PERA (PPTX 14MB)

Report
Public Employees Retirement
Association of Minnesota
Public Employees
Retirement Association
of Minnesota
Serving Minnesota’s
Serving Minnesota’s public
Publicemployees
Employees
for Over
80Years
Years
for more
than 80
Public Employees Retirement Association of Minnesota
Statistical Data
2,100 Employers
Public Employees Retirement Association of Minnesota
Statistical Data
General
Active Members
143,385
Vested Deferred Members* 48,548
Benefit Recipients
86,911
Total
279,844
Grand Total
P&F
10,879
1,481
10,039
Correctional
3,603
2,380
769
22,399
6,752
308,995
* Includes approximately 5,000 members
now in other PERA plans, including
most Correctional members.
PERA also administers a
Defined Contribution Plan with
approximately 6,200 members.
Source: 7-1-2014 Financial Report
Public Employees Retirement Association of Minnesota
Types of Retirement Plans
Traditional
Pension Plan
(Defined Benefit Plan)
Individual
Account Plan
(Defined Contribution Plan)
Public Employees Retirement Association of Minnesota
DC Plans: Your Individual Investments
What’s the
bottom line?
Public Employees Retirement Association of Minnesota
DB Plans: What’s defined is the benefit
What’s the
bottom line?
Public Employees Retirement Association of Minnesota
Contributions
Coordinated
Correctional
Police & Fire
Ee: 6.50%
Ee: 5.83%
Ee:
10.8%
Er: 7.50%
Er: 8.75%
Er:
16.2%
+
Social Security
+
Medicare
(If hired after 3/31/86)
Ee:
7.45%
Ee:
1.45%
Er:
7.65%
Er:
1.45%
Public Employees Retirement Association of Minnesota
SBI – Diversified for the Long Term
Alternative
Assets
20%
SBI Investment Returns
FY 2014
Cash
2%
----------------------
Bonds
18%
International
Stocks
15%
* Source: 2013 Annual Financial Report
Domestic Stocks
25.9%
International Stocks
21.4%
Bonds
Domestic
Stocks
45%
Alternative Investments
5.0%
18.9%
----------------------------------------Total Combined Funds
18.6%
Public Employees Retirement Association of Minnesota
Revenues (1995-2014)
16¢
Employers
13¢
Employees
71¢
Investment
Earnings
* Revenue last 20 years for 3 statewide plans
(Source: Annual Financial Reports)
Public Employees Retirement Association of Minnesota
Expenses (1995-2014)
95.6¢
Benefits
3.3¢
Refunds
1.1¢
Admin.
Public Employees Retirement Association of Minnesota
What’s the payback?
2-3 years
All your
contributions
5-7 years
All your
contributions +
all your employer’s
contributions
Remainder of your life
Paid by PERA
investments
Public Employees Retirement Association of Minnesota
Life Expectancy (Current PERA Tables)
Present
Age
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
Life Expectancy
Males
Females
82.2
84.5
82.4
84.6
82.5
84.7
82.6
84.7
82.8
84.8
82.9
84.9
83.0
85.0
83.1
85.1
83.2
85.2
83.4
85.3
83.5
85.5
83.6
85.6
83.7
85.7
83.9
85.9
84.0
86.0
Present
Age
65
66
67
68
69
70
71
72
73
74
75
Life Expectancy
Males
Females
84.2
86.2
84.4
86.4
84.6
86.6
84.8
86.8
85.0
87.0
85.3
87.2
85.5
87.5
85.8
87.7
86.0
88.0
86.3
88.3
86.6
88.6
Public Employees Retirement Association of Minnesota
Building Your Pension
Your pension is built on a formula using:
 Age at Retirement
 Years of Service
 High-5
Average Salary
Public Employees Retirement Association of Minnesota
Combined Service
Service in your PERA plan can be combined
with service under 14 other MN plans
 Pension from PERA
 Pension from other retirement plan
 Both benefits based on high-5 salary
(no matter when credit earned)
Public Employees Retirement Association of Minnesota
Benefit Options
% of
Single-life
Member (63)
Survivor (61)
Single-life
100%
$1,079
$ 0
25%
97%
$1,047
$262
50%
94%
$1,014
$507
75%
92%
$ 993
$745
100%
89%
$ 960
$960
* If other than spouse, survivor may not be more than 10 years
younger for the 100% or 19 years younger for the 75% option
Public Employees Retirement Association of Minnesota
Decisions . . . Decisions
Public Employees Retirement Association of Minnesota
Your Options
What if you leave
public service before
retirement?
Public Employees Retirement Association of Minnesota
Refunds
Take the $ and run!
Contributions + 4% Interest
- 20% Federal Withholding
- 10% Federal Penalty
(until age 59½ if leave before 55)
Refund
Public Employees Retirement Association of Minnesota
Refunds
Rollover
You do it
 20% Federal
Withholding
Direct Rollover
We do it
 No Withholding
 No Penalty
Public Employees Retirement Association of Minnesota
Deferred Pension
 If vested, you
qualify for a pension
any time after age 55
 The longer you defer, the larger the
monthly benefit until full retirement age
 You may not defer past age 70½
Public Employees Retirement Association of Minnesota
Repaying a Refund *
Total Repayment (Lump sum)
 Must return to public service minimum 6 mos.
 Refund + 8.5% interest compounded annually
Partial Repayment
 Must be active public employee
 Refund must cover at least 2 yrs. service
 Repayment must be at least 1/3 of refund you received
(Total refund + interest) x
Service wish restored
Total service lost
* You may roll over tax-deferred investments, like deferred comp., to repay a refund
Public Employees Retirement Association of Minnesota
Other Benefits
Disability
Survivor
Public Employees Retirement Association of Minnesota
Disability Benefits
(Qualification)
Coordinated
Total and Permanent (At least one year)
P&F and Correctional
Unable to perform duties of your position
Common to All Plans
 Active public employee when disabled
(Must apply w/in 18 months of leaving)
 May not be collecting a retirement benefit
 Less than age 65 (Age 55 for P&F & Correctional)
 Must supply medical evidence of disability
Public Employees Retirement Association of Minnesota
Survivor Benefits (Coordinated/Correctional)
Must be vested for a future benefit
 100% option pension
 Term-certain spouse benefits
- 10 years
- 15 years
- 20 years
 If no spouse, term-certain
benefits for dependent children
 Refund of member deductions
plus interest
Public Employees Retirement Association of Minnesota
Survivor Benefits (P&F)
Benefits:
 50% of average salary of last six
months for spouse and 10% for
each child (60% if death result of hazardous duty)
or
 100% option pension payable to spouse if member
reaches age 50 with 3 or more years of service
or any age with 30 years of service
or
 Refund of member deductions plus interest
(Maximum monthly family benefit is 70% of average salary /
80% if result of hazardous duty /Minimum benefit 50% & 60%)
Public Employees Retirement Association of Minnesota
Pension
Increases?
Benefits will increase by
1% every January until
plans are 90% funded for
2 years, and then at 2.5%
Public Employees Retirement Association of Minnesota
Applying for Retirement
Termination Verification
• Sent to member
before retirement
• Filled out by employer
Know Your Pension Options
• Review pension estimates
• Make sure all your
questions are answered
Apply for Retirement
•
•
Choose option
Signed by member
& spouse
Retirement effective
first of month
following termination
Required Documents
• Proof of age*
• Proof of name change*
* If choosing survivor option,
PERA needs same info.
for survivor
Public Employees Retirement Association of Minnesota
You Must Really Retire!
Requirements
 Resignation or dismissal
 Not just a leave of absence
 No prior agreement, written or verbal,
to be rehired in any capacity
 30 day break in service
 This includes work as an independent
contractor or consultant
 Does not apply to elected service
Public Employees Retirement Association of Minnesota
Member
Information,
Marital
Information,
and Direct
Deposit
Public Employees Retirement Association of Minnesota
Benefit
Selection
& Notarized
Signatures
Public Employees Retirement Association of Minnesota
Federal &
State Tax
Withholding
Public Employees Retirement Association of Minnesota
Termination
Verification
Form
Public Employees Retirement Association of Minnesota
Birth and Marriage
Documents / Passport
Public Employees Retirement Association of Minnesota
Earnings limits only apply if you
return to PERA-covered employment
Earnings
Limit
Timeline
(2015)* Annual
Limit
Jan. 1 year you
reach full S.S.
retirement age
$15,720
$41,880
Month you reach full
S.S. retirement age
No limit
Reduction*
$1 for every $2 over or suspension of benefit
* Reduction placed in escrow.
Available one year after leaving job.
If work extends past end of year, available one year later.
Public Employees Retirement Association of Minnesota
Taxes
Most, if not all, of your PERA
pension is taxable income
 If you were hired after
Dec. 31, 1982, your
entire benefit is taxable
 If you were a member prior to 1983,
you will receive your after-tax contributions
back over your estimated lifetime, or the
estimated lifetime of both you and your survivor
Public Employees Retirement Association of Minnesota
PERA Office
Retirement Systems of
Minnesota Building
60 Empire Drive
St. Paul, Minnesota
Public Employees Retirement Association of Minnesota
On-line Resources
Public Employees Retirement Association of Minnesota
9 0
Public Employees Retirement Association of Minnesota
MY
PERA
Public Employees Retirement Association of Minnesota
Our newest feature
Public Employees Retirement Association of Minnesota
And now a word from our attorneys . . .
This presentation is intended to provide general
information; the rights and obligations of PERA
members are governed by state and federal laws,
rules and regulations. The Minnesota Legislature or
the federal government may change the statutes, rules
and regulations governing PERA at any time. If there
is a discrepancy between the law governing PERA
and the information contained in this presentation,
the statutes and regulations shall govern.

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