A Primer for Adjunct Faculty By Phyllis Eckler (NOTE: Financial data from Fall 2010)

Slides:



Advertisements
Similar presentations
Retirement Issues Facing Part- Time Faculty Jennifer Baker Legislative Advocate California Teachers Association.
Advertisements

Social Security Who Gets Benefits from Social Security? 58 million people.
Social Security
Social Security Essentials for OPERS Employees. Earning Credits 40 Credits for retirement 40 Credits for retirement Maximum 4 credits in 1 year Maximum.
Linda Yelverton Angie Dowdy Social Security Program DirectorAnalyst (225) (225) John Neely Kennedy State Treasurer and State Social Security.
Cash Balance Benefit Program Los Angeles Community College District Social Security Special Election.
Retirement Benefit Seminar
UW Staff Benefits University of Wisconsin- Extension Payroll and Benefits Office.
Federal Retirement and Benefits Presented by Josephine Harris Human Resources Specialist U. S. Department of Agriculture September 2006.
Just what am *I* GOING to GET Anyway? And When?. What’s in this presentation? Overview When can I retire? What will be my FERS Retirement Benefit? How.
Social Security Administration An Overview of the Impact of NOT Paying Social Security Taxes as a State Employee Windfall Elimination Provision Government.
Tennessee Consolidated Retirement System 15 th Floor Andrew Jackson Bldg. 502 Deaderick Street Nashville, TN
Presented by Lorraine Moreno, Regional Manager TMRS Membership.
IPERS Overview & Benefit Options
Santa Monica College Part-time Faculty Retirement Workshop By Deborah Dahl Shanks FACCC Retirement Committee.
Part-Timer Retirement: Should You Switch to Social Security? Presented by Cliff Liehe Los Angeles, April Revised by Phyllis Eckler, February 2008.
Department of National Defence Modernization of the Canadian Forces Pension Plan Reserve Force members under Part I.1 February 2007.
Social Security Administration Windfall Elimination Provision & Government Pension Offset Windfall Elimination Provision & Government Pension Offset.
PPA 419 – Aging Services Administration Lecture 4b – Program Characteristics of Social Security.
What Must You Know to Determine Retirement Savings Needs? 6 key questions.
Pension Basics for Local Officials Teacher Welfare Education Program 3F(n) Edmonton Catholic Teachers’ Local #54.
Retirement Plan for Faculty and Certain Employees Understanding your Annual Pension Statement March 29, 2007.
Franklin Regional Retirement System
Human Resources Office of Job Changes and Your Benefits IT Job Family Study Employee Information Session May 2013.
The United States Social Security System “Nuts and Bolts” October 11, 2006.
Plan and Track Your Retirement Focus on Federally Employed Women.
Department of National Defence Modernization of the Canadian Forces Pension Plan Reserve Force members under Part I February 2007.
Retirement Planning and Employee Benefits for Financial Planners
Solid Finances Sponsor This program is made possible by a grant from the FINRA Investor Education Foundation through a partnership with United Way Worldwide.
Social Security 2 Who Gets Benefits from Social Security? 1/ million people.
My Financial Philosophy By: Kyle Clemency
Making the Most of Your District’s 403(b) Plan. General Information Only Please be aware that this information is intended to be general in nature and.
Copyright © 2008 Pearson Education Canada 6-1 Defined-contribution Pension Plans The reverse of defined-benefit plans Contribution is known up-front The.
CSRS and FERS Overview pending legislative changes
 The earlier you begin to plan and save for retirement, the better financially prepared you will be.
The United States Social Security System “Nuts and Bolts” October 2, 2007.
Welcome. Who participates in INPRS? 500,000 Members from over 1,400 Public Employers Employers include…  Cities  Towns  Counties  School Corporations.
Mid-Year Early Retirement Incentive Meeting UACT and CVUSD Friday, November 6, 2009.
TACOMA EMPLOYES' RETIREMENT SYSTEM. Orientation Outline ISources of Retirement Income IIHow the Plan Is Funded and Managed IIIService Retirement Benefits.
Milwaukee Public Schools Employees Pre-Retirement Planning City of Milwaukee Employes’ Retirement System.
CHAPTER 14: MEETING RETIREMENT GOALS 14-2 Pitfalls in Retirement Planning  Starting too late.  Putting away too little.  Investing too conservatively.
TACOMA EMPLOYES' RETIREMENT SYSTEM. 2 Orientation Outline I Sources of Retirement Income II How the Plan Is Funded and Managed III Service Retirement.
Part-time Faculty Retirement Options By Deborah Dahl Shanks CCA Winter Conference.
Loans and Investments Lesson 1.5.
Social Security 2 Social Security is the foundation for a secure retirement, but you will also need other savings and investments.
National Life Group ® is a trade name representing various affiliates, which offer a variety of financial service products. Form No (0813) Life Insurance.
Are you ready to retire? A close up look at Teacher Retirement and Social Security.
Social Security and MA Public Pensions What You and Your Members Need to Know MACRS, August 25, 2015 Middlesex County Retirement System.
National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,
Aim: Employee Benefits Course: Math Literacy Do Now: Name some non-monetary payments. Aim: What are other paid and non-paid income we receive, not necessarily.
Arizona State Retirement System Presentation to the Government Finance Officers Association of Arizona January 7, 2011.
THE 100% SOLUTION Maximizing Your Pension: How to Retire with 100% of Final Compensation Presented by: Tax Deferred Services 457 Plan Administrator
THE SCHEME  The TPS is a final salary scheme which provides a guaranteed pension and a tax free lump sum. Benefits are index- linked to protect against.
Group IV Membership Provisions. Introduction TCRS provides benefits to more than 220,000 active members, and over 110,000 retired members TCRS provides.
1 EMS/Fire Department Consolidation Treatment of Pension and Service Under the Police/Fire, CSRS, and 401(a) Plans.
Today’s Lecture #24 Social Security What Goes In and What Goes Out? Financing Historical Development Benefits What You Can Expect.
Retirement Planning Chapter 18 in Text. Two Types of Retirement Plans Defined Benefit Plans o Employer-sponsored plan o Benefits are typically determined.
Social Security Social Security Retirement Benefits Pensions Savings & Investments Other Income 2016.
2013. Over 56 Million People Who Receives Benefits from Social Security? 36.4 million Retired Workers 2.9 million Dependents 8.4 million Disabled Workers,
A Primer for Adjunct Faculty By Phyllis Eckler (NOTE: Financial data from Spring 2008)
Social.Security Contribution to SS is in the form of the Federal Insurance Contributions Act (FICA) Taxes are withheld from most paychecks. Medicare is.
CSRS Retirement NALC Branch 79 Retirement NALC Branch 79.
401K IRA SEP SIMPLE KEOGH 403B What do these letters and numbers represent?
National Conference on Public Employee Retirement Systems Public Pensions & Social Security Hank Kim, Esq. Executive Director & Counsel National Conference.
Service Center Training: Plan Provisions
RETIRE Retirement Earnings Training and Information for Retiring Employees
Lecture 27 Plan Restrictions Aimed at Highly Compensated Employees
Part-time Faculty Retirement Workshop
Social Security and Medicare Coverage for State Employees
Presentation transcript:

A Primer for Adjunct Faculty By Phyllis Eckler (NOTE: Financial data from Fall 2010)

What Are My Choices? State Teachers Retirement Defined Benefit Plan (STRS DB) State Teachers Retirement Cash Balance Plan (STRS CB)

STRS Defined Benefit (DB) A true pension plan that uses a formula based on years of service, age and average equivalent full-time earnings to derive the monthly benefit amount. Monthly retirement payments are lifelong and one can include other family members. Employee puts in 8% of salary while the district contributes 8.25%, tax deferred Vesting requires 2625 hours of any paid work in any combination of districts (approximately 5-10 years) Go to calstrs.com to calculate your virtual benefit

How STRS DB Pension is Calculated Formula for retirement benefits is based on: 1. Avg. hr. wage X 525* hrs. (15 hrs./wk X35 weeks)= annual earnable 2. Your age when you take retirement (63 gives you the best multiplier of 2.4) 3. Years of Service based on max. of 525 hours in one year. Annual earnable X 2.4 X years of service = $ Best Benefit *For non-credit annual earnable is 875 hours per year

Example DB Benefit Joe has accumulated 4 years of service credit (SC) in 4 years by working a 60% load during the spring and fall and taking on one class (20%) in each of two intersessions each year. Joe also received pay for 2 office hours which goes into his DBS savings plan as 16.25% of $682.50/year In the last four years of work Joe only taught one class per year and receiving 20% of a year’s SC plus 4.4% SC for office hours plus.6 SC for paid ancillary activities= 1 year of service credit after four years. In total he now has 5 years of service credit after working 8 years and so he is vested. Although he decides to retire at age 60 and begin to take his lifelong benefit, he may still continue teaching but must earn less than $31,020 in teaching.

Joe’s Benefit Formula Take Joe’s avg. hourly rate for the last three years ($60)and multiply times 525 (full-time hrs. per year) =$31,500 annual earnable Joe’s age factor at 60 years old = 2.0 Joe’s years of service (SC) = 5 years Formula: $31,500 X 2.0 X 5 =$262.50/month NOTE: Joe also receives a lump sum payment of $2,866 from his DBS account

STRS Cash Balance (CB) More of a hybrid 401K type plan - no loss of principal Benefits are paid out in a lump sum or can be annuitized (go to calstrs.com to figure out monthly benefit using the DBS calculator)to pay out a monthly benefit Employee pays in 4% of salary while district contributes 4%, tax deferred Vesting is immediate. Guaranteed annual interest rate

Example CB Benefit Jane also works four years teaching 60% in spring and fall and 20% for each of two interesessions and receives 2 hours of office pay during regular semesters. She also slows down in her last few years and only teaches 20% of a load for five years. In total, she and the district have put away $10,000 in her CB account at the end of the nine years plus interest totaling $500. Jane decides at age 60 to retire. Jane may take all of her $10,500 out at one time or she may decide to receive a monthly lifetime annuity like Joe has.

How STRS CB Monthly Benefit is Calculated

Jane’s Benefit Amount According to the chart Jane ends up receiving around $77/month from her Cash Balance Lifetime Annuity. She may also continue teaching after retirement earning a maximum annual amount of approximately $31,020

Social Security A true pension plan that requires 40 “credits” (in 2007 each credit = $1,000 earned in each calendar quarter) in order to vest Monthly retirement benefits are lifelong and include family members Contributions: 6.2% from employee, 6.2% from employer, and not tax deferred

How Social Security Benefits Are Calculated 1. First your wages are indexed for inflation 2. Then you find the average of your 35 highest earnings years 3. Result is Average Indexed Monthly Earnings (AIME)

Example of Social Security Benefit AIME = $ % X $761 =$ % X $3664 ($4425-$761) = $1, % X $0 = $0 Total monthly benefit = $1,857

Windfall Elimination Provision WEP If any part of your government pension, such as STRS Define Benefit OR Cash Balance, is based on work not covered by Social Security, you may be affected by the Windfall Elimination Provision.

Example of WEP Effects on Social Security Benefits AIME = $ % 40% X $761 =$ % X $3664 ($4425-$761) = $1, % X $0 = $0 Total monthly benefit = $1,476 (vs. $1875) Difference = $381 Maximum difference = ½ of government (e.g. STRS) pension

Exception of the Windfall Elimination Provision For Those Who Were Covered by Social Security in Another Job Exception of the Windfall Elimination Provision For Those Who Were Covered by Social Security in Another Job % of First Factor Years of Coveragein Benefit Formula 30 or more % of First Factor Years of Coveragein Benefit Formula 30 or more

Government Pension Offset GPO If you receive a government pension based on work not covered by Social Security, your Social Security spouse’s or widow(er)’s benefits may be reduced

Example of Effects of GPO on Social Security Benefits Spouse’s Benefits Only 2/3 of amount of Government pension will be used to reduce the Social Security spouse’s benefit Example: Social Security Spouse Benefits = $ 500/month $ 262 STRS pension received mthly 2/3 = $ 173/month Benefit payable by Social Security = $327/month No amount of social security years will reduce this.

Other Issues to Consider If one is in Cal STRS CB or DB program when one retires and also in the group health benefits program of that district one can require the school district to continue to offer this group plan to the ex-employee and their spouse on a “buy in” basis. Cal STRS DB offers lifetime disability coverage for those who cannot continue to work but the benefit is related to the actual earnings of the individual. The CalSTRS DB program offers guarantees 85% purchasing power over the life of the pension.