Village of Orland Park Early Retirement Incentive Programs - - PowerPoint PPT Presentation

Village of Orland Park Early Retirement Incentive Programs

Information and Question/Answer Session

June 14, 2018

Village of Orland Park Voluntary Retirement Incentive Program

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Program Term, Eligibility and Incentives

• Incentive Period –
• June 30, 2018 thru June 30, 2019
• Eligibility –
• Tier 1 – 55 Year of Age, 8 Years of IMRF Service, 8 Years of Consecutive

Service with the Village of Orland Park

• Notification Requirements –
• Intent to retire should be submitted to HR by September 1, 2018, or as

soon as possible, but no later than 30 days prior to retirement date

• “Full and Final Resignation and Release Agreement” must be signed and

submitted to HR at least thirty (30) days prior to an retirement date

• Incentives –
• Health Reimbursement Arrangement (HRA)
• 401(a) Plan

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Health Reimbursement Arrangement (HRA)

• Tax exempt irrevocable trust arrangement into which funds

are deposited by the Village on behalf of the retiree

• Funds can be used to pay for retiree and retiree’s

dependent(s) health care costs even if retiree does not continue on the Village’s Employee Benefits Program

• Eligible costs include co-pays and deductibles, prescription

costs, Medicare part B and D premiums, medical, dental and vision premiums

• Village contribution amounts and any investment earnings

can be withdrawn from the HRA on a tax-free basis

• Remaining funds can be utilized by surviving spouse and

qualified dependents

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Health Reimbursement Arrangement (HRA) (Cont’d)

• Amount to be deposited into HRA on monthly

monthly basis for non- Medicare eligible retirees participating in Village’s Employee Benefit Program on date of retirement -

• Based on the medical, dental and vision plan retiree was

participating in as an employee as of May 7, 2018

• Equal to Village’s full premium rate less

less the non-union employee contribution rate @ 100% for year 1, 80% for year 2 and 50% for years 3 and 4 as of May 7, 2018

Full P ll Premiu ium Emplo loyee S Shar are o

• f P

Premiu ium Villag illage C Contribution t to H HRA Year 1 $1,657.36 $157.90 $1,499.46 Year 2 $1,657.36 $157.90 $1,199.57 Year 3 $1,657.36 $157.90 $749.73 Year 4 $1,657.36 $157.90 $749.73 Contribu bution E Exam ample ple -

• E

Emplo ployee + + S Spouse S Silv ilver P Plan an, D Dental, V al, Vision

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Health Reimbursement Arrangement (HRA) (Cont’d)

• Amount to be deposited into HRA on monthly

monthly basis for Medicare eligible retirees and retirees that were not participating in the Village’s Employee Benefits Program on the date of retirement -

Ye Year ar 1 1 Year 2 2 Ye Years 3 & 4 3 & 4 Medicare Eligible - Employee $400.00 $400.00 $200.00 Medicare Eligible - Employee + Covered Dependent(s) $800.00 $800.00 $400.00 Employees not enrolled in benefit program $300.00 $200.00 $100.00

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Health Reimbursement Arrangement (HRA) (Cont’d)

Ye Year ar 1 1 Year 2 2 Ye Year ars 3 & 4 3 & 4 Hea Health I Insurance: e: HMO - Employee 580.96 464.77 290.48 HMO - Employee + Children 1,102.62 882.10 551.31 HMO - Employee + Spouse 1,148.96 919.17 574.48 HMO - Family 1,705.94 1,364.75 852.97 Silver - Employee 742.50 594.00 371.25 Silver - Employee + Children 1,363.30 1,090.64 681.65 Silver - Employee + Spouse 1,421.10 1,136.88 710.55 Silver - Family 2,066.52 1,653.22 1,033.26 HDHP/HSA - Employee 684.10 547.28 342.05 HDHP/HSA - Employee + Children 1,334.68 1,067.74 667.34 HDHP/HSA - Employee + Spouse 1,395.30 1,116.24 697.65 HDHP/HSA - Family 2,071.58 1,657.26 1,035.79 IUOE 1,066.00 852.80 533.00 Den Dental I Insurance: e: Dental - Employee 34.48 27.58 17.24 Dental - Employee + Children 85.36 68.29 42.68 Dental - Employee + Spouse 68.94 55.15 34.47 Dental - Family 119.84 95.87 59.92 Vis ision ion I Insurance: e: Vision - Employee 4.96 3.97 2.48 Vision - Employee + Children 9.92 7.94 4.96 Vision - Employee + Spouse 9.42 7.54 4.71 Vision - Family 14.56 11.65 7.28 Ye Year ar 1 1 Year 2 2 Ye Year ars 3 & 4 3 & 4 Medicare Eligible - Employee 400.00 400.00 200.00 Medicare Eligible - Employee + Covered Dependent(s) 800.00 800.00 400.00 Employees not enrolled in benefit program 300.00 200.00 100.00 Volunta tary ry R Reti tire rement In Incenti ntive

Monthly C Contributi tion

• n to R

to Reti tiree' ree's H HRA

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401(a) Incentive

• Village has established a retirement savings plan that allows the

Village to contribute tax deferred funds on behalf of employees enrolled in the plan

• Participation in the 401(a) is a mandatory requirement of the Incentive

Program

• Maximum annual contribution is $55,000 (2018)
• Contribution to a 401(a) does not affect 457(b) contribution limits
• Employee will have immediate access to amounts contributed to the 401(a)
• Participant pays tax on employer contributions and any earnings at time of

distribution from the plan

• Funds can be withdrawn for a variety of purposes
• Employees under the age of 55 may incur a 10% early withdrawal penalty
• Utilizing the 401(a) limits the employee’s and the Village’s tax liability, as well

as required contributions to IMRF

• Employee is able to designate beneficiaries

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401(a) Incentive (Cont’d.)

• Village will fund employee’s 401(a) with the amount of the

employee’s accrual payout that exceeds 25% exceeds 25% of the employee’s estimated IMRF final rate of earnings (FRE)

• FRE will be determined by IMRF
• Contribution to the 401(a) will occur one (1) month prior to the

employee’s retirement date

• If amount to be contributed exceeds the IRS contribution limit,

the amount over the limit will be included in the employee’s final paycheck

• 25% of FRE will be included on the employee’s final paycheck

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Village of Orland Park IMRF ERI with Voluntary Retirement Incentive Program

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Program Term, Eligibility and Incentives

• Incentive Period –
• June 30, 2019 thru June 30, 2020
• Eligibility –
• Tier 1 – 50 Year of Age, 20 Years of Service with IMRF or a Reciprocal Plan
• Notification Requirements –
• Intent to retire should be submitted to HR by March 1, 2019, or as soon as

possible, but no later than 30 days prior to employee’s retirement date

• “Full and Final Resignation and Release Agreement” must be signed and

submitted to HR at least thirty (30) days prior to an employee’s retirement date

• Incentives –
• Purchase IMRF Service Credit
• Health Reimbursement Arrangement (HRA)
• 401(a) Plan

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Purchasing IMRF Service Credit

• IMRF allows eligible members to purchase up to five (5) years of

service credit at retirement; for each month of service purchased, the member’s retirement age is increased accordingly

• Calculating the Cost of Your ERI Service –
• Highest 12 months of salary within final rate of earnings period

x 4.5% x # of years/months purchased

• Paying IMRF Service Credit Cost –
• Distribution from 401(a), IRA, 457 Plan
• Refund of Voluntary Additional Contributions
• Accrual payout paid on employee’s final paycheck (25% of FRE)
• 24 equal installments deducted from your pension payment
• IMRF ERI participants are not allowed to work for another IMRF (or

reciprocal plan) employer

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Health Reimbursement Arrangement (HRA)

• Tax exempt irrevocable trust arrangement into which funds

are deposited by the Village on behalf of the retiree

• Funds can be used to pay for retiree and retiree’s

dependent(s) health care costs even if retiree does not continue on the Village’s Employee Benefits Program

• Eligible costs include co-pays and deductibles, prescription

costs, Medicare part B and D premiums, medical, dental and vision premiums

• Village contribution amounts and any investment earnings

can be withdrawn from the HRA on a tax-free basis

• Remaining funds can be utilized by surviving spouse and

qualified dependents

13

Health Reimbursement Arrangement (HRA) (Cont’d)

• Amount to be deposited into HRA on monthly

monthly basis for non- Medicare eligible retirees participating in Village’s Employee Benefit Program on date of retirement -

• Based on the medical, dental and vision plan retiree was

participating in as an employee as of May 7, 2018

• Equal to Village’s full premium rate less

less the non-union employee contribution rate @ 100% for year 1, 50% for year 2 as of May 7, 2018

Full P ll Premiu ium Emplo loyee S Shar are o

• f P

Premiu ium Villag illage C Contribution t to H HRA Year 1 $1,657.36 $157.90 $1,499.46 Year 2 $1,657.36 $157.90 $749.73 Contribu bution E Exam ample ple -

• E

Emplo ployee + + S Spouse S Silv ilver P Plan an, D Dental, V al, Vision

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Health Reimbursement Arrangement (HRA) (Cont’d)

• Amount to be deposited into HRA on monthly

monthly basis for Medicare eligible retirees and retirees that were not participating in the Village’s Employee Benefits Program on the date of retirement -

Ye Year 1 1 Year 2 2 Medicare Eligible - Employee 400.00 200.00 Medicare Eligible - Employee + Covered Dependent(s) 800.00 400.00 Employees not enrolled in benefit program 300.00 200.00

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Health Reimbursement Arrangement (HRA) (Cont’d.)

Ye Year ar 1 1 Year 2 2 Hea Health I Insurance: e: HMO - Employee 580.96 290.48 HMO - Employee + Children 1,102.62 551.31 HMO - Employee + Spouse 1,148.96 574.48 HMO - Family 1,705.94 852.97 Silver - Employee 742.50 371.25 Silver - Employee + Children 1,363.30 681.65 Silver - Employee + Spouse 1,421.10 710.55 Silver - Family 2,066.52 1,033.26 HDHP/HSA - Employee 684.10 342.05 HDHP/HSA - Employee + Children 1,334.68 667.34 HDHP/HSA - Employee + Spouse 1,395.30 697.65 HDHP/HSA - Family 2,071.58 1,035.79 IUOE 1,066.00 533.00 Den Dental I Insurance: e: Dental - Employee 34.48 17.24 Dental - Employee + Children 85.36 42.68 Dental - Employee + Spouse 68.94 34.47 Dental - Family 119.84 59.92 Vis ision ion I Insurance: e: Vision - Employee 4.96 2.48 Vision - Employee + Children 9.92 4.96 Vision - Employee + Spouse 9.42 4.71 Vision - Family 14.56 7.28 Ye Year ar 1 1 Year 2 2 Medicare Eligible - Employee 400.00 200.00 Medicare Eligible - Employee + Covered Dependent(s) 800.00 400.00 Employees not enrolled in benefit program 300.00 200.00 IM IMRF ER ERI + I + In Incentive

Mo Mont nthl hly C Cont ntribution t to R Retiree's H HRA

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401(a) Incentive

• Village has established a retirement savings plan that allows the

Village to contribute tax deferred funds on behalf of employees enrolled in the plan

• Participation in the 401(a) is a mandatory requirement of the

Incentive Program

• Maximum annual contribution is $55,000 (2018)
• Contribution to a 401(a) does not affect 457(b) contribution limits
• Employee will have immediate access to amounts contributed to

the 401(a)

• Participant pays tax on employer contributions and any earnings at time
• f distribution from the plan
• Funds can be withdrawal for a variety of purposes
• Employees under the age of 55 may incur a 10% early withdrawal penalty
• Utilizing the 401(a) limits the employee’s and the Village’s tax liability,

as well as required contributions to IMRF

• Employee is able to designate beneficiaries

17

401(a) Incentive (Cont’d.)

• Village will fund employee’s 401(a) with the amount of the

employee’s accrual payout that exceeds 25% exceeds 25% of the employee’s estimated IMRF final rate of earnings (FRE)

• FRE will be determined by IMRF
• Contribution to the 401(a) will occur one (1) month prior to the

employee’s retirement date

• If amount to be contributed exceeds the IRS contribution limit,

the amount over the limit will be included in the employee’s final paycheck.

• 25% of FRE will be included on the employee’s final paycheck

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Questions/Comments

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