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Tacoma Employees’ Retirement System New Employee Orientation.

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Presentation on theme: "Tacoma Employees’ Retirement System New Employee Orientation."— Presentation transcript:

1 Tacoma Employees’ Retirement System New Employee Orientation

2 Tacoma Employees’ Retirement System TERS – Defined Benefit Eligibility – All City of Tacoma Employees – Member Public Agencies – Exceptions By ordinance Active members of another retirement system 2NEO 12/10

3 Plan Funding Employee Contributions – 8.74% of pay (effective 1/1/2011), and 9.20% of pay (effective 1/1/2012 and thereafter) Employer Contributions – 10.26% % of pay (effective 1/1/2010) and 10.8 % of pay (effective 1/1/2012 and thereafter) Investment Earnings 3NEO 12/10

4 Governance Board of Administration – Mayor – Director of Finance – Designee of the City Manager – Director of Public Utilities – 3 Employee Representatives – 1 Retiree Representative – 1 Citizen Representative – 1 Alternate Member Responsibilities – Act solely in the best interest of plan participants (members) – Oversee plan funding both contributions and investments earnings 4NEO 12/10

5 Service Retirement Eligibility AGE 60, any number years of service (full benefit) AGE 55 or older, 10 Years of service (reduced benefit) AGE 40 or older, 20 Years of service (reduced benefit) ANY AGE, 30 Years of service (full benefit) RULE OF 80 (Age & Years of Service= 80) (full benefit) 5NEO 12/10

6 Termination of Employment Less than 5 years: – Lump sum equal to refund of contributions plus interest Or 5 years or more (vested) : – Lump sum equal to refund of contributions, plus additional amount equal to 3.22%* of historical pay plus interest Both are taxable unless rolled directly to an Individual Retirement Account (IRA) or qualified plan. * amount may differ for pay prior to 2001 6 NEO 12/10

7 Portability What is portability? Portability refers to retirement service that can be utilized in conjunction with another retirement system (Dual Membership). NEO 12/107

8 Portability Cont. Systems included: – TRS, PERS, SERS SCERS, WSPRS, LEOFF II, SEATTLE, SPOKANE & TACOMA Service Requirement – Must be met for each system Average Final Salary – Highest base salary will be used for all calculations Retirement Eligibility – Years of service under portability may be used for purposes of eligibility and benefit formula 8 NEO 12/10

9 Portability Cont. For example: Sam, who is age 55, has 20 years of service and a salary of $40K a year with the City. He also has 5 years of service and had a salary of $30K a year with his prior employment with the State. What kind of retirement benefit is he eligible for under each retirement system? NEO 12/109 City - TERSWA State He will retire with only 20 yrs with the City, but with his 5 yrs with the State, he is eligible for a full benefit retirement due to the rule of 80. (55 age + 25 yrs svc = 80) He is eligible for a reduced benefit at age 55 with the State’s 5 yrs in conjunction with the City’s 20 yrs and salary. If he defers to age 65, he is eligible for a full benefit.

10 Contact Information OFFICE LOCATION Tacoma Public Utilities Administration Building North, Ground Floor Ph: (253) 502-8200 Fax: (253) 502-8660 Toll Free (888) 404-3787 Website: 10 NEO 12/10

11 Additional Contact Information Other Public Retirement Systems WA State – Department of Retirement Systems Toll Free 1-800-547-6657 or (360) 664-7000 Seattle City Employees’ Retirement System Ph: (206) 386-1293 Spokane Employees’ Retirement System Ph: (509) 625-6330 NEO 12/1011

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