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YOUR RETIREMENT SYSTEM

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Title: YOUR RETIREMENT SYSTEM


1
YOUR RETIREMENT SYSTEM
PSPRS
  • PUBLIC
  • SAFETY
  • PERSONNEL
  • RETIREMENT
  • SYSTEM

2
RETIREMENT DUTIES
  • WHAT YOUR LOCAL BOARD NEEDS TO KNOW

3
Most Important Responsibility
  • Decide all questions of eligibility and service
    credits, and determine the amount, manner and
    time of payment of any benefits under the plan.
    (A.R.S. 38-847, section D.1.)
  • Usually tasked to the board secretary or HR
    personnel who have access to personnel and
    payroll records

4
How do you determine eligibility for retirement
benefits?
  • Need to know what type of retirement benefits are
    available
  • NORMAL
  • DISABILITY
  • DEFERRED ALLOWANCE
  • SURVIVOR
  • GUARDIAN/CHILD
  • DEATH BENEFIT
  • DEFERRED RETIREMENT OPTION PLAN (DROP)
  • REVERSE DROP

5
NORMAL RETIREMENTS
  • Member must meet one of the following for normal
    retirement
  • 20 years of service
  • 15 years of service and age 62 (at time of
    termination)

6
DISABILITY RETIREMENTS
  • Temporary Disability total and presumably
    temporary disability incurred in performance of
    duty, prior to normal retirement, preventing
    performance of a reasonable range of duties,
    payments terminate after 12 months
  • Accidental Disability total and permanent
    disability incurred in performance of duty,
    preventing performance of a reasonable range of
    duties
  • Catastrophic Disability physical, and not a
    psychological, condition incurred in performance
    of duty, which totally and permanently prevents
    engaging in any gainful employment
  • Ordinary Disability physical condition total
    and permanent disability, preventing performance
    of a reasonable range of duties prior to normal
    retirement mental condition total and permanent
    disability preventing any substantial gainful
    activity

7
DEFERRED ALLOWANCE
  • A member with at least 10 years of credited
    service, who terminates employment, may elect to
    leave their contributions in the system and
    receive a deferred allowance, commencing at age
    62.
  • No survivor allowance
  • No benefit increase
  • No 2 tax equity
  • No insurance subsidy

8
SURVIVOR BENEFITS
  • Surviving spouse of a non-retired member
  • Marriage at time of death
  • Benefit is 80 of the pension the deceased active
    member would have been paid for an accidental
    disability retirement
  • If the member was killed in the line of duty, the
    benefit is 100 of the deceased members average
    monthly benefit compensation
  • Surviving spouse of a retired member
  • Requires two consecutive years of marriage at
    time of death
  • Benefit is 80 of retired members pension at time
    of death

9
GUARDIAN/CHILD BENEFITS
  • Non-retired member
  • Guardian Same as the spouses pension. Payable
    only during periods no spouse is being paid and
    there is at least one eligible child.
  • Child One-tenth of pension deceased active
    member would have been paid for accidental
    disability retirement (equal shares of two-tenths
    if more than two children) Eligible child must be
    unmarried, a dependent of the surviving spouse or
    guardian and either under the age of 18 or
    full-time student under the age of 23 or under a
    disability which began before age 23

10
DEATH BENEFITS
  • If a member has accumulated contributions
    remaining in the system at the date of death of
    the last beneficiary, a lump sum refund of such
    accumulated contributions are payable to the
    beneficiary named by the member.

11
DROP
  • A member with 20 or more years of credited
    service
  • The member must voluntarily and irrevocably elect
    to enter into the program with his employer for a
    period of up to 60 months
  • Payment made at the end of the DROP period at the
    same time/manner as the normal pension

12
What is the difference between DROP Retirement?
  • The local board would calculate the DROP just
    like a retirement (using a different spreadsheet)
  • The accumulated dollar amount will be pre tax,
    and allowed to grow at an assumed earnings rate,
    currently 8.50, which is compounded monthly for
    a period of five years while the member continues
    to work.
  • When the member retires, they begin receiving the
    monthly check for life as well as a lump sum of
    the accumulated DROP account.
  • By electing DROP the member will earn interest,
    and will still have to pay taxes unless they
    elect to roll the lump sum over to an IRA or
    other pension account.

13
REVERSE DROP
  • Any member who is eligible for a normal pension
    (20 years credited service and one month) and
    who is not in DROP
  • Interest rate of 3.5 annually
  • Member must voluntarily and irrevocably elect to
    terminate employment and receive a normal
    retirement upon participation

14
What is Reverse DROP?
  • Its just another payment option for the member
    to consider.
  • When electing any of the reverse DROP options the
    member will be choosing an option that will pay
    LESS money in the long run.
  • The advantage is a lump sum of money up front.
    The member will receive a smaller monthly amount
    for life than if they had stayed an additional 5
    years and retired.

15
How do you determine the high 3 years?
  • Use a period of 3 consecutive years within the
    last twenty completed years of credited service
    which yield the highest average
  • A period of non-paid or partially paid industrial
    leave shall be considered based on the
    compensation the employee would have received in
    the employees job classification if the employee
    was not on industrial leave
  • Remember to record prior service on the Form 11
  • Remember to record any leave without pay and
    industrial in members record on the Form 11
  • Note The Benefits staff will review the salary
    reported by the local board and check it against
    the members contributions paid into the system
    for the dates submitted, however if it looks like
    there are higher contributions paid into the
    system that are not in the high 3-year
    calculation as submitted by the local board, the
    Benefits staff will ask for a second review of
    the salary by the local board.

16
WHAT IS COMPENSATION?
  • Compensation means, for the purpose of computing
    retirement benefits, base salary, overtime pay,
    shift differential pay and holiday pay paid to an
    employee by the employer on a regular monthly,
    semi-monthly, or biweekly payroll basis and
    longevity pay paid to an employee at least every
    6 months for which contributions are made to the
    system pursuant to 38-843, subsection D.
    Compensation does not include, for the purpose of
    computing retirement benefits, payment for unused
    sick leave, payment in lieu of vacation, payment
    for compensatory time or any other fringe
    benefits. (A.R.S. 38-842)
  • For the purposes of this paragraph, base salary
    means the amount of compensation each employee is
    regularly paid for personal services rendered to
    an employer before the addition of any extra
    monies, including overtime pay, shift
    differential pay, holiday pay, longevity pay
    fringe benefit pay and similar extra payments.

17
DEADLINES FOR RETIREMENT PAPERWORK
  • Submit retirement paperwork for all benefits by
    the 10th of each month
  • Ensure paperwork is filled out correctly and
    completely
  • Fill in the final contribution amount (estimate
    if needed) on the Form 11
  • Check for all signatures by the member and local
    board/employer
  • Include all supporting documents to include
    medical documentation for children listed as
    disabled and full-time school enrollment for
    eligible children 18-22
  • Tax forms need to be marked correctly (Note
    Accidental, Temporary, and Catastrophic
    disabilities under 20 years of service are
    tax-exempt, however the member must complete the
    tax forms claiming the exemption)
  • Copy of minutes need to be submitted with all
    disability applications
  • Certified copy of the divorce decree papers with
    raised seal (if applicable) (it may delay
    payment)
  • Note Please make sure you are using most
    current forms dated September 2006.
  • The date is shown in the upper right
    hand corner of the forms 9/06.

18
SUGGESTIONS
  • Submit estimates (FORM 11) for review before the
    member signs paperwork
  • Print out the statutes and retirement instruction
    manual from the website for reference
  • Encourage all local boards to use the electronic
    spreadsheets to process retirements versus
    manually filling in each individual form

19
SPREADSHEETS
  • Use for all types of retirements
  • Spreadsheets have changed so be sure to download
    the most current version available on website
  • DROP and Reverse DROP have its own spreadsheet
    now from the Normal/Survivor
  • Just fill in the Input Sheet and the rest of the
    forms are filled in automatically (See handout
    for special instructions)
  • Save the file and email to our Benefits Staff to
    review the estimate and upload the retirement
    into our system (Dont forget to mail in the
    original signed forms)
  • Bonnie_at_psprs.com
  • Don_at_psprs.com
  • Tara.Smith_at_psprs.com
  • Joann.Lowey_at_psprs.com
  • Della_at_psprs.com
  • ROrtega_at_psprs.com

20
Whats happening?
  • Document Scanning
  • Bar Codes on forms
  • Members Handbook
  • IT Project Member/Retiree information on web
  • Retiree Newsletter
  • DRO Domestic Relations Order (new legislation)
  • Fire Fighter Cancer Insurance (includes police
    officer)

21
WEBSITE RESOURCESwww.psprs.com
  • General
  • Statues, Summary of Benefits, FAQs, Legislation
  • Members
  • Reverse DROP Estimate, Retirement Estimate,
    Common Forms, Preparing for Retirement, Insurance
    Information
  • Employers
  • Forms, Spreadsheets, Oath of Office
  • Slides
  • FF Cancer Insurance, Local Board Training
  • Learn About
  • Taxation of Pension Amounts
  • Survivors (Links to resources also on main
    menu)
  • Disability Slides

22
BENEFITS STAFF
  • Bonnie Brown (Manager of Benefit Services)
  • Joann Lowey (Team Lead/DROP)
  • Don Mineer (Team Lead/Retirements)
  • Tara Smith (Retirements)
  • Della Hieb (Retirements)
  • Paul Hemmes (Retirements/Web Services)
  • Robert Ortega (Retirements)

23

PERMANENT/BASE SUBSIDY
  • The Public Safety Retirement System
    provides a monthly, premium benefit payment to
    eligible, enrolled retirees. (To be eligible a
    member must be enrolled for his medical and or
    dental insurance through an employer of the
    system or one of the state of Arizona programs.)
    This payment is applied to health insurance
    premiums and is intended to help lessen the
    out-of-pocket insurance cost to retirees.
  • More commonly known as subsidy. The
    allotted subsidy amount is based upon insurance
    plan type (family or single) and Medicare
    eligibility.
  • 150 is the subsidy for a member who is not
    Medicare eligible and on single coverage, 100 is
    the subsidy for member that is on Medicare.
  • 260 is the subsidy for a member who is not
    Medicare eligible nor his dependents and on
    family coverage , 170 is the subsidy if everyone
    on the plan is on Medicare, 215 is the subsidy
    if just one person on the plan is on Medicare.
  • There have been cases where a member is eligible
    for more than one subsidy, in these cases both
    subsidys would be applied toward members premium
    to reduce the out of pocket

24
Rural /Temporary Subsidy
  • In June 2007, the AZ State Legislature passed
    HB 2311 this extended the temporary, rural
    subsidy for 2 additional years. The rural subsidy
    is provided only to qualified AZ retirees who
    meet the following requirements
  • 1. Retiree MUST be Medicare eligible (A B),
    not eligible if spouse is Medicare.
  • 2. Retiree MUST reside within specified AZ
    counties
  • where no HMO-type service is available
  • 3. Retiree MUST pay a minimum out of pocket prior
    to receiving subsidy
  • Qualifying counties currently are
  • Mohave, Apache, Gila and Navajo
  • Out of Pocket amounts are
  • 100.00 for single, 200.00 retiree 1 both
    Medicare, 400.00 combination with member only
    Medicare
  • Subsidy amount that apply once out of pocket
    has been met
  • 170.00 single, 350.00 retiree 1 both Medicare,
    470.00 combination with member only Medicare.

25
Insurance Contact Information
If you need further information you may visit our
website at www.psprs.com and click on the
Retiree Health Insurance or contact one of the
representatives listed below.
Annette Jorgensen Insurance Team Leader
annette.jorgensen_at_psprs.com (602) 255-5575
X2024 Stac
ey Alcott Insurance Specialist
stacey.alcott_at_psprs.com (602) 255-5575 X
2013
26
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