KENT ENTUCKY R RETIRE IREMEN ENT S SYSTEMS EMS Tier ier 1: - - PowerPoint PPT Presentation

KENT ENTUCKY R RETIRE IREMEN ENT S SYSTEMS EMS Tier ier 1: 1: Strategi egies es f for R Retiremen ement W Webin inar ar will b ll begin gin m momen mentarily ily…

KENT ENTUCKY R RETIRE IREMEN ENT S SYSTEMS EMS Tier ier 1: 1: Strategi egies es f for R Retiremen ement W Webin inar ar

Plea ease keep eep in n mind nd tha hat Kentucky cky Revi vised Stat atute 61.661 661 requires es KRS t to a administ ster er accounts s in a confid identia ial l manne nner. Dur uring ng o

• ur

ur web ebina nar today, p plea ease d do no not sub submit quest uestions sp spec ecific to your ur account nt and nd do no not post st sens sensitive info nformation, n, suc such a h as y s your ur K KRS M S Mem ember I ID, So Social Sec Secur urity y Num umber er, or P PIN, in n the c he cha hat. If f you u ha have sp spec ecific quest uestions about your ur ind ndividual acco account, pleas ase con contact K KRS at 1-800 800-928 928-4646. 4646.

Agenda f for r Today’ y’s W s Webinar

• Zoom Tutorial
• Benefit Calculations for Tier 1 members
• Strategies to Retire

Zoom T m Tutor

• ria

ial

• The Q&A function is used to ask general retirement

questions for a KRS representative to respond. We will answer each question in the order they are received before the conclusion of the webinar today

• The CHAT

AT and RA RAISE HA HAND ND function will not be used during this webinar

Benefi efit C Calc lculatio ion

Tier 1 1 (par artici cipation p prior t to S

• September 1,

1, 2008 2008) How

• w i

is my my mon monthly p pay ayment cal calcu culated?

The t three (3 (3) ) systems a admin inistered by by the he KRS a RS are qualif lified pu public d blic defin ined be benefit it pla plans

X Special Early Factor

(if applicable)

Benefi efit C Calc lculatio ion

Final C l Compensation ion

NONHAZARDOUS HIGH 5 YEAR PAY # MONTHS Year 1 $3,625 1 Year 2 $31,295 12 Year 3 $29,795 12 Year 4 $28,295 12 Year 5 $26,795 12 ($119,805 ÷ 49) X 12 = $29,340 HAZARDOUS HIGH 3 YEAR PAY # MONTHS Year 1 $4,000 1 Year 2 $46,000 12 Year 3 $44,000 12 ($94,000 ÷ 25) X 12 =$45,120  No Nonhazardous= Hig ighest fiv ive (5 (5) ) fis isca cal years rs Hazardous= Hig ighest three (3 (3) ) fis isca cal l years rs  Partial years rs ca can be be used to determine Fin Final C l Compensation  A min inim imum o

• f 48 m

months ths may be be used in in the a averaging o

• f s

sala lary f for No Nonhazardous a and a min inim imum of 24 m months ths for H Hazar ardo dous

Benefi efit C Calc lculatio ion

Final C l Compensation ion

NONHAZARDOUS HIGH 5 YEAR PAY # MONTHS Year 1 $3,625 1 Year 2 $31,295 12 Year 3 $29,795 12 Year 4 $28,295 12 Year 5 $26,795 12 ($119,805 ÷ 49) X 12 = $29,340 HAZARDOUS HIGH 3 YEAR PAY # MONTHS Year 1 $4,000 1 Year 2 $46,000 12 Year 3 $44,000 12 ($94,000 ÷ 25) X 12 =$45,120  No Nonhazardous= Hig ighest fiv ive (5 (5) ) fis isca cal years rs Hazardous= Hig ighest three (3 (3) ) fis isca cal l years rs  Partial years rs ca can be be used to determine Fin Final C l Compensation  A min inim imum o

• f 48 m

months ths may be be used in in the a averaging o

• f s

sala lary f for No Nonhazardous a and a min inim imum of 24 m months ths for H Hazar ardo dous  Compe pensatory p payments ca can be be repo ported a as sala lary and u used in in determinin ing t the a average sala lary

Benefi efit C Calc lculatio ion

Final C l Compensation ion

NONHAZARDOUS HIGH 5 YEAR PAY # MONTHS Year 1 $3,625 1 Year 2 $31,295 12 Year 3 $29,795 12 Year 4 $28,295 12 Year 5 $26,795 12 ($119,805 ÷ 49) X 12 = $29,340 HAZARDOUS HIGH 3 YEAR PAY # MONTHS Year 1 $4,000 1 Year 2 $46,000 12 Year 3 $44,000 12 ($94,000 ÷ 25) X 12 =$45,120  No Nonhazardous= Hig ighest fiv ive (5 (5) ) fis isca cal years rs Hazardous= Hig ighest three (3 (3) ) fis isca cal l years rs  Partial years rs ca can be be used to determine Fin Final C l Compensation  A min inim imum o

• f 48 m

months ths may be be used in in the a averaging o

• f s

sala lary f for No Nonhazardous a and a min inim imum of 24 m months ths for H Hazar ardo dous  Compe pensatory p payments ca can be be repo ported a as sala lary and u used in in determinin ing t the a average sala lary

Benefi efit C Calc lculatio ion

Final C l Compensation ion

NONHAZARDOUS HIGH 5 YEAR PAY # MONTHS Year 1 $3,625 1 Year 2 $31,295 12 Year 3 $29,795 12 Year 4 $28,295 12 Year 5 $26,795 12 ($119,805 ÷ 49) X 12 = $29,340 HAZARDOUS HIGH 3 YEAR PAY # MONTHS Year 1 $4,000 1 Year 2 $46,000 12 Year 3 $44,000 12 ($94,000 ÷ 25) X 12 =$45,120  No Nonhazardous= Hig ighest fiv ive (5 (5) ) fis isca cal years rs Hazardous= Hig ighest three (3 (3) ) fis isca cal l years rs  Partial years rs ca can be be used to determine Fin Final C l Compensation  A min inim imum o

• f 48 m

months ths may be be used in in the a averaging o

• f s

sala lary f for No Nonhazardous a and a min inim imum of 24 m months ths for H Hazar ardo dous  Compe pensatory p payments ca can be be repo ported a as sala lary and u used in in determinin ing t the a average sala lary

Benefi efit C Calc lculatio ion

Benefit it F Factor

• r

KERS Non-Hazardous (1) 1.97%

If a member does not have 13 months credit for 1/1/1998-1/1/1999.

KERS Non-Hazardous (2) 2.00%

If a member has 13 months credit for 1/1/1998-1/1/1999.

KERS Hazardous 2.49%

Only approved hazardous duty positions are eligible.

CERS Non-Hazardous (1) 2.00%

If a member began participating on, or after, 8/1/2004-8/31/2008.

CERS Non-Hazardous (2) 2.20%

If a member began participating prior to 8/1/2004.

CERS Hazardous 2.50%

Only approved hazardous duty positions are eligible.

SPRS 2.50%

Only approved hazardous duty positions are eligible.

Set by statute and vary based on:

• Participation date
• Type of service
• System

Benefi efit C Calc lculatio ion

Ti Tier 1 1 Exam ample

RETIREMENT FORMULA:

Members participating prior to 9/1/08

John Doe works in a NonHazardous position for an agency participating in CERS Retirement Date is

8/1/2023

Final Compensation is $29,340

27 years of

Service Credit

$29,340 X 2.2% X 27 yrs =

$17,427.96

Strategi egies es t to Retir ire

• Purchasing Service Credit
• Using Accrued Sick Leave
• Using Compensatory Time
• Timing your Retirement

WITHOUT P T Purcha chase

Years of se service = = 27 27 years

Final nal Compens nsat ation = n = $29, $29,340

Retir etirement Formula:

$29,340 x 2.2% x 27 years $17,4 $17,427.96 96

WITH Purchase

Year ars of service = 32 32 year ars (27 curren ent + 5 purchased) ed)

Final C Compens nsat ation = n = $29, $29,340

Retir etirement Formula:

$29,340 x 2.2% x 32 years $20, $20,655. 5.36

By pu purch chasing 5 5 years rs o

• f s

service ce cr credit it, t the a annual l be benefit it increas ased d by by $3,227. 27.40

• 40. On a monthly b

basis, t the be benefit it in incr creased by by $268. 68.95! 95!

Purchas hasing ng Service C e Cred edit it

Use our

• ur Membe

mber Sel elf Service ice to to prod

• duc

uce ret etirem emen ent estim imat ates a and ser ervice e purch chas ase c cost calcu calculat lations

Using ng A Accru crued S Sick ck L Leave

Unuse nused si sick l leave i is s conv nverted t to mont nths hs o

• f se

service cred edit it a at retir irem emen ent.

Many mem ember ers are e el eligi igible e to rec ecei eive ser ervice e cred edit fo for unus used accum umulated sic ick le leave upon n retir irement nt.

7 ½ H Hour

• ur Day

8 8 Hour ur Day Months nths o

• f Service

ice 82. 82.5 88 88 1 Mon

• nth

th 240 240 256 256 2 Mon

• nths

ths 397. 397.5 424 424 3 Mon

• nths

ths 555 555 592 592 4 Mon

• nths

ths 712. 712.5 760 760 5 Mon

• nths

ths 870 870 928 928 6 Mon

• nths

ths 1,027. 27.5 1, 1,09 096 7 Mon

• nths

ths 1, 1,18 185 1, 1,26 264 8 Mon

• nths

ths 1,342. 42.5 1, 1,43 432 9 Mon

• nths

ths 1, 1,50 500 1, 1,60 600 10 10 Months ths 1,657. 57.5 1, 1,76 768 11 11 Months nths 1, 1,81 815 1, 1,93 936 12 12 Months ths In In Days Months nths of

• f

Cre redit 5-10 10 1 15 15-20 20 2 25 25-30 30 3 35 35-40 40 4 45 45-50 50 5 55 55-60 60 6

Sick L Leave e Conv nver ersion n Chart for for 2 24-hrs on

• n &

& 48 48-hrs of

• ff e

employe yees:

Fin inal l Compen ensation x Benefi efit Factor x Yea Years of

• f

Service Cre Credi dit x SEF EF = Annual Benefi efit Monthly ly Benefi efit

$29, 29,34 340. 0.00

x

2. 2.2% x 27 Yrs Yrs. x 1.000 00 = $17, 17,42 427. 7.96 $1,45 452. 2.33 $29, 29,34 340. 0.00

x

2. 2.2% x 27 27.5 .5 Yrs Yrs. x 1.000 00 = $17, 17,75 750. 0.70 $1,47 479. 9.23

Ex Example le: Accumulation of 6 months of sick leave credit to increase service at retirement.

In th this e s exam xampl ple, the he me memb mber us used 6 mont months hs o

• f

accu ccumula lated s sick ick le leave to in incr crease service ice a at retir irement. . The he monthly ben benefi efit i increa eased ed by by $322. 2.74 74 per per y yea ear. On On a mont nthl hly basi asis, s, the he ben benefi efit in incr creased by by $26. 26.90. 0.

Using ng A Accru crued S Sick ck L Leave

Fin inal l Compen ensation x Benefi efit Factor x Yea Years of

• f

Service Cre Credi dit x SEF EF = Annual Benefi efit Monthly ly Benefi efit

$29, 29,34 340. 0.00

x

2. 2.2% x 26. 26.5 Yrs Yrs. x 0.96 9675 75 = $16, 16,54 549. 9.30 $1,37 379. 9.11 $29, 29,34 340. 0.00

x

2. 2.2% x 27 27 Yrs Yrs. x 1.000 00 = $17, 17,42 427. 7.96 $1 $1,45 452. 2.33

Ex Example le: Accumulation of 6 months of sick leave credit to attain unreduced benefits at retirement.

In th this e s exam xampl ple, the he me memb mber us used 6 mont months hs o

• f

accu ccumula lated s sick ick lea eave t e to red educe e the he Specia cial l Early ly F Facto tor an and d increase ased d the he mont monthl hly b bene nefit b by $878. 8.64 4 annu nnually. On On a mont nthl hly basi asis, s, the he ben benefi efit in incr creased by by $73. 73.22.

Using Accrued Sick Leave

Compens nsat atory Pay ayment nt for 239 ho hour urs

Yea ear 1 $8,664 664 1 mont

• nth

Yea ear 2 $40, $40,000 00 12 12 mos Yea ear 3 $38, 8,000 000 12 12 mos Yea ear 4 $37, 7,000 000 12 12 mos Yea ear 5 $35, $35,360 60 12 12 mos $159 $159,02 024 / / 49 49 mos. X X 12 12 = $38, 8,945. 945.00

No C Compensator tory Pay ayment nt

Yea ear 1 $3, $3,500 1 month Yea ear 2 $40, 0,000 000 12 12 mos Yea ear 3 $38, 8,000 000 12 12 mos Yea ear4 $37, 7,000 000 12 12 mos Yea ear 5 $35, 5,360 360 12 12 mos $153 $153,86 860 / / 49 49 mos. X X 12 12 = $37, 7,680. 680.00

At At the e time o e of f ret etirement, the he me memb mber’s annua nnual ben benefit i increa eased by by $682. $682.86. . On On a m a month thly basi asis, the he me memb mber’s ben benefit increa eased by by $56. $56.91 91.

The mem e member’s pay ayout at at termination f for compen ensatory le leave is is $5,164. 164.00 00 bas ased on a a 7. 7.5 5 hr/da day y emp employee.

Using ng C Compensa nsatory T y Time

Compens nsat atory Pay ayment nt for 239 ho hour urs

Yea ear 1 $8,664 664 1 mont

• nth

Yea ear 2 $40, $40,000 00 12 12 mos Yea ear 3 $38, 8,000 000 12 12 mos Yea ear 4 $37, 7,000 000 12 12 mos Yea ear 5 $35, $35,360 60 12 12 mos $159 $159,02 024 / / 49 49 mos. X X 12 12 = $38, 8,945. 945.00

No C Compensator tory Pay ayment nt

Yea ear 1 $3, $3,500 1 month Yea ear 2 $40, 0,000 000 12 12 mos Yea ear 3 $38, 8,000 000 12 12 mos Yea ear4 $37, 7,000 000 12 12 mos Yea ear 5 $35, 5,360 360 12 12 mos $153 $153,86 860 / / 49 49 mos. X X 12 12 = $37, 7,680. 680.00

At At the e time o e of f ret etirement, the he me memb mber’s annua nnual ben benefit i increa eased by by $682. $682.86. . On On a m a month thly basi asis, the he me memb mber’s ben benefit increa eased by by $56. $56.91 91.

The mem e member’s pay ayout at at termination f for compen ensatory le leave is is $5,164. 164.00 00 bas ased on a a 7. 7.5 5 hr/da day y emp employee.

Using ng C Compensa nsatory T y Time

Calculation for July wages with Comp $3,500 wages earned + $5,164 compensatory leave payout $8,664 new wages representing July

Compens nsat atory Pay ayment nt for 239 ho hour urs

Yea ear 1 $8,664 664 1 mont

• nth

Yea ear 2 $40, $40,000 00 12 12 mos Yea ear 3 $38, 8,000 000 12 12 mos Yea ear 4 $37, 7,000 000 12 12 mos Yea ear 5 $35, $35,360 60 12 12 mos $159 $159,02 024 / / 49 49 mos. X X 12 12 = $38, 8,945. 945.00

No C Compensator tory Pay ayment nt

Yea ear 1 $3, $3,500 1 month Yea ear 2 $40, 0,000 000 12 12 mos Yea ear 3 $38, 8,000 000 12 12 mos Yea ear4 $37, 7,000 000 12 12 mos Yea ear 5 $35, 5,360 360 12 12 mos $153 $153,86 860 / / 49 49 mos. X X 12 12 = $37, 7,680. 680.00

At At the e time o e of f ret etirement, the he me memb mber’s annua nnual ben benefit i increa eased by by $682. $682.86. . On On a m a month thly basi asis, the he me memb mber’s ben benefit increa eased by by $56. $56.91 91.

The mem e member’s pay ayout at at termination f for compen ensatory le leave is is $5,164. 164.00 00 bas ased on a a 7. 7.5 5 hr/da day y emp employee.

Using ng C Compensa nsatory T y Time

June une 1 1st Sal alar ary Ave verag age August 1 st 1st Sal alar ary Ave verage age

Year 1 $40,333 11 11 mos

• s

Year 2 $42,000 12 12 mos Year 3 $40,000 12 12 mos Year 4 $39,000 12 12 mos Year 5 $37,000 12 12 mos Total al $198 $198,33 333 59 59 mont

• nths

$198,333 ÷ 59 mos. X 12= $40, 40,339 39 Year 1 $4,000 1 month nth Year 2 $44,000 12 12 mos Year 3 $42,000 12 12 mos Year 4 $40,000 12 12 mos Year 5 $39,000 12 12 mos Year 6 $37,000 12 12 mos Total al $1 $169, 9,000 00 49 49 months ths $169,000 ÷ 49 mos. X 12 = $41, 41,38 388

The he me memb mber’s annua nnual b bene nefit in incr creased by y $704. 704.44 44 a ye year ar! On a a m month thly y basi sis, s, the he benefit i t increase ased b by $58. $58.70!

Timing Your Retirement

June une 1 1st Sal alar ary Ave verag age August 1 st 1st Sal alar ary Ave verage age

Year 1 $40,333 11 11 mos

• s

Year 2 $42,000 12 12 mos Year 3 $40,000 12 12 mos Year 4 $39,000 12 12 mos Year 5 $37,000 12 12 mos Total al $198 $198,33 333 59 59 mont

• nths

$198,333 ÷ 59 mos. X 12= $40, 40,339 39 Year 1 $4,000 1 month nth Year 2 $44,000 12 12 mos Year 3 $42,000 12 12 mos Year 4 $40,000 12 12 mos Year 5 $39,000 12 12 mos Year 6 $37,000 12 12 mos Total al $1 $169, 9,000 00 49 49 months ths $169,000 ÷ 49 mos. X 12 = $41, 41,38 388

The he me memb mber’s annua nnual b bene nefit in incr creased by y $704. 704.44 44 a ye year ar! On a a m month thly y basi sis, s, the he benefit i t increase ased b by $58. $58.70!

Timing Your Retirement

Determining a Fiscal Year’s Monthly Average Fiscal Year 1 Earnings $40,333 Service earned in Fiscal Year 1 ÷11 months

$3,666.64/month

June une 1 1st Sal alar ary Ave verag age August 1 st 1st Sal alar ary Ave verage age

Year 1 $40,333 11 11 mos

• s

Year 2 $42,000 12 12 mos Year 3 $40,000 12 12 mos Year 4 $39,000 12 12 mos Year 5 $37,000 12 12 mos Total al $198 $198,33 333 59 59 mont

• nths

$198,333 ÷ 59 mos. X 12= $40, 40,339 39 Year 1 $4,000 1 month nth Year 2 $44,000 12 12 mos Year 3 $42,000 12 12 mos Year 4 $40,000 12 12 mos Year 5 $39,000 12 12 mos Year 6 $37,000 12 12 mos Total al $1 $169, 9,000 00 49 49 months ths $169,000 ÷ 49 mos. X 12 = $41, 41,38 388

The he me memb mber’s annua nnual b bene nefit in incr creased by y $704. 704.44 44 a ye year ar! On a a m month thly y basi sis, s, the he benefit i t increase ased b by $58. $58.70!

Timing Your Retirement

• The decision to retire should be based on your individual situation and

needs

• Calculate different retirement scenarios including service purchases, sick

leave, and compensatory time and compare to several dates to determine when you should retire. Go to: myre retirement.k .ky.g .gov

• Visit Ready to Retire on the KRS website at kyret.k

.ky.g .gov.

• Attend a Pre-Retirement Education Program or other KRS webinars to

prepare for your decision to retire

Strategi egies es f for R Retiremen ement

Leg Legal N Not

• tice

If If yo you have ve any ny questi stions about

• ut the

he materi erial in in th this s prese sentat tation please ase co contact ct KR KRS at at 1-800 800-928 928-46 4646 46. This is pr pres esen entation is is int ntend nded mere rely as as a gen ener eral infor

• rma

mation refer eferen ence for

• r mem

ember bers of

• f the

he KRS. S. Th This s present ntation i

• n is not

not int ntend nded as as a a sub ubstitut ute f for

• r applica

licable le Fed edera eral or

• r

sta state la law, , nor nor will ill its ts interpretati tation pr prev evail shoul hould a confli lict ct ar arise se bet between en it its cont

• ntent

nts and nd applica licable le Fede deral al or

• r sta

state law. w. Bef Before makin king decis cisio ions about

• ut your
• ur reti

tirement, t, you

• u shoul

hould co contact ct Kentucky cky Retireme ment nt Syst ystems. s.

Questions?

If we are unable to answer your question during today’s webinar, please email it to:

krsbenefitsoutreach@kyret.ky.gov