Retirement Benefits. Presented by: Ashley Ranger Financial Services Specialist

Transcription

1 Retirement Benefits Presented by: Ashley Ranger Financial Services Specialist

2 Virginia Retirement System

3 Virginia Retirement System Defined Benefit Plan Membership is required for full-time employees Monthly contributions guarantee a lifetime benefit

4 Membership Plan 1 Members Members with VRS service as of July 1, 2010 HCS contributes employee share of contribution (5%) No out of pocket cost to member Unreduced retirement at 65 and 5 or 50 and 30 Reduced retirement at 55 and 5 or 50 and 10

5 Membership Plan 2 Members Members with no VRS service as of July 1, 2010 Employers may elect for member to contribute 5% employee share Unreduced retirement at normal Social Security age and 5 or age and service = 90 (i.e. 55 and 35) Reduced retirement at 60 and 5

6 Purchase of Prior Service Prior service not credited to a member account Types of service credit eligible for purchase: Leave of Absence for military duty, education, birth or adoption of child Refunded, active duty, public, and federal service Non-covered service with a participating employer

7 Purchase of Prior Service If purchased within three years of hire date, cost is 5% of creditable compensation After the three-year period, the member s cost will be based on a higher actuarial equivalent rate Refunded service remains at 5%

8 Service Retirement Retirement Payout Options Basic Survivor PLOP Advanced Pension Option days to process paperwork

9 Basic Benefit Highest consistent benefit under the basic option Beneficiary receives no ongoing monthly benefit upon retiree s death

10 Basic Benefit Formula AFC * 1.7% Times Years of Service Equals Annual Basic Benefit Divided by 12 = Monthly Basic Benefit

11 Survivor Option Reduction of basic benefit VRS Options range from 10% - 100% A retiree gets one amount & upon his death survivor gets X% of what the retiree was receiving

12 Survivor Option Example Example: Basic Option = $1200/month 75% Joint and Survivor Option = $1000/month Upon the retiree s death, the survivor will receive $750/month If the retiree pre-deceases the survivor, the survivor collects the monthly benefit until they pass away If the survivor pre-deceases the retiree, the retiree reverts back to the Basic Benefit

13 Partial Lump-Sum Option Payment (PLOP) Eligible after 1,2, or 3 full years beyond earliest unreduced retirement date Lump-sum distribution of up to 3 years Reduces the basic monthly retirement benefit

14 Advance Pension Option (APO) Temporary increase in the retirement benefit until retiree chooses to draw Social Security VRS adds a % of the estimated SS to the basic benefit amount VRS is reduced by 100% of SS at the time of collection Provides a level income throughout retirement

15 Case Study Gary Parker is a 55 year old educator. His wife, Carolyn, is 50 5 years younger. Gary s last year s salary before retirement is $45,000. His highest average salary for three consecutive years is $43,702. He has 33 years of service as a Virginia Educator.

16 Annual Salary = $45,000 VRS Gary's Carolyn's Option Monthly Survivor Benefit Benefit Basic Benefit $ 2, $ 50% Option $ 1, $ % Option $ 1, $ 1, PLOP (36 mo) $ 73, One time lump sum $ $ 1, Monthly benefit APO (Until 62) $ 2, Before 62 $ $ 1, & after

17 CAUTION! Once your retirement date has passed, the Option chosen CANNOT be changed Rare exception death of beneficiary or divorce with consent

18 Disability Retirement Eligible as of 1 st day of active employment Regular Disability Work-related Disability Retirement Payout Options Basic Benefit Survivor Option

19 Hampton Employees Retirement System

20 Hampton Employees Retirement System (HERS) Full-time prior to July 1, 1984 Full Retirement 55 years of age + 25 years of service 60 years of age + 5 years of service Reduced Retirement 55 years of age + 5 years of service 50 years of age + 10 years of service

21 Hampton Employees Retirement System (HERS) Basic Benefit Highest consistent benefit under the basic option Beneficiary receives no ongoing monthly benefit upon retiree s death Survivor Option Reduction of basic benefit 50% or 100%

22 Other Information

23 Post-retirement Benefits Health Insurance Credit 15 or more years of VRS service Professional employees $4 per year of VRS service Cost of Living Adjustment (COLA) July 1 of the second year of retirement Life Insurance Reduces until it reaches 25% of the value

24 Insurance May remain on group plan until 65 Must pay entire premium 10 month premium, 12 month coverage $ PPO, $ HMO Spouse or family coverage costs more Dental premiums remain the same

25 Unused Sick Leave Option 1 Payout of unused leave at $30 per day Payout occurs on the next payroll following your resignation date Taxable

26 Unused Sick Leave Option 2 Payout of unused leave at $30 per day to your 403(b) or 457 with ING Payout occurs on the next payroll following your resignation date Only FICA and Medicare taxes are withheld

27 Unused Sick Leave Option 3 Application of unused sick leave days towards health insurance premiums Must have at least 100 sick leave days and be covered under HCS insurance May apply in increments of 50, starting at 100 with no more than 300 sick leave days Unused sick leave days may be applied for 10 years or until 65, whichever occurs first

28 Unused Vacation Leave Unused vacation leave is paid at the daily rate as follows: 0 5 years employment 24 days max 6 10 years employment.. 30 days max 11 years + employment.36 days max All additional days will be rolled into sick leave

29 Working After Retirement One full calendar month break prior to returning part-time (does not include summer) Must not exceed 80% of normal work hours May not perform all duties required at pre-retirement

30 Contacts Virginia Retirement System ING Contacts: P.O. Box 2500 Jacques Cureton Richmond, VA Bill Fitzgerald Pete Olenick (757) Hampton Employees Retirement System Dianne Whistler 22 Lincoln Street - 7th Floor City Hall Hampton,VA Phone: (757) Hampton City Schools Ashley Ranger Financial Services Specialist (757) aranger@hampton.k12.va.us