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MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM. WELCOME TO THE RETIREMENT INFORMATION SESSION JULY 12, 2007. WELCOME. MR. JACK L. HOHREIN EMPLOYEES’ RETIREMENT SYSTEM MANAGER. INFORMATION SESSION AGENDA. 12:30 – 1:15PENSION BENEFITS Milwaukee County Retirement Staff

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MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM

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MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM

WELCOME TO THE RETIREMENT INFORMATION SESSION

JULY 12, 2007


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WELCOME

MR. JACK L. HOHREIN

EMPLOYEES’ RETIREMENT SYSTEM MANAGER


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INFORMATION SESSION AGENDA

12:30 – 1:15PENSION BENEFITS

Milwaukee County Retirement Staff

1:15 – 1:30QUESTIONS

1:30 – 2:15HEALTH, DENTAL AND LIFE INSURANCE

Thomas MacAlpine, Cambridge Advisory Group

2:15 – 2:30BREAK

2:30 – 3:00 SOCIAL SECURITY AND MEDICARE

Karyl Richson, Social Security Administration

3:00 – 3:30DEFERRED COMPENSATION

Marco Gruchalski, Great West Retirement Services

3:30 – 4:30QUESTIONS


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OVERVIEW OF ERS PRESENTATION

  • ERS Staff

  • Pension Board Members and ERS History

  • Membership in ERS

  • Reciprocity

  • Funding

  • ERS Benefits

  • ERS Distributions and Forms of Payment

  • Backdrop

  • Pension Calculation

  • Retirement Process


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MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM

WHO WORKS IN RETIREMENT AND WHAT DO THEY DO?


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Jack Hohrein

Retirement System Manager/Pension Board Secretary

Gordon Mueller

Fiscal Officer

Administrative Specialists

Vivian Aikin

Robert Shupe

Denise McCaskill

Veronica Britt

Retirement System Coordinator

Clerical Specialists

Tracy Jackson

MILWAUKEE COUNTY RETIREMENT STAFF


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MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM

WHAT IS THE HISTORY AND STRUCTURE OF MILWAUKEE COUNTY’S ERS?


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PENSION BOARD MEMBERS

  • 5 Citizen Members

    • Linda Bedford

    • Donald Cohen

    • Michael Ostermeyer

    • Sarah Peck

    • Thomas Weber

  • 3 Employee Members

    • Dean Roepke (Chairman)

    • John Martin

    • John Parish

  • 1 Member Elected by Retirees

    • Marilyn Mayr


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ROLE OF THE PENSION BOARD

  • Monitor Investment of Funds

  • General Administration

  • Proper Operation of ERS


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MILWAUKEE COUNTY RETIREMENT SYSTEM HISTORY

  • ERS (Employee Retirement System) Established in 1937

  • OBRA (Omnibus Budget Reconciliation Act) Established in 1992

  • Pension Board established in 1937

  • Milwaukee County General Ordinance Chapters 201 and 203

  • Milwaukee County Retirement Rules “Appendix B and B1”


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MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM

HOW DO I BECOME A MEMBER OF THE ERS?


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MEMBERSHIP

  • ERS is Milwaukee County’s primary

    retirement system

  • ERS participation is automatic with

    the exception of:

    • Excluded employees (i.e., board and commission members)

    • Optional employees

    • Seasonal employees

      These employees participate in OBRA and can contact

      ERS at 414-278-4143 for details


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MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM

WHAT IS RECIPROCITY AND WHO IS ELIGIBLE?


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RECIPROCITY

  • Special provisions are available for individuals who have participated in either of these systems:

    • State of Wisconsin Retirement System

    • City of Milwaukee Employees’ Retirement System (City/County Transfer)

  • Pension credits in one or more of these systems may increase your total benefits payable from Milwaukee County

  • Members with credits in either of these systems should contact Milwaukee County ERS at 414-278-4143 for additional information


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MILWAUKEE COUNTY EMPLOYEES’ RETIRMENT SYSTEM

IF I GET LAID OFF HOW DOES IT AFFECT MY RETIREMENT?


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LAY-OFFS

  • If eligible for retirement contact ERS immediately for retirement date planning

  • Retirement applications must be

    completed while in active employment status

  • Deferred Retirements non-eligible for:

    • Backdrop

    • Rule of 75


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MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM

HOW IS THE ERS FUNDED?


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FINANICAL INFORMATION


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CUSTODIAN

  • Pension Board has the authority to select a custodian

  • Pension Board had delegated custody to Mellon Trust


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ERISA

EMPLOYEE RETIREMENT INCOME SECURITY ACT

  • ERISA imposes funding, vesting disclosure and fiduciary requirements on certain pension plans

  • ERISA does not apply to governmental plans (i.e., ERS and OBRA)

  • ERISA guidance may be helpful in some contexts


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TAX QUALIFICATION

  • One of the IRS requirements is Code 415

  • Favorable determination letter

  • Internal Revenue Code (“The Code”) and Treasury Regulations contain requirements for tax qualification

  • Importance of tax qualified status

  • IRS tax ID Number 39-6146761


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FINANICAL SUMMARY

  • Healthy Plan

  • High Quality Custodian

  • Tax Qualified


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MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM

WHAT BENEFITS ARE OFFERED BY THE ERS?


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ERS BENEFITS

  • Death Benefit

    • Payable upon death of an active employee

  • Disability Benefits

    • Accidental (injury on the job at specific time and place

    • Ordinary (mentally or physically incapacitated for duty)

      *Special provisions apply for Deputy Sheriffs killed in the line of

      duty


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ERS BENEFITS CONT’D

  • Separation Benefits

    • Withdrawal of contributions (prior to 1971)

    • Deferred vested benefits status

  • Monthly Annuity Benefit (normal retirement allowance)


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MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM

HOW DO I BECOME ELIGIBLE FOR RETIREMENT AND WHAT TYPE OF PENSION BENEFIT WILL I RECEIVE?


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PENSION BENEFITS

  • Normal retirement pension

    • Employment terminates on or after age 55 and 30 years of service

    • Employment terminates on or after age 60

    • Rule of 75 (special rules apply for reciprocity)

  • Early retirement pension

    • Employment terminates on or after age 55 and 15 years of service

    • Reduced monthly benefits


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PENSION BENEFITS (CONT’D)

  • Deferred vested retirement pension

    • Eligibility requirements

    • May begin at normal retirement age or, if earlier, at age 55, if member has 15 years of service

  • Accidental disability retirement

    • Disabled as the result of a work-related injury

    • Other eligibility requirements apply

    • Payable at 60% or 75% of FAS (Final Average Salary) unless normal pension is greater


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PENSION BENEFITS (CONT’D)

  • Ordinary disability retirement

    • Disabled as the result of a non-work-related injury or illness

    • Other eligibility requirements apply

      • 15 years of service credit

    • Payable at 25% of FAS unless normal pension is greater


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PENSION BENEFITS (CONT’D)

  • Survivor benefits (Spouse and children)

    • Sheriff’s

    • Others


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MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM

WHAT ARE THE FORMS OF DISTRIBUTION AND WHAT OPTIONS DO I HAVE?


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ERS FORMS OF DISTRIBUTION

  • Normal form of benefit is an annuity for the member’s lifetime

  • Before benefits begin, a member may select a form of payment under ERS


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FORMS OF PAYMENT

  • Maximum Benefit

    • This is the maximum benefit allowed

    • No beneficiary is designed when the maximum is chosen

  • Option 1: Reduced monthly benefit for life of member; upon members death beneficiary gets any amount remaining in member’s membership account


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FORMS OF PAYMENT CONT’D

  • Option 2: 50% joint and survivor annuity

  • Option 3: 100% joint and survivor annuity

  • Option 4: 25% joint and survivor annuity

  • Option 5: 75% joint and survivor annuity


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FORMS OF PAYMENT (CONT’D)

  • Option 6: 10 year certain annuity

  • Option 7: A member can apply to receive benefits in any other form

    • Subject to Pension Board’s approval

    • Rule 1013 describes process

    • The Pension Board has restricted lump sum requests and joint surviors options less than 25%

    • Members will incur fees for option 7 request that require actuarial calculations


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MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM

WHAT IS A BACKDROP AND WHO IS ELIGIBLE FOR IT?


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BACK DROP BENEFIT

  • Eligibility Requirement

    • Must be eligible for an early or normal retirement

    • Eligibility dates are determined by union contract agreements

    • Must work one year beyond eligibility date

    • Special rules for represented employees

  • 2-Part Benefit

    • Lump sum DROP benefit

    • Monthly DROP benefit


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MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM

HOW IS MY PENSION CALCULATED?


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ERS PENSION CALCULATION

  • Calculation of Normal Pension Benefit (General Formula)

    • General formula takes into account FAS, years of service and multiplier (i.e, 1.5% of FAS x years of service)

    • Other Factors Include

      • 80% of FAS maximum

      • Post retirement adjustments


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ERS PENSION CALCULATION

  • Calculation of Normal Pension Benefit (Recruitment and Retention Incentives)

    • Recruitment and retention incentives may increase Normal Pension Benefit

    • Recruitment and retention incentives include

      • Pension benefit multiplier

      • Bonus to FAS

      • Backdrop


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PENSION BENEFIT MULTIPLIER

  • Eligibility Requirements

    • General eligibility rule –initial ERS membership began on or after 1/1/82

    • Special eligibility rules for represented employees, non-represented deputy sheriffs and elected officials

  • Pension multiplier is credited with an additional .5% of member’s FAS

    • Only applies to certain years of service credit

    • 80% of FAS limit applies


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FAS “BONUS”

  • Eligibility Requirements

    • General eligibility rule – initial ERS membership began prior to 1/1/82

    • Special eligibility rules for represented employees and non-represented deputy sheriffs

  • FAS is increased by 7.5% for each year of pension service earned after 1/1/01

    • Maximum of 25% of pre-bonus FAS

    • 80% of FAS limit applies


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MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM

WHAT STEPS DO I TAKE IF I AM THINKING ABOUT RETIREMENT?


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RETIREMENT CALCULATOR

  • Milwaukee County Intranet Site (http://172.31.1.4/MCnet)

  • Fields to be entered:

    • Social Security Number

    • Last Day of Pay

    • Backdrop Date (Optional)

    • Beneficiary Birth Date


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REQUESTING AN ESTIMATE

  • Estimate Request Provided

    • Within six months of anticipated retirement date

    • Request mailed to your home within three to four weeks of your request

  • Contact ERS

    • Phone (414-278-4143), letter or email

  • Information Needed

    • Social Security Number

    • Estimated date of retirement

    • Beneficiary Date of Birth

    • Contact Information

    • Backdrop date


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SICK ALLOWANCE

  • In accordance with current union contracts and ordinances

  • Exception for deputy sheriffs

    • Pension service credit

  • Separate lump sum check less taxes

    • Taxed at 39.15%

  • Sick pay cannotbe rolled over into an IRA

  • Eligible employees who die (while working) their sick allowance is paid in a lump sum to the spouse/designated beneficiary


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VACATION TIME

  • Vacation Time

  • Personal Time

  • Accrued Overtime

  • Accrued Holiday

    • May be run out in bi-weekly payments

    • Paid in lump sum less taxes (39.15%)

  • End of year retirements do not require you to work into the new year

    • If you have full pay up to the end of year, vacation time, three personal days, and holidays (up to retirement date) will be granted for the new year (If bi-weekly payments were chosen)


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ERS INDIVIDUAL RETIREMENT SESSION

  • Scheduled 2nd Tuesday of each month

  • Sick Allowance/Vacation Payout (if applicable)

  • Retirement Option Chosen

  • Beneficiary Designation

  • Official Retirement Date

  • Federal and State Withholdings (W4P)

  • Direct Deposit

  • Date of 1st Pension Check

  • Date of Backdrop Check (if applicable)


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PENSION CHECK

  • The 1st retirement check is mailed the the 3rd week of the following month in which you retire

  • Checks are mailed one day before the last business day of each month

  • Direct deposits are deposited on the last business day of each month. Effective July 1, 2007, all retirees were required to have their checks directly deposited

  • Annual Increase (2% of your original pension amount on the anniversary of your retirement)


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THANK YOU

ERS STAFF


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QUESTIONS


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