Public Employees Retirement Association of Minnesota Serving Minnesota’s Public Employees for Over 85 Years

Statistical Data 2,100 Employers

Statistical Data General P&F Correctional Active Members 145,650 11,157 3,692 Vested Deferred Members* 51,605 1,560 2,620 Benefit Recipients 90,592 10,209 864 Total 287,847 22,926 7,176 Grand Total 317,949 * Includes approximately 5,000 members now in other PERA plans, including most Correctional members. PERA also administers a Defined Contribution Plan with approximately 7,000 members. Source: 7-1-2015 Financial Report

Traditional Pension Plan Types of Retirement Plans Traditional Pension Plan (Defined Benefit Plan) Individual Account Plan (Defined Contribution Plan)

DC Plans: Your Individual Investments What’s the bottom line?

DB Plans: What’s defined is the benefit What’s the bottom line?

Contributions Coordinated Correctional Police & Fire Ee: 6.50% Ee: 5.83% Ee: 10.8% Er: 7.50% Er: 8.75% Er: 16.2% + + Social Security Medicare (If hired after 3/31/86) Ee: 7.45% Ee: 1.45% Er: 7.65% Er: 1.45%

SBI Investment Returns FY 2016 ---------------------- SBI – Diversified for the Long Term Alternative Assets 20% SBI Investment Returns FY 2016 ---------------------- Domestic Stocks 0.0% International Stocks -9.7% Bonds 5.9% Alternative Investments .2% ----------------------------------------- Total Combined Funds -0.1% Cash 2% Bonds 18% International Stocks 15% Domestic Stocks 45% * Source: 2016 Annual Financial Report * Source: 2013 Annual Financial Report

Revenues (1996-2015) 19¢ Employers 15.3¢ Employees 65.7¢ Investment Earnings * Revenue last 20 years for 3 statewide plans (Source: Annual Financial Reports)

Expenses (1996-2015) 95.8¢ Benefits 3.1¢ Refunds 1.1¢ Admin.

What’s the payback? 2-3 years 5-7 years Remainder of your life All your contributions + all your employer’s contributions 5-7 years Paid by PERA investments Remainder of your life All your contributions

Life Expectancy (Current PERA Tables) Present Life Expectancy Age Males Females 50 82.2 84.5 51 82.4 84.6 52 82.5 84.7 53 82.6 84.7 54 82.8 84.8 55 82.9 84.9 56 83.0 85.0 57 83.1 85.1 58 83.2 85.2 59 83.4 85.3 60 83.5 85.5 61 83.6 85.6 62 83.7 85.7 63 83.9 85.9 64 84.0 86.0 Present Life Expectancy Age Males Females 65 84.2 86.2 66 84.4 86.4 67 84.6 86.6 68 84.8 86.8 69 85.0 87.0 70 85.3 87.2 71 85.5 87.5 72 85.8 87.7 73 86.0 88.0 74 86.3 88.3 75 86.6 88.6

Your pension is built on a formula using: Building Your Pension Your pension is built on a formula using: Age at Retirement Years of Service High-5 Average Salary

Combined Service Service in your PERA plan can be combined with service under 14 other MN plans Pension from PERA Pension from other retirement plan Both benefits based on high-5 salary (no matter when credit earned)

Benefit Options % of Single-life Member (63) Survivor (61) 25% 97% $1,047 $262 50% 94% $1,014 $507 75% 92% $ 993 $745 100% 89% $ 960 $960 * If other than spouse, survivor may not be more than 10 years younger for the 100% or 19 years younger for the 75% option

Decisions . . . Decisions Can I get a do-over?

What if you leave public service before retirement? Your Options What if you leave public service before retirement?

Take the $ and run! Refunds Contributions + 4% Interest - 20% Federal Withholding - 10% Federal Penalty (until age 59½ if leave before 55) Refund

Refunds Rollover Direct Rollover We do it No Withholding You do it 20% Federal Withholding Direct Rollover We do it No Withholding No Penalty

Deferred Pension If vested, you qualify for a pension any time after age 55 The longer you defer, the larger the monthly benefit until full retirement age You may not defer past age 70½

Repaying a Refund * Total Repayment (Lump sum) Partial Repayment Must return to public service minimum 6 mos. Refund + interest Partial Repayment Must be active public employee Refund must cover at least 2 yrs. service Repayment must be at least 1/3 of refund you received (Total refund + interest) x Service wish restored Total service lost * You may roll over tax-deferred investments, like deferred comp., to repay a refund

Other Benefits Disability Survivor

Disability Benefits (Qualification) Coordinated Total and Permanent (At least one year) P&F and Correctional Unable to perform duties of your position Common to All Plans Active public employee when disabled (Must apply w/in 18 months of leaving) May not be collecting a retirement benefit Less than age 65 (Age 55 for P&F & Correctional) Must supply medical evidence of disability

Survivor Benefits (Coordinated/Correctional) Must be vested for a future benefit 100% option pension Term-certain spouse benefits - 10 years - 15 years - 20 years If no spouse, term-certain benefits for dependent children Refund of member deductions plus interest

Benefits: Survivor Benefits (P&F) 50% of base pay of last six months for spouse and 10% for each child (60% if death result of hazardous duty) or 100% option pension payable to spouse if member reaches age 50 with 3 or more years of service or any age with 30 years of service or Refund of member deductions plus interest (Maximum monthly family benefit is 70% of base pay / 80% if result of hazardous duty /Minimum benefit 50% & 60%)

Pension Increases? Benefits will increase by 1% every January until plans are 90% funded for 2 years, and then at 2.5%

Retirement effective first of month following termination Applying for Retirement Termination Verification Sent to member before retirement Filled out by employer Know Your Pension Options Review pension estimates Make sure all your questions are answered Apply for Retirement Choose option Signed by member & spouse Required Documents Proof of age* Proof of name change* * If choosing survivor option, PERA needs same info. for survivor Retirement effective first of month following termination

Requirements You Must Really Retire! Resignation or dismissal Not just a leave of absence No prior agreement, written or verbal, to be rehired in any capacity 30 day break in service This includes work as an independent contractor or consultant Does not apply to elected service

Member Information, Marital Information, and Direct Deposit

Benefit Selection & Notarized Signatures

Federal & State Tax Withholding

Termination Verification Form

Birth and Marriage Documents / Passport

Earnings Limit Timeline (2017)* Earnings limits only apply if you return to PERA-covered employment Earnings Limit Timeline (2017)* Jan. 1 year you reach full S.S. Month you reach full retirement age S.S. retirement age Annual Limit $16,920 $44,880 No limit Reduction* $1 for every $2 over or suspension of benefit * Reduction placed in escrow. Available one year after leaving job. If work extends past end of year, available one year later.

Most, if not all, of your PERA pension is taxable income Taxes Most, if not all, of your PERA pension is taxable income If you were hired after Dec. 31, 1982, your entire benefit is taxable If you were a member prior to 1983, you will receive your after-tax contributions back over your estimated lifetime, or the estimated lifetime of both you and your survivor

PERA Office Retirement Systems of Minnesota Building 60 Empire Drive St. Paul, Minnesota

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And now a word from our attorneys . . . This presentation is intended to provide general information; the rights and obligations of PERA members are governed by state and federal laws, rules and regulations. The Minnesota Legislature or the federal government may change the statutes, rules and regulations governing PERA at any time. If there is a discrepancy between the law governing PERA and the information contained in this presentation, the statutes and regulations shall govern.