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Public Employees Retirement Association of Minnesota

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Presentation on theme: "Public Employees Retirement Association of Minnesota"— Presentation transcript:

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

2 Statistical Data 2,100 Employers

3 Statistical Data General P&F Correctional
Active Members 145, ,157 3,692 Vested Deferred Members* 51, ,560 2,620 Benefit Recipients 90, , Total 287, ,926 7,176 Grand Total ,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: Financial Report

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

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

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

7 Contributions Coordinated Correctional Police & Fire
Ee: % Ee: % Ee: % Er: % Er: % Er: % Social Security Medicare (If hired after 3/31/86) Ee: 7.45% Ee: 1.45% Er: 7.65% Er: 1.45%

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

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

10 Expenses ( ) 95.8¢ Benefits 3.1¢ Refunds 1.1¢ Admin.

11 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

12 Life Expectancy (Current PERA Tables)
Present Life Expectancy Age Males Females Present Life Expectancy Age Males Females

13 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 Average Salary

14 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)

15 Benefit Options % of Single-life Member (63) Survivor (61)
25% % $1, $262 50% % $1, $507 75% % $ $745 100% % $ $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

16 Decisions Decisions Can I get a do-over?

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

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

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

20 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

21 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

22 Other Benefits Disability Survivor

23 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

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

25 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 / % if result of hazardous duty /Minimum benefit 50% & 60%)

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

27 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

28 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

29 Member Information, Marital Information, and Direct Deposit

30 Benefit Selection & Notarized Signatures

31 Federal & State Tax Withholding

32 Termination Verification Form

33 Birth and Marriage Documents / Passport

34 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, $44, 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.

35 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

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

37 On-line Resources

38 9 MY PERA 100

39 MY PERA

40 Our newest feature

41 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.


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