“The Fundamentals of Planning Your Retirement” Florida State College at Jacksonville Presented By: Robert Ard TSA Consulting Group, Inc.

Topics  FRS  DROP  Personal Savings  Special Pay Plan  Retiring- The Process  Retirement Plan Distributions  TSA Consulting Groups Role

Retirement Options  Florida Retirement System  All Full-time employees  Pension Plan  Investment Plan  CCORP Plan

Florida Retirement System  Pension  Defined Benefit Plan  Years of Service  Age  Average Final Compensation  Investment Plan  Defined Contribution  Contributions amount  Investment Results

FRS Pension  How much income can I expect?  AFC x YOS x Factor  Example: $50,000 x 30 x 1.6% = $24,000  COLA = Years of service at 7/1/2011 divided by years of service at Retirement x 3%  28 / 30 =.93 x 3% = 2.8%  What are my Benefit Payout Options  Life only  Life with 10 year certain  Joint with 100% to the Survivor  Joint with 2/3 to Survivor  Note all Options now require a Beneficiary designation

FRS Investment Plan  Defined Contribution Plan  Benefits based on  Employer contributions  Investment Returns  Your investment skills  Portability  If you move from an FRS employer to a different employer, this money moves with you.

CCORP Plan  Defined Contribution Plan (eligible employees only) –Based on Employer contributions to employer sponsored 403(b) plan Investment Returns –Portability Contributions and earnings available for transfer upon termination of employment or retirement

What is DROP? FRS Pension benefit that was designed to allow an employee to work past normal retirement age and increase their personal wealth through accumulations in their DROP account.

DROP  Only available to FRS Pension Plan Participants  After Normal Retirement Age  Employee retires from Pension Plan  Payments made to a trust earning 1.3% (Higher if entered DROP before 7/1/2011)  Money available at full retirement  Portability  You may take distribution in cash, utilize a rollover, or combination of two.

DROP  When can you DROP?  Normal Retirement Age  Age 57 if later  What happens if I don’t DROP?  Normal Pension  Lose DROP options after one year if you have reached age limit

DROP  How long can I DROP?  Up to 5 years  What if I want to keep working after five years  Must come back as a new employee after being retired for at least one year

What happens at DROP termination?  DROP Accumulations for most participants  $100,000 to $200,000  DROP Options  Take Cash – Pay taxes  Rollover – Defer taxes  Combination Cash & Rollover

Your Pre-Tax Retirement Savings  Types of plans available through Florida State College at Jacksonville:  403(b) Tax Sheltered Accounts  457(b) Deferred Compensation Program  403(b) Special Pay Plan

Personal Savings Options  Employer sponsored savings programs  Pre-tax plans  Fixed interest Annuities  Equity Indexed Annuities  Variable Annuities  Mutual Funds

Personal Savings Options  Non-Employer sponsored savings  Tax Deductible (if you qualify)  IRA  Mutual Funds  Annuities  Stocks, Bonds, etc.  Non-Tax Deductible  Stocks, Bonds  Real Estate  Annuities  Commodities  Etc.

403(b) Retirement Savings  Available to Education and Qualified Non- Profit Organization Employees  Pre-tax savings and accumulation  Savings made through salary reduction  Deposits made to the authorized vendor of your choice  Tax Deferral  Account grows without current taxation

457(b) Retirement Savings  Available to Governmental Employees  Governed by IRS and Plan Document  Pre-tax savings and accumulation  Savings made through salary reduction  Deposits made to the authorized vendor of your choice  Tax Deferral  Account grows without current taxation

Rules for using accounts  Withdrawals  Governed by Internal Revenue Code  Only pay taxes when withdrawn  Loans  Loans up to ½ of account to $50,000  Retirement Income  Take income as you need it after retirement (Subject to Internal Revenue Guidelines).

Contribution Guidelines for 403(b) and 457(b)  Basic Limit  $17,500 in 2014  Aged Based Addition  $5,500 additional contribution if you are over 50 years old  Service Based Catch-up  Up to $3,000 additional contributions - 403(b) only  Subject to Years of Service and Prior Contribution Restrictions

FSCJ Special Pay Plan

Contributions Made to the TIAA-CREF Special Pay Plan  Accumulated Sick Leave  Accumulated Annual Leave

Tax Savings & Deferrals  FICA – SS and MediCare Taxes  Federal Income Taxes

FICA & Medicare taxes  Without the Special Pay Plan you pay up to 7.65% in Social Security and Medicare payroll taxes  With the Special Pay Plan Plan  Avoid all Payroll Taxes  Example: $20,000 x 7.65% = $1,530 savings

Access to Special Pay Plan  TIAA-CREF holds the assets to this plan  Once the funds are credited the employee must contact TIAA-CREF to receive their funds  Money is eligible to rollover into other qualified plans

Retiring From FRS  FRS Pension  Drop  Retiring from FRS and Employer

Retiring From FRS  FRS Investment Plan  What to do with the money?  How long before I receive it?

Retiring From FRS  CCORP  What to do with the money?  How long before I receive it?

Types of Retirement Plan Distributions Transaction Categories Exchange: Moving $ from one provider to a provider w/in Plan Rollover: Moving $ from Plan to account(s) outside Plan Transfer: Purchase of Service Credit w/ State Retirement System Moving a current contract from one employer to another Loan: Personal or Residential Loan Normal Withdrawal: Age 59.5 or current Separation from Service Hardship Withdrawal: “Safe Harbor” reasons only. Qualified Domestic Relations Order (QDRO) Death/Disability (permanent)

Current Process TSA Consulting Group, Inc. All Plan transactions must be recorded by TSACG TSA ParticipantAgent/RepProvider Transactions are submitted through TSACG

Two ways to submit transactions TSA Consulting Group, Inc. TSA Mailed Originals Faxed Documents

E-FAX Facts TSA Consulting Group, Inc. Originals Each set of documents received for a transaction is scanned and converted to a Adobe.pdf file. Faxed Documents Each Fax is automatically converted to a Adobe.pdf

Suggestions on Transactions TSA Consulting Group, Inc. Always include Employee and Rep address – this allows us to send confirmations of receipt. Always include a completed, LEGIBLE transaction routing request form available at (Fillable) Double check transactions to ensure they are in good order. Incomplete transactions usually crawl to their destination. Check for current version of routing form.

TSA Consulting Group, Inc. Questions & Answers