PRERETIREMENT SEMINAR

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PRE-RETIREMENT SEMINAR

• Presented by Dawn Lea
• May 25, 2004

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StanCERA 1937 ACT RETIREMENT

• Minimum Requirements to Retire
• Final Average Salary
• Length of Service
• Retirement Options
• Social Security Modification
• Cost-of-Living Increases
• Example Benefit Calculation
• Health Insurance
• Death Benefit
• Processing your Retirement

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MINIMUM REQUIREMENTS TO RETIRE

• Safety
• All Tiers
• 1. Age 50 with 10 years or
• 2. 20 years of service
• General
• Tiers 1, 2, 4 5
• 1. Age 50 with 10 years or
• 2. 30 years of service
• Tier 3
• 1. Age 55 with 10 years

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BENEFIT CALCULATIONFACTORS

• Age
• Years of Service
• Final Average Salary

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BENEFIT CALCULATION (cont)

• Age
• Age factor increases by quarter year increments
• Must complete quarter year to receive credit for
  that quarter
• Substantially lower retirement at early ages
• e.g. Age 50 (Age 40 for Safety)
• Maximum age benefits
• Tiers 1,4 5 at age 62 Tier 2 at age
  65
• Safety at age 50

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BENEFIT CALCULATION (cont)

• Years of Service
• Extended to the nearest day
• Rounded to the nearest ten thousandth of a year
• Buy backs
• you may have lost time for the following
  reasons that you may or may not be able to
  purchase back

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BENEFIT CALCULATION (cont)

• Can purchase
• SDI
• Workers Comp
• Leave of Absence
• (due to illness)
• Family Medical Leave Act

• Can not purchase
• DOC time
• Percentage time
• Personal Service
  Contract
• Leave of absence for education

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BENEFIT CALCULATION (cont)

• You can buy back time to help increase your years
  of service with the following
• Part time service
• Intermittent part time service
• Prior full time service
• Military time (Tiers 1 4 only)
• Other public service (Tiers 1 4 only)

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BENEFIT CALCULATION (cont)

• Final Average Salary
• Tier 1,4 5 - Highest consecutive 12 months
  (2,080 hours)
• Tier 2 3 - Highest consecutive 36 months (6,240
  hours)

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FINAL AVERAGE SALARY

• Includes
• Regular pay codes (regular, sick, vacation)
• Flexible spending account excess
• Certificate pay
• On call pay
• Bilingual pay
• Shift differential
• Uniform allowance
• Management car allowance
• 30 year pay (Tier 1/ 4 members only)
• Vacation cash out (while an active employee)
• Bonuses
• Note This is not an all inclusive list. Please
  see your payroll clerk to inquire about specific
  pay codes.

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FINAL AVERAGE SALARY

• Does not include
• Overtime
• Reimbursements
• Professional development
• Termination vacation cash-out
• Termination sick cash-out
• Note This is not an all inclusive list. Please
  see your payroll clerk to inquire about specific
  pay codes.

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EXCESS SICK LEAVE (STANISLAUS COUNTY, SUPERIOR
COURT AND STANCOG EMPLOYEES ONLY)

• Unused sick leave accruals above cash out limit
  will be converted to retirement service credit at
  100

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RETIREMENT OPTIONS

• Unmodified
• Provides the highest monthly allowance
• 60 continuance to spouse (except Tier 3)
• 50 continuance to spouse (Tier 3)
• Return of unused contributions to beneficiary
  other than a spouse (member contributions are
  normally depleted within the first two to four
  years of retirement)

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RETIREMENT OPTIONS

• Option 1
• Slightly reduced monthly allowance
• No monthly continuance
• Return of unused contributions to beneficiary
  (member contributions are normally depleted
  within eight to ten years of retirement)

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RETIREMENT OPTIONS

• Option 2
• Actuarially reduced monthly allowance (based on a
  combined life expectancy)
• 100 continuance to ONE beneficiary
• If your beneficiary is anyone other than your
  spouse, and is more than 10 years younger than
  you, the 100 continuance will be reduced to the
  applicable percentage established by IRS
  Temporary Regulation 1.104(a)(9)-6TA-2.(c)

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RETIREMENT OPTIONS

• Option 3
• Actuarially reduced monthly allowance (based on a
  combined life expectancy)
• 50 continuance to ONE beneficiary

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SOCIAL SECURITY MODIFICATION

• Government Code Section 31810
• Increased retirement allowance before age 62
• Reduced retirement allowance at age 62 and after
• Social Security estimate showing expected benefit
  at age 62 is required

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EXAMPLE

• Suppose a member, Stanley, could receive a
  monthly unmodified benefit of 3,322.62 and has
  an estimate showing he would receive 1,000.00
  per month in Social Security benefits at age 62.
• If Stanley chooses the Section 31810
  modification, instead of receiving 3,322.62 per
  month without change, Stanley would submit a
  written estimate from Social Security of benefits
  payable at age 62 and the StanCERA retirement
  allowance would be as follows Before age 62
  Stanley receives from StanCERA 3,997.16 per
  month. At age 62 the StanCERA retirement is
  reduced by 1,000.00 per month. After age 62
  Stanley receives from StanCERA 2,997.16 per
  month. As you can see, Stanley receives more
  that 3,322.62 per month from StanCERA before age
  62 and less than 3,322.62 per month from
  StanCERA at age 62 and after.

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EXAMPLE
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COST-OF-LIVING ADJUSTMENTS

• All Tiers (except Tier 3)
• Effective on April 1st
• Reflected on the May 1st retirement check
• Based on Consumer Price Index for the San
  Francisco Bay area
• Maximum of 3 increase or decrease
• Excess percentages (above or below the 3 max)
  are banked for future use
• Compounded annually
• Can never cause your retirement allowance to be
  less than your original allowance
• Tier 3 - No cost-of-living adjustments

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DEATH BENEFIT AFTER RETIREMENT

• Lump sum payment of 5,000
• Fully funded by the Board of Retirement
• Available to all Tier members (except Tier 3)
  whose last work was in StanCERA
• Tier 3 - No death benefit

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HEALTH INSURANCE ALLOWANCE

• Tier 1,2,4 5 members with 5 or more years of
  service
• Tier 3 members with 10 or more years of service
• 18.50 per each completed year of service in
  StanCERA (2004)
• Maximum benefit is 370.00 per month (2004)
• 20 or more years of service receives maximum
  benefit

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HEALTH INSURANCEALLOWANCE (Cont)

• Buy back of other public service, military, or
  reciprocal time will not be considered when
  calculating years of service for health insurance
  allowance (StanCERA service only)
• Excess sick leave converted to retirement service
  credit will not be considered when calculating
  years of service for health insurance allowance
  (Stanislaus County, Superior Court and StanCOG
  employees only)
• This is not a vested benefit

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PROCESSING YOUR RETIREMENT

• Choosing a date - Critical Factors
• Final Average Salary - Salary raise?
• Length of service
• Age - Increments of 1/4 years
• Cost-of-living (except Tier 3 members)
• Complete application No more than 60 days prior
  to date of retirement.
• Electing Options - Signing Final Paperwork
• Retirement Options
• Unmodified Option 2
• Option 1 Option 3

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PROCESSING YOUR RETIREMENT (Cont)

• Options for Federal and State withholding
• No tax withheld
• Tax tables
• Flat amount withheld
• Out of State - No state withholding
• Health Insurance Enrollment
• RESCO membership
• Direct Deposit - Paid on first federal banking
  day of the month

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StanCERA 1937 ACT RETIREMENT

• Questions ???