YOUR RETIREMENT SYSTEM

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YOUR RETIREMENT SYSTEM
PSPRS

• PUBLIC
• SAFETY
• PERSONNEL
• RETIREMENT
• SYSTEM

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RETIREMENT DUTIES

• WHAT YOUR LOCAL BOARD NEEDS TO KNOW

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Most Important Responsibility

• Decide all questions of eligibility and service
  credits, and determine the amount, manner and
  time of payment of any benefits under the plan.
  (A.R.S. 38-847, (D)(1)).
• The local board secretary or HR representative
  may perform the necessary calculations and
  prepare the necessary paperwork for the local
  boards review and approval.

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How do you determine eligibility for retirement
benefits?

• Need to know what type of benefits are available
• NORMAL
• DISABILITY
• DEFERRED ALLOWANCE
• SURVIVOR
• GUARDIAN/CHILD
• DEATH BENEFIT
• DEFERRED RETIREMENT OPTION PLAN (DROP)
• REVERSE DROP

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NORMAL RETIREMENTS

• Member must meet one of the following for normal
  retirement
• 20 years of service
• 15 years of service and age 62 (at time of
  termination)

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DISABILITY RETIREMENTS

• Temporary Disability total and presumably
  temporary disability incurred in performance of
  duty, prior to normal retirement, preventing
  performance of a reasonable range of duties,
  payments terminate after 12 months
• Accidental Disability total and permanent
  disability incurred in performance of duty,
  preventing performance of a reasonable range of
  duties
• Catastrophic Disability physical, and not a
  psychological, condition incurred in performance
  of duty, which totally and permanently prevents
  engaging in any gainful employment
• Ordinary Disability physical condition total
  and permanent disability, preventing performance
  of a reasonable range of duties prior to normal
  retirement mental condition total and permanent
  disability preventing any substantial gainful
  activity

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DEFERRED ALLOWANCE

• A member with at least 10 years of credited
  service, who terminates employment, may elect to
  leave their contributions in the system and
  receive a deferred allowance, commencing at age
  62.
• No survivor allowance
• No benefit increase
• No 2 tax equity
• No insurance subsidy

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SURVIVOR BENEFITS

• Surviving spouse of a non-retired member
• Married for at least 2 years at time of death
• Benefit is 80 of the pension the deceased active
  member would have been paid for an accidental
  disability retirement
• If the member was killed in the line of duty, the
  benefit is 100 of the deceased members average
  monthly benefit compensation
• Surviving spouse of a retired member
• Married for at least 2 years at time of death
• Benefit is 80 of retired members pension at time
  of death

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GUARDIAN/CHILD BENEFITS

• Non-retired member
• Guardian Same as the spouses pension. Payable
  only during periods no spouse is being paid and
  there is at least one eligible child.
• Child One-tenth of pension deceased active
  member would have been paid for accidental
  disability retirement (equal shares of two-tenths
  if more than two children) Eligible child must be
  unmarried, a dependent of the surviving spouse or
  guardian and either under the age of 18 or
  full-time student under the age of 23 or under a
  disability which began before age 23

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DEATH BENEFITS

• Accumulated contributions remaining in the system
  at the date of the members death shall be paid
  to the members refund beneficiary or the
  members contingent refund beneficiary, if the
  primary beneficiary is not surviving at the time
  of death.
• If both the primary and contingent beneficiary
  predecease the member, then any accumulated
  contributions remaining in the system shall be
  paid to the members nearest of kin as determined
  by the local board.

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DROP

• A member with 20 or more years of credited
  service
• The member must voluntarily and irrevocably elect
  to enter into the program with his employer for a
  period of up to 60 months
• Payment made at the end of the DROP period at the
  same time/manner as the normal pension

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What is the difference between DROP Retirement?

• The local board would calculate the DROP just
  like a retirement (using a different spreadsheet)
• The accumulated dollar amount will be pre tax,
  and allowed to grow at an assumed earnings rate,
  currently 8.50, which is compounded monthly for
  a period of five years while the member continues
  to work.
• When the member retires, they begin receiving the
  monthly check for life as well as a lump sum of
  the accumulated DROP account.
• The advantage is a lump sum of money up front.
  The member will receive a smaller monthly amount
  for life than if they had included the reverse
  DROP period (5 years) in their pension.

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REVERSE DROP

• Any member who is eligible for a normal pension
  (20 years credited service and one month) and
  who is not in DROP
• Interest rate of 3.5 annually
• Member must voluntarily and irrevocably elect to
  terminate employment and receive a normal
  retirement upon participation

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What is Reverse DROP?

• Its just another payment option for the member
  to consider.
• When electing any of the reverse DROP options the
  member will be choosing an option that will pay
  LESS money in the long run.
• The advantage is a lump sum of money up front.
  The member will receive a smaller monthly amount
  for life than if they had stayed an additional 5
  years and retired.

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How do you determine the high 3 years?

• Use a period of 3 consecutive years within the
  last twenty completed years of credited service
  which yield the highest average
• A period of nonpaid or partially paid industrial
  leave or qualified military service leave under
  USERRA shall be considered based on compensation
  the employee would have received in the
  employees job classification if the employee was
  not on industrial or qualified military service
  leave.
• Remember to record prior service on the Form 11
• Remember to record any leave without pay and
  industrial in members record on the Form 11
• Note The Benefits staff will review the salary
  reported by the local board and check it against
  the members contributions paid into the system
  for the dates submitted, however if it looks like
  there are higher contributions paid into the
  system that are not in the high 3-year
  calculation as submitted by the local board, the
  Benefits staff will ask for a second review of
  the salary by the local board.

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WHAT IS COMPENSATION?

• Compensation means, for the purpose of computing
  retirement benefits, base salary, overtime pay,
  shift differential pay and holiday pay paid to an
  employee by the employer on a regular monthly,
  semi-monthly, or biweekly payroll basis and
  longevity pay paid to an employee at least every
  6 months for which contributions are made to the
  system pursuant to 38-843, subsection D.
  Compensation does not include, for the purpose of
  computing retirement benefits, payment for unused
  sick leave, payment in lieu of vacation, payment
  for compensatory time or any other fringe
  benefits. (A.R.S. 38-842)
• For the purposes of this paragraph, base salary
  means the amount of compensation each employee is
  regularly paid for personal services rendered to
  an employer before the addition of any extra
  monies, including overtime pay, shift
  differential pay, holiday pay, longevity pay
  fringe benefit pay and similar extra payments.

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DEADLINES FOR RETIREMENT PAPERWORK

• Submit retirement paperwork for all benefits by
  the 10th of each month
• Ensure paperwork is filled out correctly and
  completely
• Fill in the final contribution amount (estimate
  if needed) on the Form 11
• Check for all signatures by the member and local
  board/employer
• Include all supporting documents to include
  medical documentation for children listed as
  disabled and full-time school enrollment for
  eligible children 18-22
• Tax forms need to be marked correctly (Note
  Accidental, Temporary, and Catastrophic
  disability benefits under 20 years of service are
  not included as taxable income).
• Copy of minutes need to be submitted with all
  disability applications
• Certified copy of the divorce decree papers with
  raised seal (if applicable) (it may delay
  payment)
• Note Please make sure you are using most
  current forms dated September 2008.
• The date is shown in the upper right
  hand corner of the forms 9/08.

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SUGGESTIONS

• Submit estimates (FORM 11) for review before the
  member signs paperwork
• Print out the statutes and retirement instruction
  manual from the website for reference
• Encourage all local boards to use the electronic
  spreadsheets to process retirements versus
  manually filling in each individual form

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SPREADSHEETS

• Use for all types of retirements
• Spreadsheets have changed so be sure to download
  the most current version available on website
• DROP and Reverse DROP have its own spreadsheet
  now from the Normal/Survivor
• Just fill in the Input Sheet and the rest of the
  forms are filled in automatically (See handout
  for special instructions)
• Save the file and email to our Benefits Staff to
  review the estimate and upload the retirement
  into our system (Dont forget to mail in the
  original signed forms)
• Bonnie_at_psprs.com
• Tara.Smith_at_psprs.com
• Joann.Lowey_at_psprs.com
• Della_at_psprs.com
• ROrtega_at_psprs.com

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Whats happening?

• Document Scanning
• Bar Codes on forms
• Members Handbook
• IT Project Member/Retiree information on web
• Retiree Newsletter
• DRO Domestic Relations Order (new legislation)
• Fire Fighter Cancer Insurance (includes police
  officer)

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WEBSITE RESOURCESwww.psprs.com

• General
• Statues, Summary of Benefits, FAQs, Legislation
• Members
• Reverse DROP Estimate, Retirement Estimate,
  Common Forms, Preparing for Retirement, Insurance
  Information
• Employers
• Forms, Spreadsheets, Oath of Office
• Slides
• FF Cancer Insurance, Local Board Training
• Learn About
• Taxation of Pension Amounts
• Survivors (Links to resources also on main
  menu)
• Disability Slides

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BENEFITS STAFF

• Bonnie Brown (Manager of Benefit Services)
• Joann Lowey (Team Lead/DROP)
• Tara Davis (Retirements)
• Della Hieb (Retirements)
• Robert Ortega (Retirements)

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