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 There is no reason to rush into a decision! › Active members have from Sept. 4 th through October 26 th to decide  Have you registered for online access.

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Presentation on theme: " There is no reason to rush into a decision! › Active members have from Sept. 4 th through October 26 th to decide  Have you registered for online access."— Presentation transcript:

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2  There is no reason to rush into a decision! › Active members have from Sept. 4 th through October 26 th to decide  Have you registered for online access to the Retirement System website through miAccount? › › Look for this Need Member ID

3  Two primary “voluntary” decisions to make › Pension Election – Only applies to active members who became a member before July 1, › Retirement Healthcare Election – Applies to all active members with service credit earned in 12 months ending Sept. 3, 2012

4  Were you a member before July 1, 2010?  Do you know what pension type you are? › Basic, MIP-Fixed, MIP-Graded and MIP-Plus – Current contributions to the pension system vary based on when you started work, or made the election be in Basic or MIP-Fixed.  Do you know how your pension amount is calculated?  Choice of four options

5 Option 1  Want to retain the 1.5 percent pension factor for all years earned until retirement. › Basic members: 4% contribution to pension fund (0% now) › All MIP types: Flat 7% contribution to pension fund (Current contributions range from 3.9% to 6.4%)

6 Option 2  Very similar to Option 1  Retain the 1.5 percent factor until reach 30 years of service  Contributions increase like Option 1 until reach 30 years  Years earned after 30 years would use a 1.25 percent factor  Contributions would then return to current levels

7 Option 3  Member does not want to increase their contribution for their pension  At retirement, pension formula will use years of service earned through Dec. 1, 2012 at the 1.5% factor. The pension formula for service after that date would include a 1.25% pension factor.

8 Option 4  Elect to no longer contribute to the pension fund  At retirement, pension formula will use years of service earned and final average compensation as of Dec. 1, 2012 at the 1.5% factor.  Switched to a Defined Contribution plan as of Dec. 1, Receive a 4 percent employer contribution. Can choose to contribute up to IRS maximum.

9  So how is this a “voluntary” election? › Members who don’t make an election will be defaulted into Option 3

10  Members have a choice of two options  Premium Subsidy (a percentage of the premium cost is paid for by the retirement system healthcare fund)  Personal Healthcare Fund (establish a portable, tax-deferred fund that can be used for paying healthcare expenses in retirement)

11 Premium Subsidy Option  Continue to contribute 3% of compensation to Healthcare Fund and retain the retiree health insurance premium subsidy “offered by the state upon their retirement”  Could be maximum subsidy or graded premium subsidy, depending on date first worked  Maximum subsidy is 80% as of Jan. 1, 2013 (90% for Medicare eligible and enrolled)

12 Personal Healthcare Fund  No premium subsidy upon retirement  Stop paying the 3% Healthcare Fund contribution as of Dec. 1, 2012  Automatically enrolled in a 2% employee contribution into a 457 account, which earns a 2% employer match into a 401(k)  Prior contributions will be deposited into their 401(k) by Feb. 1, 2013

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