Financial Services Academy PLANNING FOR RETIRMENT RETIREMENT SERVICES 2017-2018

Agenda Retirement Services General Plan Information Retirement Process Retirement Planning

Retirement Services

Our Brand Executive Director Accounting and Retirement Services Greta Tinaglia Professional Assistant Tania Muniz Retirement Coordinator Ersula May Retirement Specialist Fredrica Jones Maurice Roebuck Financial Analyst Bernadette Vanterpool Rierre Robinson Who we are? RETIREMENT SERVICES What we do? To provide efficient and cost effective quality retirement services to our members and their families.

Contact Information Fulton County Schools Retirement Services 6201 Powers Ferry Road Atlanta, GA 30339 470-254-0102 http://www.fultonschools.org/retirementservices Retirementservices@fultonschools.org

GENERAL PLAN INFORMATION

FCS Retirement Plans Teacher’s Retirement System of Georgia FCS Employees Pension Plan Tax Sheltered Investments

Teacher’s Retirement System Majority of our employees are TRS 1988 State Administered/ Legislative  81.9 % Funded Ratio (ranked 12 nationally) Retirement Services http://www.trsga.com

Defined Benefit Plan $$$$$$$$$$$$$$$$$$$$$ TRS Mandatory Employee contributes 6.0% Employer Contributes the rest Income Stream $$$$$$$$$$$$$$$$$$$$$ Retire 58 Death at 85 The Good News, TRS/FCS will replace about 60% of your pre-retirement income for the rest of your life. Participation in the DB plan is mandatory along with a 6 (TRS only) or 6.66 (Safety Net with Beneficiary coverage) percent contribution. The employer contributes the rest on your behalf.

Eligibility for Retirement 30 Years Service (no age requirement)* 60 Years of age (10 Years of Service) 25 Years of Service (penalty for every year under 60) Disability (10 Years of Service) *If dually enrolled( Safety-Net participant)- must be age 55.

TRS Formula Years of creditable service, including partial years Basic monthly benefit under Plan A Maximum Highest 2. consecutive yrs. of salary 2% Subject to applicable taxes and applicable deductions, such as SHBP coverage. Additional concepts available for discussion: We will discuss the components of the formula in more detail later, but we wanted to show you the formula first, because that concept is likely one of your biggest concerns. Creditable service includes partial years of service, if you had any in your career. Members could work past 40 years and still earn a larger benefit from TRS if their high average salary is earned beyond their 40th year of covered work. The high average salary is based on the highest consecutive 24 months of compensation. TRS uses “earnable compensation” to compute the benefit, which is your full regular gross pay for full normal working time and regular supplements in your written contract. To verify if a supplement is included in salary reported to TRS, you can check if the TRS contribution amount is coming out of your supplemental pay. When we compute your benefits under all the available plans of retirement, we start with your Maximum benefit and then work backwards based on actuarial considerations, such as life expectancies.

Full Gross Plan A Maximum Benefit Example Basic Benefit Calculation Example: Date of Retirement = 6/01/2013 Highest 2 of Consecutive Yrs of. Salary = $5,536.83 (occurs from 9/2008 through 8/2010) Member’s years of creditable TRS service = 34.444 34.444 Years of Service Additional concepts available for discussion: Closing: The initial benefit amount under the Maximum Plan becomes the starting point when we calculate your benefit under the other options – as you will see in next slide, which is part of an actual estimate. $5,536.83 Highest 2 Consec. Yrs Of Salary $3,814.21 Full Gross Plan A Maximum Benefit 2%

Sick Leave Service Credit Unused Sick Leave for Service Credit TRS grants 1.25 days per month worked After 10 years, Fulton awards additional sick leave Service Credit Purposes Only TRS awarded leave may be counted

Sick Leave Service Credit Manual calculation versus employee express Contact Maurice Roebuck RoebuckM@fultonschools.org Allow at least 2 weeks

Sick Leave Conversion-TRS 60 days minimum Conversion Chart – www.trsga.com Days Credit 0 to 59 0 months 60 to 69 3 months 70 to 89 4 months 90 to 109 5 months 110 to 129 6 months 130 to 149 7 months 150 to 169 8 months 170 to 189 9 months

FCS Employees Pension Fund Positions not eligible for TRS. i.e. Bus Drivers, Cafeteria Workers, Maintenance, Custodial Prior to 1988 Full Administration by Retirement Services Governed By FCSEPF Pension Board http://www.fultonschools.org/retirementservices

Defined Benefit Plan $$$$$$$$$$$$$$$$$$$$$ FCSEPF Mandatory Employee contributes 5.6 or 6.6% Employer Contributes the rest Income Stream $$$$$$$$$$$$$$$$$$$$$ Retire 58 Death at 85 The Good News, TRS/FCS will replace about 60% of your pre-retirement income for the rest of your life. Participation in the DB plan is mandatory along with a 6 or 6.66 percent contribution. The employer contributes the rest on your behalf.

Eligibility for Retirement 30 Years Service * 65 Years of age (10 Years of Service) 25 Years of Service (penalty for every year under 60) Disability (10 Years of Service) *If dually enrolled( Safety-Net participant)- must be age 55. No restriction with 30 years 55 with 25 years with penalty 60 with 25 years 65 with 10 years

FCSEPF Formula Years of creditable service, including partial years Basic monthly benefit 3 Year High average salary 2% Subject to applicable taxes and applicable deductions, such as SHBP coverage. Additional concepts available for discussion: We will discuss the components of the formula in more detail later, but we wanted to show you the formula first, because that concept is likely one of your biggest concerns. Creditable service includes partial years of service, if you had any in your career. Members could work past 40 years and still earn a larger benefit from FCS Pension if their high average salary is earned beyond their 40th year of covered work. The high average salary is based on the highest consecutive 36 months of compensation. When we compute your benefits under all the available plans of retirement, we start with your Maximum benefit and then work backwards based on actuarial considerations, such as life expectancies.

Three Year High Average Salary Example Basic Benefit Calculation Example: Date of Retirement = 6/01/2013 High Average Salary = $5,536.83 (occurs from 9/2007 through 8/2010) Member’s years of creditable service = 34.444 34.444 Years of Service Additional concepts available for discussion: Closing: The initial benefit amount under the Maximum Plan becomes the starting point when we calculate your benefit under the other options – as you will see in next slide, which is part of an actual estimate. $5,536.83 Three Year High Average Salary $3,814.21 Monthly Benefit 2%

FCSEPF Beneficiary Coverage Elect Coverage at Hire Date or prior to term Contribute additional 1% Eligible Beneficiary receives up to 70%

Tax Sheltered Investment Plans Vendor Administered Three District Approved Vendors Valic Lincoln TIAA- CREF Open to all employees

Tax Sheltered Investments Optional Employee Directs Investments and assumes risk Employee Contributions Only Balance $ $ $ $ $ $ $ $ Death $ Retire $0 Another way we can address our gap is through saving with our Tax Sheltered Investment Program through the District. A TSI is different from our traditional defined benefit plan in many ways. First for us the TSI is optional meaning we can elect to contribute or not. The employer contributes zero. In our case the TSI is meant to supplement our primary db plan. The most important difference is that the TSI will distribute a balance and once that balance is depleted you will not receive anything further.

TSI Mechanics 403 B and 457 B Elective Deferrals: $18,000/yr. if under age 50 $24,000/yr. if 50 and older Enroll or Stop Deductions at any time Choose investment options Cannot access the money without tax penalty Exceptions Loans Hardship Withdrawals

Social Security Administration Please contact your local SSA office for further questions about social security www.socialsecurity.com 1-800-772-1213

Windfall Elimination Provision WEP Earnings Calculation: $0-$856 * .40 not .90 $856-$5,157 *.32 $5,157 *.15 Max amount reduced with less than 30 yrs of Social Security substantial earnings for 2017 is $442.50 or ½ your pension. WEP Example (SS Earnings $3,000) Unadjusted $856*.90 = $770 $2,144 *.32 = $686 Benefit = $1,456 WEP $856*.40 = $342 Benefit = $1,028 WEP Penalty = $428

TRS and Social Security Windfall Elimination Provision Government Pension Offset Social Security Low wage earners higher percentage If less than 30 Year Earnings of Substantial Earnings: $0-$856* .90 $856-$5,157 *.32 $5,157 *.15 10 Years or 40 Quarters SOMEWHERE ELSE you may be Soc. Sec Benefit eligible However Subject to WEP Eligible for a Widow or Widower Benefit Reduction of Benefit by 2/3 of TRS Pension Example Widows Benefit = $4,000 TRS Benefit = $3,700 Adjusted Benefit = $1,534

QUIZ Question 1 I am a bus driver which plan to I belong to? TRS PSERS FCSEPF All of the above Answer c!

Quiz Question 2 When can I retire from TRS 20 years service regardless of age Whenever I feel like it Age 55 regardless of service 30 Years Answer d!

Quiz Question 3 Where can I get a 403 B Plan? The Fulton Credit Union SunTrust Bank Valic, Lincoln or Tia-Creff My Uncle Jimmy’s Broker Answer c!

RETIREMENT PROCESS

Process Timeline Aug Oct Dec 2018 Apr Jun Aug FCS Application / 4/30/2018 Intent to Retire TRS Check 2/28/2018 6/15/2018 Aug Oct Dec 2018 Apr Jun Aug School Year Starts School Year Ends 8/7/2017 5/24/2018 FCS Check TRS Application 8/31/2018 3/31/2018

STEP 1 SUBMIT INTENT TO RETIRE FORM (FEBRUARY)

Online Intent to Retire

STEP 2 SUBMIT TRS APPLICATION MARCH TRS Application can be located on TRS Website -http://www.trsga.com

TRS APPLICATION

SUBMIT FCS PENSION APPLICATION STEP 3 SUBMIT FCS PENSION APPLICATION (APRIL)

STEP 4 APPLY FOR POST RETIREMENT BENEFITS (MAY) VISION HEALTH STEP 4 APPLY FOR POST RETIREMENT BENEFITS (MAY) LIFE DENTAL

Sample Benefits E-mail Employee : Intent to Retire Benefits Process Status Congratulations! Your retirement is in process, and you have only a few things left to do to finish the paperwork regarding your final pay and benefits. All of the forms and information referenced in the steps listed can be accessed by following the link at the bottom of this email. 1. Complete and return the Payout of Sick Leave Waiver Form to the Payroll Department, if you elect not to receive your sick leave payout. Please click here for Sick Leave Waiver form. 2. Contact your 403(b) or 457 plan vendor if you wish to shelter some or all of your sick leave payout in your pre-tax plan (Optional). A complete list of vendors and contact information is available at www.myfultonbenefits.com under the “Retirement” heading. 3. Review the Benefit Packet for plan details, and elect or decline plans. Return the form(s) to the Employee Benefits Office (Required). PLEASE SELECT HERE FOR BENEFITS PACKET. COMPLETE AND RETURN TO EMPLOYEE BENEFITS OFFICE OR FAX TO 470- 254-5515. QUESTIONS REGARDING RETIREE BENEFITS 470-254-6848 4. Review the Benefit Packet for plan details, and elect or decline plans. Return the form(s) to the Benefits Office. (Required) Questions regarding the Payout of Sick Leave should be addressed to the payroll department at payroll@fultonschools.org or 470-254-6849. Questions regarding the receipt of the 403(b) or 457 contribution change should be addressed to Retirement Services: retirementservices@fultonschools.org or 470-254-0102. Questions regarding your benefits should be addressed to the Benefits Department: retirement@fultonschools.org or 470-254- 6848.

Health Insurance State Health Benefit Plan (SHBP) Must have insurance at time of Retirement Retiree Option Change Period If you drop insurance during retirement, NO reenrollment Automatic Transfer when TRS retiree

Medicare Retirees age 65+ should enroll in Medicare Part B & submit Medicare ID card to SHBP Retirees age 65 + will be enrolled in a Medicare Advantage Plan through United Healthcare Retirees not enrolling in Medicare will be charged full premium for selected plan

Dental Insurance Delta Dental Insurance-effective 01/01/2015 Two coverage tiers available: Single, Family No Open Enrollment Period If you drop insurance during retirement, NO reenrollment www.deltadentalins.com

Vision Insurance Davis No Open Enrollment Periods Three Coverage Tiers Single, Employee + 1, Family If you drop insurance during retirement, NO reenrollment www.davisvision.com

Life Insurance $20,000 of Group Term Life with Unum Life Insurance Company Rates will vary depending on age at retirement Rate changes effective July 1 every year Additional Life Insurance carried as an active employee will not automatically transfer into retirement Arrangements with the company if you wish to continue the policy into retirement Deductions for these cannot be made from your retirement check If you drop insurance during retirement, NO reenrollment

Our Best Advice Read your retirement emails Read them again Save them in a Folder Called Retirement Follow all instructions carefully

QUIZ Question 1 How do I begin the retirement process Tell the principal Write a letter to the Retirement Office Submit an intent to retire on the Employee Portal Call HR Answer c!

QUIZ Question 2 What should I do FIRST if I don’t understand something in the process? Tell the principal Read my retirement emails Call the Retirement Office Panic Answer b!

QUIZ Question 3 True or False When I turn 65 I do not have to apply for Medicare because I have a government pension Answer False!

RETIREMENT PLANNING

When do you need to start planning your Retirement? NOW!

Components of a Successful Retirement Financial Security Family Work Health

Desired Retirement Lifestyle GO GO Years Kids In College? Pay off House? Will I Work? Travel? Slow Go Years No Go Years Medical Expenses Estate Planning What is my desired and or likely retirement lifestyle? We are fortunate in public education in that we are eligible to retire at a young age. As our lifespans have increased our retirement lifestyles are evolving. In our grandparents generation 50 was considered old and you were ready for the rocking chair. I heard I believe it was Clark Howard give a perfect analogy we have our go go , slow go and no go years. Due to medical advancements we are able to enjoy our Go Go years much longer. It’s important to think what each stage will look like for you and each person will be different. I know in my own personal situation my mother retired about fifteen years ago and is no 74 still very much in her go go years, in fact I rarely see her. My in laws on the other hand are the same age and are firmly in their slow go years where you start to stay at home more and maybe travel modestly etc. Then we have our No Go Years and here is where we really start to think about medical expenses, medical power of attorney, estate planning etc. Again your personal situation will impact here. Bottom line when thinking about retirement it is important to evaluate what your needs both financial and otherwise will be in each stage of retirement.

How will I finance my lifestyle? How much income will I need to support my lifestyle? How will I finance my lifestyle? How much income will I need at each stage of my retirement? The Good News, TRS/FCS will replace about 60% of your pre-retirement income for the rest of your life. So at this stage of your career it is appropriate to begin thinking about how you will fill the gap. Do you want to work or have other income sources?

Defined Benefit Plan $$$$$$$$$$$$$$$$$$$$$ TRS and or FCS (60%) Income Stream $$$$$$$$$$$$$$$$$$$$$ Retire 58 Death at 85 The Good News, TRS/FCS will replace about 60% of your pre-retirement income for the rest of your life. Participation in the DB plan is mandatory along with a 6 or 6.66 percent contribution. The employer contributes the rest on your behalf. I am going to pause here and introduce Brett.

“The GAP” 100% My Defined Benefit Plan My Defined Benefit Plan The not so great news. Our defined benefit plan will cover us for 60% leaving a gap. The size of your gap will be dependent upon your desired lifestyle. If you will need 100% of your current income in retirement you will have a 40% Gap to address. If you need 80 you will address 20% etc.

How will you fill the Gap Working for the District? Working somewhere else? Social Security? TSI? Other Savings?

Tax Sheltered Investments Earlier the Better Balance $ $ $ $ $ $ $ $ Death $ Retire $0 Another way we can address our gap is through saving with our Tax Sheltered Investment Program through the District. A TSI is different from our traditional defined benefit plan in many ways. First for us the TSI is optional meaning we can elect to contribute or not. The employer contributes zero. In our case the TSI is meant to supplement our primary db plan. The most important difference is that the TSI will distribute a balance and once that balance is depleted you will not receive anything further.

Do I intend to stay in public education? Refund of Contributions- Can roll to an IRA FCS 6.6% TRS 6% Vest 10 years and 60 vs 65 Can I transfer my service? TRS GA Service Purchases If you are considering a career change and you have less than 10 years of service you may apply for a refund of contributions from the DB plan which you may then roll into an IRA or other tax sheltered product to avoid tax. If you have 10 years you may wish to leave your contributions in and receive a lifetime benefit from the plan once you attain retirement age of 60 or 65 dependent upon your plan. Once you withdraw your contributions however you are no longer entitled to any benefit from the plan. Another common question is what happens if I leave FCS and go to another district? If you are a member of TRS y and you employ at another GA Public School District your TRS Service will transfer with you. If you leave the state and employ in a different state you may be eligible to purchase years of service in that District using your contribution refund. Check with the District you are transferring in to.

Do I want to provide for my spouse or other dependents? Do I want to provide beneficiary coverage? Do I have financial responsibilities to others? What about life insurance?

What will my healthcare needs be? Coverage in Retirement How much will this cost me? Do I get Medicare?

Goal of Retirement Planning YES NO

QUIZ Question 1 TRS or FCS will generally replace what percentage of my income? 60% 100% 40% 90% Answer a!

QUIZ Question 2 When is the best time to start to plan for retirement? Two months before retirement Immediately A Year in advance Never Answer b!

Conclusion Any questions?