement effective date, and the date you would need to retire from the reciprocal system, would be December 31. You must leave your contributions and interest on deposit with each retirement system. You must apply for reciprocity and both retirement systems must concur and confirm that reciprocity exists. Upon retirement, you will receive a monthly retirement benefit from each entity based on the service credit you acquired with that entity and the benefit formula used by that retirement system. However, both retirement systems will use the highest consecutive 12 or 36 months base salary from either entity. WHAT IF I DIE BEFORE I RETIRE? Several options are available to your designated beneficiary or beneficiaries in the event of your death before retirement. Distribution of Contributions Plus Interest In all cases, your contributions and those contributions made by the District (employer pick-up) if applicable, with accrued interest, can be distributed in a lump sum payment to your designated beneficiary/beneficiaries. January 1, 2018 Page 10

19 Monthly Benefit for Classic Members If you are a Classic Clerical/Maintenance employee and die after completing ten or more years of service, or you are a Classic Professional/Supervisory, Confidential, or Unrepresented employee and die after completing five or more years of service and you reached the minimum retirement age of 50 but before retiring, your spouse/state of California registered domestic partner (RDP) (of not less than six months) will be eligible to receive a monthly benefit for life equal to 85 percent of the amount that otherwise would have been paid to you in retirement. If you do not have a spouse/rdp, but do have a child or children under the age of 21, then the monthly benefit shall be paid to the child or children in equal shares until each respectively attains age 21, with the balance remaining (if applicable) to your designated beneficiary/beneficiaries. Monthly Benefit for PEPRA Members If you are a PEPRA Member regardless of employee group and die after completing five or more years of service and you reached the minimum retirement age of 52 but before retiring, your spouse/rdp (of not less than six months) will be eligible to receive a monthly benefit for life equal to 85 percent of the amount that otherwise would have been paid to you. If you do not have a spouse/rdp, but do have a child or children under the age of 21, then the monthly benefit shall be paid to the child or children in equal shares until each respectively attains age 21 with the balance remaining (if applicable) payable to your designated beneficiary/beneficiaries. Distribution of Contributions and a Reduced Monthly Benefit As an option to receiving an 85 percent monthly benefit, your spouse/state of California RDP may elect to take a lump sum payment and a reduced monthly income. WHAT IF I BECOME DISABLED BEFORE I RETIRE? If you become totally and permanently disabled, (as determined by the Social Security Administration and confirmed by the Retirement Plan Committee) your retirement benefits earned to your date of disablement will become fully vested regardless of your number of years of service with the District. You will not be eligible to receive a retirement benefit until age 50 at the earliest (vesting by disability does not entitle you to automatically qualify as an eligible retiree for medical coverage). Clerical/Maintenance Employees Only: Classic and PEPRA Members who become disabled after ten years of continuous service, and who have used all accumulated sick leave and vacation time, are entitled, prior to retirement, to a monthly disability benefit payment during their period of disability equal to 30% of current salary of the classification of the participant at the beginning of the disability. Please refer to Article X of the Retirement Trust Agreement for additional details. January 1, 2018 Page 11

20 RETIREMENT ELIGIBILITY WHEN CAN I RETIRE? Your retirement date will depend on a number of factors such as your age and years of service. The general guidelines are discussed here. However, if you have specific questions about your eligibility for retirement, please contact the Human Resources and Risk Division. Please refer to CCWD Pension and OPEB Vesting Requirements on page 7 for additional details. Date of Retirement You may retire at any time after you become vested and reach age 50 for Classic Members or 52 for PEPRA Members. (Please see the Section titled Vesting on page 6 for more information.) Your effective retirement date typically is the day after your final day on District payroll. For example, if your last workday is December 15 then your effective retirement date is December 16, or if your last workday is December 30, then your effective retirement date is December 31. Your last day worked must be a scheduled workday. For example, if you are not scheduled to work on a Saturday or a District observed holiday, this may not be your last day worked. HOW WILL HUMAN RESOURCES STAFF PROCESS MY RETIREMENT? Upon receipt of your Service Retirement Application, the Human Resources and Risk Division will: 1. Obtain payroll pension contribution data (if reciprocal agency deferred retiree, the average of your highest 12 or 36 consecutive months of basic compensation will be confirmed with appropriate agency). 2. Calculate your pension. 3. Send your pension data to the District s actuarial firm for verification. The verification process can take up to four weeks to complete. 4. Hand-deliver or mail your retirement packet containing the following documents: a) Cover letter explaining your retirement benefit options and providing instructions on filling out your retirement forms; b) Irrevocable Request for Pension Benefit form for electing your benefit options and designating a joint annuitant, if applicable; c) Designation of Beneficiary form allowing you to identify beneficiaries for the balance of your plan contributions; d) Federal and State Tax Withholding Election form informing the District at what rate you want your monthly retirement benefit taxed; e) Periodic Payment Change Request Form (direct deposit) that can be used to automate your monthly pension payments into your chosen bank account(s). The Human Resources and Risk Division prepares the final retirement documentation for the Plan Administrator s review and approval. All retirement requests must be finalized by the 15th of the month to be processed such that the first pension payment is issued by the first day of the following month. For example, if the required documentation is received and finalized on March 15, 2018, then the first pension payment would be received on April 1, Should the documentation not be received and finalized by the deadline of the 15 th of the month prior to retiring, the initial pension payment may be delayed accordingly. January 1, 2018 Page 12

21 Date of Payment Payment of your retirement benefit is not prorated for a partial month of service and will begin the first day of the month following the date you retire. However, in no event will payment begin before the first of the month following or concurrent with your 50th or 52nd birthday, as applicable. January 1, 2018 Page 13

22 PRE-RETIREMENT DECISIONS RETIREMENT CHECKLIST The following is a brief checklist of items you should review before applying for retirement through the Human Resources and Risk Division: 1. Your Retirement Eligibility You must be at least 50 (Classic Members) or 52 (PEPRA Members) years old and vested with the retirement plan. Please see the Vesting section of the Handbook on page 6 for more information. 2. In order to receive your first pension payment on the first of the month, you must have a retirement date of no later than the last day of the previous month. If 90 days advance notice of your retirement is not provided, your first pension payment may be delayed. 3. Retiring with Reciprocity If you came to the District from a reciprocal system, you must retire on the same day from both (or all) systems for the reciprocal benefits to be effective. Additionally, you will want to provide your reciprocal retirement system with sufficient time to process your retirement usually 90 days before your retirement date. The reciprocal system will contact the District to obtain your employment and salary information. You alone are responsible for applying for retirement through your reciprocal system(s) and providing them with any required information. 4. Retiree Medical Program Refer to the Group Benefits After Retirement section of this Handbook on page 23 for information about the District s retiree medical program. 5. Understand Your Pension Options You can obtain estimates at any time from the CCWD Employee Website at These estimates can provide you with an understanding of your future monthly pension options within various retirement scenarios (i.e., retiring at age 55, 57 or 59, etc.). 6. Divorced While Employed at the District If you became divorced or dissolved a registered domestic partnership while employed with the District, and are participating in the CCWD Retirement Plan, you will be required to provide a copy of the divorce decree (Stipulation of Marriage Dissolution), Notice to Terminate Domestic Partnership, or Qualified Domestic Relations Order (QDRO) that addresses how the community property interest in the Plan is to be distributed. More information can be found on the potential impact of your change of status on your retirement pension on page Make Use of Your EAP The Employee Assistance Program (EAP) is a resource available to help you prepare for your transition into retirement. The District sponsored EAP program offers many discounted counseling and referral services, including legal, financial, and emotional, that may assist you in your retirement planning. 8. Contact Your Deferred Compensation Provider If you contributed to deferred compensation through the District or with another provider, ask to speak with a representative from your provider to understand your options on taking withdrawals after retirement. HOW DO I APPLY FOR RETIREMENT? You should contact the Human Resources and Risk Division at least 90 days in advance. Staff will provide you with information and the necessary forms. Staff will also help you and your spouse/state of California registered domestic partner (RDP) with completing the forms and January 1, 2018 Page 14

23 answer all your questions. Please call the Human Resources and Risk Division to schedule an appointment. If you believe you are entitled to Social Security or retirement benefits with a reciprocal retirement system, contact the appropriate agency directly for information and assistance. Please be advised that if you have reciprocity with other retirement plans, you must retire from all retirement systems on the same day to maintain reciprocity. WHAT IF I DIVORCE OR DISSOLVE MY DOMESTIC PARTNERSHIP PRIOR TO RETIREMENT? Your CCWD retirement benefits are considered community property under California law. You should contact the Human Resources and Risk Division to see how this impacts your future retirement benefits. The Human Resources and Risk Division will need a copy of your divorce decree (Stipulation of Marriage Dissolution), Notice to Terminate Domestic Partnership, or QDRO, if applicable. Dividing your CCWD retirement benefit requires a special form known as a QDRO which is usually a separate document from your dissolution decree, though, in some cases, a QDRO may be contained within the dissolution decree itself. The District requires submission of the QDRO for review and approval. If, as written, the QDRO is acceptable to the Plan Administrator of the CCWD Retirement System, and approved and signed by both parties and the court, the District will then consider the QDRO to be an approved QDRO. The approved QDRO will specify what portion, if any, of your benefit will be paid to your former spouse or RDP. When you begin to receive a CCWD pension benefit, the portion specified in the QDRO will be paid to your former spouse or RDP. Likewise, if you withdraw your member contributions and interest, the QDRO will govern what portion your former spouse or RDP receives. If you and your former spouse or RDP agree that the former spouse will relinquish any and all rights to the community property in the CCWD Retirement Plan, and that you will not be dividing your CCWD pension in any manner, that agreement must be reflected in your dissolution decree or QDRO. Failure to provide a QDRO or a copy of your dissolution decree, which states the division of retirement benefit, could impact the District s ability to process your retirement benefits. Furthermore, if a QDRO or a copy of your dissolution decree is not submitted to the District by your effective retirement date, the District will process your retirement benefits at 50% of the normal rate until such documentation is provided. If you have divorced or dissolved your domestic partnership, or are going through a divorce or dissolution of your domestic partnership, you need to contact the Human Resources and Risk Division for assistance on this important matter as it relates to your benefits. January 1, 2018 Page 15

24 DETERMINING RETIREMENT BENEFITS RETIREMENT BENEFITS FOR EMPLOYEES The amount of your service retirement income will depend upon the following considerations: Compensation Compensation used to determine your retirement income is your average base monthly compensation paid during the 12 or 36 highest compensated consecutive months of service. Basic compensation is defined in the Trust Agreement as the amount paid by the District to an employee as a regular ( base ) salary or wage, excluding amounts payable as overtime, shift premium, callout pay, or other irregular compensation and excluding District contributions under the Plan. For Classic Members hired on or before December 31, 2012 or employees with established classic membership reciprocity, a 12-month highest compensated consecutive period will be used to determine the benefit. For PEPRA Members, an average of the highest 36-months compensated consecutive period will be used to determine benefit. The Public Employees Pension Reform Act (PEPRA) provides that a public employer shall not make contributions to qualified retirement plans on the portion of the amount of total pensionable compensation that exceeds the amount specified in Section 401(a)(17) of Title 26 of the United States Code. The compensation limit for 2018 is $121,388. Once a PEPRA Member, reaches the referenced 2018 compensation limit, employee plan contributions will cease. The Plan Administrator will adjust the annual compensation limit following each actuarial valuation of the Plan based on changes to the Consumer Price Index for All Urban Consumers in accordance with Section (d) of the California Government Code. Service Credit Service is measured from your full-time permanent/project hire date to your date of separation from District employment. This service must be continuous except that the District may grant a leave of absence for military service or other reasons, and your service will not be considered broken, provided you return to District employment after the leave of absence expires. The District calculates retirement service credit using full years and full months of service. For example, if an employee started working at the District on March 3, 2008 and retired on May 7, 2018, the employee would have nine years and two months, or years, of service credit. The employee would accrue an additional month of service on the third of every month if he/she did not retire and remained an employee of the District. Age Your age used to determine your benefit is your age when payment begins in increments of whole months. Retirement Benefit For Classic Members hired on or before December 31, 2012 or those with established classic reciprocity, the retirement benefit is calculated through the multiplication of the average basic monthly compensation, the total years of service, and the retirement benefit factor up to the IRS maximum (please see employee retirement factor table on page 18), effective January 1, For PEPRA Members hired on or after January 1, 2013, the retirement benefit is calculated through the multiplication of the average basic monthly compensation (subject to a maximum), the total January 1, 2018 Page 16

25 years of service, and the retirement benefit factor as defined under Government Code (please see employee retirement factor table on page 19), effective January 1, If you left the District prior to January 1, 2009, please contact the Human Resources and Risk Division at for the retirement formula that applies to you. Limits The CCWD Retirement Plan and its individual participants are subject to IRS limitations for salary and pension payments as defined in IRS Code sections 401(a)(17) and 415(b)(1)(a). These limits may be adjusted on an annual basis by the IRS. WILL MY BENEFIT BE ADJUSTED FOR INFLATION? The Retirement Committee annually reviews defined benefit payments in light of economic factors. A Cost of Living Adjustment (COLA) is not automatic. The Retirement Committee may recommend a cost of living adjustment to the Board of Directors for their approval. Typically, COLAs are considered by the Board of Directors in December, and if authorized, are made effective on January 1. An employee must have a retirement date on or before December 31 to receive a January 1 COLA. For example, if an employee retires on or before December 29, 2018, they will be eligible for a COLA on January 1, 2019 if a COLA is granted. WILL SOCIAL SECURITY AFFECT MY PLAN BENEFIT? No. The amount you receive as a benefit from the District s Retirement Plan is independent from your other retirement income sources, including Social Security. However, your plan benefit may affect Social Security; questions about this should be directed to the Social Security Administration. January 1, 2018 Page 17

26 RETIREMENT BENEFIT FOR CLASSIC MEMBERS EMPLOYEE RETIREMENT FACTORS AS A PERCENTAGE OF BASIC COMPENSATION BY AGE AND SERVICE AT RETIREMENT EFFECTIVE JANUARY 1, 2009 AGE 55 AGE Years of Service or over % 8.94% 9.56% 10.23% 10.96% 11.75% 12.06% 12.36% 12.67% 12.98% 13.29% % 10.73% 11.48% 12.28% 13.16% 14.10% 14.47% 14.83% 15.20% 15.58% 15.95% % 12.52% 13.39% 14.33% 15.35% 16.45% 16.88% 17.31% 17.73% 18.18% 18.60% % 14.31% 15.30% 16.37% 17.54% 18.80% 19.29% 19.78% 20.27% 20.77% 21.26% % 16.10% 17.22% 18.42% 19.73% 21.15% 21.70% 22.25% 22.80% 23.37% 23.92% % 17.88% 19.13% 20.47% 21.93% 23.50% 24.11% 24.72% 25.33% 25.97% 26.58% % 19.67% 21.04% 22.52% 24.12% 25.85% 26.52% 27.19% 27.87% 28.56% 29.24% % 21.46% 22.95% 24.56% 26.31% 28.20% 28.93% 29.67% 30.40% 31.16% 31.89% % 23.25% 24.87% 26.61% 28.50% 30.55% 31.34% 32.14% 32.93% 33.76% 34.55% % 25.04% 26.78% 28.66% 30.70% 32.90% 33.76% 34.61% 35.47% 36.35% 37.21% % 26.83% 28.69% 30.70% 32.89% 35.25% 36.17% 37.08% 38.00% 38.95% 39.87% % 28.61% 30.61% 32.75% 35.08% 37.60% 38.58% 39.56% 40.53% 41.55% 42.53% % 30.40% 32.52% 34.80% 37.27% 39.95% 40.99% 42.03% 43.07% 44.14% 45.18% % 32.19% 34.43% 36.84% 39.47% 42.30% 43.40% 44.50% 45.60% 46.74% 47.84% % 33.98% 36.35% 38.89% 41.66% 44.65% 45.81% 46.97% 48.13% 49.34% 50.50% % 35.77% 38.26% 40.94% 43.85% 47.00% 48.22% 49.44% 50.67% 51.94% 53.16% % 37.56% 40.17% 42.98% 46.04% 49.35% 50.63% 51.92% 53.20% 54.53% 55.81% % 39.34% 42.08% 45.03% 48.24% 51.70% 53.04% 54.39% 55.73% 57.13% 58.47% % 41.13% 44.00% 47.08% 50.43% 54.05% 55.46% 56.86% 58.27% 59.73% 61.13% % 42.92% 45.91% 49.12% 52.62% 56.40% 57.87% 59.33% 60.80% 62.32% 63.79% % 44.71% 47.82% 51.17% 54.81% 58.75% 60.28% 61.81% 63.33% 64.92% 66.45% % 46.50% 49.74% 53.22% 57.01% 61.10% 62.69% 64.28% 65.87% 67.52% 69.10% % 48.29% 51.65% 55.26% 59.20% 63.45% 65.10% 66.75% 68.40% 70.11% 71.76% % 50.07% 53.56% 57.31% 61.39% 65.80% 67.51% 69.22% 70.93% 72.71% 74.42% % 51.86% 55.47% 59.36% 63.58% 68.15% 69.92% 71.69% 73.47% 75.31% 77.08% % 53.65% 57.39% 61.41% 65.78% 70.50% 72.33% 74.17% 76.00% 77.90% 79.74% % 55.44% 59.30% 63.45% 67.97% 72.85% 74.74% 76.64% 78.53% 80.50% 82.39% % 57.23% 61.21% 65.50% 70.16% 75.20% 77.16% 79.11% 81.07% 83.10% 85.05% % 59.02% 63.13% 67.55% 72.35% 77.55% 79.57% 81.58% 83.60% 85.69% 87.71% % 65.04% 69.59% 74.55% 79.90% 81.98% 84.05% 86.13% 88.29% 90.37% % 71.64% 76.74% 82.25% 84.39% 86.53% 88.67% 90.89% 93.02% % 78.93% 84.60% 86.80% 89.00% 91.20% 93.48% 95.68% % 86.95% 89.21% 91.47% 93.73% 96.08% 98.34% % 91.62% 93.94% 96.27% 98.68% % % 96.42% 98.80% % % % % % % % % % % % % The above factors shall be interpolated to give credit for full months of service over full years. January 1, 2018 Page 18