Pre-Retirement Workshop: Overview
• L.A. County Employees and Retirees
• Financial Components of Retirement
• Cost of Living Adjustment
• Social Security Integration
• Retirement Eligibility
• Computing Your Retirement Allowance
• Choosing a Retirement Date
• Purchasing Service Credit and Plan Transfer
• Retirement Benefit and Election Form
• Retirement Process
• Retiree Health Care Plans
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Did you know?
Source: May 2011 – All Retired Members & Survivors
•• How
retirees
&&
survivors
are
over
100
years?
Theremany
are 50
retirees
survivors
over
age
100:
- 45 female and 5 male
• There are 2,135 retirees & survivors between age 90 & 100
• Top
What3 are
the with
top 3most
states
with most retirees?
states
retirees:
- California = 45,168
- Arizona = 1,365
- Nevada = 1,359
• 181 members have their primary address outside of the U.S.
- Top
= Philippines
and Canada
• What
are2the
top 2 countries?
•• Oldest
is 10/01/1958
What isretirement
the oldestdate
retirement
date?
• First survivor benefit goes back to 12/22/1950 and she continues to
receive a monthly benefit.
3
Who is in what plan?
Source: 6/30/10 Actuarial Report - Active General Members
Plan E
27,626
Male
9,044
Plan D
51,794
17,284
A, B, C
1,994
Total
Female
18,582
34,510
81,414
4
How old are our retirees?
Source: 6/30/10 Actuarial Report – All Retired Members & Survivors
Under 60
5,534
10.2%
60 - 69
18,820
34.7%
70 - 79
16,862
31.1%
80 - 89
10,696
19.8%
90 - 99
2,227
4.1%
100 plus
57
0.1%
Total
54,196
100.0%
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Income Sources
How Will Your Retirement Picture Look?
How much income do I need?
70% of working income enough?
SSA
Personal
Investments
Deferred
Compensation
LACERA Pension
6
Health Insurance Subsidy
• County subsidy based on Benchmark Plan - - Anthem Blue Cross Indemnity
• County subsidy is subject to change
7
Retirement and Inflation
8
Cost-of-Living Adjustment (COLA)
Plan A
Maximum 3% annual adjustment
Plans B, C, and D
Maximum 2% annual adjustment
Plan E COLA
Maximum 2% based on service earned
after June 4, 2002 (COLA % prorated)
Plan E members may purchase
Elective COLA
CPI & COLA Accumulation
9
Social Security if you are eligible…
• 40 Credits/10 Years
• WEP (Windfall Elimination Provision)
– Implemented in 1986
– Possible reduction – verify with SSA
– Some exemptions apply
• GPO (Government Pension Offset)
– Affects member as spouse, widow, widower
– SS benefit reduced by 2/3 of LACERA benefit
10
Social Security Impact on LACERA Pension
• No impact on LACERA pension
– If you joined the County after 1982
• RELAX!
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Social Security Impact on LACERA Pension
Plan E Offset
Affects those employed by County prior to
1983 and paid into Social Security as County employee
Reduction based on actuarial assumptions
built into plan formula
Retirement Before Age 62:
- Pre-defined Social Security benefit
assumption used in calculation
- No adjustment can be made to LACERA
pension calculation
13
Social Security Impact on LACERA Pension
• Plan E Offset
Retirement at Age 62 or older:
- Actual WEP-reduced Social Security
benefit, or ineligibility, can be used to recalculate
LACERA benefit (more $$$ for you)
- Submit verification from SSA within
6 months of retirement date for
recalculation of LACERA benefit
14
Retirement Eligibility
General Plans A, B, C, and D
Vesting 5 years
•
Age 50 with 10 or more years of County* service credit
•
At any age with 30 years of County* service credit
•
Age 70 regardless of years of service credit
*NOTE: Reciprocal retirement system service credit will help meet the
minimum County service requirements.
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Retirement Eligibility
General Plans E
Vesting 10 years
•
Age 55 with 10 or more years of County* service credit
•
Age 70 regardless of years of service credit
*NOTE: Reciprocal retirement system service credit will help meet the
minimum County service requirements.
16
General Members - Retirement Allowance Calculation
•
Age
•
Years and Months of Service Credit
Age and Service Credit Determine Your Percentage
Percentage x Final Compensation = $ Monthly Check
Plans A, B, C, and D
•
1 year highest compensation – monthly average
Plan E
•
Any 3 years of highest compensation – monthly average
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Final Compensation - Pensionables
Base Salary
Cafeteria Plan Contribution (before 1996)
Other Pensionable Pay Items (visit www.lacera.com)
Buybacks (if available in your department):
6 days sick buyback (non-Megaflex)
20 days excess vacation buyback (non-Megaflex)
10 days excess non-elective leave (Megaflex)
Overtime Pay NOT Pensionable !
Termination Pay NOT Pensionable !
19
Computing Your Retirement Allowance
Pre-retirement Guide Page 26 (A), Page 27 (B), Page 28 (C & D)
for Members with No OASDI
21
Computing Your Retirement Allowance
Pre-retirement guide Page 29 (E) for Members with No OASDI
22
Age at Retirement
Plans A, B, C and D compute age in quarter-year increments up
until the age of:
• 62 – General Plan A
• 65 – General Plans B, C, and D
• Retirement benefit calculation increases each quarter of age
•
(March 15, June 15, September 15, December 15)
What if February, Birthday on the 31st ……….
Plan E computes age in full years:
• Up until the age of 65
• Retirement benefit calculation increases each birthday
25
Purchase Service Credit
Only Contributory Plan members are eligible to purchase
prior government service credit
County Credit
Note: Certain limitations and higher costs for County Credit if you transfer from E to D
Temporary Time
Sick Without Pay (SWOP)
Redeposit of Withdrawn Contributions/Restoration/E to A
Counts for Insurance
Other Public Agency (OPA) Credit
Military/Federal
Other Public Agency (California only)
Counts for Insurance
27
Purchase Service Credit
Additional Retirement Credit (ARC)
• Purchase from 1-5 years
• Open to eligible members of all plans
- Must have 5 years of actual County service
• Not based on actual employment
• ARC time eligible for COLA
Does not count for Insurance
Plan E Only (ARC):
• Cannot be converted to Plan D later
• Cost is higher when you have under 35 years of service
• If you have close to 35 years of service, you may want to wait
until you have 35 years
28
Payment Methods
Lump sum
Monthly payroll deductions
Combination lump sum/monthly payroll deductions
Before-tax payroll deductions (irrevocable but tax benefit)
After-tax payroll deductions (no tax benefit)–may stop
payroll deduction or pay off in lump sum
120 days to complete contract after retirement
Funds from any source (except ROTH IRA), pursuant to Pension
Protection Act of 2006
29
Purchase and Your Retirement Allowance
Pre-retirement Guide Page 26 (A), Page 27 (B), Page 28 (C & D)
for Members with No OASDI
30
Purchase and Your Retirement Allowance
Pre-retirement guide Page 29 (E) for Members with No OASDI
31
Plan Transfers
Traditional/Open Window:
• Plan E to Plan D only
• Must convert all previous Plan E time to D
• Entry age
Prospective:
• Plan E to Plan D
• Age at transfer
- Incremental Buyback – optional conversion to D
• Plan D to Plan E
For All Prospective Plan Transfers:
» Combined Benefit at Retirement
» Retirement Eligibility (Age 50 for D, Age 55 for E)
» 3-year commitment in new plan
Plan E
Plan D
Plan E
32
Online Help
Calculators on www.lacera.com
Retirement Calculator
• Calculate your
retirement allowance
Transfer Calculator
• See how much it
would cost to transfer
to Plan D
ARC Calculator
• Determine the cost of
purchasing Additional
Retirement Credit
(ARC)
33
Brochures & Forms on www.lacera.com
To view, print, or order
printed materials, visit
the Brochures &
Forms page.
Look for these web tips
within our printed
materials to direct you to
web pages online.
34
My LACERA on www.lacera.com
Register to use the new
feature, My LACERA, and
access your personal
retirement information online,
24/7.
Look for the link on the home
page.
New Retirement Calculator
with payment options
now available
New ARC Calculator available
35
You Have Options!
39
The Process of Retiring
Retirement Benefit Estimate and Election Form
43
Guide ― Page 15
What Happens When I Retire?
County payroll will stop
Outgoing final check will be paid by your department
No gap in Health Insurance coverage
Board Letter
Termination date must be posted before
LACERA can pay you
First payment will be a check
Keep LACERA updated on address changes
Maintain at least 2 valid photo ID’s
47
Choice of Health Insurance Plans
Who may enroll?
Spouse, Registered Domestic Partner
Dependent unmarried children
(Submit certified original birth certificates)
- Until 19th birthday or 23rd if full-time student
- Disabled adult children
60 days from retirement date to enroll
Survivor coverage continuation
- “1-year” requirement for Spouse/Domestic partner
- “Payments” required
*The County health insurance subsidy may be subject to change
51
How do I contact LACERA?
By phone - 800-786-6464
In person - 300 N. Lake Avenue, Pasadena, CA
By email - welcome@lacera.com
Online - www.lacera.com
59
Pre-Retirement Workshop
Good luck with
Your Future Retirement!
Thank you
for completing the survey!
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