Pre-Retirement Seminar Last updated 9/16/2018

Employees’ Retirement Fund ERF is a Defined Benefit Plan Retirement/Pension Disability Death A defined benefit plan for permanent employees’ of the City of Dallas

Pension Contributions Employee Contribution 13.32% City Contribution 22.68% On your pay stub you may have noticed ERF/PEN that is your 13.32% contribution it comes out of your paycheck every time you get paid (pre-taxed dollars) The City contributes 22.68% to the Pension Fund every pay period for each employee

Earning a Pension Benefit Vested After 5 Years Credited Pension Service Ways to Retire Normal Retirement Age 60 Service Retirement 30 Years of Service Rule of 78 Vesting - You’ve earned a benefit once you have contributed to the Fund for five years - At age 65 you are eligible for retirement benefits - If you leave city service you must leave your contributions in the Fund to get this benefit at retirement age. Pension Formula is 2.50% x Credited Pension Service x Average Monthly Income Credited Pension Service Credit – You earn service credit for any period that you are a permanent employee paid by the City and you made contributions to the Fund. There are some instances that may temporarily suspend you from earning service credit like: Leave without pay Out of work and being paid by Workers Compensation (Excluding Injury time) For accrued pension estimates and actual retirements: the Fund will use your three highest paid years to determine your average income to calculate your monthly pension benefit

CALCULATING YOUR BENEFIT Your retirement is based on three factors: Credited Pension Service Pension Multiplier (2.75%) Monthly salary for 3 Highest Paid Years Normal Retirement – Age 65 (Five Year Minimum Service Required) Service retirement – You may receive retirement benefits when you have 40 years of service credit. If you are under age 65 when you retire, your monthly benefit will not be reduced. Rule of 80 – you may retire at or after age 65 if your age and years of service credit added together total at least 80. You can retire before age 65, but your benefit will be reduced. Give examples of the reduction Say we calculate your benefit to be $2,750 a month, you have 16 years of service and you are 64 years old. Your pension would be reduced 10.3% which would bring it to $2,467 Reduction amounts: Age 63 = 19.3% Age 62 = 27.4% Age 61 = 34.5% See page 4 of the Member Guide to see examples of how we calculate your benefit.

Pre-Retirement Seminar Last updated 9/16/2018 Rule of 78 Retirement Steps to Calculate Benefit – Page 4 Step 1. Calculating Final Average Pay Three Highest Paid Years vs. Last 36 Months Three Highest Paid Last 36 Months $32,000 2011 $22,800 $33,000 2012 $33,000 $35,000 2013 $35,000 Total $100,000 2014 $5,600 Vac LS $4,200 Total $100,600 Final Average Pay = $100,600/36 months = $2,794.44 The monthly pension does not include your monthly health benefit supplement of $125 This estimate reflects 63% of your annual pay City employees have the rare opportunity of earning a pension up to 100% of their avg. income however you must work for the City for 36.4 years.

Calculating Your Benefit, rule of 78 Step 2. Benefit Percentage Multiple Years of Service by 2.75% 2.75% x 26.4 years = 72.6% Step 3. Monthly Retirement Benefit Multiply Average Monthly Pay by Benefit Percentage – 72.6% $2,794.44 x 72.6% = $2,028.76 + $ 125 $2,153.76

Health Benefit Supplement Pre-Retirement Seminar Last updated 9/16/2018 Health Benefit Supplement Provided to help you manage cost of healthcare after retirement $25 a month for each full year of service credit up to $125 each month The Health Benefit Supplement is provided by the Fund to retiree’s to help manage the costs of health care after you retire You receive $25 per month for each full year of service credit, up to $125 a month

Cost of Living Adjustment Pre-Retirement Seminar Last updated 9/16/2018 Cost of Living Adjustment COLA Adjustments made annually on January 1st Adjustments are prorated for all new retirees Added to your base pension COLA’s for last three years 2018 – 2.053% 2017 – 1.446% 2016 – 0% Each January 1, retirees benefit amount may be adjusted up to 5% to account for changes in the cost of living the previous year. (2007 COLA was 3.475% 2006 COLA was 4.665% 2005 COLA was 3.445% 2004 1.89% in 2003 it was 3.08%) For those retiring in any part of the year the COLA is prorated. It appears in the January check. Keep in mind the COLA is added to your base benefit (If necessary mention) A cost-of-living adjustment to the base pension shall be made based on the greater of: The percentage of change in the price index for October of the current year over October of the previous year up to 5%, or The percentage of annual average change in the price index for the 12 month period ending with the effective date of the adjustment, up to 5%.

example: cola Calculation Pre-Retirement Seminar Last updated 9/16/2018 example: cola Calculation COLA Julia retired in 2005 with a monthly pension benefit of $2,968 Her current pension is $3,209… Her base pension is $2,968 2018 COLA Calculation Base Pension x COLA Percentage $2,968 x 2.053% = $60.93 + $3,209 (Current Pension) = $3,269.93 + $125 (Health Benefit Supplement) = $3,394.93 2006 COLA Calculation – 4.665% Base Pension $2,968 x COLA 4.665% = $138 2006 Pension - $2,968 + $138 = $3,106 2007 COLA Calculation – 3.475% Base Pension $2,968 x COLA 3.475 % = $103 2007 Pension - $3,106 + $103 = $3,209

Reduction In Force Eligible to retire if within 2 years of eligibility Member can Buy Forward Member will receive benefits at eligibility date

What If You Leave the City? You will have three options: Refund of your contributions Rollover your contributions into another qualified retirement plan; e.g., IRA, 401K, etc. Leave your contributions in the Fund, if Vested Refund - When you terminate, you can request a refund of your contributions from the Fund. If you take a refund, and you are vested you will no longer be entitled to retirement benefits. If you are not vested you must take a refund or a rollover. If you do take a refund of your contributions keep in mind the Fund will deduct 20% up front for tax purposes and at the end of the year the Fund will send you a 1099 that you will be required to fill with your income taxes this could result in another 10% tax penalty. Rollover – In lieu of a refund you also have the option to rollover into a qualified plan of your contributions If You’re Vested - You can leave your contributions in the Fund until you reach age 60 you are then entitled to receive a monthly pension check for the rest of your life. If you do not have at least five years of service credit, you must request a refund. ERF refund are not generated with your final City payroll check. You must apply in the ERF office or complete a refund application online, print it off, get it notarized and return in person or by mail to the Fund office.* If you are not vested and leave the City, your pension contributions will be forfeited after three years if they are not either refunded or rolled over into another qualified plan

Pre-Retirement Seminar Last updated 9/16/2018 WHAT If You Are Rehired? You will have three options: Treated as a break in service Previous service is counted if you left your money in the fund You may be able to buy back your service if you took a refund The period you were gone is called a break in service If you left your contributions in when you left that time is counted toward your service credit If you took a refund of your contributions you are eligible to re-instate your service credit if your break in service is six years or less: You must work for the City one year before you can pay the money back You must put back your contributions plus any interest You have three years to put the money back in the Fund If you have previously forfeited your contributions you can request reinstatement of service time

Your Beneficiary & Designee By Texas state law, your spouse is your beneficiary Other qualified beneficiaries are: Your parent over 65 Your disabled child Your minor child(ren) Designee Anyone you choose; other family, adult children, friends, etc. An Organization or Charity Your spouse—Define qualified recipient If you are married and you want your beneficiary to be someone other than your spouse, he or she must agree on a signed and notarized Spousal Waiver Form filed with the Fund’s Executive Director. If you and your spouse divorce, that spouse is no longer your beneficiary. If you marry after you retire, that spouse is not your beneficiary—but you may make that spouse your designee by submitting a Death Benefit Form. Your beneficiary receives a monthly payment after your death. A designee receives your benefit if you die with no beneficiary and will be paid a lump sum benefit upon your death.

monthly Death Benefit Form, section I Section I. Member Information Fill in Your Personal Information Your Spouse Will Only Appear in Section 1

monthly Death Benefit Form, section II Section II. Beneficiary Indicate if you have any Primary Beneficiaries or not and who that will be, you may only choose ONE

monthly Death Benefit Form, section III Section III. Contingent Beneficiary Indicate if you have any Contingent Beneficiaries or not and who that will be, you may only choose ONE Complete Side 2 if you have chosen one or more Primary or Contingent Beneficiaries

monthly Death Benefit Form Member Signature Sign & Date

monthly Death Benefit Form, section IV Section IV. Beneficiary Information List Your Primary and Contingent Beneficiaries Information

monthly Death Benefit Form Member Signature Sign & Date

LUMP SUM DEATH Benefit Form, section I Section I. Member Information Fill in Your Personal Information Your Spouse Will Only Appear in Section 1

LUMP SUM DEATH Benefit Form, section II Section II. Primary Designees List Your Primary Designee(s) Complete Side 2 if you have chosen one or more Primary or Contingent Beneficiaries

LUMP SUM DEATH Benefit Form Member Signature Sign & Date

LUMP SUM DEATH Benefit Form, section III Section III. Contingent Designees List Your Contingent Designee(s) List your Contingent Designee(s)

LUMP SUM DEATH Benefit Form Member Signature Sign & Date

What If You Become Disabled? There are Two Types of Disability Retirement Service Disability No Minimum Service Required Minimum Monthly Benefit $1000 Non-Service Disability Active Members must have Five or more Years of Service Inactive Members must have Ten or more Years of Service Service Disability—If you become totally and permanently disabled while performing your job, you are eligible to apply for service disability benefits. There is no minimum service requirement. Disability is calculated the same as a retirement calculation. The member will be given no less then a $1,000 a month, if it calculates to more the member will be given that number. Non-service Disability—If your disability is not related to your work, you may apply for non-service disability benefits. The following Fund members are eligible for non-service disability retirement: • Active members with five or more years of service credit • Inactive members with 10 or more years of service credit. Read about disability benefits in more detail on page 14 in your member guide

What If You Die Before Retiring? There are Two Types of Death Benefits Service Death Benefits Death Benefits will be paid to the eligible Beneficiary(ies) or Designee(s) Minimum Monthly Benefit $1000 Non-Service Death Benefits Active Members with less than Two Years of Service a Refund of Contributions are paid – No Paid Death Benefit Active Members with Two or more Years of Service – Death Benefits will be paid to eligible Beneficiary(ies) or Designee(s) If you die before you are eligible to retire, your beneficiary or designee will receive a death benefit. Service death benefits - If an active Fund member dies on the job as the result of a job-related injury or illness, the Fund pays service death benefits to the member’s beneficiary. The death benefit is calculated on the greater of 10 years of service credit or the member’s actual service credit. The minimum service death benefit is $1000 per month. Non-service death benefits - If you are an active Fund member who dies because of an injury or illness that is not the result of City employment, non-service death benefits depend on your years of service credit. If you have completed: Less than two years of service credit—your beneficiary will receive a refund of your contributions and no death benefits will be paid. Two or more years of service credit—death benefits will be paid to your eligible beneficiary or designee.

WHAT If You Get Divorced? Pre-Retirement Seminar Last updated 9/16/2018 WHAT If You Get Divorced? Provide ERF with a copy of any divorce decrees for divorce(s) occurring while you are working for the City Qualified Domestic Relations Order in a divorce, the court may enter a qualified domestic relations order (QDRO) requiring the Fund to divide benefits between you and your former spouse or your children. Contact the Fund office for information about a QDRO.

COMMON LAW MARRIAGE The State of Texas recognizes common law marriage Declaration of Marriage Certificate Requires divorce to end marriage For more information, visit the Texas State Law Library, http://guides.sll.texas.gov/common-law-marriage If you get a divorce while working for the City please provide ERF with the finalized decree as soon as possible. Divorce decrees prior to employment with the City are not required. In a divorce, the court may enter a qualified domestic relations order (QDRO) requiring the Fund to divide benefits between you and your former spouse or your children. Contact the Fund office for information about a QDRO.

Choosing a Benefit Option Pre-Retirement Seminar Last updated 9/16/2018 Choosing a Benefit Option The Fund offers Three Benefit Payment Options when you Retire: Life with 10 Years Certain Joint & 1/2 Survivor with 10 Years Certain Joint & Full Survivor with 10 Years Certain

Choosing a Benefit Option 10 YEAR CERTAIN Pre-Retirement Seminar Last updated 9/16/2018 Choosing a Benefit Option 10 YEAR CERTAIN Life with 10 Years Certain Full benefits for your lifetime When you pass away, your beneficiary will receive the reminder of 120 payments If you don’t have a beneficiary, your designee will receive lump sum payment This option pays you full benefits for a lifetime. If you die before you receive 120 payments the remainder of those 120 payments will be made to your beneficiary. If you have no eligible beneficiary a lump sum will be paid to your designee

Choosing a Benefit Option JOINT & HALF SURVIVOR Pre-Retirement Seminar Last updated 9/16/2018 Choosing a Benefit Option JOINT & HALF SURVIVOR Joint & Half Survivor w/ 10 Years Full benefits for your lifetime When you pass away, your beneficiary will receive 1/2 of your monthly benefit for the rest of his or her life If you both pass away before 120 payments, your estate or designee will receive a lump sum payment This option pays you full benefits for your lifetime After your death your beneficiary receives half of your monthly benefit If you both die before you receive 120 payments your designee receives a final lump sum payment of the remaining 120 payments

Choosing a Benefit Option JOINT & FULL SURVIVOR Pre-Retirement Seminar Last updated 9/16/2018 Choosing a Benefit Option JOINT & FULL SURVIVOR Joint & Full Survivor w/ 10 Yrs. Available to you if you have 15 years of service or you are Age 60 Reduced benefits for your lifetime When you pass away, your beneficiary will receive the same amount for the remainder of his or her life This option pays you full benefits for your lifetime After your death your beneficiary receives half of your monthly benefit If you both die before you receive 120 payments your designee receives a final lump sum payment of the remaining 120 payments

Member Elected Trustees John Jenkins Chair Carla Brewer Vice-Chair Tina Richardson Trustee These are our three member elected trustees … John Jenkins - works for the Parks & Recreation Department Carla Brewer - works for Equipment & Building Services Department Tina Richardson – works for the Street Department Every two years, we have the opportunity to vote for who we want to represent us on the board. - Any member can run for trustee - Currently the election process is: - You receive your voting instructions in the mail - You call in your selection for trustee or vote online

City Auditor Craig Kinton The Dallas City Auditor is an ex officio member of the ERF Board of Trustees. City Auditor serves on the ERF Board of Trustees the current City Auditor is Craig Kinton.

ERF Appointed Trustees Randy Bowman Trustee Lee Kleinman Trustee John W. Peavy III Cimarron Asset Management Portfolio Manager ERF’s three board members appointed by the City council are: John Peavy - Portfolio Manager for Cimarron Asset Management Lee Kleinman - Trustee appointed by City council Randy Bowman - Trustee appointed by City council, Randy has been President & Co-Owner of MW Logistics, LLC, since its inception in 2001.

Retirement Checklist Original Documents Required: Birth Certificate(s) Marriage Certificate(s) Social Security Card(s) Voided Check for Direct Deposit Copy of Divorce Decree(s)

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