Public Employees Retirement Association of Minnesota

1. Public Employees Retirement Association of Minnesota Serving Minnesota’s Public Employees for Over 80 Years

2. Statistical Data 2,100 Employers

3. Statistical Data General P&F Correctional Active Members 139,763 10,940 3,493 Vested Deferred Members* 45,946 1,388 2,232 Benefit Recipients 79,083 9,579 690 Total 264,792 21,907 6,415 Grand Total 293,114 * Includes approximately 5,000 members now in other PERA plans, including most Correctional members. PERA also administers a Defined Contribution Plan with approximately 6,200 members. Source: 7-1-2013 Financial Report

4. Types of Retirement Plans Traditional Pension Plan (Defined Benefit Plan) IndividualAccount Plan(Defined Contribution Plan)

5. DC Plans: Your Individual Investments What’s thebottom line?

6. DB Plans: What’s defined is the benefit What’s thebottom line?

7. Contributions Coordinated Correctional Police & Fire Ee: 6.25% Ee: 5.83%Ee: 10.2% Er: 7.25% Er: 8.75% Er: 15.3% + + Social Security Medicare (If hired after 3/31/86) Ee: 7.45%Ee: 1.45% Er: 7.65%Er: 1.45%

8. SBI – Diversified for the Long Term AlternativeAssets20% SBI Investment ReturnsFY 2013 ---------------------- Domestic Stocks 21.9% International Stocks 16.1% Bonds 8.8% Alternative Investments 11.3% ----------------------------------------- Total Combined Funds 14.2% Cash 2% Bonds18% InternationalStocks15% Domestic Stocks45% * Source: 2013 Annual Financial Report

9. Revenues (1994-2013) 16¢Employers 14¢Employees 70¢InvestmentEarnings * Revenue last 20 years for 3 statewide plans (Source: Annual Financial Reports)

10. Expenses (1994-2013) 95.5¢Benefits 3.3¢Refunds 1.2¢Admin.

11. 5-7 years Remainder of your life All yourcontributions +all your employer’scontributions Paid by PERAinvestments What’s the payback? 2-3 years All yourcontributions

12. Life Expectancy (Current PERA Tables) Present Life Expectancy Age Males Females 50 82.2 84.5 51 82.4 84.6 52 82.5 84.7 53 82.6 84.7 54 82.8 84.8 55 82.9 84.9 56 83.0 85.0 57 83.1 85.1 58 83.2 85.2 59 83.4 85.3 60 83.5 85.5 61 83.6 85.6 62 83.7 85.7 63 83.9 85.9 64 84.0 86.0 Present Life Expectancy Age Males Females 65 84.2 86.2 66 84.4 86.4 67 84.6 86.6 68 84.8 86.8 69 85.0 87.0 70 85.3 87.2 71 85.5 87.5 72 85.8 87.7 73 86.0 88.0 74 86.3 88.3 75 86.6 88.6

13. Building Your Pension • Your pension is built on a formula using: • Age at Retirement • Years of Service • High-5 Average Salary

14. Combined Service • Service in your PERA plan can be combinedwith service under 14 other MN plans • Pension from PERA • Pension from other retirement plan • Both benefits based on high-5 salary(no matter when credit earned)

15. Benefit Options % ofSingle-lifeMember (63)Survivor (61) Single-life 100% $1,079 $ 0 25%97% $1,047 $262 50%94% $1,014 $507 75%92% $ 993 $745 100% 89% $ 960 $960 * If other than spouse, survivor may not be more than 10 years younger for the 100% or 19 years younger for the 75% option

16. Decisions . . . Decisions Can I geta do-over?

17. Your Options What if you leavepublic service before retirement?

18. Refunds Take the $ and run! Contributions + 4% Interest - 20% Federal Withholding - 10% Federal Penalty (until age 59½ if leave before 55) Refund

19. Refunds • Rollover • You do it • 20% FederalWithholding • Direct Rollover We do it • No Withholding • No Penalty

20. Deferred Pension • If vested, you qualify for a pension any time after age 55 • The longer you defer, the larger the monthly benefit until full retirement age • You may not defer past age 70½

21. Service wish restored Total service lost (Total refund + interest) x Repaying a Refund * • Total Repayment (Lump sum) • Must return to public service minimum 6 mos. • Refund + 8.5% interest compounded annually Partial Repayment • Must be active public employee • Refund must cover at least 2 yrs. service • Repayment must be at least 1/3 of refund you received * You may roll over tax-deferred investments, like deferred comp., to repay a refund

22. Other Benefits Disability Survivor

23. Disability Benefits (Qualification) • Coordinated • Total and Permanent (At least one year) • P&F and Correctional • Unable to perform duties of your position • Common to All Plans • Active public employee when disabled(Must apply w/in 18 months of leaving) • May not be collecting a retirement benefit • Less than age 65 (Age 55 for P&F & Correctional) • Must supply medical evidence of disability

24. Survivor Benefits (Coordinated/Correctional) Must be vested for a future benefit • 100% option pension • Term-certain spouse benefits- 10 years - 15 years - 20 years • If no spouse, term-certain benefits for dependent children • Refund of member deductions plus interest

25. Survivor Benefits (P&F) • Benefits: • 50% of average salary of last six months for spouse and 10% for each child(60% if death result of hazardous duty)or • 100% option pension payable to spouse if member reaches age 50 with 3 or more years of service or any age with 30 years of serviceor • Refund of member deductions plus interest (Maximum monthly family benefit is 70% of average salary / 80% if result of hazardous duty /Minimum benefit 50% & 60%)

26. PensionIncreases? Benefits will increase by1% every January untilplans are 90% funded for2 years, and then at 2.5%

27. Termination Verification • Sent to member before retirement • Filled out by employer • Apply for Retirement • Choose option • Signed by member & spouse • Required Documents • Proof of age* • Proof of name change** If choosing survivor option, PERA needs same info. for survivor Applying for Retirement • Know Your Pension Options • Review pension estimates • Make sure all your questions are answered Retirement effectivefirst of monthfollowing termination

28. You Must Really Retire! • Requirements • Resignation or dismissal • Not just a leave of absence • No prior agreement, written or verbal, to be rehired in any capacity • 30 day break in service • This includes work as an independent contractor or consultant • Does not apply to elected service

29. Applying forRetirement Member Information,Marital Information,and Benefit Selection

30. Temporary Pre-62 Increase & Taxes Applying forRetirement

31. Combined Service,Direct Deposit, and Notarized Signature Applying forRetirement

32. Termination Verification Form

33. Birth and Marriage Documents / Passport

34. Earnings limits only apply if you return to PERA-covered employment EarningsLimit Timeline (2014)* Jan. 1 year you reach full S.S. Month you reach full retirement age S.S. retirement age Annual Limit$15,480 $41,400 No limit Reduction* $1 for every $2 over or suspension of benefit * Reduction placed in escrow.Available one year after leaving job.If work extends past end of year, available one year later.

35. Taxes • Most, if not all, of your PERA pension is taxable income • If you were hired after Dec. 31, 1982, your entire benefit is taxable • If you were a member prior to 1983, you will receive your after-tax contributionsback over your estimated lifetime, or theestimated lifetime of both you and your survivor

36. PERA Office Retirement Systems ofMinnesota Building 60 Empire DriveSt. Paul, Minnesota

37. On-line Resources

38. 9 0 MY PERA 100

39. MY PERA

40. Our newest feature

41. And now 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.