ABOUT TO RETIRE. San Joaquin. County Employees Retirement Association SJCERA

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1 ABOUT TO RETIRE San Joaquin County Employees Retirement Association SJCERA

2 SJCERA - About to Retire Page 2 of 13 This booklet provides general information to SJCERA members who are planning to retire in the next two years. This booklet is intended as a simple guide to help you plan for the decisions you will need to make and the information and documents you will be asked to provide, when applying for your retirement benefits. The retirement law is sometimes very complex. If there is any conflict between the information in this b ooklet a nd the p rovisions o f a pplicable law, the law shall p revail. Table of Contents Contemplating Retirement... 2 Checklist... 3 Retirement Eligibility... 3 Reciprocity... 4 Additional Service Credit / Redeposit... 4 Retirement Benefit Estimates... 5 Retirement Options... 6 Community Property and Domestic Relations Orders... 7 Direct Deposit... 7 Income Taxes... 8 Deductions... 8 Cost of Living Adjustments (COLA)... 8 Post- Retirement Death Benefit... 8 Conversion of Accumulated Sick Leave Hours... 9 Normal Retirement Age and Working After Retirement... 9 County Sponsored Health, Dental and Vision Insurance for Retirees Deferred Compensation Life Insurance Social Security Benefits Contact Information Contemplating Retirement The San Joaquin County Employees Retirement Association (SJCERA) offers individual retirement counseling for our members. You will meet with one of our Retirement Service Officers who will review all of your benefit information and answer your questions about your retirement. You are encouraged to notify SJCERA of your intent to retire up to three months prior to your planned retirement date. This will enable us to review your service credit and compensation records, identify any potential discrepancies, and offer you an opportunity to consider the purchase of additional service credit or redeposit for which you may be eligible. Your formal application for retirement may be filed up to two months prior to your date of retirement.

3 Page 3 of 13 Checklist Things to do: Attend the About to Retire workshop presented by SJCERA Submit the Request for Application form at Contact Social Security to obtain your Statement of Benefits Contact the plan administrator for your Deferred Compensation program Contact your employer s Human Resources department regarding other benefits such as life insurance (if applicable), leave payoffs, or, for members not employed by the County, retiree health benefits. Notify your employer of your planned retirement date Documents you will be required to provide to SJCERA: Copy of your Marriage License Retiree s birth certificate if not already on file with SJCERA Birth certificate of the beneficiary you designated to receive continuance Your Spouse s or beneficiary s Social Security number Medicare cards if you and/or your beneficiary are enrolled in Medicare Final Disolution of Marriage or Registered Partnership if Divorced Documents you will need to complete: Application for service retirement Authorization for voluntary deductions from your monthly allowance, if applicable For members employed by San Joaquin County: Completed enrollment forms for your choice of County- sponsored retiree health, dental or vision insurance Medicare form if eligible Retirement Eligibility Members of SJCERA Tier I are eligible for service retirement: 1) With ten or more years of service credit at age 50 or older; or 2) At age 70 or older, regardless of years of service credit; or 3) General Members at any age with at least 30 years of service credit; or 4) Safety Members at any age with at least 20 years of service credit. Members of SJCERA Tier II are eligible for service retirement: 1) With five or more years of service credit and at least age 52 for General Members or at least age 50 for Safety Members; or 2) At age 70 or older, regardless of years of service credit. Effective Date of Retirement Retirement begins, at the earliest, the day after the last day you earned regular compensation as an active employee, but no sooner than the day you complete an application for service retirement. If you wish to retire in time to receive the annual

4 Page 4 of 13 cost- of- living increase, which is first applied to the monthly allowance for April and payable in the monthly benefits issued May 1st each year, you must terminate your employment on or before the 31st of March and retire no later than April 1st. Reciprocity If you have reciprocity with another California public retirement system, you must retire with the same effective date from each system and must file a separate application for retirement with each system. Once SJCERA is able to verify reciprocal membership in another California public retirement system, your highest final compensation from either reciprocal system is used to calculate the estimate of your monthly service retirement allowance from SJCERA. Reciprocity also impacts the determination of disability retirement benefits from each reciprocal system. If you apply for disability retirement with SJCERA or a reciprocal system, the potential impact on your SJCERA benefits will be explained during the retirement interview. Additional Service Credit / Redeposit of Previously Withdrawn Contributions You may be eligible to purchase additional service credit for part- time or temporary service prior to membership in SJCERA, unpaid medical leaves of absence, active military service, or other public service, provided you are not entitled to receive a retirement benefit for that service from another public retirement system. If you are eligible and elect to purchase additional service credit, you can increase the amount of your total service credit and receive a greater retirement allowance. If you previously terminated employment covered by SJCERA, withdrew your accumulated member contributions, and are subsequently employed in a permanent, full- time position with the County or special district participating in SJCERA, you may redeposit your withdrawn contributions and interest, plus interest that would have accrued on those contributions had they been left on deposit, and receive the retirement service credit associated with those contributions. Except for public service, all additional service credit you purchase or for which you redeposit previously withdrawn member contriutions counts toward vesting; and all additional service/ redeposit credit is included in the calculation of your retirement benefits. You may request SJCERA calculate the estimated cost to redeposit previously withdrawn contributions or purchase additional service credit by completing the Additional Service Credit form. You may pay the retirement contributions required for the redeposit or additional service purchase by lump sum payment, rollover of tax- deferred funds from a qualified source such as a 457 deferred compensation plan, or through payroll deductions for a period not to exceed five (5) years, depending upon the type of service purchased. You are responsible for providing SJCERA the necessary supporting documentation to substantiate your eligibility to purchase additional service credit. You will receive credit for the redeposit or additional service when you have paid the required contributions in full prior to retirement.

5 Page 5 of 13 Retirement Benefit Estimates There are two ways to get an estimate. You can go to and do your own using the new and improved retirement calculator or you can submit a request for estimate form. Each estimate is just that, an ESTIMATE. If there were any periods of employment for which you did not receive compensation (leave without pay, etc.) those periods will not count toward your years of service credit. Part- time or temporary employment prior to membership in SJCERA is not included in the benefit estimate (but may be purchased as additional service credit prior to your effective date of retirement.) An estimate of your monthly retirement allowance is provided based on an estimate of your total service credit, final compensation, and expected age (to the nearest quarter age) as of your intended effective date of retirement. If you provide the name and birthdate of your spouse or other beneficiary you may designate at retirement, your benefit estimate includes the estimated amounts that would be payable to your spouse or beneficiary under each of the applicable retirement options upon your death after retirement. For members of SJCERA Tier I, final compensation is the member s highest twelve (12) consecutive months of compensation recognized by the Board of Retirement as compensation earnable, not to exceed the federal annual compensation limit specified in Section 401(a)(17) of the Internal Revenue Code, if applicable. For members of SJCERA Tier II, final compensation is the member s highest thirty- six (36) consecutive months of compensation recognized by the Board of Retirement as pensionable compensation, not to exceed the applicable annual compensation limit specified in Section (c) of the California Government Code. The Board has adopted a Final Compensation Review Policy that establishes a procedure for determining whether an element of compensation was paid to enhance a member s retirement benefit. This policy authorizes SJCERA staff to review compensation included in your final compensation for the purpose of making an initial assessment as to whether any pay element was paid to enhance your retirement benefit. If SJCERA staff recommend excluding a pay element, the written report to the Board would include any evidence submitted by you or your employer to rebut SJCERA staff s recommendation. The Board will make the final determination. If your service credit, final compensation and age as of your effective date of retirement differ from what was projected, your retirement allowance will be based on your actual and service credit and compensation.

6 Page 6 of 13 Retirement Options There are a number of different retirement allowance options from which to choose. The following paragraphs summarize each of them. The estimated amount of your and your beneficiary s (if named) monthly allowance under each retirement option is thoroughly explained during your individual retirement counseling appointment with SJCERA. You will be making an irrevocable election of an option for your retirement benefits from SJCERA that cannot be changed once your monthly retirement allowance payments commence. Unmodified Retirement Allowance 60% Continuance to Eligible Surviving Spouse The unmodified retirement allowance provides the highest monthly benefit amount payable to you for your lifetime. Upon your death, 60% of your unmodified allowance will be paid to your eligible surviving spouse for his or her lifetime. If you have no eligible surviving spouse at the time you retire, the remaining balance of your accumulated member contributions, if any, at the time of your death will be paid to your surviving spouse/registered domestic partner, minor children, or other designated beneficiary(ies). NOTE: An eligible surviving spouse is a person to whom you have been married, or registered as a domestic partner, for at least one year prior to the effective date of your retirement. If you are unmarried at the time you retire, and subsequently marry or become a registered domestic partner after retirement, your new spouse/partner is not entitled to a monthly benefit upon your death, but is eligible to receive the $5,000 post- retirement death benefit. Option #1 Possible Lump Sum to Beneficiary: This optional allowance provides a slight reduction in your monthly benefit for your lifetime, but extends the length of time over which your accumulated member contributions are drawn down. Upon your death, the remaining balance of your accumulated member contributions is paid to your designated beneficiary. Under this option, there is no continuing lifetime monthly benefit payable to a surviving beneficiary. Option #2 100% Continuance to Beneficiary: This optional allowance reduces the monthly benefit payable to you for your lifetime, and provides that, upon your death, 100% of your monthly allowance will be paid to your option beneficiary for his or her lifetime. The reduction in your monthly allowance is determined based on the age of your option beneficiary at the time of your retirement. Option #3 50% Continuance to Beneficiary: This optional allowance reduces the monthly benefit payable to you for your lifetime, and provides that, upon your death, 50% of your monthly allowance will be paid to your option beneficiary for his or her lifetime. The reduction in your monthly allowance is determined based on the age of your option beneficiary at the time of your retirement.

7 Page 7 of 13 Social Security Advancement Option: The Social Security Advancement option is available for members who retire for service before age 62. You will receive a higher monthly benefit from your date of retirement until age 62, and a reduced monthly benefit after attaining age 62. The calculation of the increased benefit and the subsequent reduction of that benefit is based on your age at retirement and on the amount the Social Security Administration says you will receive in Social Security benefits at age 62 if you stopped working on the effective date of your SJCERA retirement. Whether or not you begin drawing your Social Security benefits, when you attain age 62, your monthly allowance from SJCERA will permanently decrease by the full amount of your estimated monthly benefits from Social Security. If you are interested in this option, you must contact Social Security to obtain an estimate of your expected benefits at age 62 based upon your selected earlier retirement age and provide that information to SJCERA. Retirement benefits from SJCERA are payable to the member and to the member s eligible survivors/beneficiaries, if any. Upon the death of the member and eligible beneficiaries, all benefits from SJCERA cease. Your and your beneficiaries should take reasonable steps to advise relatives, an executor, or other responsible party that SJCERA must be promptly notified in the event of your death. Community Property and Domestic Relations Orders If you are or were married, or in a registered domestic partnership during your SJCERA membership, your (former) spouse/partner may have a community property interest in all or a portion of your retirement benefit which cannot be terminated or transferred to another person without your spouse s written consent or a qualified domestic relations order issued by a court of competent jurisdiction. If SJCERA has been joined in a petition for legal separation or dissolution of marriage to which you are a party, initial payment of your retirement allowance will be delayed until SJCERA receives a qualified domestic relations order from the court. Pursuant to California law, a member s domestic partner registered with the California Secretary of State has the same rights and benefits as a member s spouse. Direct Deposit On the first banking day of each month, your monthly retirement allowance will be deposited directly into your checking or savings account at the financial institution you designate on your Direct Deposit Authorization form. A remittance advice showing your monthly and year- to- date benefit amount, deductions and withholdings, and net pay will be sent to your mailing address each month.

8 Page 8 of 13 Taxes Your retirement allowance is subject to federal and state income tax. You must complete a Federal and State Withholding Certificate to instruct SJCERA regarding your income tax withholding preference for your monthly allowance payments from SJCERA. If you do not file a Withholding Certificate with SJCERA, we will withhold taxes from your monthly allowance as if you were a married person claiming three withholding exemptions. If you need assistance in determining which withholding category is best for you, please consult with a professional tax advisor. SJCERA does not provide tax advice. You may change your federal and state tax withholding preferences at any time by submitting a new Withholding Certificate to SJCERA. Your monthly statement from SJCERA will reflect the amount of federal and state taxes withheld from your allowance. If the amount withheld is incorrect, it is your responsibility to contact SJCERA and/or file a new Withholding Certificate. SJCERA will issue a Form 1099R to you each year that shows the total retirement allowance paid to you for the previous calendar year, and the amount that is taxable. This information is also reported to the IRS. The Form 1099Rs are mailed to all payees by January 31 st each year. Deductions You may initiate or terminate voluntary deductions from your monthly allowance by written notice to SJCERA for income taxes; retiree health, dental and/or vision insurance premiums; United Way contributions; Financial Center Credit Union payments; or membership dues in RPESJC or PORAC. SJCERA may be required to withhold a portion of your monthly retirement allowance pursuant to a court order. Examples of such withholding include spousal support, back taxes, and child support. Cost of Living Adjustment (COLA) SJCERA retirees may receive an annual COLA on April 1 of each year, not to exceed 3%, based on changes in the consumer price index (CPI) using the All Urban CPI for the San Francisco- Oakland- San Jose area. In years when the change in CPI is greater than the statutory annual maximum COLA of 3%, the percentage over the 3% limit is banked for use in future years when the COLA is less than 3%. Post- Retirement Death Benefit Upon your death after retirement, a benefit of $5,000 will be paid to your designated beneficiary after SJCERA receives a certified copy of the death certificate, provided your last employment prior to retirement was with an SJCERA participating employer. You may change your beneficiary designation for this $5,000 death benefit at any time.

9 Page 9 of 13 Conversion of Accumulated Sick Leave Hours (Sick Leave Bank) If you began SJCERA- covered employment on or before August 27, 2001, you may be eligible to convert your accumulated sick leave at retirement to a sick leave bank. (Employees hired after August 27, 2001 are not eligible for this benefit.) If eligible, you must have at least 160 hours of accumulated sick leave at retirement (after any applicable cash out pursuant to the terms of employment applicable to your position classification) to be eligible to establish a sick leave bank. SJCERA will require your last employer to certify your accrued sick leave hour in writing prior to your retirement. Accumulated sick leave hours will be converted to a dollar value for your sick leave bank at the rate of $27.65 per hour of sick leave. You may use the value of your sick leave bank to pay monthly premiums for employer- sponsored health, dental, and vision insurance benefits and/or to be reimbursed for Medicare Part B premiums. When your sick leave bank balance is depleted, your monthly health, dental and/or vision insurance premiums will be deducted from your monthly retirement allowance. Depending upon your collective bargaining unit at the time you retire, a specified percentage of your accumulated sick leave may be converted to a cash payment to you from your employer. The cash conversion rate is based on your hourly salary rate, which is different from the sick leave bank conversion rate. In January 2002, members who were active full- time civil service employees or deferred members of SJCERA as of August 27, 2001, were eligible to make an irrevocable one- time election to convert accumulated sick leave at the time of retirement to additional retirement service credit in lieu of converting sick leave hours to a sick leave bank. Members who were eligible to, but did not, make an election of sick leave service credit, are only eligible for sick leave bank at retirement. Normal Retirement Age and Bona Fide Separation The Board of Retirement defines normal retirement age for General Members as age 59, and for Safety Members as age 54. Federal law applicable to SJCERA requires that you must have a bona fide separation from service before beginning work after retirement. A bona fide separation means: a) You may not enter into an agreement prior to the commencement of retirement, either verbal or written, to be reemployed by an SJCERA participating employer, regardless of the length of your break in service. b) Not less than 90 days must elapse between your effective date of retirement and the date you begin post- retirement employment with an SJCERA participating employer.

10 Page 10 of 13 Working After Retirement State law applicable to SJCERA prohibits retired members from being employed, whether as an employee or through a direct contract, by an SJCERA participating employer without reinstatement from retirement, unless all of the following apply: 1) The retired member is appointed by the employer either during an emergency to prevent stoppage of public business or because the retired person has skills needed to perform work of limited duration. 2) The appointment is temporary and the retired member does not work more than 720 hours in a fiscal year. If you return to work in a permanent, full- time position, your retirement will be suspended until you retire again. You must inform SJCERA if you are re- employed in a full- time permanent position with an SJCERA participating employer. 3) The retired member has not received any unemployment insurance compensation in relation to previous employment with a public employer in the twelve months prior to appointment. A retiree must certify in writing to the employer upon accepting an offer of employment that he or she is in compliance with this requirement. 4) At least 180 days has elapsed from the date of retirement to the date of appointment, unless either of the following apply: i. The employer certifies the nature of the employment and that the appointment is necessary to fill a critically needed position before 180 days have passed, and the appointment has been approved by the governing body of the employer in a public meeting. A copy of the document certifying the governing body s action must be provided to SJCERA. ii. The retired member is a public safety officer or firefighter hired to perform a function or functions regularly performed by a public safety officer or firefighter. Neither of these exceptions to the 180- day waiting period shall apply if the retired member accepted a retirement incentive upon retirement. A member retired for disability is prohibited from returning to work in the same job classification, position, or capacity for which the member was found disabled by the Board of Retirement. There are no restrictions on post- retirement employment with an employer that does not participate in SJCERA. If you are receiving Social Security benefits, working after retirement could cause those benefits

11 Page 11 of 13 to be reduced. If you have questions about the effect of employment on your Social Security benefits, please contact the Social Security Administration directly for information. Health, Dental and Vision Care Plans SJCERA does not sponsor a health, dental or vision insurance. San Joaquin County provides employer- sponsored group retiree health plans for members who retire from employment with the County. (If you are retiring from another SJCERA participating employer, please consult with your employer s benefits manager regarding your options for coverage after retirement.) San Joaquin County negotiates and controls the plan design and coverage with each insurance carrier for the active employee and retiree plans. Information about the health, dental, and vision care plans are available to retirees and applicable monthly insurance premiums is provided to you as part of your retirement application process with SJCERA. The coverage available to you as a retiree may be different than the coverage options available to you as an active County employee. Your retirement from active County employment is an event that qualifies you to change health, dental, or vision coverage. You may also add or defer coverage for yourself or your dependents at the time of retirement. If a birth, legal adoption, marriage, or registered domestic partnership occurs in your household, you have 60 days from the date of the qualifying event to add or defer a new dependent to your coverage. You may also change your health, dental, or vision coverage and add or delete dependents during any annual open enrollment period. When you and/or your dependents become eligible, you must subscribe to Medicare parts A and B. You will be eligible to enroll in retiree health plans that coordinate with or supplement Medicare coverage. If at the time of retirement you have access to other, possibly more affordable, coverage for yourself and/or your dependents, you may choose to defer participation in County- sponsored retiree health, dental and visions plans for yourself and/or your dependents. You must record this intent with SJCERA in writing. If you do not formally defer coverage, or if you enroll in coverage and later discontinue coverage for reasons other than enrolling in other group coverage sponsored by another employer, you will not be allowed to subsequently re- enroll in County- sponsored group plans.

12 Page 12 of 13 Deferred Compensation SJCERA does not sponsor a deferred compensation program for retirees. If you participate in an employer- sponsored Deferred Compensation plan and would like information about the status and disbursement options for your account, you should contact the plan administrator. Life Insurance SJCERA does not sponsor a life insurance program for retirees. The County provides a basic life insurance policy to active County employees. The policy amounts range from $1,000 and $10,000, depending upon an employee s years of service. Employees may purchase additional optional life insurance in increments of $25,000. The basic and optional life insurance coverage the County provides/offers to its active employees will terminate upon your retirement. You have 31 days from the end of the month in which you terminate employment to elect to convert your life insurance to an individual policy and pay the required premium directly (premiums may not be deducted from your SJCERA retirement allowance). An application for policy conversion is available from SJCERA. For employees in certain representation units, the County provides supplemental term life insurance in varying amounts up to a maximum of $50,000. This coverage continues at the same or decreasing face value for up to five years after retirement at no additional cost to the employee. All County- provided supplement life insurance coverage terminates at the end of the fifth year following retirement. All other employees should consult their employer s benefits manager regarding any life insurance benefits that may be available to that employer s retirees. Social Security Benefit The commencement of Social Security payments is not automatic upon reaching age 62. You must contact the Social Security Administration and apply for benefits at least three (3) months prior to the date you wish to begin receiving Social Security benefits. If you are age 62 or over and plan to begin receiving your Social Security payments soon after terminating employment, you may need to supply Social Security with a letter stating that your final payment for accrued leave was earned in prior years, to allow the leave payoff amount to be excluded from the Social Security earnings test. Your employer s payroll office can provide this letter after you have received your final paycheck.

13 Page 13 of 13 Contacts San Joaquin County Employees Retirement Association (SJCERA) 6 S. El Dorado St., Suite 400, Stockton, CA San Joaquin County Human Resources - Benefits 44 N. San Joaquin Street, 3 rd Floor, Suite 330, Stockton, CA Retired Public Employees of San Joaquin County (RPESJC) P.O. Box 8556, Stockton, CA Massachusetts Mutual Life Insurance Company (Mass Mutual) County General Social Security Administration 4747 Feather River Drive, Stockton, CA Medicare To request this material in an alternative format, call , or TTY 711. Updated January 2018