Presentation on theme: "Early Retirement Incentive"— Presentation transcript:
1 Early Retirement Incentive CalPERS Miscellaneous
2 Early Retirement Incentive Eligibility - Current employees covered by the CalPERS Miscellaneous contract.Excludes - Elected Officials, County Executive Officer, Parks, Flood, Waste, andother Special Districts (except for Regional Conservation Authority).Requirements:Age 50;Five or more years with CalPERS;Eligible classification; andRetire within window period (February 12, 2010 through August 9, 2010).Note: Eligible employees were mailed a communication on February 9, Apayroll stuffer is scheduled for mailing on February 24, 2010 to all employees.
3 Important Information Delete a funded position for each employee electing this incentive.Vacated position does not have to be the same as a retiree position.The Human Resources Department will track vacant positions that will be left open.Employee’s last day of work must be no later than August 8, 2010 and, s/he must retire no later than August 9, 2010.
4 Department Head Responsibility Authorize the employees retirement by signing the Employer Certification (Section 7) of the CalPERS Service Retirement Election Application.Identify, on the Certification Form for CalPERS Early Retirement Incentive form, a Position Number and title to remain vacant.Provide a copy of each form to the Human Resources Retirement Division at: Fax: (951) or Mail Stop: 1150
5 Application Process Attend an Early Retirement Workshop. Contact CalPERS to get a retirement estimate.Contact Social Security Administration – if you are eligible for Social Security and/or Medicare benefits make an appointment at least 3 months before your retirement date.Retirement booklets are available at the early retirement workshops, Human Resources Retirement Division and on-line at the CalPERS website.Employees must notify their department head of their intent and provide to the Human Resources Retirement Division a signed copy of Section 7 of the retirement application.Please note: Employees will need to be on payroll as of February 11, 2010and retire between February 12, 2010 and August 9, 2010.
6 WorkshopsTo attend any of the workshops listed on the Human Resources website,employees must call the Human Resources Retirement Division at: ,option 2.There are two types of workshops being offered:Early Retirement Workshop.Representatives from CalPERS and Social Security will present;How benefits are determined;Retirement process;Options available; andOther post-retirement considerations.Preparing for Retirement/Post Employment Program (PEP) Workshop.Retirement benefits;Special Pay Plan; andVEBA Health Savings Plan options.Refer to the Human Resources website for periodic updates.
7 Effect of the Incentive on the Retirement Allowance Calculation The pension formula is made up of three factors:Service Credit (# of years of CalPERS service)% Benefit Factor e.g., age 60 (based on age at retirement)Highest 12 consecutive months of compensation (minus $133 to coordinate with Social Security)The Early Retirement Incentive adds two more years of Service Credit.Note: CalPERS will make adjustments to include the additional two-years ofservice. Retroactive adjustments may take up to six months after the close ofthe window period.
8 Use of Leave Accruals in Lieu of Mandatory Furloughs Employees who submit a letter of intent to retire during any fiscal year in whichmandatory furloughs have been authorized may use any banked leave, exceptsick leave, to receive payment for mandatory furlough hours taken within the fiscalyear.Notification of Retirement – Intent to Use Leave Accruals in Lieu of MandatoryFurlough forms can be found online at:orBy contacting the Human Resources Retirement Division at , option2.Employees must notify their departments to appropriately track and creditMandatory Furlough hours. Completed forms must be returned to the HumanResources Retirement Division.Note: Only employees covered under the Management Resolution and SEIUMOU are eligible.
9 Impact of Mandatory Furlough on Final Compensation Example:Employees base pay rate is $5,600 per month. 8% EPMC Special Compensationis added to Final Compensation and is paid based on actual hours worked.No Mandatory Furlough:CalPERS Compensation is $5,600 (Base Pay) (EPMC) = $6,Mandatory Furlough:CalPERS Compensation is $5,600 (Base Pay) + $ (EPMC) = $6,031.Actual pay is $5,169 per month after 7.7% furlough. EPMC is $5,169 x 8% EPMC*=$413.52*Only employees covered under the Management Resolution receive EPMC.
10 ReciprocityReciprocity allows members to move from one public employer to another withinspecific time limits without losing valuable retirement and related benefit rights.Service under both systems may be used to meet each system’s vesting and retirement eligibility requirements; andFinal compensation is based on the highest rate of pay under any system, as long as you retire on the same date from all systems.If you have prior service with another public agency, contact CalPERS at:(888)
11 Leave CashoutEmployees must provide a minimum of 6 months notice prior to their retirementto cash out their eligible unused leave accruals. Note: As of February 16, 2010Human Resources will allow a one-time exception for employees who takeadvantage of the Early Retirement Incentive to submit their leave cash-outforms through March 9, 2010, as long as their retirement date is on August9, 2010.Example:Your retirement date is August 9, 2010, you must turn in your election for theOne-Time Pre-Retirement Cashout by March 9, 2010.Employees are permitted a one-time election to cash out a portion of theiraccrued leave balances up to the limits provided in their Memorandum ofUnderstanding.Employees who elect a pre-retirement cashout and do not subsequently retire are required to repay any cashed out sick leave.Eligible leave balances remaining or accrued after the One-Time Pre-Retirement Cashout will be paid through the PEP program on the employee’s final paycheck.
12 Loss of Additional Service Credit If a retiree reinstates to a CalPERS agency after retirement:The monthly retirement allowance is stopped;The two additional years of service credit is permanently lostA retiree cannot receive credit under this program if the retiree receivesunemployment insurance during the designated window Period.
13 Retiree Health Benefits When an employee retires and enrolls in a County-sponsored retiree medical plan,the County will contribute toward the retirees medical plan premiums. Thecontribution amount is based on the bargaining unit the retiree was in at the timeof retirement.The County’s contributions for 2010 are as follows:LIUNA and SEIU employees: $25.00 per monthManagement, Confidential, and Unrepresented employees: $ per month.The retiree will also be offered the opportunity to temporarily continue group healthcoverage through COBRA. Premium cost through COBRA is 102% of the ratecharged to active employees. Retirees are entitled to continue COBRA coveragefor up to 18 months.
14 Retiree Medical vs. COBRA Example:Angela Apple retired on July 1, 2010 and was enrolled with single partycoverage in the Kaiser Health plan. Angela must decide whether she shouldenroll in the Retiree Medical plan or elect COBRA.Unsubsidized Retiree Rate* w/$ County Contribution:Kaiser Permanente – Single Party: $ per month.$ – $ = $ per month.18 Month COBRA* :Kaiser Permanente – Single Party: $ per month.Note: No County Contribution is provided and retirees may elect to enrollin the County Retiree Medical plan after the end of the 18 month COBRAperiod. Retirees must elect within 60 days of the event.*Rates are subject to change each calendar year.
15 Steps Employees Should Take Before They Retire Request a retirement estimate from CalPERS.Attend an Early Retirement Workshop.Contact CalPERS for information about Reciprocity or the purchase of additional service credit.Meet with a VALIC or Nationwide representative.Consider making an appointment with Social Security Administration.Consider your health plan and voluntary benefit options.Decide if you intend to use paid leave to cover Mandatory Furlough time.