Westmoreland County Employee Retirement Fund Presentation prepared by Jeffrey Balzer, County Controller

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Westmoreland County Employee Retirement Fund

Plan Authority “County Pension Law” Act 96 of 1971 DISCLAIMER This presentation is designed to provide a summarization of information concerning your Retirement Plan, however Act 96 is the governing plan authority.

Retirement Board

Supporting Parties Investment Managers –C.S. Mckee LP –Corry Capital –Grosvenor Capital Management –Metropolitan West Asset Management –Victory Gradison –Emerald Advisors –SIT Investment –Fusion Investment –Twin Capital –Stewart Capital –Wellington Management –ABS Investment Management –Passive: Vanguard S&P 500 Index Janus Global Research Fund Investment Consultant –Gallagher Fiduciary Advisors Actuary –Hay Group Custodian –PNC Advisors Auditor –Zelenkofske Axelrod, LLC

Membership All appointed county employees-FT Elected officers (optional) Part-time--hired with the expectation of working 1,000 hours of service during the 12-month period after employment and each 12-month period thereafter

Member Contributions 9% required for most employees –Not subject to federal income taxes in the year of contribution Voluntary contributions –Up to an additional 10% –Made with after-tax dollars

Interest Credit The law permits interest credit in the range of 4-5 1/2 percent per annum. Your member contributions are currently credited at the end of each year with interest of 5 1/2 per cent per annum. (The maximum permitted by law.)

County Contributions County contributes amounts which are actuarially determined to provide adequate resources for the payment of current and future benefits –Tax dollars –Excess interest reserves

Investments Pension board acting as fiduciaries invests your money with the aid of financial experts

Normal Retirement You are eligible if you are: –60 years of age or older regardless of your credited service –55 years of age with 20 years credited service

Early Retirement Voluntary –20 years of service and not yet reached age 55 –Termination voluntary Involuntary –8 years credited service –Termination is not voluntary –Elected official after 8 years of service

Disability Retirement Totally and permanently disabled Have 5 years of credited service Not eligible for a normal retirement Board requires independent medical evaluation or Social Security Disability Determination. Disability retirement will be 25% of your “final salary”

“FINAL SALARY” Final salary is the average of the highest three years of compensation earned as a county employee.

Death Benefit Death in active service –After age 60 or –After 10 years credited service A lump sum will be paid to your beneficiaries –Lump-sum –Life-time pension (if this option is chosen during deceased employees lifetime)

Vesting County employees are vested after completing 5 years of county service Gives you the right to receive a pension at normal retirement age If you break service prior to vesting your accumulated deductions will be returned to you. If after vesting, you die before being eligible for a deferred pension, the full amount of your accumulated deductions will be paid to your estate or designated beneficiary. Interest continues to accrue.

Refunds You may receive a refund of your accumulated deductions only when you leave county service –Refunds may be “rolled over” to an IRA. –Taken with 10% IRS penalty imposed. –No provision for partial disbursement.

Calculation of Normal Pension  Total retirement is comprised of two parts: Member’s pension County pension

Member’s Pension The equivalent actuarial value of your accumulated deductions credited to your member reserve account

County Pension Formula Class of Service times Final Salary times Years Credited Service

Example-County Share 1/60 Class = Final salary = $ 20, years credited service Annual county pension = $ Monthly county pension = $

Retirement Options –Before making any decisions regarding your selection of a retirement option you are encouraged to seek the counsel of your financial advisor(s). –The Controller’s Office staff is prohibited from rendering advice on your selection of a retirement option!

Retirement Options “NO OPTION” – – Full Monthly Pension as long as you live. – If total pension received to date of your death is less than accumulated deductions at the time of retirement, the balance will be paid to your designated beneficiary(s). –Annual Benefit Statement uses this option –May name as many beneficiaries and/or change them as often as you want.

Retirement Options “ OPTION ONE ” – – Lesser amount than “No Option”. ). –Guarantee that if total pension received to the date of your death is less than the present value of your pension (member and County shares) at the time of retirement, the balance will be payable to your designated beneficiary (s ). –May name as many beneficiaries and/or change them as often as you want.

Retirement Options “ OPTION TWO ” –100% joint-life pension. –Based on your age and the ages of your designated joint-life beneficiary and is payable as long as either lives. –If your joint-life beneficiary survives you, the same basic monthly pension paid to you will continue for the balance of their life. –If your designated joint-life beneficiary predeceases you, you will continue to receive a monthly pension until your death at which time all monthly payments stop. –If total pension received( by you & your joint-life beneficiary) is less than the accumulated deductions lump-sum paid to your contingent beneficiaries.

Retirement Options “ OPTION THREE ” –50% joint-life pension. –Based on your age and the ages of your designated joint-life beneficiary and is payable as long as either lives. –If your joint-life beneficiary survives you, 50% of the same basic monthly pension paid to you will continue for the balance of their life. –If your designated joint-life beneficiary predeceases you, you will continue to receive a monthly pension until your death at which time all monthly payments stop. –If total pension received(by you & your joint-life beneficiary) is less than the accumulated deductions lump-sum paid to your contingent beneficiaries.

Retirement Options “ OPTION FOUR ” – – May withdraw an amount equal to the accumulated deductions as lump-sum at the time of retirement. –Receive county share in form of monthly pension. –Pension subject to rules similar to No option thru 3. –If you are not age 55 at the time of retirement you may rollover to qualified plan.rollover to qualified plan. Lump-sum distribution with 10% IRS penalty imposed.Lump-sum distribution with 10% IRS penalty imposed.

Pension Payments Pensions are payable at the end of each month.

SOCIAL SECURITY CARVEOUT NONE Unlike many private sector plans!

BENEFICIARIES (Primary/Contingent) Beneficiaries are designated in order to instruct plan administrators to whom the refund of your accumulated deductions or death benefit will be paid upon your death. Differs from “Joint-Life Beneficiary” May designate one or more. Must have an “insurable interest” in your life. You may name your “estate” as beneficiary. Need periodic review for changes due to: –marital status, death, birth

Cost of Living Adjustments COLA’s must be considered at least once every three years. COLA’s only paid to members. They do not continue to a surviving beneficiary.

Military Service Intervening –member with six months of service inducted or enlists in military during time of declared war,armed conflict or national emergency is entitled to service credit and the county will make the member contributions at the minimum rate based on the salary at the time of entry into ACTIVE service.

Military Service Non-Intervening –Member with 3 or more years of service may purchase and receive credit for not more than 5 years of military served prior to employment by the county.

Sources of Information Summary Plan Description. Annual Statements Quarterly Pension Board Meetings. Controller’s Office –Lisa Szczerba (Ext. 3131) –Mary Jo Nardizzi (Ext. 3132) County Website –