Tacoma Employees’ Retirement System

1. Tacoma Employees’ Retirement System New Employee Orientation

2. Tacoma Employees’ Retirement System • TERS • Defined Benefit • Eligibility • All City of Tacoma Employees • Member Public Agencies • Exceptions • By ordinance • Active members of another retirement system NEO 12/10

3. Plan Funding • Employee Contributions – 8.74% of pay (effective 1/1/2011) , and 9.20% of pay (effective 1/1/2012 and thereafter) • Employer Contributions – 10.26% % of pay (effective 1/1/2010) and 10.8 % of pay (effective 1/1/2012 and thereafter) • Investment Earnings NEO 12/10

4. Governance • Board of Administration • Mayor • Director of Finance • Designee of the City Manager • Director of Public Utilities • 3 Employee Representatives • 1 Retiree Representative • 1 Citizen Representative • 1 Alternate Member • Responsibilities • Act solely in the best interest of plan participants (members) • Oversee plan funding both contributions and investments earnings NEO 12/10

5. Service Retirement Eligibility • AGE 60, any number years of service (full benefit) • AGE 55 or older, 10 Years of service (reduced benefit) • AGE 40 or older, 20 Years of service (reduced benefit) • ANY AGE, 30 Years of service (full benefit) • RULE OF 80 (Age & Years of Service= 80) (full benefit) NEO 12/10

6. Termination of Employment • Less than 5 years: • Lump sum equal to refund of contributions plus interest Or • 5 years or more (vested): • Lump sum equal to refund of contributions, plus additional amount equal to 3.22%* of historical pay plus interest Both are taxable unless rolled directly to an Individual Retirement Account (IRA) or qualified plan. 6 NEO 12/10

7. Portability What is portability? Portability refers to retirement service that can be utilized in conjunction with another retirement system (Dual Membership). NEO 12/10

8. Portability Cont. • 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 Eligibility • Years of service under portability may be used for purposes of eligibility and benefit formula 8 NEO 12/10

9. Portability Cont. For example: Sam, who is age 55, has 20 years of service and a salary of $40K a year with the City. He also has 5 years of service and had a salary of $30K a year with his prior employment with the State. What kind of retirement benefit is he eligible for under each retirement system? NEO 12/10

10. Contact Information OFFICE LOCATION Tacoma Public Utilities Administration Building North, Ground Floor Ph: (253) 502-8200 Fax: (253) 502-8660 Toll Free (888) 404-3787 Website: http://www.cityoftacoma.org/ters NEO 12/10 10

11. Additional Contact Information Other Public Retirement Systems WA State – Department of Retirement Systems Toll Free 1-800-547-6657 or (360) 664-7000 http://www.drs.wa.gov Seattle City Employees’ Retirement System Ph: (206) 386-1293 http://www.seattle.gov/retirement Spokane Employees’ Retirement System Ph: (509) 625-6330 http://www.spokanecity.org/departments NEO 12/10