1. Pension Reform Presentation
City of Atlanta
Pension Reform Presentation
August 2011

2. Purpose
Familiarize employees with the changes made to the City of Atlanta retirement system
Explain how the changes impact each employee
Update employees on the timeline of changes and available resources
Respect your time by keeping the presentation short. This presentation is an overview.
Answer employee questions

3. Agenda
Why pension reform?
Who is impacted?
What are the changes?
When will the changes take place?
What are the next steps?

4. “If your money’s not right, then you’re not right!”
Why Pension Reform?
Reduce the City’s annual pension costs
Diversify and balance the City’s and the employee’s risk
Be competitive with other local governments
Retain existing retirement benefits for current employees
Encourage saving for healthy retirement
“If your money’s not right, then you’re not right!”

5. Definitions
Pension/Defined Benefit Plan (DB)
Employee pays percentage of salary into DB Plan each pay period
City pays pension benefit to employee from start of retirement through end of life, and to surviving qualified beneficiary (if any)
Benefit calculated based on set formula
Defined Contribution Plan (DC)
Employee pays percentage of salary into DC Plan each pay period
City pays percentage into employee DC Plan each pay period
Employee determines how to invest DC funds
Retiree receives benefits until DC funds depleted

6. No change No Impact Employees who retire before November 1, 2011
Current employees hired before 1984
Employees who retire before November 1, 2011
No change
Employees hired before 1/1/1984 are not affected by the changes AND will not be able to opt into the DB Hybrid Plan

7. Current Employees. in DC Plan
Current Employees* in DC Plan * Throughout this presentation, “Current Employees” are employees hired before 9/1/11
No Change
Employee contributes 6% of Salary into DC Plan Retirement Account
Employer contributes 6% of salary into DC Plan Retirement Account
DC Retirement Acct
is an investment acct. Employee directs how money is invested. Value at retirement is based on amount invested and performance of investment.

8. Current Employees in DB Plan
Employees may remain in current DB Plan or switch to DB Hybrid Plan
City will hold election prior to 11/1/11
Employee will be unable to reverse decision

9. Current Employees in DB Plan
If employee chooses current plan
Contribution increases by 5% of Salary
No change in benefit
Stress that if you stay in the current plan, the only change you will see is the increase in contributions

10. Current Employees in DB Plan
If employee switches to DB Hybrid Plan
Benefits accrued prior to 11/1/11 remain the same
Beginning 11/1/11, Retirement Plan has DB component and DC component

11. How the DB pension benefit is calculated
Your Annual Pension Amount will be a percentage of your annual salary.
The percentage is based on your years of service with the City and a “multiplier”.
The multiplier is set in your pension plan. It is either 2%, 2.5%, or 3%.
The Pension Benefit Formula* is: Annual Compensation x (Years of Service x Multiplier)
Annual
Compensation X
Years of Service (YOS)
Multiplier %
(YOS x Multiplier)
Annual Comp x
Annual Pension Amount
$25,000 30
2.5%
75%
$25,000 x 75%
$18,750 25
62.5%
$25,000 x 62.5%
$15,625
Understanding the calculation of the DB plan is important.
* The Pension Benefit Formula does not include adjustments such as age penalty and vesting percentage.

12. How the DB pension benefit is calculated
Your Annual Pension Amount will be a percentage of your annual salary.
The percentage is based on your years of service with the City and a “multiplier”.
The multiplier is set in your pension plan. It is either 2%, 2.5%, or 3%.
The Pension Benefit Formula is: Annual Compensation x (Years of Service x Multiplier)
Annual Compensation X (Years of Service (YOS) X Multiplier)
$25,000 X 30 X 2.5%
$25,000 X 75%
$18,750
Breaking the benefit calculation into two separate parts may make it easier to understand.

13. Current Employees in DB Plan Contributions Before and After 11/1/11
Before Nov. 2011
Current Contributions through October 31, 2011
DB Plan
Starting Nov
Effective 11/1/11 for employees hired prior to 9/1/11, unless employee opts into DB Hybrid Plan
DB Hybrid Plan
Effective 11/1/11
Employee Contribution
Current
7% of salary
with no beneficiary
8% of salary
with designated beneficiary
Employee Contribution
Increases by 5% Salary on 11/1/11
12% of salary
with no beneficiary
13% of salary
with designated beneficiary
DB Plan Component
Employee Contribution
8% of Salary
_ _ _ _ _ _ _ _ _ _ _ _ _ _
DC Plan Component
3.75% of salary mandatory
4.25% of salary voluntary*
City Contribution
100% match of Employee contribution
Not to exceed 8% total
Total Mandatory Employee Contribution DB Contribution: 8% salary
Plus
Min. DC Contrib.: 3.75% salary
Total Contribution= 11.75% salary
*Employee may make additional voluntary contributions w/o City match up to the maximum amt. allowed by IRS

14. All Employees May Make Voluntary Contributions to a Retirement Account
Employee decides contribution amount and whether to use pre-tax or post-tax dollars. Employee may make voluntary contributions up to the maximum amount allowed by the IRS
Contributions
Type
Post-Retirement Withdrawal
Pre-tax
Traditional
Contribution & growth taxed
Post-tax
Roth
Neither contribution nor growth taxed
All employees may participate in 457 Plan. However, employees in the DB Hybrid plan or the Combination plan will receive a match to that contribution up to 4.25%.
These notes apply to any employee who chooses to make a voluntary contribution.
Pre-tax Contribution--Employees do not pay any tax until withdrawal during retirement
Post-tax Contribution (Roth)--Employees contribute funds after tax
New plan offered as of November 1, 2011
Contributions and investment earnings are withdrawn tax free

15. Retirement Plan for Employees Hired on or After September 1, 2011 (“New Employees”)
DC Plan
Combination Plan
Employees hired at PG18 and below, Sworn Police and Fire personnel, and other employees not hired at PG 19 and above
All employees hired at PG19 and above except for Sworn Police and Fire personnel

16. Future Employees in DC Plan
Identical to current DC Plan
Employee contributes 6% of Salary into DC Plan Retirement Account
Employer contributes 6% of salary into DC Plan Retirement Account
457 Info
In addition to employees required Defined Benefit or Defined Contribution amounts, employees have the voluntary option to save money in a 457 plan
457 plan contributions are pre-tax, and employees do not pay any tax until withdrawal during retirement
If employees do not have a 457 plan set up and would like to, contact the Benefits department
457b Info
New plan offered as of November 1st
Roth 457(b) plan contributions are made after-tax, meaning employees pay tax on the contribution as it is going in
Upon withdrawal in retirement, everything is tax free – so employees investment grows tax free
employees can set up a Roth 457(b) plan by contacting the Benefits department after November 1st

17. Future Employees in Combination Plan
DB Plan Component
DC Plan Component
Employee Contribution 8% of Salary
Employee Contribution
3.75% of Salary Mandatory
4.25% of Salary Voluntary*
City Contribution
100% match of Employee Contribution
Not to exceed 8% total
Total Mandatory Employee DB + DC Contribution is 11.75% of salary
* Employee may make additional voluntary contributions (above 4.25% of salary) without City
match, up to the maximum amount allowed by the IRS

18. Details of Current DB Plan, and DB Portion of Hybrid Plan and Combination Plan
Your Annual Pension Amount will be a percentage of your annual salary.
The Pension Benefit Formula is: Annual Compensation x (Years of Service x Multiplier)
Current DB Plan
DB Hybrid Plan
Combination Plan
Employees who stay in Current DB Plan and benefits of Hybrid members before 11/1/ 11
Benefits for
November 1, 2011 through retirement
Starting September 1, 2011
Multiplier
3.00%. 2.5% or 2% as defined by participant’s current DB Plan
1.00%
Annual Compensation
Average of 3 highest consecutive years of compensation over entire career
Average of 10 highest consecutive years of compensation over entire career
Average of 10 highest consecutive years of compensation
Annual Leave
Lump sum payout included in pension benefit calculation
Sick Leave
Included in pension benefit calculation
All but 80 hours may be included in pre-11/1/11 pension benefit calculation, as designated by employee
Not included in pension benefit calculation
An earlier slide talked about how to calculate the DB benefit. Here are the details associated with the multiplier, annual compensation, and years of service.

19. Comparison of Current DB Plan, and DB Portion of Hybrid Plan and Combination Plan
Your Annual Pension Amount will be a percentage of your annual salary.
The Pension Benefit Formula is: Annual Compensation x (Years of Service x Multiplier)
Current DB Plan
DB Hybrid Plan
Combination Plan
Employees who stay in Current DB Plan and benefits of Hybrid members before 11/1/ 11
Benefits for
November 1, 2011 through retirement
Starting September 1, 2011
Vesting Period
10 yrs- hired before 7/1/10
15 yrs- hired 7/1/10 or after
15 Years
Minimum Retirement Age
None
Age 47 (Sworn APD/AFRD)
Age 52 (General Employees)
Normal Retirement Age (NRA)
Age 55 (Sworn APD/AFRD)
Age 57 (Sworn APD/AFRD)
Age 60 (General Employees)
Age 62 (General Employees)
To retire under the DB Pension Plan, the employee must satisfy the vesting period. Current employees do not have a minimum retirement age although future employees will. In order not to suffer an age penalty, employees must reach the normal retirement age or have 30 years of creditable years of service.

20. Details of Current DB Plan, and DB Portion of Hybrid Plan and Combination Plan
DB Hybrid Plan
Combination Plan
Employees who stay in Current DB Plan and benefits of Hybrid members before 11/1/ 11
Benefits for
November 1, 2011 through retirement
Starting September 1, 2011
COLA
Up to 3%
Up to 1%
Long Term Disability
Included in pension benefit
Included in pension benefit (Equivalent to Current DB Plan)
Survivor Benefits
(Pre-Retirement Death)
Retirement Benefit: Payment to qualified beneficiary
75% of retirement benefit upon death of retiree. Employee contributes additional 1% of salary throughout employment to pay cost of benefit.
75% of retirement benefit upon death of retiree
Employee decides at time of retirement whether to cover beneficiary. If so, pension amount is recalculated to pay cost of benefit.
This slide provides additional information associated with the DB Pension Plan

21. Key Factors
Shared risk: If City DB Plan contribution exceeds a set amount, the City will determine a method for payment of the excess, which could include increasing an employee’s DB contribution by no more than 5% of salary
Shared benefit: If City’s current pension debt is reduced to a set amount, the City may reduce an employee’s DB contribution
Employees who separate from City employment and are later reemployed will be required to join the DC Plan or the Combination Plan depending upon type of employment and pay grade at the time of rehire

22. Additional Contribution Total Future Contribution
Impact of Increased Contribution for DB Participants Currently Paying 8% of Salary
Impact of 5% of salary increase on bi-weekly DB Plan pre-tax contribution amount
Yearly Salary
Current Contribution
Additional Contribution
Total Future Contribution
$20,000
$62 +
$38 =
$100
$25,000
$77
$48
$125
$30,000
$92
$58
$150
$35,000
$108
$67
$175
$40,000
$123
$200
$45,000
$136
$87
$225
$50,000
$154
$96
$250
-This chart shows the impact of the increased contribution amount on current Defined Benefit employees who do not move into the Hybrid Plan.
-Based on employees yearly salary, an additional amount of money will be contributed from employees salary to the pension fund each pay period.

23. Example of Proposed Changes to Bi-weekly Deduction for Current DB Participants
Salary
Pay period
Percentage
Total
Employees in Current DB Plan (before Nov 1, 2011 w/beneficiary*)
$35,000 ÷ 26 x 8%
$108
Employees who stay in Current DB Plan (after Nov 1, 2011 w/beneficiary**)
13%
$175
Employees who Switch to the DB Hybrid Plan (Mandatory Amt as of Nov 1, 2011)
11.75%
$158
Employees who Switch to the DB Hybrid Plan (Mandatory, plus Voluntary City-matched amt as of Nov 1, 2011)
$35000
16%
$202
-This chart shows the impact of the increased contribution amount on current Defined Benefit employees who do not move into the Hybrid Plan.
-Based on employees yearly salary, an additional amount of money will be contributed from employees salary to the pension fund each pay period.
*Employee without designated beneficiary will have 7% contribution
** Employee without designated beneficiary will have 12% contribution

24. Your Next Steps
DC Plan members should consider whether to make voluntary contributions, and whether to make them pre-tax or post-tax
DB Plan members should meet with Financial Consultants provided by the City at no cost to employees
Determine impact of increased DB contribution
Assess costs and benefits of switching to DB Hybrid Plan
Consider whether to make voluntary contributions and whether to make them pre-tax or post-tax
DB Plan members should look for information about the October election to designate staying in the current DB Plan or switching to the DB Hybrid Plan
Determine impact of increased contribution
Calculate future after-tax & benefit compensation
12% contribution without beneficiary; 13% with beneficiary
Take this opportunity to review employees retirement Plans
Current age and planned retirement age
Non-COA benefits accrued (spousal, prior work, etc.)
Expected retirement expenses and necessary income
Ensure employees have correct beneficiary (or no beneficiary) listed
Consider the Combination Plan opt-in and employees 457 plan savings
Attend group retirement planning sessions in September/October
Meet individually with an advisor in September/October
Review employees current 457 plan savings and consider changes
Consider utilizing new Roth 457(b) plan option starting Nov 1st

25. Questions
For questions send to ; or Contact Sherri Dickerson, Department of Human Resources, at