1. Milwaukee Public Schools Employees Pre-Retirement Planning City of Milwaukee Employes’ Retirement System

2. 1 Getting the most from retirement Use the ERS Website – www.cmers.comwww.cmers.com Member Self Service (MSS)- From the CMERS.COM home page, active members are able to set up a user account by registering with our website. To register, you will need to select a user identification and password, know your email address, social security number, first and last name as it appears on your paycheck, and date of birth. The entry of your private information is protected by VeriSign security. Once registered, members can sign in using their secret user identification and password. MSS features include: Viewing your personal profile, Viewing information about your member account (contributions and service credit) Calculating and printing a pension benefit estimate using information ERS has on file, or using information you enter. NOTE: You will still need to contact ERS before you retire for an estimate from us. These MSS estimates are not saved in your record. The following forms can be downloaded from our website: Beneficiary Change Form- Pension Benefits, and Benefit Estimate Request. NOTE: the group life insurance beneficiary form on the website is not the form for changing your MPS group life insurance beneficiary.

3. 2 ERS Benefits Age 60 or Age 55 with at least 30 years of service No limit on outside earnings Service retirement You can retire with non-reduced benefits at Service Retirement Age:

4. 3 How monthly pension benefits are calculated Service Retirement Benefit Formula (Years of Creditable Service* x 2.0%) = Multiplier (Multiplier x Final Average Salary**) = Annual Pension Benefit Annual Pension Benefit / 12 = Monthly Pension Benefit * Creditable service is based on pension hours per year as reported by your employer **Final Average Salary: 3 Highest Years of Pensionable Earnings divided by 3

5. 4 ERS Benefits Early Retirement (Immediate Retirement Allowance) You can retire with reduced benefits at age 55 or later with at least 15 years of service A financial penalty applies Until age 60, your benefit may be further reduced for outside earnings (up to certain limits)

6. 5 How monthly pension benefits are calculated Early Retirement Benefit Formula (Years of Creditable Service* x 2.0%) = Multiplier (Multiplier x Final Average Salary**) = Annual Pension Benefit Annual Pension Benefit x Reduction Factor = Reduced Annual Pension Benefit Reduced Annual Pension Benefit / 12 = Monthly Pension Benefit * Creditable service is based on pension hours per year as reported by your employer **Final Average Salary: 3 Highest Years of Pensionable Earnings divided by 3

7. 6 Final Average Salary Final Average Salary (FAS) shall mean the average annual earnable compensation of a member computed on the 3 years of creditable service preceding their date of retirement during which their earnable compensation was the highest. Twelve-month employees are 2080 hour basis employees for pension purposes. ERS collects 78 pay periods prior to the effective date of retirement  Uses the pay periods when base salary was the highest –Over-time is not included Ten-month employees are 1600 hour basis employees for pension purposes. ERS collects 4800 hours (1600 x 3) of salary data to calculate the FAS. Earnable Compensation shall mean the annual regular base salary that would be payable to a member if he or she worked the full normal working time for his or her position.

8. 7 Final Average Salary – 1600 (4800 hours) / 2080 (78 pay periods)

9. 8 Creditable Service calculation for 1600 hour employee

10. 9 HOURS BASIS: 1600 55/30 REMARKSYEARHOURSQUALIFYYRSMOSDAYS 01986 270.00.17021 1987 1110.01.000810 1988 1092.01.00086 1989 1122.01.000813 1990 1122.01.000813 1991 1128.01.000815 1992 1134.01.000816 1993 1129.51.000815 1994 1139.01.000817 1995 1177.81.000826 1996 1174.01.000825 1997 1120.51.000813 1998 1028.01.000722 1999 1207.51.00092 2000 1134.01.000816 2001 1134.01.000816 2002 1103.01.00089 2003 1191.51.000829 2004 1111.01.000811 2005 742.00.470518 2006 1409.51.0001018 2007 691.50.43056 0.00.00000 23,470.8 20.07 TOTAL YEARS, MONTHS, & DAYS = 14813

11. 10 Estimating your monthly benefit Example: Service Retirement Monthly Benefit Assumptions: Age 60 30 Years of Creditable Service Final Average Salary (FAS): $45,000 30 Years of Creditable Service x 2.0% = 60% 60% x $45,000 FAS = $27,000 $27,000 / 12 = $2,250.00* Monthly Pension Benefit *This is a gross monthly figure. Benefit is subject to federal and state of Wisconsin tax

12. 11 Estimating your monthly benefit Example: Early Retirement Monthly Benefit Assumptions: Age 55 (Reduction Factor: 0.5935 –actual age – bonus year cannot be used to lessen the reduction) 20 Years of Creditable Service Final Average Salary (FAS): $45,000 20 Years of Creditable Service x 2.0% = 40% 40% x $45,000 FAS = $18,000 $18,000 x 0.5935 Reduction Factor = $10,683 $10,683 / 12 = $890.25* Monthly Pension Benefit *This is a gross monthly figure. Benefit is subject to federal and state of Wisconsin tax

13. 12 Retiring from ERS Your payment options Maximum Retirement Allowance/ No survivorship benefit Survivorship Options: Provide reduced lifetime benefit for you; guarantee continuing benefits to your named survivor Option 2: 100% Survivorship Option 3: 50% Survivorship Option 4: Variable Survivorship  75% Shown for Comparison

14. 13 Assumptions: Retiree - Age 60 Spouse - Age 57 Monthly Pension Benefit: $2,250 Example: How Payment Option Affects Monthly Benefit

15. 14 Assumptions: Retiree - Age 60 Spouse - Age 60 Monthly Pension Benefit: $2,250 Example: How Payment Option Affects Monthly Benefit

16. 15 Protective Survivorship Option Protective Survivorship Option (PSO) Guarantee survivor income if you continue working beyond Service Retirement Age and die before retirement Same options available as for retirement survivorship options Can be elected only during 6 months before you reach Minimum Service Retirement Eligibility – becomes effective when you reach this eligibility Once chosen, cannot be cancelled unless survivor dies before retirement or you divorce spouse survivor before retirement If you select a PSO, you will be locked into this option when you do retire

17. 16 5% Lump Sum Bonus Hired prior to 1/1/2000 5% x Maximum Retirement Allowance x Factor Payable when you begin retirement allowance – paid out the end of the month after you get your first benefit payment Example:Assumptions: Age 60 (Factor: 9.8147) Max. Ret. Allowance: $18,000 5% x $18,000 x 9.8147 = $8,833.23 Lump Sum Bonus Military Service Credit Extra service credit for pre-ERS active service  1 year for every 3 years active military service up to 3 years –Must have at least 10 months active military service –Must provide DD-214 to ERS Global Pension Settlement Benefits (GPS) 16

18. COLAs (Cost of Living Adjustments) 1.5%: Second, third, fourth retirement anniversaries 2.0%: Fifth and following anniversaries Example: $2,250 Monthly Pension Benefit Global Pension Settlement Benefits 17

19. 18 Retiring from ERS Applying for Retirement Request Pension Estimate Call ERS 6 months prior to planned retirement date – Phone: 286-3557 Provide requested information about you and your pension survivor You will receive estimate in about 4 - 6 weeks Schedule Retirement Counseling Appointment Must take place 30-90 days before retirement date Bring required documents for verification: Certified Birth Certs, Marriage Lic, SS Cards Bring completed ACH Direct Deposit Authorization Form (ERS will provide this).