New Hire Orientation Fresno County Employees’ Retirement Association Location: 1111 H Street Fresno, CA Phone: (559) Fax: (559) Stop Mail: 40 Web Address: Intranet Address: E-services  Department Sites  Retirement Association. 1

Type of Plan Defined Benefit Plan ◦ Lifetime benefit  Defined by the following:  CERL and PEPRA laws adopted by the County  Type of membership  Age at retirement  Years of service  Final compensation Your benefit is not based on contributions made to the plan 2

Membership Membership is mandatory if working 50% or more of full time ◦ If at the time of hire you are 60 years of age or older you will contribute unless you elect to not participate ◦ Membership is optional for elected officials ◦ Once election is made it is IRREVOCABLE 3

Types of Membership SAFETY  Correctional Officers  Criminologists  Deputy Sheriffs  Firefighters  Chief of Investigations  District Attorney Investigators  Sheriff GENERAL  Anyone who is not a Safety Member 4

Tier Levels of Membership Your tier level is determined by laws in place at the time of employment into a position subject to membership Each type of membership offers its own tier levels ◦ Safety  Offers Tier Levels: I, II, IV, and V ◦ General  Offers Tier Levels I, II, III, IV, and V 5

What is Reciprocity? Reciprocity is the linking of two or more California Public Retirement Systems ◦ Eligible Agencies Include:  Public Employees Retirement System (PERS)  20 County Retirement Systems in California governed by the County Employees Retirement Law of 1937  State Teachers Retirement System (STRS)  Judges Retirement System  Other California Public agencies with a contracted agreement with PERS (Example: City of Fresno) 6

Steps to Establish Reciprocity 1. Terminate your employment with the reciprocal agency 2. Leave your contributions on deposit with the reciprocal agency 3. Establish membership with FCERA within 6 months of your termination from reciprocal agency 4. Notify FCERA that you wish to establish reciprocity Reciprocity is available upon becoming a member of FCERA as well as when you are leaving and going to a reciprocal agency 7

Benefits of Reciprocity All Tier Levels ◦ Members who establish reciprocity after having worked for the reciprocal agency on or prior to 12/31/2012 will be placed into Tier IV ◦ Your service credit from other reciprocal agencies will be added to service credit from FCERA to determine eligibility for benefits under all systems for purposes of vesting ◦ Your highest final compensation average from either FCERA or the reciprocal agency is used to determine your benefit from both agencies In order to receive these benefits you must retire concurrently from all systems 8

Benefits of Reciprocity Tiers I, II, III and IV ◦ FCERA will use your entry age from the reciprocal agency to determine your contribution rate Tier V ◦ Members may be placed into Tier IV Reciprocity is designed to protect your earned retirement benefits when you transfer from one California public agency to another. It is intended to encourage a career in public service. 9

Consequences of Breaking Reciprocity Years of eligibility service for retirement may be impacted Entry age for contributions may change if enrolled in a plan that has age based contributions ◦ Tiers I, II, III, and IV  Age at which contributions are calculated may be impacted requiring a payment of under paid contributions prior to retirement 10

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Smith John

Smith John H. Street Fresno CA

11/01/2005 Retirement Coordinator Retirement Association Smith John H. Street Fresno CA

11/01/2005 Retirement Association Retirement Coordinator Smith John H. Street Fresno CA

11/01/2005 Retirement Association Retirement Coordinator Smith John H. Street Fresno CA

11/01/2005 Retirement Association Retirement Coordinator Smith John H. Street Fresno CA

11/01/2005 Retirement Association Retirement Coordinator Smith John H. Street Fresno CA

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Smith Mary 21

Smith Mary 22

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IRC 415 Notice IRS code that limits the amount of benefits a Public Retirement Plan may pay an individual in one year. For 2015 the limits are: For Safety members between the ages of the maximum annual limit is $210,000 For General members between the ages of the maximum annual limit is $210,000 25

PEPRA Limits Tier V Members ◦ Pensionable Compensation Limits for contributions are set for this tier annually and are based on the Consumer Price Index ◦ The amounts for 2015 are:  $117,020 annually if integrated with Social Security  $140, 424 if not integrated with Social Security ◦ Once limits are met, no contributions will be withheld for the remainder of the payroll year 26

Tier Level I Final Compensation used in retirement calculation: ◦ Highest 1 year Final Average Compensation  General  2.5% at age 55 (GCS ) and a maximum of % at age 60  Safety  2.5% at age 50 (GCS ) and a maximum of % at age 60 Annual Cost of Living Adjustment (COLA) ◦ April 1 st of each calendar year up to a maximum of 3% Contributions are deducted from your bi-weekly salary based on your current compensation earnable and the age you enter the retirement system. Your contributions will change based on salary changes or actuarial valuations, which may cause contribution rate changes. Your age for contribution calculations does not change as long as you are continuously employed with the County of Fresno or reciprocal agency. 27

Tier I Benefit Example 28

Tier Level II Final Compensation used in retirement calculation: ◦ Highest 1 year Final Average Compensation  General  offers 2.0% at age 55 (GCS ) and a maximum of % at age 63  Safety  offers % at age 50 (GCS ) and a maximum of 3.0% at age 55 Annual Cost of Living Adjustment (COLA) ◦ April 1 st of each calendar year up to a maximum of 3% Contributions are deducted from your bi-weekly salary based on your current compensation earnable and the age you enter the retirement system. Your contributions will change based on salary changes or actuarial valuations, which may cause contribution rate changes. Your age for contribution calculations does not change as long as you are continuously employed with the County of Fresno, or reciprocal agency. 29

Tier II Benefit Example 30

Tier Level III Final Compensation used in retirement calculation: ◦ Highest Individual 3 year Final Average Compensation  General  2.0% at age 55 (GCS ) and a maximum of % at age 65  Safety  Not offered Annual Cost of Living Adjustment (COLA) ◦ April 1 st of each calendar year up to a maximum of 3% Contributions are deducted from your bi-weekly salary based on your current compensation earnable and the age you enter the retirement system. Your contributions will change based on salary changes or actuarial valuations, which may cause contribution rate changes. Your age for contribution calculations does not change as long as you are continuously employed with the County of Fresno or reciprocal agency. 31

Tier III Benefit Example 32

Tier Level IV Final Compensation used in retirement calculation: ◦ Highest Individual 3 year Final Average Compensation  General  1.67% at age 57.5 (GCS ) and a maximum of 2.43% at age 65  Safety  2.0% at age 55 (GCS 31664) and a maximum of 2.62% at age 55 No Annual Cost of Living Adjustment (COLA) Contributions are deducted from your bi-weekly salary based on your current compensation earnable and the age you enter the retirement system. Your contributions will change based on salary changes or actuarial valuations, which may cause contribution rate changes. Your age for contribution calculations does not change as long as you are continuously employed with the County of Fresno or reciprocal agency. 33

Tier IV Benefit Example 34

Tier Level V Final Average Compensation used in retirement calculation: ◦ Consecutive 3 year Final Average Compensation  General  offers 2.0% at age 62 (GCS ) maximum of 2.5% at age 67  Safety  offers 2.5% at age 55 (GCS (d)) maximum of 2.7% at age 57 No Annual Cost of Living (COLA) Contributions are deducted from your bi-weekly salary based on your current compensation earnable and the limit established for that payroll year. Your contributions will change based on salary changes or actuarial valuations, which may cause contribution rate changes. 35

Tier V Benefit Example 36

Benefit Calculator FCERA’s web site has a benefit calculator accessible by: ◦ Internet at: ◦ Intranet at: E-services  Department Sites  Retirement Association By entering the required information you can receive an estimated retirement benefit at any time during or after your career with Fresno County. The four pieces of required information include:  Your Tier  Your age at retirement  Years of service  Monthly salary 37

Contributions Contributions are: ◦ Deducted the 1 st day of the pay period following your date of hire ◦ Tax deferred ◦ Credited with interest twice annually on June 30 th and December 31 st ◦ Also made by your employer, you are only eligible to receive employer contributions as part of your lifetime benefit at retirement ◦ Subject to change annually Contribution rates are provided each year by FCERA 38

Purchase of Fresno County Service Service credit that may be purchased: ◦ Extra help – service prior to membership ◦ Part time service - less than 50% of full time ◦ New hire period - period between hire date and FCERA membership ◦ Unpaid medical leave - maximum one year of each leave ◦ Unpaid military leave - all time served while a County employee ◦ Redeposit previously withdrawn contributions - prior to retirement. If you return to membership with a FCERA plan sponsor within 90 days and redeposit withdrawn contributions within 180 days of your termination date with a FCERA plan sponsor will retain your original age. 39

Purchasing Service Credit You must complete a Request for Service Credit Calculation form Purchases in progress at termination will have a limited window to be paid in full. Members whose funds remain in the plan after termination can purchase available service prior to retirement 40

Disability Retirement You must be permanently incapacitated from performing the duties of your job ◦ 2 types of Disability  Service Connected Disability  No minimum service required for eligibility  Injured on the job  Non-Service Connected Disability  Minimum of 5 completed years of service  Not injured on the job 41

Death Benefits Before Retirement A death benefit is payable to your beneficiary upon your death as an active member before retirement The basic death benefit consists of: If you have completed at least 5 years of service, your surviving spouse or dependent children may elect to receive, in lieu of the basic death benefits, a continuing benefit Deferred members – receive lump sum of member’s contributions plus associated interest Your accumulated contributions Interest + + Last 12 months of pensionable pay x One month for every year of service (not to exceed 6 months pay) ( ) 42

Required Documents for Retirement Birth Certificate(s) ◦ Member ◦ Beneficiary Marriage or Domestic Partner Certificate(s) ◦ California is a community property state therefore your legal spouse is your beneficiary at death. Minor child – beneficiary after spouse Court Filed Divorce Documents ◦ Status only judgments are not acceptable To change your beneficiary for any reason, you must complete a FCERA Beneficiary Designation Form and provide necessary documents for the new beneficiary FCERA and Employee Benefits do not share information. You must provide any changes to both departments. 43

Retirement Qualifications You are eligible for service retirement benefits if:  You terminate your employment  You leave your contributions and interest with the retirement plan Tiers I, II, III, and IV  Have completed at least 10 years of service and are age 50+  You are a General Member with 30 years of service credit regardless of age  You are age 70 regardless of years of service credit  You are a Safety Member with 20 years of service credit regardless of age Tier V ◦ Have completed at least 5 years of service  General: minimum retirement age is 52  Safety: minimum retirement age is 50 44

Deferred Member To be eligible to defer your retirement benefits to a later date, you must have at least 5 years of service Tiers I, II, III, and IV ◦ If you do not have 5 years of service, you may leave your funds with FCERA in an interest bearing account until you are ready to withdraw your funds. ◦ At age 70 members are eligible to begin receiving a retirement benefit Tier V ◦ You must have 5 years of service to retire at a later date 45

Withdrawal of Contributions You may not borrow against your contributions for any reason. As long as you are employed with Fresno County or with a reciprocal agency (if reciprocity has been established), including extra help, you cannot withdraw any of your contributions. If you terminate employment, you need to file a Disposition of Member Retirement Contributions form with our office, indicating your election for the disposition of your funds 46

Withdrawal of Contributions If you elect to withdraw your funds at separation you will only receive your contributions and the interest associated with them You will not receive the contributions made by Fresno County on your behalf The employer contribution portion is only payable if you stay long enough to draw a monthly retirement benefit 47

Tax Implications If you choose to withdraw your contributions, when you terminate your employment, there will be a MANDATORY 20% Federal Tax withholding taken from your total..There may also be a penalty due when you file your tax returns. Speak with your tax professional before making your election. If you Roll Over your contributions to another tax deferred account, there will not be a 20% withholding 48

Any Questions? 49