Kingsport City Schools Retirement Overview 2018 Human Resources Department

HR Department Overview Jennifer Guthrie Chief Human Resources Officer Debbie Risdon HR Assistant Certified Staff Angie Price HR Assistant Benefits Administrator Tony Heaton HR Assistant Classified Staff Tabatha Graham HR Assistant Substitutes and Retirees

Retirement Meetings General Retirement Overview February 19, 9:00 am and 4:00 pm : KCS Human Resources February 26, 4:00 pm: KCS Human Resources Tim Crawford, Empower/Great West TCRS and Hybrid Retirement, 401(k) and 403(b) optional plans for all employees March 28, 4:00 pm ICMA 401(k) and 457 plans, classified and optional for all employees April 5, 4:00 pm Social Security April 18, 10:00 am and 4:00 pm Presented by VALIC

WHAT MANDATORY RETIREMENT PLAN AM I PARTICIPATING IN? Deduction/Benefit Description in Skward TCRS Legacy (certified) TCRS-Teaching (under benefits) TCRS Legacy (classified) Retirement CLS (under benefits) Certified Hybrid Plan, 401(K) portion (certified) Great West AMT Certified Hybrid Plan, TCRS portion TCRS-HYBRID ICMA 401(k) (Classified) ICMA 401 ICMA 457 (Classified)- if participating in additional 3% matching ICMA 457

WHAT MANDATORY RETIREMENT PLAN AM I PARTICIPATING IN? CERTIFIED CLASSIFIED Hired before July 1, 2014? Hired before July 1, 2012? YES NO YES NO TCRS Legacy HYBRID Combined TCRS and Empower/Great West TCRS ICMA 401(k) “Hire Date” is the date on which you were hired into a certified position in the state of TN. Time in prior districts is transferable. *Breaks in service may effect eligibility in TCRS Legacy. “Hire Date” is the date on which you were hired into a classified position with KCS. Time in prior districts or positions in the state is not transferable.

What Plans Are Available? In addition to a mandatory plan identified on the previous slide, you may be participating in an optional plan or you may want to sign up for an optional plan Optional Plans (employees may participate in these plans in addition to any mandatory retirement plans, but without employer contribution): 401(k) – ICMA or Empower/Great West 457 - ICMA 403(b) – Variety of providers.

Plan Descriptions TCRS 401(k) 457 403(b) This is a defined pension plan which means the amount of your benefit will be determined by a benefit formula rather than by an account balance. 401(k) This is a defined contribution plan and contributions will be invested in market funds you select or can be put in funds managed by the 401(k) provider. Funds can be withdrawn without penalty after the age of 60 and after separation of employment. (Federal and state taxes still apply) 457 This plan operates similar to 401(k) and 403(b) plans, with a key difference that you can take a withdrawal from the 457 without penalty at any age as long as you are separated from employment. (Federal and state taxes still apply) 403(b) A tax-advantaged retirement savings plan available for public education organizations. Tax treatment is similar to a 401(k). Employee salary deferrals into a 403(b) plan are made before income tax is paid and allowed to grow tax-deferred until the money is taxed as income when withdrawn from the plan.

TCRS (Legacy) Hybrid ICMA Applicable Employees (Note special conditions may apply for employees transferred between certified and classified positions or re-hired after these dates) Certified hired before July 1, 2014 Classified hired before July 1, 2012 Certified hired as of July 1, 2014 Classified hired as of July 1, 2012 Type of Plan Defined Benefit (pension) through State of TN. Combined plan including both defined benefit (pension through state of TN) and defined contribution (401(k) through state of TN) Defined Contribution plan (401(k)) through City of Kingsport.  Also offers 457 plan. Employee Contribution 5% mandatory for certified No contribution for classified 5% mandatory to TCRS 2% automatic to Empower, but employee can opt-out 5% mandatory into 401(k) (KCS will match an additional 3% at the employee’s option. The employee portion of that 3% is deposited into a 457 account and the employer portion is deposited into the 401(k) account.)

TCRS (Legacy) Hybrid ICMA KCS Contribution Funded for both certified and classified-  amount determined by state of TN.   TCRS: 4% Empower Contribution: 5% regardless of employee participation 5% match to 401(k) Additional 3% match available. Vesting Schedule (applies to KCS contributions only, employee contributions belong to the employee) 5 years TCRS:  5 years Empower/Great West 401(k):  Immediately vested in both employer and employee portion Years of Service         % Vested         0-1                         0%  2                              20%           3                              40%           4                              60%           5                              80%           6                             100%

TCRS (Legacy) Hybrid ICMA Full Retirement Eligibility Age 60, or 30 years of service at any age *must be vested TCRS:  Age 65, or “Rule of 90”- Age plus years of service equal 90. 401(k):  Over age 59 ½ can take all or portion without penalty (as long as money is in there at least 5 years) *Can still be working. 401(k): Can w/draw at age 55 w/out penalty, but have to be separated from service. Federal and state taxes apply. 401(k): Age 60 and separated from employment. Can withdraw during service at age 70 ½. (Federal and state taxes apply) 457: Can withdraw without penalty at any age as long as separated from employment. (Federal and state taxes apply)

Sick Time Applied as Service Credit Yes TCRS (Legacy) Hybrid ICMA Early Retirement Age 55 and vested: Benefit is reduced 4/10% for each month member retires early. (other reduction factors apply for retirement before age of 60 and less than 10 yrs service) 25-29 yrs service, two reduction factors applies- one for age, another for service. Further reduction factors apply for withdrawing prior to these years Penalties apply for early withdraw. 401(k): Tax penalties apply for withdrawing prior to the age of 59 ½. (Cannot withdraw prior to the age of 60 under plan rules) 457: No penalties at any age, must be separated from employment. Sick Time Applied as Service Credit Yes 20 days of sick leave for one additional month of retirement credit TCRS-Yes No *There is no payout for sick time with KCS at this time.  

TCRS (Legacy) Hybrid ICMA Contact Information Tennessee Consolidated Retirement System www.mytcrs.tn.gov 1-800-922-7772 Tennessee Consolidated Retirement System : www.mytcrs.tn.gov Empower/Great West (401 Plan): www.retirereadytn.empower-retirement.com Tim Crawford 1-615-244-1030 ICMA-RC Retirement (401 Plan) http://www.icmarc.org Trey Sizemore 1-800-326-7272 1-800-669-7400 Other Account Information TCRS no longer sends paper statements. Annual statements can be accessed on-line. Any changes should be made on-line.   Mail paper statements or accessible on-line.

Other TCRS Considerations: Election of Benefit Payment Plans Single Life Annuity Plan Regular or Maximum Plans: Maximum monthly benefits payable to member for life with all benefits ceasing at death. Social Security Leveling: This option is allowed by TCRS. Members receive increased retirement allowance prior to the age of 62 and a reduced allowance after that date. *Requires a retirement estimate from Social Security for their retirement at age 62 (drawing early from Social Security means taking a reduced social security benefit for life). Need to designate a beneficiary- They are entitled to payment of any remaining contributions in the member’s account not returned to the member in the form of retirement benefits. Joint and Survivor Plans: There are 4 types of joint and survivor plans available. These allow a member to designate a beneficiary(ies) to continue receiving annuity payments. **All members are encouraged to seek financial advice from a financial planning/TCRS specialist when making these selections.

Other TCRS Considerations: COLA Adjustment Retired members for at least 12 full months on July 1st of each year is eligible to receive an increase in his or her retirement allowance dependent on increases to the Consumer Price Index. **Consider the date on which you apply for retirement. A retirement date of July 2nd, will result in waiting a 2-year cycle to receive the benefit of a COLA adjustment

Can I Work After Retirement Without Impacting my Benefit? Yes, but rules apply TCRS work full time in any other position that is not covered by the retirement system Returning to a covered position- 60 day waiting period. 120 day limit w/in 12 months of date of retirement, except under limited circumstances where a retired teacher can return for greater than 120 days where superintendent certifies that no other qualified persons are available and certification by the commissioner of education. Retiree cannot accrue additional retirement benefits. Defined Contribution Plans Different rules apply- 401(k), generally have to be at retirement. 457 can withdraw so long as separated employment.

Am I Eligible for Retiree Medical Benefits? Eligibility for retiree medical benefits from the state of Tennessee. a. Employees hired after June 30, 2015 are no longer eligible for retiree medical benefits with the state of Tennessee due to changes in state law. i. “Hire date” is determined by the date hired into any position and any status, including certified, classified part time or full time. b. Minimum of 10 years of creditable service in the state of Tennessee. c. Carry medical insurance with the state of Tennessee for a minimum of three years (where service is between 10-20 years) or one year (where service is 20+ years) immediately prior to retirement. d. Must have a retirement account with TCRS.

Am I Eligible for Retiree Medical Benefits? 20+ years of creditable service? Hired prior to July 1, 2015? Yes Yes No Minimum 1 year on state medical plan the year immediately preceding retirement? Have a retirement account with TCRS? 10 years of creditable service? No Yes No Yes Yes No Minimum 3 years on state medical plan the year immediately preceding retirement? Not Eligible for Retiree Medical No Yes Employees age 65 or older at date of retirement receive Medicare. Retiree medical eligibility under the state medical plan does not apply. Eligible

What Are My Premiums for Retiree Medical? Premiums are set each year by the state of Tennessee. Retirees from Kingsport City Schools pay 30% of the state premium if they meet eligibility requirements: Retire from KCS Those hired as of July 1, 2010 must have 10 years of service with KCS in order to receive this credit. Final premium amounts are automatically deducted from your monthly TCRS retirement check.

What Happens When I Turn 65? Retirees become eligible for Medicare and will no longer be eligible for medical insurance through the state of Tennessee. (Active employees at age 65 or over remain on the state health insurance plan until retirement.) POMCO is a Medicare supplement that pays for the remaining 20% of covered benefits not paid for by Medicare. This supplement is available to employees hired prior to July 1, 2015 and who have a TCRS retirement account. There is no minimum service requirement or length of participation required under the group health plan in order to receive POMCO.

Other Retirement Benefits: Life Insurance Kingsport City Schools carries life insurance for all eligible retirees at no cost to the retiree This policy is valued at 25% of annual salary at the time of retirement

What Do I Need to Do When I Am Ready for Retirement? Reach out to Human Resources: Certified: Debbie Risdon at drisdon@k12k.com Classified: Tony Heaton at theaton@k12k.com If you have a TCRS account, you will need to contact TCRS for a retirement estimate.