City of Tacoma, Washington TERS New Employee Orientation Tacoma Employees’ Retirement System

City of Tacoma, Washington TERS What is the Tacoma Employees' Retirement System? 2 The Tacoma Employees' Retirement System is a defined benefit plan funded by employee contributions and employer contributions which are tax deferred, as well as investment return. Defined Benefit: A defined benefit plan guarantees a certain payout at retirement, according to a fixed formula which usually depends on the member's salary and the number of membership years in the plan.

City of Tacoma, Washington TERS Who Is Eligible to Participate in the Tacoma Employees' Retirement System? 3 All employees of the City of Tacoma and Member Public Agencies shall become members of the Retirement System, unless excluded by ordinance or are active members of another retirement system.

City of Tacoma, Washington TERS 4 Plan Funding Employer Contributions – 9.72% of salary (effective 1/1/2010) Employee Contributions – 8.28% of salary (effective 1/1/2010) Investment Earnings

City of Tacoma, Washington TERS 5 Who are the members of the Board of Administration? Marilyn StricklandMayor (Chairperson) Robert BilesDirector of Finance (Secretary) Rey ArellanoDesignee of the City Manager Bill Gaines Director of Public Utilities Alice PhillipsEmployee Representative Sam BenscoterEmployee Representative Jim CurleyEmployee Representative David PetersonRetired Representative Chris WebsterCitizen Representative Wayne ReedAlternate Board Member Elected by Employees Elected by Retirees

City of Tacoma, Washington TERS 6 Service Retirement Eligibility AGE 60, ANY NUMBER OF YEARS OF SERVICE (full benefit – 2% factor) AGE 55 OR OLDER, 10 YEARS OF SERVICE (reduced benefit – see Table) AGE 40 OR OLDER, 20 YEARS OF SERVICE (reduced benefit – see Table) ANY AGE, 30 YEARS OF SERVICE (full benefit – 2% factor) RULE OF 80 (AGE & YEARS OF SERVICE = 80) (full benefit – 2% factor)

City of Tacoma, Washington TERS 7 Factor Table

City of Tacoma, Washington TERS 8 Twice the Value Effective on and after January 1, 1997, a service pension shall not be less than the actuarial equivalent of twice the value of the individual’s accumulated contributions & interest. *Currently 40% of TERS retiree pensions are provide a higher benefit based on twice the value of each member’s total contributions.

City of Tacoma, Washington TERS Termination of Employment LUMP SUM EQUAL TO REFUND OF CONTRIBUTIONS PLUS INTEREST (less than 5 years) or LUMP SUM EQUAL TO 150% OF CONTRIBUTIONS PLUS INTEREST (5 years or more) Both are taxable unless rolled directly to an Individual Retirement Account (IRA) or qualified plan. 9

City of Tacoma, Washington TERS Purchase of Time 10 Individuals may purchase up to 5 years of service, provided the member is vested (five or more years) and that no purchase shall exceed a total of 30 credited years. Payments shall be made in a lump sum per the following: — On an after-tax basis (personal check) — A direct trustee-to-trustee transfer from a qualified 457 or 403 (b) plan — A direct rollover from an Individual Retirement Account (IRA) qualified under Internal Revenue Code Section 408 Purchase of time must be made at the time of retirement or to become eligible for retirement.

City of Tacoma, Washington TERS Portability SYSTEMS INCLUDED: — TRS, PERS, SERS SCERS, WSPRS, LEOFF II, SEATTLE, SPOKANE & TACOMA SERVICE REQUIREMENT — Must be met for each system AVERAGE FINAL SALARY — Highest base salary will be used for all calculations RETIREMENT ELIGIBLITY — Years of service under portability may be used for purposes of eligibility and benefit formula 11

City of Tacoma, Washington TERS Pension Calculator The pension calculator will allow you to calculate estimated retirement benefits, calculate purchase of time, and the cost to repay previously withdrawn contributions. The Pension Calculator is located under Member Tools/Pension Calculator on the our website at:  12

City of Tacoma, Washington TERS Contact Information OFFICE LOCATION Tacoma Public Utilities Administration Building North 3628 South 35th Street, Ground Floor Tacoma, WA Ph: (253) Fax: (253) Toll Free (888) Website: 13

City of Tacoma, Washington TERS Additional Contact and Website Information 14 Other Public Retirement Systems WA State – Department of Retirement Systems Toll Free or (360) Website Seattle City Employees’ Retirement System Ph: (206) Website Spokane Employees’ Retirement System Ph: (509) Website