FCERA PRE-RETIREMENT SEMINAR January 17, 2013

2 PRESENTATION TOPICS How will PEPRA affect me? What is a Defined Benefit plan? Membership Other Service Eligibility Types of Retirement Choosing Best Retirement Date Retirement Options Retirement Timeline

January 17, HOW WILL PEPRA AFFECT ME? Majority of changes affect Tier V members only Tiers I – IV - Benefit calculations have not changed Normal cost of contributions will increase for active members at some point between now and 2018 Four earn codes that are no longer pensionable as of 1/1/13 – Cell Phone, Car Allowance, Uniform Allowance and out-of-town allowances

January 17, DEFINED BENEFIT PLAN Defined Benefit Plan – Lifetime benefit – Based on formula using: Age at retirement Years of service Final average compensation earnable – Tiers I – III, Annual Cost of Living – Up to 3% annually – Not based on contributions

January 17, MEMBERSHIP Safety – Tier I, II, IV, V – Sheriff’s Officers – Correctional Officers – DA Investigators – Firefighters General – Tier I, II, III, IV, V – All others

January 17, ELIGIBILITY SERVICE Eligibility Service – Years of credited service earned by the member which we use to determine the member’s qualification to service retire. Service from date of membership to date of termination, excluding breaks in service Prior county service purchased Leaves of absence purchased Reciprocal service Deferred service Reciprocity Purchase Service Credit

January 17, RECIPROCITY Must have left contributions in reciprocal agency’s plan Use your entry age from reciprocal agency – (Tiers I - IV only - incoming reciprocity) Years of service from reciprocal agency added to years of service at FCERA to determine retirement eligibility Highest compensation earned from FCERA or reciprocal agency will be used in benefit calculation (generally) Must retire concurrently from all systems to receive benefits from reciprocity

January 17, CONSEQUENCES OF BREAKING RECIPROCITY Tiers I, II, III, IV – – Age at which contributions are calculated may be impacted Tier V – – Contributions are not age based Tiers I, II, III, IV, V – – Years of eligibility service for retirement may be impacted

January 17, PURCHASE SERVICE CREDIT You may purchase: – Prior County Service Extra help New hire period Redeposit previously withdrawn contributions – Medical Leave of Absence – Military Leave of Absence – Prior Public Service (recalculation only) Time that cannot be purchased – Personal Leave of Absence – Educational Leave of Absence

January 17, TYPES OF RETIREMENT Service Retirement Service Connected Disability (SCD) Non-Service Connected Disability (NSCD)

January 17, SAFETY MEMBER - Tiers I - IV 10+ years of retirement service eligibility – At least 50 years of age 20+ years of retirement service eligibility – No minimum age required

January 17, GENERAL MEMBER - Tiers I - IV 10+ years of retirement service eligibility – At least 50 years of age 30+ years of retirement service eligibility – No minimum age requirement Age 70, regardless of service eligibility

January 17, SAFETY and GENERAL MEMBERS - Tier V Safety Member – 5+ years of service – At least 50 years of age General Member – 5+ years of service – At least 52 years of age

January 17, SERVICE RETIREMENT Age at retirement Final average compensation earnable – Tiers I and II – Highest consecutive 365 days = 1 year – Tiers III and IV – Average of 3 highest individual years – Tier V – Average of 3 highest consecutive years Total years of service – Earned plus purchased service credit

January 17, SERVICE CONNECTED DISABILITY Unable to work due to injury or illness related to your specific job duties No minimum service requirement Pays up to 50% of final average compensation or Service Retirement, whichever is greater

January 17, NON-SERVICE CONNECTED DISABILITY Unable to work due to injury or illness not related to your specific job duties Must have minimum 5 years service credit Benefit varies depending on age and years of service. Contact a retirement coordinator for more information

January 17, CHOOSE THE BEST RETIREMENT DATE Each ¼ year of age increases benefit Tiers I – III - Up to 3% Cost of Living Adjustment (COLA) paid each April (in general) Tiers IV and V – no annual cost of living adjustment

January 17, RETIREMENT OPTIONS Unmodified Option Option #1 Option #2 Option #3 Option #4

January 17, Unmodified Option Highest monthly benefit 60% continuance to eligible beneficiary – May change beneficiary after retirement Eligible Beneficiary – Married/registered partnership for at least 1 year prior to retirement, or – Married/registered partnership for at least 2 years at member’s death AND spouse/partner is at least age 55 at member’s death – Minor child/children

January 17, Option #1 No survivor continuance Slightly reduced monthly benefit – Upon death, beneficiary receives lump sum payment of remaining contributions and interest – Uses your actual contributions at a slower rate May change beneficiary after retirement

January 17, Option #2 A reduced monthly allowance based on age of beneficiary 100% continuance to beneficiary – Does not have to be eligible spouse – Cannot change beneficiary for any reason

January 17, Option #3 A reduced monthly allowance based on age of beneficiary – 50% continuance to beneficiary – Does not have to be an eligible spouse – Cannot change beneficiary for any reason

January 17, Option #4 Customized actuarial calculation based on specific instructions – Used to comply with Marital Settlement Agreement due to divorce – Allows customization of retirement for multiple beneficiaries – Cannot change beneficiaries for any reason

January 17, TEMPORARY ANNUITY OPTION (TAO) Advance benefit based on Social Security Estimate Higher allowance to retirees under age 62 – FCERA allowance is increased until age 62, then decreased until death – Cost of living reduced at age 62 on TAO portion of COL Levels out retirement income with Social Security Does not affect future social security benefits Does not affect survivor continuance Only available for Service Retirement

January 17, TAO COMPARISON General member Age 50 Social Security estimate$ Modification factor Advanced by FCERA$198.00

January 17, PENSION WITH TAO Base retirement$ Temporary Annuity Option Total pension (payable to age 62) $ Social Security reduction (600.00) Total FCERA pension (payable at age 62) $ Social Security (payable at age 62) Combined pensions (at age 62) $

January 17, PENSION WITHOUT TAO Base retirement for life$ Social Security (payable at age 62) Combined pension (at age 62) $

January 17, TAO CHART – WITH TAO Selection of a retirement benefit with the TAO will provide a level income until the member’s death provided the member elects to begin receiving Social Security benefits at age 62

January 17, TAO CHART – WITHOUT TAO Selecting Retirement Option without the TAO will allow for increased retirement income when Social Security benefit begins

January 17, HEALTH BENEFIT ALLOWANCE Provides an additional cash benefit to retirees – Tiers I, II, III (General and Safety) and Tier IV Safety - Settlement Health Benefit provides an ongoing amount based on years of service (permanent benefit) – Tiers I, II, III, IV, V (General and Safety) Non-vested Health Benefit amount based on years of service (may be modified or eliminated by the Board of Retirement at any time – currently scheduled to end in calendar year 2016)

January 17, REQUIRED DOCUMENTS FOR RETIREMENT Required Documents: – Member’s birth certificate – Beneficiary’s birth certificate/s – Marriage Certificate/Certificate of Registered Domestic Partnership (if applicable) – Dissolution of Marriage documents (if applicable) Judgment, ( Status Only – not acceptable) DRO/Marital Settlement Agreement – Social security estimate (if choosing TAO)

January 17, RETIREMENT TIMELINE 5 years from retirement – Provide required documents Birth/Marriage Certificates, Divorce documents – Purchase available service credit – Attend FCERA retirement planning seminar 3 years from retirement – Review retirement calculator –

January 17, RETIREMENT TIMELINE 1 year from retirement – Target possible Retirement date – Contact a FCERA retirement coordinator to schedule a pre-retirement counseling session – Contact reciprocal agency if applicable Must retire from FCERA and all reciprocal agencies on the same day

January 17, RETIREMENT TIMELINE 3 months from retirement date – Schedule counseling session with Retirement Coordinator – Obtain Social Security Estimate if electing the TAO

January 17, RETIREMENT TIMELINE 1 month prior to retirement date – Contact Personnel Services regarding accrued leave – Contact your bank of choice and make alternate arrangements for any payroll deductions now in place – Resolve any retirement questions with your FCERA Retirement Coordinator – Finalize details regarding Health Insurance and Deferred Compensation – Notify your department of your retirement date. FCERA must have a copy of an accepted letter of resignation.

January 17, RETIREMENT PAYROLL DEDUCTIONS FCERA withholds specific deductions from retirement checks Taxes Health insurance payments REFCO dues Garnishments as required by law

January 17, WORKING AFTER RETIREMENT You may work a maximum of 960 hours per year with a FCERA Plan Sponsor You may not return to work as a full-time employee You may work in a extra-help, contractual or temporary service position Mandatory 180 day break between retirement and date of rehire You may have not received unemployment benefits within one year prior to returning to work in these capacities

January 17, FCERA CONTACTS Mailing address – 1111 H Street Fresno, CA Call FCERA at (559) Questions or appointments – A Retirement Coordinator will assist you Website – Comments on service – us using “FCERAwebmail” or from our website

January 17, HAPPY RETIREMENT The decisions you make as you plan for your retirement benefits with Fresno County Employees’ Retirement Association will affect the rest of your life. We look forward to meeting you and working with you as we guide you through the retirement process.