FCERA PRE-RETIREMENT SEMINAR January 17, 2013

FCERA PRE-RETIREMENT SEMINAR January 17, 2013

PRESENTATION TOPICS How will PEPRA affect me? What is a Defined Benefit plan? Membership Other Service Eligibility Types of Retirement Choosing Best Retirement Date Retirement Options Retirement Timeline 2 January 17, 2013

HOW WILL PEPRA AFFECT ME? Majority of changes affect Tier V members only Tiers I – IV - Benefit calculations have not changed Normal cost of contributions will increase for active members at some point between now and 2018 Four earn codes that are no longer pensionable as of 1/1/13 – 3 Cell Phone, Car Allowance, Uniform Allowance and out-of-town allowances January 17, 2013

DEFINED BENEFIT PLAN Defined Benefit Plan – – Lifetime benefit Based on formula using: Age at retirement Years of service Final average compensation earnable – 4 – Tiers I – III, Annual Cost of Living – Up to 3% annually Not based on contributions January 17, 2013

MEMBERSHIP Safety – Tier I, II, IV, V – – – – General – Tier I, II, III, IV, V – 5 Sheriff’s Officers Correctional Officers DA Investigators Firefighters All others January 17, 2013

ELIGIBILITY SERVICE Eligibility Service – Years of credited service earned by the member which we use to determine the member’s qualification to service retire. Service from date of membership to date of termination, excluding breaks in service Prior county service purchased Leaves of absence purchased Reciprocal service Deferred service 6 Reciprocity Purchase Service Credit January 17, 2013

RECIPROCITY Must have left contributions in reciprocal agency’s plan Use your entry age from reciprocal agency – 7 (Tiers I - IV only - incoming reciprocity) Years of service from reciprocal agency added to years of service at FCERA to determine retirement eligibility Highest compensation earned from FCERA or reciprocal agency will be used in benefit calculation (generally) Must retire concurrently from all systems to receive benefits from reciprocity January 17, 2013

CONSEQUENCES OF BREAKING RECIPROCITY Tiers I, II, III, IV – – Tier V – – Contributions are not age based Tiers I, II, III, IV, V – – 8 Age at which contributions are calculated may be impacted Years of eligibility service for retirement may be impacted January 17, 2013

PURCHASE SERVICE CREDIT You may purchase: – Prior County Service Extra help New hire period Redeposit previously withdrawn contributions – – – Time that cannot be purchased – 9 Medical Leave of Absence Military Leave of Absence Prior Public Service (recalculation only) – Personal Leave of Absence Educational Leave of Absence January 17, 2013

TYPES OF RETIREMENT 10 Service Retirement Service Connected Disability (SCD) Non-Service Connected Disability (NSCD) January 17, 2013

SAFETY MEMBER - Tiers I - IV 10 years of retirement service eligibility – 20 years of retirement service eligibility – 11 At least 50 years of age No minimum age required January 17, 2013

GENERAL MEMBER - Tiers I - IV 10 years of retirement service eligibility – 30 years of retirement service eligibility – 12 At least 50 years of age No minimum age requirement Age 70, regardless of service eligibility January 17, 2013

SAFETY and GENERAL MEMBERS - Tier V Safety Member – – General Member – – 13 5 years of service At least 50 years of age 5 years of service At least 52 years of age January 17, 2013

SERVICE RETIREMENT Age at retirement Final average compensation earnable – – – Total years of service – 14 Tiers I and II – Highest consecutive 365 days 1 year Tiers III and IV – Average of 3 highest individual years Tier V – Average of 3 highest consecutive years Earned plus purchased service credit January 17, 2013

SERVICE CONNECTED DISABILITY 15 Unable to work due to injury or illness related to your specific job duties No minimum service requirement Pays up to 50% of final average compensation or Service Retirement, whichever is greater January 17, 2013

NON-SERVICE CONNECTED DISABILITY 16 Unable to work due to injury or illness not related to your specific job duties Must have minimum 5 years service credit Benefit varies depending on age and years of service. Contact a retirement coordinator for more information January 17, 2013

CHOOSE THE BEST RETIREMENT DATE 17 Each ¼ year of age increases benefit Tiers I – III - Up to 3% Cost of Living Adjustment (COLA) paid each April (in general) Tiers IV and V – no annual cost of living adjustment January 17, 2013

RETIREMENT OPTIONS 18 Unmodified Option Option #1 Option #2 Option #3 Option #4 January 17, 2013

Unmodified Option Highest monthly benefit 60% continuance to eligible beneficiary – 19 May change beneficiary after retirement Eligible Beneficiary – Married/registered partnership for at least 1 year prior to retirement, or – Married/registered partnership for at least 2 years at member’s death AND spouse/partner is at least age 55 at member’s death – Minor child/children January 17, 2013

Option #1 No survivor continuance Slightly reduced monthly benefit – Upon death, beneficiary receives lump sum payment of remaining contributions and interest – Uses your actual contributions at a slower rate May change beneficiary after retirement 20 January 17, 2013

Option #2 A reduced monthly allowance based on age of beneficiary 100% continuance to beneficiary – – 21 Does not have to be eligible spouse Cannot change beneficiary for any reason January 17, 2013

Option #3 A reduced monthly allowance based on age of beneficiary – – – 22 50% continuance to beneficiary Does not have to be an eligible spouse Cannot change beneficiary for any reason January 17, 2013

Option #4 Customized actuarial calculation based on specific instructions – – – 23 Used to comply with Marital Settlement Agreement due to divorce Allows customization of retirement for multiple beneficiaries Cannot change beneficiaries for any reason January 17, 2013

TEMPORARY ANNUITY OPTION (TAO) Advance benefit based on Social Security Estimate Higher allowance to retirees under age 62 – – 24 FCERA allowance is increased until age 62, then decreased until death Cost of living reduced at age 62 on TAO portion of COL Levels out retirement income with Social Security Does not affect future social security benefits Does not affect survivor continuance Only available for Service Retirement January 17, 2013

TAO COMPARISON 25 General member Social Security estimate Modification factor Advanced by FCERA Age 50 600.00 0.3302 198.00 January 17, 2013

PENSION WITH TAO Base retirement Temporary Annuity Option Total pension Social Security reduction (600.00) Total FCERA pension (payable at age 62) 1098.00 Social Security (payable at age 62) 600.00 Combined pensions (at age 62) 26 (payable to age 62) 1500.00 198.00 1698.00 1698.00 January 17, 2013

PENSION WITHOUT TAO Base retirement for life 1500.00 Social Security (payable at age 62) 600.00 Combined pension (at age 62) 2100.00 27 January 17, 2013

TAO CHART – WITH TAO Selection of a retirement benefit with the TAO will provide a level income until the member’s death provided the member elects to begin receiving Social Security benefits at age 62 With TAO (Provides a level income until member's death) FCERA and Social Security Allowance Combined 2,500.00 2,000.00 1,500.00 Social Security Advance 1,000.00 FCERA Retirement 500.00 Social Security Retirement 0.00 48 50 52 54 56 58 60 62 64 66 68 70 72 74 Age 28 January 17, 2013

TAO CHART – WITHOUT TAO FCERA allowance to age 62 when Social Security Retirement Added Selecting Retirement Option without the TAO will allow for increased retirement income when Social Security benefit begins Without TAO (Provides increased income with Social Security) 2,500.00 2,000.00 1,500.00 FCERA Retirement 1,000.00 Social Security Retirement 500.00 0.00 48 50 52 54 56 58 60 62 64 66 68 70 72 74 Age 29 January 17, 2013

HEALTH BENEFIT ALLOWANCE 30 Provides an additional cash benefit to retirees – Tiers I, II, III (General and Safety) and Tier IV Safety - Settlement Health Benefit provides an ongoing amount based on years of service (permanent benefit) – Tiers I, II, III, IV, V (General and Safety) Non-vested Health Benefit amount based on years of service (may be modified or eliminated by the Board of Retirement at any time – currently scheduled to end in calendar year 2016) January 17, 2013

REQUIRED DOCUMENTS FOR RETIREMENT Required Documents: – Member’s birth certificate – Beneficiary’s birth certificate/s – Marriage Certificate/Certificate of Registered Domestic Partnership (if applicable) – Dissolution of Marriage documents (if applicable) Judgment, (Status Only – not acceptable) DRO/Marital Settlement Agreement 31 – Social security estimate (if choosing TAO) January 17, 2013

RETIREMENT TIMELINE 5 years from retirement – Provide required documents Birth/Marriage – – Purchase available service credit Attend FCERA retirement planning seminar 3 years from retirement – 32 Certificates, Divorce documents Review retirement calculator – www.fcera.org January 17, 2013

RETIREMENT TIMELINE 1 year from retirement – Target possible Retirement date – Contact a FCERA retirement coordinator to schedule a pre-retirement counseling session – Contact reciprocal agency if applicable Must retire from FCERA and all reciprocal agencies on the same day 33 January 17, 2013

RETIREMENT TIMELINE 34 3 months from retirement date – Schedule counseling session with Retirement Coordinator – Obtain Social Security Estimate if electing the TAO January 17, 2013

RETIREMENT TIMELINE 35 1 month prior to retirement date – Contact Personnel Services regarding accrued leave – Contact your bank of choice and make alternate arrangements for any payroll deductions now in place – Resolve any retirement questions with your FCERA Retirement Coordinator – Finalize details regarding Health Insurance and Deferred Compensation – Notify your department of your retirement date. FCERA must have a copy of an accepted letter of resignation. January 17, 2013

RETIREMENT PAYROLL DEDUCTIONS FCERA withholds specific deductions from retirement checks Taxes Health insurance payments REFCO dues Garnishments 36 as required by law January 17, 2013

WORKING AFTER RETIREMENT 37 You may work a maximum of 960 hours per year with a FCERA Plan Sponsor You may not return to work as a full-time employee You may work in a extra-help, contractual or temporary service position Mandatory 180 day break between retirement and date of rehire You may have not received unemployment benefits within one year prior to returning to work in these capacities January 17, 2013

FCERA CONTACTS Mailing address – Call FCERA at (559) 457-0681 Questions or appointments – A Retirement Coordinator will assist you Website – www.fcera.org Comments on service – 38 1111 H Street Fresno, CA 93721 Email us using “FCERAwebmail” or from our website January 17, 2013

HAPPY RETIREMENT The decisions you make as you plan for your retirement benefits with Fresno County Employees’ Retirement Association will affect the rest of your life. We look forward to meeting you and working with you as we guide you through the retirement process. 39 January 17, 2013