1. NJPSA RETIREMENT PLANNING WEBINAR
Good afternoon. I want to welcome you to our Retirement Webinar Series.. My name is Bob Murphy and it is my pleasure to serve as the Director of Retirement Services for NJPSA.
At NJPSA, our office provides retirement counseling to our members as a service before, during and after the application and retirement process. We also serve as your advocate in Trenton for issues regarding both retirement and health benefits.
Many of our members make appointments with us as far as two years before they plan to retire to look at their options and to ensure they are looking long range at the retirement process. If you are interested in a one-on-one appointment, you can contact me at the NJPSA office.
We are pleased to provide our members with a three part webinar series dedicated to retirement issues. Today’s webinar is designed to introduce you to your retirement program, highlight the application process and options that are available to you, and also point out the changes in the pension tiers since July 2007.
Robert Murphy
Director Retirement Services
© New Jersey Principals and Supervisors Association 2014.This presentation is the property of the New Jersey Principals and Supervisors Association (NJPSA) and is intended solely for the use of NJPSA members. It may not be copied or transmitted without the express written permission of the NJPSA.
Revised 2/20/14

2. Teachers’ Pension and Annuity Fund
Division of Pensions and Benefits 50 West State Street Trenton, NJ Mailing Address Division of Pension and Benefits PO Box 295 Trenton, NJ (Include membership number or Social Security number on all correspondence.) (609) Internet: Electronic Correspondence:
All certificated educators are enrolled as members in the “Teacher’s Pension and Annuity Fund” or TPAF. The state pension fund office is located on West State Street in Trenton. There are a number of ways you can contact the pension fund.

3. MEMBER BENEFITS ONLINE SYSTEM (MBOS)
The Member Benefits Online System (MBOS) gives registered users Internet access to pension and health benefit account information and online applications.
You can register and use MBOS from any Internet connected computer.
One of the most convenient ways to gain access to your pension account is through the Member Benefit Online System or (MBOS). Many of the applications through the fund are now only done on-line, so I strongly recommend that you register for this service.

4. Types of Retirement Service Retirement Early Retirement
Veteran Retirement
Deferred Retirement
Ordinary Disability Retirement
Accidental Disability Retirement
There are six types of retirement that we will address.

5. Retirement Benefits by Membership Tier
Enrolled prior to July 1, 2007
Tier 2
Eligible for enrollment on or after July 1, 2007 and prior to November 2, 2008
Tier 3
Eligible for enrollment on or after November 2, 2008 and on or before May 21, 2010
Tier 4
Eligible for enrollment after May 21, 2010 and before June 28, 2011
Tier 5
Eligible for enrollment after June 28, 2011
Retirement benefits vary according to your membership tier which is determined by your enrollment date into the pension fund. Many of our members are Tier 1 enrollees – this is your tier if you were enrolled in the pension fund prior to July 1, 2007.

6. Service Retirement Tier 1-2 Minimum age 60 Tier 3-4 Minimum Age 62
No minimum amount of membership credit required
Tier 1,Tier 2, and Tier 3 - Benefit based upon total years of service in system divided by 55 and multiplied by Final Average Salary (3 yrs.)
Tier 4 and Tier 5 - Benefit based upon total years of service in system divided by 60 and multiplied by Final Average Salary (5 yrs.)
Service Retirement is the age at which you can retire with no minimum service credit required. For tiers 1 and 2 that is age 60, age 62 for tiers 3 and 4 and age 65 for tier 5 members.
Your pension formula is also determined by your enrollment tier. For tiers 1, 2, and 3 you divide your years of service by 55 and then multiply by your final average salary for the highest three years of service. For tiers 4 and 5, the formula is different. You divide the total years by 60 and the final average salary is the average of the highest 5 years.

7. Enrollment Requirements-TPAF
Tier 1
Minimum Base Salary $500
IRS Maximum Salary Limit $380,000
Tier 2
TPAF salary limited to maximum wage base 2014-$117,000. DCRP eligible amount over maximum.
Enrollment in each tier is controlled by specific salary and/or hours requirements. Tier 1 members have a minimum salary requirement of $500 and the IRS salary limit is $255K. Tier 2 members have the same minimum salary requirement of $500, but their pensionable salary is limited to the $113, 700 in 2013 (the SSI max for contributions), Over that amount, you are eligible to participate in the Defined Contribution Retirement Program (or DCRP).

8. Enrollment Requirements-TPAF
Tier 3
Minimum salary for enrollment $8,
Base salary between $5,000 and $8,100 eligible for DCRP
Salary limited to Social Security maximum wage base 2014-$117,000
DCRP eligible for salary over the maximum wage limit
For Tier 3 members, the salary minimum increases to $8,000. If you make between $5000 and 8000 you are eligible to participate in the DCRP. The salary maximum is the same as tier 2 - $113,700 and any amount over that is eligible for DCRP enrollment.

9. Enrollment Requirements-TPAF
Tier 4 and Tier 5
Requires minimum of 32 hours per week for local education employees
No minimum salary requirement
DCRP eligible if under minimum hours and earn at least $8,100
TPAF salary limitation 2014-$117,000
DCRP eligible over maximum wage limit
Tiers 4 and 5 require a minimum of 32 hours (full time) for local education employees. – not a minimum salary. If you earn at least $5000 and work less than 32 hours, you may participate in the DCRP. Also the salary pension limitation is $113,700 and any amount over that is eligible for DCRP enrollment.

10. Salary
The base salary upon which your pension contributions were based.
It does not include extra pay for overtime or money given in anticipation of your retirement.
It does not include additional salary for temporary or extracurricular duties beyond the regular school day or regular school year.
When looking at your salary for use in your “Final Average Salary”, keep in mind that it is the base salary upon which your pension contributions were based. It does not include extra pay for overtime, or any additional salary for temporary or extra-curricular duties beyond the school day. The Final Average Salary is an average of your highest salaries, usually your last 3 or 5 years, depending on your enrollment tier.

11. Final Average Salary Final Average Salary- Tier 1, Tier 2, Tier 3
Average salary for the 3 years immediately preceding your retirement (36 months/12 month contracts or 30 months/10 month contracts). 3 highest fiscal years if your last 3 years are not the highest.
Tier 4 and Tier 5
60 months/ 12 month contracts or 50 months/10 month contracts. 5 highest fiscal years if your last 5 years are not the highest.
To calculate your Maximum allowance you use the formula for your tier. Tiers 1, 2, and 3 are the years of service over 55 times your Final Average Salary. For Tiers 4 and 5 you use the years of service over 60 times the Final Average Salary.

12. Example: Calculating the Maximum Allowance Tiers 1,2,3
Years of Service x F. A. S. = Maximum Allowance Years x $100,000 = 63.6% X $100,000= $63,636 Tier 4 and Tier 5 35 Years x $100,000= 58.3% X $100,000= $58,333 60
As you can see the same final average salary and 35 years of service results in a different Maximum allowance for Tiers 1, 2, and3; and Tiers 4, and 5.

13. Early Retirement At least 25 years of service required Tiers 1,2,3,4
Benefit calculated using Service formula
Tier 1
Before age 55-Allowance permanently reduced .25% per month under age 55 (3% per year)
Tier 2
Before age 60-Allowance permanently reduced 1/12 of 1% per month under age 60 (1% per year)
You qualify for Early Retirement based on the years of service requirement. For all tiers except Tier 5 that minimum is 25 years of service. For tier 5 you need at least 30 years of service for early retirement. The benefit is calculated the same way you would for the service retirement formula.
In addition to years of service, you also have an age requirement for an early retirement for which you will not incur a permanent financial penalty. For tier 1 if you have 25 years, but retire before reaching age 55, you will have a .25%/month reduction – or 3%/year.
For tier 2 if you retire before age 60 there is a 1/12th of 1%/month permanent reduction between age 55 and 60. And if you retire before age 55 you will incur a .25%/month permanent reduction (or 3%/year.)

14. Early Retirement Tier 3 and Tier 4 Tier 5
Before age 62-Allowance permanently reduced 1/12 of 1% per month under age 62 through age 55 (1% per year)
Before age 55-Allowance permanently reduced 3% per year(.25% per month) under age 55
Tier 5
Before Age 65-Allowance permanently reduced 3% per year (.25% per month) under age 65
For tiers 3 and 4 if you retire before age 62 there is a 1/12th of 1%/month permanent reduction between age 55 and 62. And if you retire before age 55 you will incur a .25%/month permanent reduction (or 3%/year.)
Finally, tier 5 members may retire early provided you have 30 years of service. However, A Retirement before age 65 would result in a permanent reduction of 3%/year or .25%/month.

15. Veteran Retirement -Tiers 1,2,3,4,5
Available to qualified veterans in active employment until retirement date. Benefits cannot be deferred.
Holds honorable discharge from military service of the United States during recognized periods.
Copy of DD-214 (discharge papers) must be on file.
The next type of retirement is Veteran Retirement. This type of retirement is available to qualified veterans in active employment until their retirement date. Veteran benefits cannot be deferred. You must hold an honorable discharge from the military during recognized periods of service and a copy of your DD-214 discharge papers must be on file with the pension board

16. Veteran Retirement
Continue in TPAF covered employment until at least age 60 with 20+years service credit or at least 55 with 25+ years of service credit
Entitled to annual benefit 54.5% of the salary on which pension contributions were made in any consecutive twelve month period which would provide the largest possible benefit.
Age 55 with 35 years of service credit are entitled to an annual allowance based on the formula: Years Service / 55 X Highest Consecutive 12 Months of Salary=Maximum Annual Allowance
Veteran may retire on Service Retirement if it would result in a higher benefit
For veteran retirement your Final Average Salary is based on your highest 12 months of salary. The formula adjusts based on age and years of service. If you are age 60 with at least 20 years of service, or age 55 with at leaset 25 years of service – you are entitled to an annual benefit that is 54.5% of your final average salary. If you have 35 years of service and age 55, the formula is your years of service over 55 times your final average salary. In some cases, a veteran may retire on a service retirement formula if it results in a higher benefit.

17. Deferred Retirement Ten years of service credit and not age 60
Retirement effective first of month after attaining age
Tier 1 and 2 collectible at age 60 (n/55 X 3 yrs.), Tier 3 at age 62 (n/55 X 3 yrs.), Tier 4 at age 62 (n/60 X 5 yrs.), and Tier 5 age 65 (n/60 X 5 yrs.)
Allowance based upon Service formula
Must file application for retirement to take effect
Life insurance not in effect from termination until Deferred Retirement becomes effective
Death between termination and retirement effective results in return of contributions with interest. No other death benefit.
State Health Benefit restrictions with less than 25 years
25 or more years eligible for SHBP coverage when they retire at age 60 or later.
A Deferred Retirement is available to a member who has vested their pension – having accrued ten years of service credit – and has not reached the retirement age for their tier. Your retirement becomes effective on the first of the month after attaining retirement age. The formula for your annual benefit is based on the Service formula. You will need to file an application for the deferred retirement to take effect.
Your life insurance is not in effect between the date of your separation and the first day of your retirement. Therefore, a death that occurs during this time will result only in the return of contributions with interest – No other death benefit.
Health benefits will be provided for those who have attained 25 years of service credit when they retire.

18. Ordinary Disability Tiers 1,2,3
Active pension account
10+ years New Jersey service credit
Totally and permanently disabled for the performance of your job
Annual benefit 43.6% FAS or 1.64 % of FAS for each year of service credit (Service or Early Retirement may be higher)
Process may take 6 months
Workers’ compensation and Social Security Disability has no bearing on TPAF Disability Retirement
Tier 4 and Tier 5-
The benefit outlined above is not available, but members may be eligible for Disability Insurance Coverage
There are two types of disability retirements and they are only available to members in Tiers 1, 2, or 3. To qualify you must be an “active” member.
For Ordinary Disability Retirement – you must be vested with at least 10 years of credit service in order to apply. You will need to prove that you are totally and permanently disabled for the performance of you job. The annual benefit will be 43.6% of your Final Average Salary (highest 3 years) unless the formula for either service or early retirement results in a higher benefit.
It is also important to point out that neither Social Security Disability nor Workman’s Compensation have a bearing on a TPAF Disability Retirement.

19. Accidental Disability Retirement Tiers 1,2,3 Only (Tier 4 and Tier 5- May be eligible for Disability Insurance Coverage)
Active member on or before date of “Traumatic Event” and at time of filing
Considered permanently and totally disabled as a result of traumatic event that is identifiable as to time and place, undesigned and unexpected, caused by circumstances external to the member, occurred during and as a result of the member’s regular and assigned duties, not result of member’s willful negligence, and member mentally and physically incapacitated from performing any other duty. File within five years of traumatic event
Examined by physicians selected by TPAF
72.7% of base salary at time of traumatic event
An Accidental Disability Retirement application would be considered for an actively enrolled member who suffers a traumatic event at work resulting in their being permanently and totally disabled. There are specific parameters that need to be met in order for you to qualify for Accidental Disability Retirement. The Annual Pension amount for this type of retirement is 72.7% of the member’s base salary at the time of the traumatic event.

20. Pension Options What to consider when selecting an option Your health
Your beneficiary’s health
Need to provide survivor benefits
Life insurance benefits available
Income from other sources such as Social Security benefits, investments, etc.
Now that we have explored the types of retirements that are available to members, we will look at the pension options you need to consider. When considering your pension option you need to remember that this is an option that will be permanent. You need to consider you and your beneficiaries health, the need to provide survivor benefits, what life insurance you have as well as any additional income from social security, investments and even employment.

21. Pension Options
Once you have made your choice and your retirement becomes due and payable (usually when your first check is issued), you cannot change your payment option.
Again, once you receive your first pension check, you cannot change your payment option.

22. Nine Pension Options Maximum-No Pension Benefit to a Beneficiary
Option 1-Reducing Reserve to a Beneficiary
Options 2, 3, 4, A, B, C, D
Smaller monthly benefit based on life expectancies of you and your beneficiary at time of retirement.
Beneficiary must be individual and not a charity, institution, or estate.
For each of the retirement types you have a choice of 9 pension options. The maximum option provides no benefit to a beneficiary where as the other options do. I will briefly address each option.

23. Maximum Option No Pension Benefit to Beneficiary
Pays highest retirement benefit
Benefits end at your death
Death before receiving your contributions, including interest, balance paid to beneficiary
The maximum option is the option upon which the other options are based on. This option provides the highest retirement benefit, but has no pension benefit to a beneficiary. Benefits end at your death. However, should death occur before you receive all of your contributions, including interest, and that balance will be paid to your designated beneficiary.

24. Options Other Than Maximum
Option A – 100% to Beneficiary - Increase to Maximum
Option B – 75% to Beneficiary - Increase to Maximum
Option C – 50% to Beneficiary - Increase to Maximum
Option D – 25 % to Beneficiary - Increase to Maximum
The next group of options, A-D, leave a specified percentage of your monthly retirement benefit to a beneficiary. That percentage ranges from 100% down to 25%. These options are called “pop ups” because in each case, should your beneficiary die before you do, your monthly benefit pops up to the Maximum allowance.

25. Options A,B,C,D “Pop Up” Joint and survivor benefit
Provides lifetime benefit to you
Living beneficiary at time of your death receives selected option benefit
If beneficiary dies before you, your retirement allowance increases to the Maximum Option
Name one beneficiary and beneficiary can never be changed after retirement
Each of the pop up options provides for a joint benefit – for the member and survivor - that they will receive for their lifetime. The living beneficiary receives the allowance you selected at the time of your death. You will need to name one beneficiary and that can never be changed after your retirement is due and payable.

26. Option 1 Lifetime monthly payment to you
Reduced from Maximum
Lifetime monthly payment to you
May provide lump sum to beneficiary
Sets up reserve reduced each month by monthly allowance. Any balance is paid to beneficiary at time of your death.
Name more than one beneficiary
Change beneficiary at any time
Option 1 is slightly reduced from the maximum option and provides for a lifetime monthly payment to you. This option establishes a reserve fund that is reduced each month by the monthly allowance you receive. Any balance that remains at the time of your death is paid to your beneficiary. For this option you can name more than 1 beneficiary and you can change the beneficiary at any time. The reserve is usually depleted in approximately 9 years.

27. Options 2, 3, and 4 Joint survivor benefit
Provides lifetime benefit to you
Living beneficiary at time of your death receives selected option benefit
If beneficiary dies before you, you continue to receive the reduced retirement allowance you had been receiving
Beneficiary can never be changed after retirement
Options 2-4 are similar to options A-D in that they provide a survivor benefit as well as a lifetime benefit to you. The living beneficiary receives the percentage you select at the time of your death. Unlike the lettered options, should your beneficiary die before you, there is no pop up to maximum. The beneficiary for these options cannot be changed after retirement.

28. Option 2-Permanent Reduction
100% joint and survivor benefit
Lifetime payment to you
If beneficiary living at time of your death-100% of your monthly retirement allowance
Name one beneficiary
Cannot change beneficiary
Similar to Option A except if beneficiary dies before you, your allowance does not increase
Options 2-4 are similar to options A-D in that they provide a survivor benefit as well as a lifetime benefit to you. The living beneficiary receives the percentage you select at the time of your death. Unlike the lettered options, should your beneficiary die before you, there is no pop up to maximum. The beneficiary for these options cannot be changed after retirement.

29. Option 3-Permanent Reduction
50% joint and survivor benefit
Lifetime payment to you
If beneficiary living at time of your death, one-half of your monthly retirement allowance
Name one beneficiary
Cannot change beneficiary
Similar to Option C except if beneficiary dies before you, your allowance does not increase
Options 2-4 are similar to options A-D in that they provide a survivor benefit as well as a lifetime benefit to you. The living beneficiary receives the percentage you select at the time of your death. Unlike the lettered options, should your beneficiary die before you, there is no pop up to maximum. The beneficiary for these options cannot be changed after retirement.

30. Option 4-Permanent Reduction
Lifetime payment to you
If beneficiary living at time of your death-receives monthly retirement allowance you decide (Not more than your allowance)
Name one or multiple beneficiaries
Cannot change beneficiary
If beneficiary dies before you, your allowance does not increase
Option 4 does provide for some flexibility in that you can name multiple beneficiaries and you can name or specific dollar amount or a percentage that is left to your survivor(s) that is different from those in the other options.

31. Bold and underlined can leave to Child
Pension Benefit to Beneficiary Upon Death of Retiree
*Increases to Maximum Allowance
**Stays at Reduced Option Allowance
Bold and underlined can leave to Child
None
Lump Sum
100% 0f Retirement Allowance
75% of Retirement Allowance
50% of Retirement Allowance
25% of Retirement Allowance
Maximum x
Option A*
Option B*
Option C*
Option D*
Option 1**
Option 2**
Option 3**
Option 4**
This chart summarizes the benefit that is paid to your beneficiary upon your death.

32. Pension Calculation Sample - Based Upon Early Retirement Benefits Date of Retirement: 7/1/2014 Length of Service: 35 Years/ 0 Months Final Average Salary: $100,000 Annuitant DOB: 6 / 25 / Age at Retirement: Beneficiary DOB: 4 / 15 / 1956 Age at Retirement: 58 Contributory Insurance Benefits: $48,125 Current Salary: $110,000 Monthly Gross: $9,166 Maximum Yr. Gross: $63,636 Max. Monthly Gross: $5,303
Option 1 Reserve Factor: 9.7
Reduction Factor: Reserve: $617,272
Option 1 Factor: 0.973
Option 1 Yr. Gross: $61,917
Option 1 Mo. Gross: $5,159
Option 2 Factor: % Beneficiary
Option 2 Yr. Gross: $55,044 $55,044
Option 2 Mo. Gross: $4,587 $4,587
Option 3 Factor: % Beneficiary
Option 3 Yr. Gross: $60, $30,068
Option 3 Mo. Gross: $5, $2,505
Option 4
To be determined by the pension fund based on your criteria
Option A 100% Factor: % Beneficiary
Option A Yr. Gross: $54,409 $54,409
Option A Mo. Gross: $4, $4,534
Option B 75% Factor: % Beneficiary
Option B Yr. Gross: $56, $42,715
Option B Mo. Gross: $4, $3,559
Option C 50% Factor: % Beneficiary
Option C Yr. Gross: $59, $29,908
Option C Mo. Gross $4, $2,492
Option D 25% Factor: % Beneficiary
Option D Yr. Gross: $61, $15,447
Option D Mo. Gross: $5, $1,287
Now, let’s take a look at a hypothetical Pension calculation. For this example the member is in tier 1, is 59 years old with 35 years in the pension fund. Since she has 25 years in but is not yet 60, the retirement is considered an Early retirement. This member’s Final Average Salary is $100,000 even though her current salary is listed as $110,000. Remember the Final Average Salary for tier 1 is the average of the highest three years – which are usually the last three. The Member’s spouse is 58 years old. – For each option that is listed, both the age of the member and the age of the spouse figure into the “factor” when a benefit is left to your spouse.
In this case the member will have a retirement with a maximum pension option of $63,636 or $5,303 a month. This is determined by dividing 35 years by 55 and multiplying that times the Final Average Salary of $100,000. You then see how, with each option, the benefit allowance is reduced in order to take into account the benefit that you choose to leave for yourself and your beneficiary. This is what you will need to determine which is the best option for you – since there is no single best option. Everyone’s needs are different and your choice will be based on a number of factors in your life.

33. Taxation of Retirement Benefits
Pension subject to federal income tax, except Accidental Death or Disability
Contributions prior to 1/1/1987 already taxed
New Jersey Income Tax
Voluntary withholding
Not subject to NJ tax until you recover your contributions
Age 62 or disabled some exclusion of retirement income-2003 and beyond:
$20,000 (MFJ)
$15,000 (S)
$10,000 (MFS)
* Effective tax year 2005 pension exclusion for taxpayers with gross income of $100,000 eliminated
We get many questions about what ‘comes out of my pension check.’ What is my take home - since that is what you get to live on. You pension is subject to federal income tax – with the exception of any contributions that were made into the fund prior to January 1, Your pension is also subject to NJ income tax, if you reside in NJ. You pay NJ income tax on the amount that you collect beyond what you have personally contributed into the pension fund on your behalf.

34. Loans If you retire with an outstanding loan balance, you may:
Pay the loan in full prior to receiving any benefits; or
Continue your monthly loan repayment schedule into retirement
Should you have an outstanding pension loan at the time you retire, you may either pay off the full loan prior to receiving any benefit, or you can continue the monthly loan repayment schedule into retirement.

35. Retirement Checklist 6-8 Months Before Retirement
Request a retirement estimate
Attend retirement seminar
4-6 Months Before Retirement
Complete application
Proof of age, veteran
Employer certification
Receipt of application
3 Months Before Retirement
Letter offering enrollment in State Health Benefits Program, if eligible
2 Months Before Retirement
Quotation of retirement allowance with option
Loan balance payoff amount
Outstanding purchase quote
You can submit an application to retire – now only done online through MBOS –up to one year prior to your retirement date. Once you consider retirement, I strongly recommend you get an online estimate and then make an appointment to meet with us to review your retirement options with you.
Generally you should apply 4 to 6 months prior to your retirement date. You do so by completing the online application through MBOS. You will need to send the pension fund proof of your age and your spouse’s age if needed as well as proof of your veteran status if you are applying for a veteran Retirement. Once your application is received, your employer will be notified electronically and they will complete the employer certification.
Three months prior to your retirement you will be sent a letter offering you enrollment in the SHBP if you are eligible based on years of service. Health benefits in retirement will be the subject of our February 28th Retirement Services webinar – so be sure watch for the date and time.
Two months prior to your retirement you will receive a Quotation of Retirement Allowance that will list your selected option, any loan balance payoff amount, as well as…

36. Retirement Checklist 1 Month Before Retirement
Retirement presented to TPAF Board of Trustees
30 days from approval date or effective retirement date (whichever is later) to change option or cancel retirement. Canceling does not guarantee reemployment with employer.
Shortly After Retirement
Statement of Retirement Allowance
Forms for withholding of federal and NJ State income tax
Direct deposit form
1st check dated first of month or 30 days after TPAF approval, whichever is later.
Your retirement is presented to the TPAF Board of Trustees usually in the month prior to your retirement. It is important to note that you have 30 days from the date the TPAF Board approves your retirement or from the effective date of your retirement – whichever is later – to change your option or cancel your retirement. But remember – cancelling you retirement does not guarantee reemployment with your employer – and they need to be notified by statute at least 60 days prior to your effective date of retirement.
Shortly after your effective retirement date you will receive a Statement of your retirement allowance indicating your monthly allowance and any deductions. Forms for both federal and State withholding for taxes will be sent to you as will a form to enroll in direct deposit of your check. Your first check will be dated the first of the month following your retirement date.

37. Life Insurance-Active Employee
Non-Contributory- Provided by employer through pension fund at no cost to you
Contributory- Employee paid
Required for first 12 month of membership after which time you may cancel. Cannot be reinstated after you cancel
Rate 0.4% (.004) of base salary
Amount of death benefits paid to beneficiaries at your death depends on membership status at time of death; salary, and your age
Coverage for Active Members
Age at Death
Non-Contributory Insurance Only
Non-Contributory and Contributory
At any age
150% of salary
350% of salary
LIFE INSURANCE:
As an active employee you are covered with non-contributory insurance which is provided by your employer at no cost to you. This insurance is equal to 1 and a half times your salary.
In addition, many members pay for an additional insurance amount equal to two times your salary for a total of three and a half times your salary for Active Employee life insurance.

38. Life Insurance-Retired Member
Coverage for Retired Members (with 10+years/service)
Type of Retirement
Non-Contributory
Contributory & Non- Contributory
Death before Age 60
Death after
Age 60
Disability
150%
18.75%
175%
43.75%
Early & Veteran
Deferred
None
Service
N/A
When you retire with 10+ years of service credit, the amount of life insurance you have – free of charge- in retirement is determined by the life insurance you had as an active employee. If you had only non-contributory insurance or 1.5 times your salary, your insurance in retirement will be 18.75% of you final salary. If you had both non-contributory and contributory insurance, or 3.5 times your salary your retired life insurance will be 43.75% of your final salary.
The exceptions are for those on Disability Retirement where your benefit is either 150% or 175% of your final salary until you reach the age of 60.

39. Conversion of Life Insurance
Group life insurance ends 31 days after you cease employment
Eligible to continue coverage by purchasing converted life insurance policy, without medical examination, at your expense
Conversion guaranteed through Prudential
Coverage amounts up to those while employed
Purchase at retirement reduced by amount of retired life insurance benefit
Special rules apply in cases of deferred, disability, termination, or leave of absence
At the time of your retirement, you have a onetime option to convert the balance of the life insurance you had as an active employee which you will have to pay for each month. This tends to be expensive, but it is an option that, based on your individual circumstances, is available to you no matter you health at the time you retire. You will have 31 days after you terminate you employment to convert this insurance.

40. Chapter 78, P.L. 2011 Cost Impact for Future Retirees Health Benefits
With Less Than 20 Years of Service on 6/30/2011
Sections 125 Plans- Creation of Cafeteria Plans
Employee Payments “Pre-tax”
Permits Dependent Care Flexible Spending Accounts
Employee Pension Contribution 6.5%
with additional one percent phased in over 7 years
Payment for Waiver of Health Benefits- Shall not exceed 25% or $5,000, whichever is less, of the amount saved by the employer. Waiver maximum applies to all new employees and to any existing employee who submits or renews a waiver on or after May 21, (Chapter 2, P.L. 2010)
Chapter 78 dramatically changed pension law in June, Those changes include:
The establishment of a new Tier 5 for members who enroll in the pension system after June 30, 2011;
changes in the pension contribution rate from 6.5% to 7.5% phased in over seven years;
The Cost impact to retirees for their health benefits for members who had less than 20 years of service as of June 30, 2011;
The establishment of “Pre-tax” employee health contributions/payroll deductions.

41. Retirement Resources Retirement Living Information Center
Division of Pensions
Horizon
Aetna
Aetna Dental
Social Security
Medicare
Medco
IRS
Retirement Living Information Center
Retirement Communities
Places to Retire
Taxes by State
Newsletter
Retirement News
Resources
Senior Bookstore
Senior Online Publications
Marketplace
Products and Services
State Aging Agencies
There are a number of online services available to assist you as you consider your retirement plans. You can find these on the NJPSA website under the tab for Retirement Services.

42. Retirement Package Presented by Bob Murphy
Retirement Services January 24, 2013
Retirement Health Benefits February 28, 2013
Employment After Retirement March 28, 2013
I want to thank you for tuning in to our webinar today. Our second retirement webinar will air next week on January 31st and will focus on Employment after retirement. Our third and final webinars will air on February 28th and focuses on Health Benefits in retirement.
Retirement consultations are an important member service at NJPSA. I encourage you to contact our office and set up an appointment if you are considering your retirement options - whether that date is soon or down the road. It is important to know how to plan to make the most of your retirement benefits.
Thank you for watching!

43. Director Retirement Services
Robert Murphy
Director Retirement Services
12 Centre Drive
Monroe, NJ
Phone:
Fax: