Retiring Presented by Kevin Wenndt Senior Retirement Benefits - - PowerPoint PPT Presentation

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Retiring Presented by Kevin Wenndt Senior Retirement Benefits - - PowerPoint PPT Presentation

Mar 14, 2024 227 likes •634 views

For Members Retiring Presented by Kevin Wenndt Senior Retirement Benefits Officer IPERS is The largest public retirement system in Iowa 2,100 employers public schools, cities, counties, state government, state universities, State

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For Members Retiring

Presented by Kevin Wenndt Senior Retirement Benefits Officer

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IPERS is…

  • The largest public retirement system in Iowa

– 2,100 employers

– public schools, cities, counties, state government, state universities, State Board of Regents

– Over 346,000 total members – Over 108,000 retirees

  • 61- Average age pension starts
  • Average of 22 yrs of service
  • $16,000 annual pension amount
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Who belongs to IPERS?

Active Members Grouped by Major Employers

Membership Status

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How does it work?

Contributions from Active Members and Employers are paid in. Lifetime Retirement Benefits, Disability Benefits, Death Benefits and Refunds are paid out. The IPERS Trust Fund

The IPERS Trust Fund must be used for the exclusive benefit of members and their beneficiaries.

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Contributions

Can be adjusted +/- 1% each year based on the Actuarial Evaluation

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Interest 2015 Interest = 1.99%

Interest Rate

2014 – 1.65% 2011 – 2.03% 2013 – 1.28% 2010 – 2.64% 2012 - 1.34% 2009 – 3.61%

Established each Jan 1st based on current $1000 CD rate plus 1%

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Account Value

  • IPERS Investment Amount =

Contributions + Interest

– Contributions are based on gross wages

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Vesting

  • Entitles the member to:
  • Monthly retirement or

disability benefit

  • A portion of employer’s investment

if refund is taken

  • Required for a service purchase

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What Is “Vesting”?

Vested status is obtained after:

  • 28 quarters (7 years) of reported

wages,

  • r
  • When wages are reported in the

same calendar year age 65 or older is attained

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Active Member Death Benefit

  • Sole beneficiary has a choice

– Monthly benefit – Actuarial Lump Sum Death Benefit

  • No beneficiary, multiple beneficiaries or

estates can only receive the – Actuarial Lump Sum Death Benefit

Members Age 61

  • Avg. Income $36,652.81
  • Yrs. of Service 21.75

Sole Beneficiary Age 36 yrs. old (this is a child) Investment amount = $33,473.41 Actuarial Present Value = $132,866 Lifetime Monthly Benefit = $846 Paid over 25 yrs = $253,800 The child is now the same age as the parent was at death – 61

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How Your Benefit is Determined

The IPERS Formula

– Your Age – Your Years of Service – Your Highest Five Years of Salary (average)

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X Salary

(Based on Your Years of Service) (Your Highest 5-Year Average )

The IPERS Formula

Multiplier

  • Each year worked earns 2% of the 60% payable for the first 30 years.
  • 1% for a maximum total of 65% payable for each additional year after 30.
  • Early retirement reduction applied if retiring before normal retirement.
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Reduce 3% a year for portion of service through 06/30/12

  • From nearest normal retirement

eligibility (rule of 88; rule of 62/20; age 65) Reduce 6% a year thereafter

  • From age 65

As of July 1, 2012

Early Retirement Age Reduction

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Normal Age

  • Age 65
  • Age 62 with 20 or more years of service
  • Rule of 88 (years of service + age)
  • Receiving social security disability or railroad

disability – Must be vested if applying for disability benefits under the age of 55

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Estimated payout

  • Retirement at age 55 with 33 years of service,

$35,000 average wage. (rule of 88)

  • Lifetime monthly benefit of $1,837.50.
  • Amount paid over life expectancy of 25 years

equals $551,250.

  • Most members investment is recovered within

2-3 years after retirement.

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Plan Early - 3 to 5 years out

  • Request estimates from IPERS before

deciding on a retirement date.

– Call or Go online to get estimates

  • IPERS Website: www.ipers.org
  • Phone: 1-800-622-3849
  • Working a little longer could increase

benefits significantly.

  • May be eligible to retire earlier.
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facts to remember!

  • Working any time in a month makes

you ineligible for benefits that month

  • You can get a paycheck in the same

month you start IPERS payments

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Maximizing Years of Service

  • Free credit

– Leaves of absence

  • Granted prior to July 1998
  • Requires verification from employer

– Active military duty

  • Entered military as an IPERS-covered employee

and returned to IPERS employment within one year of discharge

  • Submission of DD214 form required
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Beginning 01/01/16: Purchasing will take place only during the retirement process.

  • Increased accuracy of cost
  • Reduced risk of under- or overpaying

Request an official cost quote when you apply for retirement benefits.

  • Application for Service Purchase

Service Purchases

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Service Purchase Options

  • Refunded IPERS service
  • IPERS employment not previously covered
  • Other public system(s)
  • Active duty military time not eligible for

free credit

  • Leave of Absence
  • Non-Qualified Service (Air Time)
  • IPERS Buy-up Credit Conversion
  • Buy back Credit
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How Much Will It Cost?

  • Submit a Service Purchase Application, available

at the IPERS website, www.ipers.org

  • Actuary calculates service purchase cost.
  • IPERS will mail cost letter giving you the cost

per quarter and the entire purchase cost.

  • Cost quotes are valid for six months.

Remember, completing the Application for Service

Purchase does not mean you are obligated to purchase service.

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Monthly Benefits: How to Begin

  • Must terminate all IPERS employment

unless age 70

  • Must be age 55 or older

– Unless vested and eligible for IPERS or Social Security disability benefits – Sheriffs and deputies can retire earlier

  • Must complete an application for

monthly benefits

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First Month of Entitlement

– At age 70 – termination not required – First month after termination of employment

  • if at least age 55 or
  • retiring under disability provision

– Must have properly complete application

  • n file

– Benefits paid last business day of month

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Monthly Benefit Options

  • Six options

– Lifetime monthly benefit to member – Different death benefit provisions

  • Option choice cannot be changed once

benefits are paid.

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Option One

  • Guarantees a lump sum payment at death.
  • Death benefit is designated in thousand

dollar increments from the min. of $1000 to the highest thousandth of investment amount.

  • Multiple beneficiaries can be designated.
  • Beneficiary designations can be changed at

any time.

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Option Two

  • Lump sum if any

balance of investment remains

  • Highest monthly

payment with no death benefit

Option Three

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Option Five

  • Death benefit only if member dies prior to

receiving 120 payments.

– Sole beneficiary to receive remainder on monthly basis. – Multiple beneficiaries eligible for Commuted Lump Sum payment only or the present value

  • f any future benefits payments remaining.
  • Beneficiary designation can be changed

at any time.

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Definitions

  • Beneficiary

– Can be one or more than one person – Can be changed at any point in retirement – Receives a lump sum

  • Contingent annuitant (CA)

– Can only be one person – That person can NEVER be changed – Receives a monthly benefit

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Option Four & Six

  • Contingent annuitant will receive a

lifetime monthly benefit at death of member

– Will receive 100%, 75%, 50% or 25% of member’s benefit payment

  • Percentage designated by member at

retirement

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Option Four & Six

  • Option 4 - If contingent annuitant precedes

member in death, the monthly payment does not change.

  • Option 6 - If contingent annuitant dies first,

member’s monthly payment will increase to

  • ption 2 benefit amount. If the member dies

before recovering their investment, the balance will be paid to a beneficiary.

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Taxes

  • Subject to federal and state income tax.

– post taxed contributions are recovered

  • ver member’s life expectancy

– can be withheld from monthly benefit payment

  • 1099R mailed each January.
  • For detailed tax information, contact the IRS

for publication 575 or consult a tax advisor

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Bona Fide Retirement

  • No employment with an IPERS covered

employer for 1 calendar month

– Cannot have any agreement oral or written to return to Any IPERS employer.

  • No IPERS covered employment for an

additional 3 months or for a total of 4 calendar months

– Get your 4th IPERS check before returning

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Reemployment Guidelines

  • Applies to IPERS covered employment
  • nly

– $30,000 earnings limit under age 65

  • Your Benefits are reduced 50 cents for

each dollar earned over the limit

– No limit after age 65

  • Benefits maybe recomputed upon

termination

– Possible monthly benefit increase, or – Lump sum payment of the combined member/employer investment

  • Know the Social Security earnings limits
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IPERS Website

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IPERS Website

By clicking on each event you get a page with the details of each event.

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IPERS Member Self-Serve

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New Member Self Service Section

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IPERS Contact Info.

General Inquiries 515-281-0020 or 1-800-622-3849 7:30 a.m.–5 p.m. CT, Monday–Friday Fax: 515-281-0053 Address: 7401 Register Drive Des Moines, IA 50321

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Thank You!

Presented by Kevin Wenndt Senior Retirement Benefits Officer

E-mail: kevin.wenndt@ipers.org Phone: (515) 281-0036 Toll Free 1-800-622-3849 Website: www.ipers.org