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 2 nd 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Purchasing Years of Service in the Pension Plan • Out-of-state & Federal Public Service • Withdrawn or Refunded Service • Leave of Absence • Military Service • OCPS pays the military leave of absence on behalf of the employee that occurred prior to 07/01/2011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% 2.00 % • SM Service
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 1 st 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 option. 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 or -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 2 nd 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 of 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 of 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 2 nd 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
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