Parochial Employees’ Retirement System

1. Parochial Employees’ Retirement System 2014 Administrative Training

2. Who Is Eligible to Participate? • Mandatory participation for all full-time permanent employees who work 28 hours or more per week • Optional participation for 55 and older with 40 quarters in Social Security

3. Age 55 Opt Out • Employees age 55 at date of hire who also have 40 quarters of Social Security coverage have an option to participate in PERS • Employee must make an election within 90 days of date of hire • This is a one time irrevocable election • Does not apply to rehired retirees

4. Eligibility of Elected Officials • Parish elected officials who are currently enrolled are allowed to remain in the plan • Parish presidents, justices of the peace and coroners are the only newly elected officials able to enroll in PERS • Contact our office with any questions concerning elected officials

5. Earnable Compensation • Regular wages and overtime are includable for purposes of retirement contributions • R.S. 11:1902 (11) provides the definition of earnable compensation • This definition specifically excludes fees and commissions

6. Earnable Compensation – Cont’d • R.S. 11:233 B provides additional exclusions from the definition of earnable compensation • Car allowances, lump sum payments for annual and/or sick leave, bonuses, and terminal leave pay are some of the exclusions listed in this statute

7. Normal Retirement Provisions • Members hired prior to 1/1/07 • Plan A • 7 years and age 65 • 10 years and age 60 • 25 years and age 55 • 30 years and any age • Plan B • 7 years and age 65 • 10 years and age 60 • 30 years and age 55

8. Normal Retirement Provisions • For members hired 1/1/07 and later • Plan A and B • 7 years and age 67 • 10 years and age 62 • 30 years and age 55

9. Benefit Estimates • An employer or the member can request a written benefit estimate when the member is within 3 years of retirement eligibility • All estimate requests must be submitted in writing • Only one estimate allowed in a 12 month period

10. Submission of Proper Applications • Normal Retirement • Retirement Application • Employer Request Form • Copy of Member’s Birth Certificate • Copy of Spouse’s Birth Certificate if member chooses Opt. 2 or Opt. 3 • Maximum Affidavit if member chooses Maximum benefits

11. Submission of Proper Applications • DROP • DROP Application • Employer Request Form • Copy of member’s birth certificate • Copy of spouse’s birth certificate if member chooses Opt. 2 or Opt. 3 • Maximum affidavit if member chooses maximum

12. Submission of Proper Applications • Disability Retirement • Retirement Application • Employer Request Form • Copy of Member’s Birth Certificate • Copy of Spouse’s Birth Certificate if member chooses Opt. 2 or Opt. 3 • Maximum affidavit if member chooses maximum benefits

13. Disability Applications – Cont’d • Disability Claim Form • Disability Report by Supervisor and Personnel Officer • Copies of all medical records which reference the disability

14. New Form Required • All applications for any form of monthly benefit must utilize our new form which requires both the retiree and spouse to have their signatures witnessed by a notary.

15. Leave Conversion • Members can convert unused & unpaid sick and annual leave at normal retirement or upon entry into DROP • Leave cannot be used to acquire eligibility • Amount of service granted is calculated by dividing the number of unused and unpaid days by 260

16. Leave Conversion – Cont’d • Cost of leave conversion is currently part of the employer contribution rate for active members hired prior to 1/1/07. For members hired 1/1/07 and later the actuarial cost of leave conversion will be paid by the employer at the time of the member’s retirement

17. Overtime & LWOP • 6 years of overtime earnings are required when a member receives overtime pay. Employers are responsible for maintaining these records. • Send written notification of the exact dates of leave without pay. This will affect service credit and eligibility.

18. Retiree Return to Work • If a retiree returns to work on a full time basis, his benefit will cease and he will begin contributing to the retirement system • If a retiree returns to work in a part-time capacity, the number or hours is limited • 480 hours per calendar year or 1,040 hours per calendar year if retired 3 or more years and age 65

19. Actuarial Transfer of Service • If a member has service credit in another state or statewide retirement system in Louisiana, he can apply to transfer that service once he has 6 months of service credit in PERS. The same is true if a former member of PERS wishes to transfer our service to another state or statewide retirement system.

20. Actuarial Transfer of Service • An Application for Actuarial Transfer of Service must be filed with the system that the member is actively contributing to. • This form can be found on our website. • Application fee of $100 must accompany the form

21. Employer Rates 2015 • Employer rates have been set as follows effective 1/1/2015: • Plan A = 14.50% • Plan B = 9.00% • PRSAC has met and has approved this valuation.

22. What Can We Do to Control Costs? • Actuarial Equation • Contributions + Investment Earnings = Benefits + Expenses • The 3 major components in this equation are contributions, investment earnings and benefits. • Expenses are a small part of the equation. The cost of administering the system was $46 per member during 2013

23. Cost Sharing Provisions Implemented in 2010 • SB 85 0f 2010 permits the Board to set the employee contribution rate higher in both Plan A and Plan B. • This will allow for cost sharing if the employer rate is scheduled to increase from current levels. • Employee rates will remain at 9.5% in Plan A and 3% in Plan B for 2015

24. Cost Saving Measures Already In Place • A new plan of benefits was put in place for new employees hired 1/1/07 and later • Provisions include: • Five year FAC • Eligibility requirements changed: • 7 years and age 67 • 10 years and age 62 • 30 years and age 55

25. Cost Savings - Continued • 7 years of service required for disability retirement. In addition, the definition of disability was changed. A member must be unable to perform any type of gainful employment • Actuarial cost of leave conversion will be paid by each individual employer at the time of the member’s retirement

26. Pension Changes Still Sweeping the Country • Although changes are still being made to plans across the country, the rate of change has slowed • States continue to make changes to employee contribution rates and COLA provisions • Cash balance plans or defined contribution plans are still being considered as substitutions for defined benefit plans

27. GASB 68 • GASB 68 provides new accounting and reporting rules for employers • The new standard will require the employer to report its proportionate share of the liability of the pension plan on its financial statements. • Our actuary will calculate the proportionate share for each participating employer in PERS

28. GASB 68 • This new standard also requires changes to the note disclosures in the employer’s financial statements. These will be prepared by your auditors. • This new standard takes effect for fiscal years beginning in 2015.

29. GASB 67 • GASB 67 revises financial reporting for pension plans. • Effective for fiscal years ending June 30, 2014 and calendar years ending December 31, 2014 • This statement will require the retirement system to conduct a sampling of payroll audits of participating employers to determine that only eligible members are enrolled and that salaries are being properly reported

30. Mandatory Social Security In Louisiana, 72% of state and local government employees are not covered by Social Security • Mandatory coverage is considered as a revenue raiser for the Federal Government

31. Mandatory Social Security Mandatory coverage could surface as part of an overall package designed to make State and local governments “reform” their pensions

32. Contact Your Congressman • Let your congressman know the number of active members covered by our retirement system • Our plans share costs between employee and employer • Investment and longevity risks are pooled • Mandatory coverage will increase Social Security’s liabilites • The Social Security Act of 1935 specifically excluded state and local governments from Social Security

33. Divided Referendum • Act 280 of 2004 allows a divided vote for Medicare coverage for those employees hired prior to 4/1/86 who currently do not pay Medicare • In order to receive Medicare Part A at no cost, you must have 40 quarters of Medicare coverage • With at least 30 quarters, Medicare Part A would cost $244 per month

34. Divided Referendum • With less than 30 quarters of Medicare coverage, Medicare Part A would cost $443 per month • To conduct a divided referendum contact Angie Dowdy at the State Treasurer’s office: 225-342-0026

35. Distribution of Summary of Principal Features • Our updated Summaries through the 2014 Legislative Session will be mailed this month • Sufficient copies for all active members • Please distribute only to those covered by PERS • Copy of the current Summary located on our website

36. Reporting Due Dates • Salary and contribution reports are due on a quarterly basis. The due dates are January 15, April 15, July 15 and October 15 • Your report along with your check must be received in our office on the due date.

37. Reporting Due Dates • If your report is not received in our office by the deadline, the late penalty assessed is 1.5% of the total remitted • If you will be remitting close to the deadline it may be cost effective to use an overnight delivery service in order to avoid the penalty: • $12.95 is less than 1.5% of $200,000 ($3,000)

38. Contact Info • Mailing address: P.O. Box 14619, Baton Rouge, LA 70898 • Phone: 225-928-1361 • Fax: 225-923-0933 • Website: www.persla.org