PRE-RETIREMENT SEMINAR 2009-2010. Planning for Retirement. PLANNING. Retirement Education Seminars
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PRE-RETIREMENT SEMINAR2009-2010 Planning for Retirement
PLANNING • Retirement Education Seminars • VRS offers Pre-Retirement Seminars and Counseling Sessions for individuals who are thinking about retirement. If you wish to attend any of these sessions, please register on-line at www.varetire.org. • PLANNING FOR RETIREMENT IS ESSENTIAL!
ERIP and RETIREMENT • Intent forms for 2010-2011 were due on December 4, 2009. • For retirements effective July 1, 2010: • ERIP applications are due by March 1, 2010 • VRS applications are due by April 1, 2010 (90 days in advance of retirement date) • Requests for retirement and ERIP will be approved at the March 10, 2010, School Board meeting
Virginia Retirement System • All full-time employees of Pittsylvania County Schools with at least five years of service are eligible to receive benefits from the Virginia Retirement System.
RETIREMENT OPTIONS • Retiring with a Full BenefitIf you have at least 30 years of service and are age 50 or older, you are eligible to retire with an unreduced (full) benefit. VRS members who are 65 with at least five years of service also may retire with an unreduced benefit. • Early retirementYou may choose to retire with a reduced benefit as early as age 50 if you have at least 10 years of service or age 55 if you have at least five years of service.
CALCULATING BENEFITS • Calculating your benefitYour benefit is based on your age at retirement; years of creditable service, including any prior service credit you may have purchased; and your average final compensation, which is the average of your 36 consecutive months of highest creditable salary. You can estimate your benefit with the Online Service Retirement Calculator or you may contact Janet Hancock for an estimate. • Social SecurityAs a public employee in Virginia, you are eligible for Social Security benefits when you retire. For information about your eligibility, visit the Social Security Administration Web site.
EXAMPLE CALCULATION Salary: 2007-2008 $ 47,650.00 2008-2009 $ 49,000.00 2009-2010 $ 49,000.00 TOTAL $ 145,650.00 Annual Final Compensation (Total divided by 3) = $ 48,550.00 AFC X .017 = $ 825.35 X 30 service years - $ 24,760.50 Divided by 12 = $ 2,063.37 (VRS Monthly Basic Benefit)
BENEFIT PAYOUT OPTIONS • Basic Benefit • Survivor Option • Advance Pension Option • Partial Lump-Sum Option Payment (PLOP)
PLOP • The Partial Lump Sum payment is subject to taxes at the time you receive your payment (20% federal tax and 4% State tax). If you are not yet 55, you may also be required to pay an additional 10% tax penalty. • To avoid taxes and penalties, you may elect to have your PLOP payment transferred directly to a tax-deferred IRA or other qualified retirement plan.
APPLICATION PROCESS • Application packets may be obtained from Mrs. Janet Hancock at the School Board Office • Date of retirement must be the first day of the month • Signature on the application must be notarized • If married or separated, spouse must also sign application (signature must be notarized) • If divorced, a copy of the divorce decree must be provided. • If widowed, a copy of the death certificate must be provided
APPLICATION PROCESS • If widowed, a copy of the death certificate must be provided • Must provide a copy of birth certificate • If survivor option is selected, must provide copy of survivor’s birth certificate • Must complete Request for Income Tax Withholding form • Must complete the Authorization for Direct Deposit of Monthly Benefit form
ERIP • If you choose to retire under ERIP, you will be required to work a certain number of days each year for up to 7 years. Your first benefit check will be received from the Pittsylvania County School Board after a 30-day break from service (for 10 and 11 month employees – October 31; for 12 month employees August 31). You may resign from ERIP at any time.
Your first VRS benefit check will be sent to you August 1 (if July 1 is the retirement date). This check will come from the Virginia Retirement System and should be direct deposited to the account you have provided. VRS BENEFIT CHECKS
COST OF LIVING ADJUSTMENTS (COLA) • You will be eligible for cost of living increases from the Virginia Retirement System effective July 1 of the second calendar year after you retire. Increases, if any, are made annually.
LIFE INSURANCE • When you retire with an unreduced or reduced VRS benefit, your Basic Group Life Insurance (Minnesota Life Insurance) continues at no cost to you after retirement provided you were covered under the Basic Group Life Insurance Program while actively employed. • At retirement, your insurance begins to reduce on January 1 of the first full year after retirement at a rate of 25 percent per year until it is valued at 25 percent of the amount of coverage at retirement. • After retirement, the natural death benefits and the accelerated death benefits continue, while the accidental and dismemberment benefits cease.
Optional Group Life Insurance • After you retire, you may continue a portion of optional life insurance coverage for yourself, your spouse and dependents into retirement. You and your dependents that wish to continue coverage must have been covered continuously under optional life insurance during the 60 months immediately preceding retirement. You must elect continuing coverage within 31 days of terminating employment. • Optional insurance amounts begin to reduce when you reach age 65 and ends at age 80.
HEALTH INSURANCE CREDIT • VRS offers health insurance credit to assist with the cost of health, dental, prescription, vision and Medicare Part B plans. • To be eligible for this credit, you must have at least 15 years of creditable service. • This health insurance credit pays $4.00 per year of service (Example: $ 4.00 per year for 30 years of services = $120.00 per month) • This benefit does not apply to custodians, cafeteria, maintenance and bus shop employees)
PURCHASE OF PRIOR SERVICE • You may be able to increase your retirement benefits by purchasing prior service credit, such as: • Leave of absence for Military Service (no cost) • Leave of absence for births or adoptions • Educational leave of absence • Non-covered service with a VRS-participating employer • Public service • Civilian service in the Federal Government • VRS-refunded service • Active Duty Military Service • Service not included in a Portability Transaction • Purchase using accumulated sick leave
WORKING AFTER RETIREMENT • May work in any non-VRS position • May be employed in a part-time position for Pittsylvania County Schools • May work as a regular substitute ($68.96 daily for teachers) • May work as a long-term substitute teacher ($116 per day) • May be employed in a critical teaching area and continue VRS benefits while working
ADDITIONAL INFORMATION My VRS is a service from VRS that allows you to update your contact information as well as check the status of your application for retirement, purchase of prior service or refund request.
QUESTIONS Contacts: • Janet Hancock at the School Board Office: Chatham: (434) 432-2761, Ext. 5008 Danville: (434) 793-1624, Ext. 5008 Gretna: (434) 656-6248, Ext. 5008 e-mail: email@example.com • Virginia Retirement System P. O. Box 2500 Richmond, VA 23218 (888) 827-3847 www.varetire.org e-mail: firstname.lastname@example.org