Retirement Planning Seminar Presented by: Office of Retirement - - PowerPoint PPT Presentation

Retirement Planning Seminar

Presented by: Office of Retirement Services 407 317-3227

www.ocps.net

(Sign-In; Click on employees, Fiscal Services, Intranet, Risk Management, Retirement Services, then Retirement)

DISCLAIMER

If questions arise as a result of this presentation or the materials provided, Chapter 121, Florida Statutes Chapter 605 Administrative Code and the Internal Revenue Code shall remain the final authorities.

Retirement Services Staff

• Adrienne Rollins, Senior Manager
• Charlotte Bennett, Retirement Specialist
• Sandra Brookins-Crudup, Retirement Specialist
• Julie Crisp, Retirement Specialist
• Olga Rivera, Secretary

Types of Retirement

• Normal/Regular Retirement

– Irrevocable Letter of Retirement (ILR) – DROP

• Early Retirement
• Disability Retirement
• Investment Plan
• Applies to anyone initially enrolled before 7/1/2011

Retirement Websites

• www.FRS.Myflorida.com

FRS Pension Plan –create estimates DROP participants-see finalized DROP Accruals may need Personal Identification Number (PIN)-if you have not created a username & password before (it will be mailed to home address on record)

• www.MYFRS.com

Investment Plan participants updated by State Board of Administration (SBA) Ernst & Young Financial Planners New Hire 5 month window 2nd choice election may need Personal Identification Number (PIN)

• www.OCPS.net

go to Departments/Index Retirement Services access retirement workshop information access FAQ’s on Retirement, TSA’s or Sick Leave Bank access website links for Bencor, SSA, FRS (Pension estimates or Investment Plan)

Normal/Regular Retirement

• Normal retirement requires either

– 30 years of FRS service regardless of age OR – Age 62 with at least 6 years of FRS service

• Irrevocable Letter of Retirement (ILR)
• OCPS option only

Must meet Normal/Regular retirement age – Not a DROP participant – Must establish future termination date – Maximum of 60 months or 5 years – Sick Leave sent to BENCOR while continuing to work – Continue to earn service credit and salary history

Pension Plan Basics

• Guaranteed lifetime monthly benefit
• Based on a formula
• Non-contributory system 1975-June

2011

• Defined Benefit Plan
• No Risk to the Employee

Purchasing Years of Service in the Pension Plan

• Out-of-state & Federal Public Service
• Withdrawn or Refunded Service
• Leave of Absence
• Military Service
• OCPS pays the military leave of absence on behalf of the

employee that occurred prior to 07/01/2011

• If all or part of your military leave occurs on or after July 1,

2011, you must pay any required employee contributions, plus interest

• Military Leave of Absence - must provide copy of leave

form, orders and DD-214 upon return to OCPS

Service Credit

• July 1 through June 30 FY
• You receive service credit each month

that you work/receive a check.

• Less than Complete Work Year

– 10 month employee (5/10 = .50) – 12 month employee (5/12 = .42)

Value Per Year

• Regular Class Service

– Age 62 or 30 years 1.60% – Age 63 or 31 years 1.63% – Age 64 or 32 years 1.65% – Age 65 or 33 years 1.68%

• SM Service

2.00%

Basic Benefit Formula

• Average of HIGHEST five years of

salary/earnings

• Years of Service x Value per Yr x AFC
• = Option 1 Annual Benefit at Normal

Retirement

Divided by 12= (Option 1) Monthly Benefit

Benefit Payment Options

• Choose an option at Retirement/DROP

Entry:

– Option 1: No benefit after death – Option 2: Up to ten years guaranteed to beneficiary – Option 3: Benefit continues to joint annuitant – Option 4: Reduced continuing benefit to survivor

Beneficiary Designation

• Option 1 or 2

Can be anyone (Spouse must sign SA-1 form)

• Option 3 or 4

Spouse or Joint Annuitant

Everyone must have a beneficiary on file!

DROP

• Must be vested and reached normal retirement age or years

Job Title Eligibility Administrators Must enter @ 30 yrs or Registered Nurses age 62 with 6 yrs to maximize PRE-K Paraprofessionals 60 months participation PRE-K Teachers Occupational Therapists Physical Therapists All Other Classified Exception-If you complete 30 yrs of service prior to age 57, you may defer until age 57 to complete 60 months of DROP. You must enter prior to age 58. If you are (K-12) Instructional/Paraprofessionals/School Psychologists, once you are eligible for DROP you may enter at any time.

DROP (cont’d)

• DROP always begins the 1st of the month
• You have until the end of that month to begin participation in

DROP

• Must establish future termination date
• Maximum of 60 months or 5 years
• 3% employee contribution stops upon DROP participation
• Retirement benefits “Banked” while continuing to work
• Earn 6.5% interest compounded monthly on benefits(prior to

07/01/2011)

• Effective 07/01/2011 DROP rate changed to1.3%
• Effective 07/01/2011 COLA based on service years through

06/2011

DROP Payout Options

– Cash Payout – Pay taxes – Rollover – Defer taxes – Combination Cash Payout & Rollover – You have 60 days from you retirement date to make a decision about your DROP money or the state makes a decision for you

– Keep your finalized DROP accruals showing your selected

• ption. This is sent 6-8 weeks after you are in DROP from FRS

– We review this information during your DROP Exit meeting

Early Retirement

• Reduction (5% per year) based on

number of months from normal retirement age of 62

• Benefit reduces to zero at age 42

Disability Retirement

• Must have at least 8 years of service for

regular disability

• Must be permanently/totally disabled;

unable to perform work of any kind

• May be in-line-of-duty (ILOD) or regular
• Minimum guaranteed benefit

– 42% for ILOD – 25% for regular

• Vesting not required for ILOD

Disability Retirement (cont’d)

• Requires certification by at least 2 physicians

licensed in the state of Florida

• Needs employer statement completed by

Retirement Services

• State makes final determination-normally 30-

45 days once all paperwork has been received by FRS

FRS Website for Pension Plan Members

WWW.FRS.Myflorida.com

• view estimates for retiring
• r
• view DROP estimates/finalized accruals
• updated by Florida Department of Management

Services

FRS Investment Plan

• Enrollment of school district members

began effective October 2002

• Defined Contribution Plan
• Employee assumes the risk
• Lump Sum pension instead of a

monthly pension check

Investment Plan Basics

• Vested after 1 year of service
• Normal retirement without possible tax

penalties Age 59 ½

• No DROP Program
• Reemployment rules discussed at

distribution by FRS.

• The 3% employee contribution continues

until you retire

FRS Retirement Plan Election

• FRS Resources

– MyFRS Financial Guidance Line -Unbiased 1-866-446-9377

• Pension or Investment Plan
• One time 2nd Election to switch plans

Must be an active employee at the time of the election and receive service credit (paycheck) during the month you make this election!

Additional Investment Plan Info…

• To retire with OCPS in the Investment Plan:
• If initially enrolled with FRS prior to

07/01/2011, then you must have 30 years

• f service regardless of age or have 6

years of service and at least 59 ½ years of age

• If initially enrolled with FRS on or after

07/01/2011, then you must have 33 years

• f service regardless of age or 8 years of

service and at least 59 ½ years of age

Investment Plan Website

• www.MYFRS.com

Investment Plan participants Ernst & Young free Financial Planners New Hire 5 month window info 2nd choice election may need Personal Identification Number (PIN)-this is mailed to you from Ernst & Young (if you don’t have it call 1866-446-9377) State Board of Administration (SBA)

Pre-Tax Retirement Savings Plans

• All Pre-Tax Retirement Savings plans with OCPS are voluntary

contributions made by the employee to reduce withholding taxes

• OCPS offers 9 different 403(B) companies
• OCPS offers 9 different 457 companies
• 2015 – 403(B) Basic Limit is $18,000

– May have additional $6,000 (if age 50 or older in the calendar year) – May have additional $3,000 (if 15 or more years with current employer) Total 2015 403(B) max is $27,000

• 2015 - 457 Basic Limit is $18,000

– May have additional $6,000 (if age 50 or older in the calendar year) Total 2015 to 457 $23,000 is max

Please visit tables during break & end

TSA Consulting Group

(tsacg.com)

2 – 3 Business Days for Processing

TSA Consulting Group

Can print certificate in minutes

Questions & Answers

BREAK

Terminal Sick Leave Pay Percentage at Retirement

An employee receives terminal pay as follows:

• 0-3 Years *

35%

• 3.01-6 Years

40%

• 6.01-9 Years

45%

• 9.01-12

50%

• 12.01-over

100%

• *Based on consecutive years of service at the time of retirement.
• Note: Revision to contract effective 07/01/08: If the person has

worked at least five consecutive years

• prior to retirement, previous time at the district may be

counted.

Sick Leave Payout Contributions during DROP or IRL

• Multiple Annual Contributions

– Increasing percentage of Sick leave at end of each year of DROP

5 Year example: Year 1

20% Year 2 25% Year 3 33% Year 4 50% Year 5 100%

Bencor Special Pay Plan

• Tax savings
• Eliminate Social Security and

Medicare Taxes

• Defer Federal Income Taxes

Special Pay Comparison

Current w/o Plan $ 10,000.00 2,500.00 Fed Tax 620.00 FICA 145.00 Medicare 6,735.00 Net Pay

With BENCOR Plan

$ 10,000.00 $ 0 Fed Tax Deferred $ 0 FICA Saved $ 0 Medicare Saved $ 10,000.00 Deposited

Plan Features

• Liquidity & Flexibility
• Safety
• Tax-Deferred Earnings
• Optional Investment Accounts
• Loans
• Probate Avoidance

Account Types

• General Account – Fixed Interest

– Guarantee of Principal & Interest – Guaranteed by Standard Insurance Company – Stable Asset Fund

• Currently 1.75% for 1st quarter

– No fees assessed against account – All deposits go into this account unless you choose otherwise

• Market Based Investment Options

– 16 Mutual Fund Choices – Account Management Fees

Account Options

• Take money for cash or rollover

– Money available within 3 to 5 working days

• Rollovers – In & Out
• Change Investments

– Over the phone, online

• Loans

– ½ of account balance up to $50,000

(one time $100 fee)

Use funds according to IRS regulations

Call BENCOR Administrative Services for funds

Bencor Special Pay Plan

OUR LOCAL REPRESENTATIVES ARE: Michael Borgailo, Danny Gay David Payne,

• r Travis Payne

407-599-2300 407-678-4014 1-800-330-4014 1-888-258-3422

Applying For Retirement/DROP Entry

• Apply for retirement 1 to 3 months in

advance, at least by TERMINATION date to prevent unnecessary delay, call for appt with Retirement Services.

• Need birth date verification for member and

spouse for some options

• Need spousal acknowledgement, if married
• Designate a beneficiary (SSN & DOB)

After Retirement

• Benefit is subject to withholding tax
• Default is married with three allowances
• Cost of Living Increase

– Based upon years of service thru 06/2011

• Health Insurance Subsidy (HIS)
• Added to your monthly benefit
• Not applicable during DROP
• Years of Service X $5.00
• Maximum Amount $150.00
• Minimum Amount $30.00

After (cont’d)

• Once a benefit payment is cashed or

deposited, retirement is final

– Option cannot be changed – No service may be added

• Benefits paid monthly
• Direct deposit required effective

7/1/2000

Restrictions for the first twelve (12) months of retirement:

• Termination Period- Months one (1) - six (6):

– No work for any FRS employer, no exceptions.

• Reemployment Period - Months seven (7) – twelve (12):
• if you work for an FRS employer, you must forfeit your benefits,

regardless of the position.

• You may volunteer after retirement and/or DROP if:
• No Compensation
• You do not occupy a regularly established position
• Register as a volunteer through OCPS.net

After one year: No restrictions No Restrictions on private employment

Reemployment After Retirement

Renewed Membership

• Retirees initially reemployed in a

retirement-covered position on or after July 1, 2010, are NOT eligible for renewed membership. (can not earn a second retirement)

• DROP interest changed to 1.3%
• 3% employee pre-tax contributions began July 1, 2011

COLA

• All service earned through June 2011 receives a 3% COLA
• Service earned July 2011 and after – 0% COLA

Formula: – Years of service through June 2011 divided by Years of service at retirement X 3% 20/21 X 3% = 2.86% 29/30 X 3% = 2.90%

2011 Legislative Changes

• Vesting-8 years of creditable service
• Normal Retirement

– Age 65 or 33 years of service before age 65

• Average Final Compensation (AFC)

– Average of the highest 8 fiscal years of salary

Members Initially Enrolled

• n or after

July 1, 2011

Insurance Benefits

• Coverage normally ends the last day of the month in

which you separate service

• Upon retirement, one opportunity to continue OCPS

health insurance

• Can continue for your lifetime by paying premiums
• Rates are negotiated annually and are effective October

through September

• Insurance Benefits 407-317-3245
• Reminder:

Please keep ALL beneficiary information updated!

Update Beneficiary Designation

• Active Pension Member Ben - 001
• DROP participant FST-12
• Investment Plan IPBEN-1
• OCPS Board Paid Life-verify with

Insurance department

Questions & Answers Course Evaluation

Sick Leave Bank Thank You Office of Retirement Services

Disclaimer: The information contained in this document is only as current as the information at the time of the seminar. Therefore, please check to make sure this information is current and updated prior to making your decisions about retirement.