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Public Employees Retirement Association of Minnesota Serving Minnesota’s public employees for more than 80 Years Public Employees Retirement Association.

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Presentation on theme: "Public Employees Retirement Association of Minnesota Serving Minnesota’s public employees for more than 80 Years Public Employees Retirement Association."— Presentation transcript:

1 Public Employees Retirement Association of Minnesota Serving Minnesota’s public employees for more than 80 Years Public Employees Retirement Association of Minnesota Serving Minnesota’s Public Employees for Over 80 Years

2 Public Employees Retirement Association of Minnesota Statistical Data 2,100 Employers

3 Public Employees Retirement Association of Minnesota Statistical Data General P&F Correctional Active Members143,38510,8793,603 Vested Deferred Members* 48,548 1,4812,380 Benefit Recipients 86,911 10, Total279,84422,3996,752 Grand Total 308,995 * Includes approximately 5,000 members now in other PERA plans, including most Correctional members. PERA also administers a Defined Contribution Plan with approximately 6,200 members. Source: Financial Report

4 Public Employees Retirement Association of Minnesota Types of Retirement Plans Individual Account Plan (Defined Contribution Plan) Traditional Pension Plan (Defined Benefit Plan)

5 Public Employees Retirement Association of Minnesota DC Plans: Your Individual Investments What’s the bottom line?

6 Public Employees Retirement Association of Minnesota DB Plans: What’s defined is the benefit What’s the bottom line?

7 Public Employees Retirement Association of Minnesota Contributions Coordinated Correctional Police & Fire Ee: 6.50% Ee: 5.83% Ee: 10.8% Er: 7.50% Er: 8.75% Er: 16.2% + + Social Security Medicare (If hired after 3/31/86) Ee: 7.45% Ee: 1.45% Er: 7.65% Er: 1.45%

8 Public Employees Retirement Association of Minnesota Domestic Stocks 45% International Stocks 15% Bonds 18% Alternative Assets 20% Cash 2% SBI Investment Returns FY Domestic Stocks 25.9% International Stocks 21.4% Bonds 5.0% Alternative Investments 18.9% Total Combined Funds 18.6% SBI Investment Returns FY Domestic Stocks 25.9% International Stocks 21.4% Bonds 5.0% Alternative Investments 18.9% Total Combined Funds 18.6% * Source: 2013 Annual Financial Report SBI – Diversified for the Long Term

9 Public Employees Retirement Association of Minnesota Revenues ( ) * Revenue last 20 years for 3 statewide plans (Source: Annual Financial Reports) 13¢ Employees 16¢ Employers 71¢ Investment Earnings

10 Public Employees Retirement Association of Minnesota Expenses ( ) 3.3¢ Refunds 95.6¢ Benefits 1.1¢ Admin.

11 Public Employees Retirement Association of Minnesota What’s the payback? 2-3 years All your contributions All your contributions + all your employer’s contributions 5-7 years Paid by PERA investments Remainder of your life

12 Public Employees Retirement Association of Minnesota Life Expectancy (Current PERA Tables) Present Life Expectancy Age Males Females Present Life Expectancy Age Males Females

13 Public Employees Retirement Association of Minnesota Building Your Pension Your pension is built on a formula using:  Age at Retirement  Years of Service  High-5 Average Salary

14 Public Employees Retirement Association of Minnesota Combined Service Service in your PERA plan can be combined with service under 14 other MN plans  Pension from PERA  Pension from other retirement plan  Both benefits based on high-5 salary (no matter when credit earned)

15 Public Employees Retirement Association of Minnesota Benefit Options % of Single-life Member (63) Survivor (61) Single-life 100% $1,079 $ 0 25% 97% $1,047 $262 50% 94% $1,014 $507 75% 92% $ 993 $ % 89% $ 960 $960 * If other than spouse, survivor may not be more than 10 years younger for the 100% or 19 years younger for the 75% option

16 Public Employees Retirement Association of Minnesota Can I get a do-over? Decisions... Decisions

17 Public Employees Retirement Association of Minnesota Final answer? Decisions... Decisions

18 Public Employees Retirement Association of Minnesota Your Options What if you leave public service before retirement?

19 Public Employees Retirement Association of Minnesota Refunds Take the $ and run! Contributions + 4% Interest - 20% Federal Withholding - 10% Federal Penalty (until age 59½ if leave before 55) Refund

20 Public Employees Retirement Association of Minnesota Refunds Rollover You do it  20% Federal Withholding Direct Rollover We do it  No Withholding  No Penalty

21 Public Employees Retirement Association of Minnesota Deferred Pension  If vested, you qualify for a pension any time after age 55  The longer you defer, the larger the monthly benefit until full retirement age  You may not defer past age 70½

22 Public Employees Retirement Association of Minnesota Total Repayment (Lump sum)  Must return to public service minimum 6 mos.  Refund + 8.5% interest compounded annually Partial Repayment  Must be active public employee  Refund must cover at least 2 yrs. service  Repayment must be at least 1/3 of refund you received (Total refund + interest) x Service wish restored Total service lost Repaying a Refund * * You may roll over tax-deferred investments, like deferred comp., to repay a refund

23 Public Employees Retirement Association of Minnesota Other Benefits Disability Survivor

24 Public Employees Retirement Association of Minnesota Disability Benefits (Qualification) Coordinated Total and Permanent (At least one year) P&F and Correctional Unable to perform duties of your position Common to All Plans  Active public employee when disabled (Must apply w/in 18 months of leaving)  May not be collecting a retirement benefit  Less than age 65 (Age 55 for P&F & Correctional)  Must supply medical evidence of disability

25 Public Employees Retirement Association of Minnesota Survivor Benefits (Coordinated/Correctional) Must be vested for a future benefit  100% option pension  Term-certain spouse benefits - 10 years - 15 years - 20 years  If no spouse, term-certain benefits for dependent children  Refund of member deductions plus interest

26 Public Employees Retirement Association of Minnesota Survivor Benefits (P&F) Benefits:  50% of average salary of last six months for spouse and 10% for each child (60% if death result of hazardous duty ) or  100% option pension payable to spouse if member reaches age 50 with 3 or more years of service or any age with 30 years of service or  Refund of member deductions plus interest (Maximum monthly family benefit is 70% of average salary / 80% if result of hazardous duty /Minimum benefit 50% & 60%)

27 Public Employees Retirement Association of Minnesota Pension Increases? Benefits will increase by 1% every January until plans are 90% funded for 2 years, and then at 2.5%

28 Public Employees Retirement Association of Minnesota Applying for Retirement Know Your Pension Options Review pension estimates Make sure all your questions are answered Required Documents Proof of age* Proof of name change* * If choosing survivor option, PERA needs same info. for survivor Apply for Retirement Choose option Signed by member & spouse Retirement effective first of month following termination Termination Verification Sent to member before retirement Filled out by employer

29 Public Employees Retirement Association of Minnesota You Must Really Retire! Requirements  Resignation or dismissal Not just a leave of absence  No prior agreement, written or verbal, to be rehired in any capacity  30 day break in service This includes work as an independent contractor or consultant Does not apply to elected service

30 Public Employees Retirement Association of Minnesota Member Information, Marital Information, and Direct Deposit

31 Public Employees Retirement Association of Minnesota Benefit Selection & Notarized Signatures

32 Public Employees Retirement Association of Minnesota Federal & State Tax Withholding

33 Public Employees Retirement Association of Minnesota Termination Verification Form

34 Public Employees Retirement Association of Minnesota Birth and Marriage Documents / Passport

35 Public Employees Retirement Association of Minnesota Jan. 1 year you reach full S.S. Month you reach full retirement age S.S. retirement age Annual Limit $15,720 $41,880 No limit Reduction* $1 for every $2 over or suspension of benefit * Reduction placed in escrow. Available one year after leaving job. If work extends past end of year, available one year later. Earnings Limit Timeline (2015)* Earnings limits only apply if you return to PERA-covered employment

36 Public Employees Retirement Association of Minnesota Taxes Most, if not all, of your PERA pension is taxable income  If you were hired after Dec. 31, 1982, your entire benefit is taxable  If you were a member prior to 1983, you will receive your after-tax contributions back over your estimated lifetime, or the estimated lifetime of both you and your survivor

37 Public Employees Retirement Association of Minnesota PERA Office Retirement Systems of Minnesota Building 60 Empire Drive St. Paul, Minnesota

38 Public Employees Retirement Association of Minnesota On-line Resources

39 Public Employees Retirement Association of Minnesota

40 Public Employees Retirement Association of Minnesota MY PERA

41 Public Employees Retirement Association of Minnesota Our newest feature

42 Public Employees Retirement Association of Minnesota And now a word from our attorneys... This presentation is intended to provide general information; the rights and obligations of PERA members are governed by state and federal laws, rules and regulations. The Minnesota Legislature or the federal government may change the statutes, rules and regulations governing PERA at any time. If there is a discrepancy between the law governing PERA and the information contained in this presentation, the statutes and regulations shall govern.


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