1. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
PERA

2. Introduction to pera

3. Trivia Who is a PERA member? School Nurse Volunteer Firefighter
City Administrator
Ambulance Driver
All of the above

4. Defined Contribution
Defined Benefit
Performance-Based
401(k)
403(b)
IRA
457(b) (Deferred Compensation)
Formula-Based
PERA
Social Security

5. PERA’s Defined Benefit Plans
Coordinated
Cities
Counties
Public schools
Correctional
County facilities
Police & Fire
Local departments
Sheriff offices

6. SVFRP and Defined Contribution
Volunteer firefighters
142 departments and 2,848 firefighters
One defined benefit plan
Defined Contribution
Ambulance personnel
Physicians
Elected officials
7,882 members
These are the fiscal year 2017 totals for the SVF. Did not include 2018 numbers since those numbers are not in the CAFR.

7. Source: PERA’s Comprehensive Annual Financial Report, 2017
DB Membership
Active
Vested/ Inactive
Recipients
Over 476,000 in
DB Membership
(not including SVF)
Not vested
Active: 168,000+
Inactive: 198,000+
Total DB membership does not include SVF department with a DB plan
Recipients: 109,000+
Source: PERA’s Comprehensive Annual Financial Report, 2017

8. Pre-Tax Contribution Rates
How PERA’s DB Plans are Funded
Pre-Tax Contribution Rates
*Employee
Coordinated
Correctional
Police & Fire
6.5%
5.83%
10.8%
*Employer
7.5%
8.75%
16.2%
Contributions reduce taxable income.
* Contribution rates are subject to legislative change.

9. Source: PERA’s Comprehensive Annual Financial Report, 2017
State Board of Investment – Diversified for the Long Term
PERA’s NET Assets:
$28.7 Billion
Cash 2%
International Stocks
19%
Bonds
20%
Alternative Assets
Domestic Stocks
39%
Source: PERA’s Comprehensive Annual Financial Report, 2017

10. SBI Performance 8% annual rate of return expected
FY 2017 Investment Returns
Domestic Stocks %
International Stocks %
Bonds %
Alternative Investments %
*Total Combined Funds %
8% annual rate of return expected
*Over last 20 years PERA’s investments have returned 7.2%
*Source: PERA’s Comprehensive Annual Financial Report, 2017

11. Funding Levels and Increases as of June 30, 2017
Coordinated
Correctional
Police & Fire
77.8%
94.5%
85.2%
Annual benefit increases of 1% until fund is 90% funded for two consecutive years, then 2.5% benefit increases
Source: PERA’s Comprehensive Annual Financial Report, 2017

12. Source: PERA’s Comprehensive Annual Financial Report, 2017
Revenues (FY1998-FY2017)
64.3%
19.9%
15.8%
Source: PERA’s Comprehensive Annual Financial Report, 2017

13. Source: PERA’s Comprehensive Annual Financial Report, 2017
Expenses 3%
96% 1%
Source: PERA’s Comprehensive Annual Financial Report, 2017

14. Annual Benefit Payments
Giving Back to Minnesota
Annual Benefit Payments
Total benefit recipients
Annual benefits paid to Minnesota residents
109,940
$1.765 Billion
Retirees of state and local government put three times as much money back into the state economy as is collected by the public pension plans from taxpayers through employer contributions.

15. Value of Your Pension Plan
Member contributions
Employer contributions
Investment growth
Recouped in first 2-3 years
Recouped in next 5-7 years
Rest of your life

16. Life Expectancy Present Age Life Expectancy Current PERA Tables 50
Men
Women 50
82.2
84.5 55
82.9
84.9 60
83.5
85.5 65
84.2
86.2 70
85.3
87.2 75
86.6
88.6

17. Public Service Start Date Years to Vest Coordinated Vesting
05/16/89 – 06/30/10 3
07/01/10 - 5

18. Public Service Start Date
Correctional Vesting
Public Service Start Date
Years
to Vest
1999 – 6/30/2010 3
Graded Vesting
7/1/2010 -
5 yr
6 yr
7 yr
8 yr
9 yr
10 yr
50%
60%
70%
80%
90%
100%

19. Police & Fire Vesting Public Service Start Date Years to Vest 5 3

20. Police & Fire Graded Vesting
10-Year Vesting
7/1/10 – 6/30/14
5 yr
6 yr
7 yr
8 yr
9 yr
10 yr
50%
60%
70%
80%
90%
100%
20-Year Vesting
7/1/14 - Later
10 yr
11 yr
12 yr
13 yr
14 yr
15 yr
16 yr
17 yr
18 yr
19 yr
20 yr
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%

21. Pera pension formula and terminology

22. Three factors:
Age at retirement
Years of service
High-five salary

23. Single-life Benefit Survivor Option Highest benefit amount
Lifetime payment to member only
Survivor Option
Member takes reduced lifetime benefit to provide lifetime payment to one survivor upon member’s death

24. Survivor Option Option at time of benefit application
One person – irrevocable
Monthly payments to
survivor if member dies first

25. Beneficiary(ies) People, entities, and/ or trusts
Primary and secondary
Change at any time
Paid if member and
survivor die before
member contributions paid out

26. Benefit Estimate

27. 25% 50% 75% 100% Member – age 63 Single-life benefit $1,079
Survivor options for a 61-year old survivor
25%
Member
$1,047
Survivor
$262
50%
$1,014
$507
75%
$993
$745
100%
$960

28. Survivor age restrictions
Survivor Options
25%
No Restrictions
50%
75%
No more than 19 years* younger than member if not a spouse
100%
No more than 10 years* younger than member if not a spouse
*Per IRS modified age difference calculation

29. Important to Note: Bounce Back
If survivor pre-deceases the member, the member benefit will bounce back to the single life amount.
No second survivor
Important
to Note:

30. If survivor is not a spouse
Changing Option
If survivor is a spouse
Court order needed revoking option – signed by spouse
If survivor is not a spouse
PERA document must be signed by the survivor revoking their right to the option

31. Important to Note: Revocation of survivor
If option is revoked, member will convert to the single life benefit for the rest of their life
Member does not get to choose another survivor

32. Deferred pensions

33. Age at Termination Benefit Collection Benefit Amount 47 55 $279 62
$443 66
$600
*70 ½
* You may not defer past age 70½ per IRS regulations

34. refunds/rollovers

35. Refund - Member Contributions Only + 4% Interest
Federal Income Tax
Lump Sum
20% withheld
*Member
Rollover
20% withheld
PERA
Rollover
Non-taxable event
You will receive a 1099-R tax form the following January
* Member has 60 days to rollover full refund (including the 20% federal tax already withheld) to not have tax liability for the year.

36. Combined service annuity (CSA)

37. Two or more MN public pension plans:
PERA Coordinated
Duluth Teachers Retirement Fund Association (DTRFA)
PERA Police & Fire
PERA Correctional
Teachers Retirement Association (TRA)
Minnesota State Retirement System (MSRS)
St. Paul Teachers Retirement Fund Association (SPTRFA)
Minneapolis Employees Retirement Fund (MERF)

38. Combined Service
Both plans will calculate benefit as a combined service annuity (CSA) and as separate stand-alone benefits.
The method yielding the highest overall benefits will be used for payments.

39. Both benefits calculated using
Combined Service Example
Plan
Years of Service
High-Five Salary
PERA 20
$5,500
MSRS 3
$1,200
Benefits
PERA
20 year benefit
Both benefits calculated using
PERA High-Five Salary
MSRS
3 year benefit

40. Repaying a refund

41. Purchasing Previously Forfeited Time
Repayment Must Be Within
Six Months of Termination
Must be active in public service for minimum of 6 months
Must pay back contributions plus interest

42. Purchasing Previously Forfeited Time
Pay with after-tax dollars or transfer from another tax-qualified retirement plan:
457(b)
401(k)
Deferred compensation
403(b)
IRA
Individual Retirement
Account

43. Repayment Example Time to Recover Benefit Without Repayment
Benefit With Repayment
$1,000
$1,500
5 years forfeited
$45,000 to purchase
Time to Recover
Repayment / difference in benefits / 12 months
$45,000 / $500 = 90 / 12 = 7.5 years
At 7.5 years the $45,000 payment has been recovered and the member is ahead $500 / month for life.

44. Transmittal for Purchase

45. DISABILITY BENEFITS

46. Disability Qualifications
Unable to work for at least one year
Must supply medical evidence of disability
Active public employee when disabled (Must apply w/in 18 months of leaving)
May not be collecting a retirement benefit
Under full retirement age

47. Same formula as for retirement (No reduction due to age)
Coordinated Plan
Total and Permanent Disability
Must be vested
Deemed unable to perform any substantial or gainful activity
Same formula as for retirement (No reduction due to age)

48. Correctional Plan Regular Duty Unable to work in this occupation
10 year minimum
25 year minimum benefit
1.9% each additional year
Unable to work in this occupation

49. 15-year benefit (regardless of service)
Police & Fire Plan
Regular
Total Permanent
15-year benefit (regardless of service)
15-year minimum
3% each additional year
Unable to work in this occupation

50. Police & Fire Plan * Duty * Vested with one day on the job Regular
Total Permanent
20-year minimum
3% each additional year
Auto Survivor
Unable to work in this occupation

51. Survivor benefits

52. Survivor Benefits Spouse Dependent Children Beneficiaries
Survivor benefits may be payable should a member die before receiving a benefit.
Depending on plan and marital status, benefits may be payable to the following:
Spouse
Dependent Children
Beneficiaries

53. miscellaneous

54. Important to Note: PERA benefits are taxable
Tax-deferred contributions since January 1, 1983
Important
to Note:

55. Weigh options carefully Survivor option is lifetime benefit
Pension Maximization
Survivor Option
or Life Insurance
Weigh options carefully
Survivor option is lifetime benefit
Bounce-back if survivor pre-deceases member

56. 30 Day separation State Statute 353.01, subd. 11a

57. Separation From Public Service
A right to a retirement benefit requires:
A complete and continuous separation from all public employment for 30 days
No written or verbal agreement prior to termination to provide services to a public employer

58. Separation From Public Service
Independent contractors and employees of an independent contractor may not work for their same employer for 30 days
Public employment includes school districts, cities, counties, townships, and state employment in Minnesota

59. Paperwork and checklist

60. Birth & Name Change Documentation
Member & Survivor ID
Birth & Name Change Documentation

61. Retirement Application
First of two PERA documents

62. Second of two PERA documents
Verification of
Termination Form
Second of two PERA documents

65. Working after retirement with a pera employer

66. Earnings Limit Timeline
Under full SSA retirement age
Earn up to annual amount with no offset
January 1 the year of full SSA retirement age
$45,360 annual limit
Full SSA
retirement age*
No limit
*See Working After Retirement brochure
$17,040 annual limit
Reduction $1 for every $2 over limit or suspension of benefit. Offsets are recovered.

67. Earnings limits only apply if you return to PERA-covered employment
Earnings Limit Timeline
Earnings limits only apply if you return to PERA-covered employment
For every $2 exceeding limits, $1 of pension goes into escrow account accessible two Januarys later or one year after termination

68. MY PERA and other ONLINE resources

69. MY PERA Active Members Retirees View retirement estimates
Use retirement calculator to create estimates
See contribution history
Retirees
Access 1099R
Change: tax withholding
direct deposit
address

70. Log On

71. Register As a New User

72. MY PERA Retirement Calculator

73. Retirement Tool Kit

74. Educational programs ask your employer to arrange a workplace presentation

75. Group Conferences
one to three years before retirement
PERA Overview
all stages of employment
Preretirement Workshop
within five years of retirement

76. 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.