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Planning to Retire Workshop: County/Courts (retiring within 5 years)

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Transcript of Planning to Retire Workshop: County/Courts (retiring within 5 years)

We're almost there...
What's the big idea?
Are we there yet?
How much will I get?
Share and share alike.
How can I increase my benefit?
What date
is right
for me?

How do
I apply?

Ready for
an encore?

Here
There
What will
my beneficiary
get?

Enjoy your
Understanding Your Plan
MCERA is a defined benefit pension plan under County Employees' Retirement Law of 1937.
Nearly $2 billion in assets from:
Investment earnings.
Employee and employer contributions.
Assets held in trust for members and beneficiaries.
Members fall into 1 of 40+ tiers.
Divorce/Partnership Dissolution
Working after Retirement
Working for non-MCERA employers:
No restrictions
Working for MCERA employers:
180 day break
960 hour limit
Unemployment insurance
Normal retirement age
Reinstatement
Eligibility to retire
Community property
What you and your beneficiary receive
Ways to increase your benefit
Selecting a date
How to apply
Payments
COLA
Working after retirement
Cost of Living Adjustments
April 1 COLA
Must be retired on or before March 31
Determined by CPI rounded to nearest half-percent
You receive up to the max for your tier
COLA bank
CPIs larger than your maximum COLA get banked
If CPI is less than your maximum COLA we'll withdraw from your bank to bring it up
Service Purchase
Must be complete prior to retirement
Limited to 5 years max to
complete purchase regardless
of how much time you're buying
Interest applied to purchase
cost every 6 months
Eligibility to Retire
When we calculate your allowance we convert your age to a factor (2%).
Factor increases every quarter year of age until it reaches the maximum for your tier.
Tier 3 factors start at 50 (1.43%) and increase until age 63 (2.4%)
Sample Benefit
County of Marin Tier 3 General
55 at retirement
20 years of service
$50,000 highest average comp.
Calculation
Factor for age 55 (2%) 0.02000

Years of service x 20

Highest average comp. x $50,000

Annual retirement benefit $20,000
Well, hello there.
General members:
Age 50 or 55 with 10 years of service
30 years of service at any age
Safety members:
Age 50 with 10 years of service
20 years of service at any age
All members:
Age 70 regardless of service
Formula based on your retirement
tier (example: 2% at 55)
Considers:
Age
Service credit
Final average compensation
Calculating Your Benefit
Age
Service credit is earned each pay period of employment during membership.
Includes completed service purchases
Does not include:
Leave without pay
Part time <75%
Service
Credit
Highest consecutive 12 or 36 month period of compensation earnable (determined by tier)
Compensation earnable does not include:
Overtime (unless FLSA)
Standby, call back, administrative response pay (after 1/1/13)
Cash paid in lieu of benefits (in-kind conversions) (after 1/1/13)
Final
Average
Comp.
What does
2% at 55
mean?
Unmodified Allowance
Highest allowance possible.
For
you:
For
them:
Option 1: Cash Refund Annuity
Slightly reduced monthly allowance compared to Unmodified.
Beneficiary receives lump sum of remaining balance in your contribution account.
There is no continuance.
For
you:
For
them:
Option 2: 100% Continuance
You may reduce your benefit to provide the same amount to your beneficiary.
Beneficiary receives 100% of the amount you were receiving for life.
For
you:
For
them:
Your benefit reduction is age-based and may be sharply reduced if your beneficiary is much younger than you are.
Option 3: 50% Continuance
You may reduce your benefit to provide a continuance to your beneficiary.
Beneficiary receives 50% of the amount you were receiving for life.
For
you:
For
them:
Your benefit reduction is age-based and may be sharply reduced if your beneficiary is much younger than you are.
Option 4: Multiple Beneficiaries
You may reduce your benefit to provide a continuance to more than one beneficiary.
Beneficiaries receive specified percentages of the amount you were receiving for life.
For
you:
For
them:
Your benefit reduction is age-based and may be sharply reduced if your beneficiaries are much younger than you are.
Must be calculated by MCERA's actuary and member incurs the cost.
Your spouse/partner is eligible for the Unmodified continuance if you have been married/partnered for at least one year prior to retirement.
Is my spouse/partner eligible?
For your new spouse to be eligible for the Unmodified continuance they must be at least 55 and you must be married for at least 2 years prior to your death.
What if I get married after I retire?
Working longer
Getting older
Earning more
Purchasing service
Redepositing contributions
Increase Your Benefit By...
Redeposit your previously
withdrawn contributions
Redeposit
(a) extra hire time
(b) part-time service <75%
(c) medical leave without pay
Service
Purchase (buy back) your:
Purchase
Lump sum check
Rollover from
qualified plan
Payroll deductions
Combination
Ways
to
Pay
Payments
Retirement benefits are a community property asset.
Submit necessary paperwork:
Judgment of dissolution/property settlement agreement
Domestic relations order (DRO)
Change your beneficiary.
Counts toward retirement eligibility
Must redeposit all or nothing
Counts toward retirement eligibility
Purchase any or all service
Age factor goes up every
quarter-year you age.
Each tier has a maximum
No increasing age benefits after reaching the maximum
Age
What does
2% at 55
mean?
Factors
You must retire from all systems concurrently (same retirement date).
Reciprocity
Reciprocity is broken and salary and service will no longer be linked.
What if I don't?
Purchase must be complete prior to your retirement date to receive full credit.
Incomplete redeposit: no credit received.
Incomplete buy back: credit only for payments received.
Service
Purchases
Continuous health coverage is required to keep benefits as a retiree.
Active coverage effective for 2 weeks after your last pay period.
Retiree coverage effective the 1st of the month after you retire.
(a) Choose a date with overlap OR
(b) Apply for COBRA to fill the gap
Health
Coverage
You're eligible for the April 1 COLA if you're retired on or before March 31.
Will I have enough money?
Age factors
Reciprocity
Service purchases
Health coverage
COLA
selecting a date:
Considerations when
Request a benefit estimate within 1 year
of your retirement date.
Request an Estimate
Review the benefit amounts under each benefit payment option in your estimate packet.
Ask questions!
Review Your Estimate Packet
In the application:
Retirement date
Beneficiary designation
Direct deposit
Tax withholding
Benefit payment option election
Additional required documents
60 day rule
Submit Completed Application
MCERA doesn't tell your employer about your retirement date.
Notify Your Employer
Payment of Your
Your first check
Deductions
Taxes

Tell us when you move or change banks.
Show me
the money!

Monthly Allowance
Eligible spouse/partner receives 60% of what you were receiving for life.
If no eligible spouse/partner, minor child receives 60% of what you were receiving until age 18 (or 22 if full-time student) or marriage.
If no spouse/partner or minor child, beneficiary receives lump sum of remaining balance in your contribution account (no continuance).
to
here
there
How do you get from
to
Planning
Retire
Any questions?
The greatest wealth is health.
Post-retirement
Eligibility and enrollment are handled by MCERA according to the County's rules.
If you're not eligible for a Benefit Plan, you can keep your medical coverage as a retiree but you are responsible for the premiums.
Medical Benefit Plans
VSP Vision Care
Separate from the Kaiser and
Blue Cross plans
Premiums not covered by your Benefit Plan
Vision Care
General Eligibility Rules
You're eligible for the level of coverage you have as an active employee.
Change plans during active open enrollment
No open enrollment in retirement
Eligibility
Maximum
Annual Subsidy
Distinguishing
Feature
Considerations
Member before
10/1/87
Member before
10/1/93
Member before
1/1/08
Member on or after 1/1/08 with 5+ years in same plan
No max
for retiree
Flat max
Max determined
by variable
allocation factor
Max determined
by flat allocation
factor
100% of retiree
covered
$2,275
$8,853
$3,000
Married with 30+ years may want BP 3
Over 5.2 years or married with 30+ years may want BP 3
Two subsidies available if married with 30+ years
BP 1
BP 2
BP
BP 4
3
5+ yrs County service
Continuity of coverage
(BP 4 - 5 yrs in same plan)
Medical
Coverage in place for 1+ yr prior
Continuity of coverage
(BP 4 - 5 yrs)
Dental
Plans
Benefit
Effective date of coverage
COBRA
Coverage areas and relocation
Life insurance
Additional Considerations
Eligibility and enrollment
Health coverage and premiums
Medicare premium reimbursement
Medicare resources
Medicare
There you have it.
Only option for those becoming members after 1/1/08
Converted sick leave accruals (if applicable)
are added at the time you retire.
Will I have enough money?
MCERA
Pension
Social
Security
457(b)
IRA
Personal
Savings
(Only meant to replace a
portion of your income)
Windfall Elimination Provision
Government Pension Offset
SSA Workshop @ MCERA
Benefit Factors for General Tiers
Benefit Factors for Safety Tiers
Full transcript