Delaware Public Employees' Retirement System State Employees

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					Delaware Public Employees’ Retirement System
       State Employees’ Pension Plan




     Retirement Planning

     Presented by the State of Delaware Office of Pensions
Current Statistics             (as of 6/30/10)


• 21,676 Retirees (State Employees’ Pension Plan)

• 35,217 Active Employees (State Employees’ Pension Plan)

• $6.3 billion + in the Delaware Public Employees’ Retirement
  System (8 pension plans, 1 length of service award plan, 3 post-
   retirement trusts, 1 investment pool)
    • Defined Benefit Plan
    • Over 96% funding ratio for State Employees’ Pension Plan
Retirement Eligibilities
• Unreduced Service Pension Benefit
   • 30 years of credited service at any age
   • Age 60 with at least 15 years of credited service
   • Age 62 with at least 5 consecutive years of credited service

• Reduced Service Pension Benefit
   • Age 55 with at least 15 years of credited service
       • Reduced 0.2% for each month the employee is under age 60
   • 25 years of credited service at any age under age 60
       • Reduced 0.2% for each month the employee is short of 30 years of
         credited service

• Vested Pension Benefit
   • Employee must have 5 consecutive years of service
   • Pension is effective first of the month following the employee’s 62nd
     birthday
How do 2011 Legislative Changes affect Pensions?
• For employees first hired on or after 1/1/2012:
    • Vesting requirements increase from 5 to 10 years

    • Change the normal retirement age to the following:
        • Age 65 with at least 10 consecutive years of credited service
        • Age 60 with 20 years of credited service
        • 30 years of credited service at any age


    • Increase early retirement reduction factor from 0.2% to 0.4%

    • Increase employee pension contributions from 3% to 5% after a
      $6,000 exclusion

    • Overtime payments will not be included in the employee’s final
      average compensation
Buy-In Options Upon Retirement
• Approved medical or personal leaves of absence
• Actuarial
• Other Professional Educational Experience (OPEE)
• Sick Leave
   • Buy-in options must be approved and/or verified by the Pension
     Office prior to retirement
Estimated Pension Benefit Calculation
Estimated Pension Benefit Calculation (continued)
Beneficiary versus Survivor

• A beneficiary is named on the back of the Employee Actuarial
  Form or Designation or Change of Beneficiary Form (as found
  in your Comprehensive Annual Statement) and receives a lump
  sum distribution of the balance of employee paid pension
  contributions, plus interest, in the event that there is no eligible
  survivor at the time of the employee’s death

• A survivor is a person eligible to receive a monthly pension
  benefit at the time of the employee or pensioner’s death
Who is an Eligible Survivor?

• Husband or wife

• Civil union partners (effective 1/1/2012)

• Child/children under age 18, unmarried, and if between the ages
  of 18 and 22, a full-time student

• Child permanently disabled prior to age 18

• Dependent parents
Joint And Survivor Benefit
• Payable to an eligible survivor
• Option must be made regardless of survivor status upon
  retirement
• One-time irrevocable election made upon retirement
    • 50% = No reduction in pensioner’s benefit. Eligible survivor
      receives 50% of current benefit at the time of pensioner’s death
    • 75% = 3% reduction in pensioner’s benefit for their lifetime.
      Eligible survivor receives 75% of current benefit at the time of
      pensioner’s death
Burial Benefit
• $7,000 benefit payable at the time of the pensioner’s death

• No cost to pensioner

• May list one or more individuals as a beneficiary

    • Can designate primary and contingent beneficiaries
    • Amount divided equally among beneficiaries if more than one is
      listed
    • Can change beneficiary(ies) by completing a Change of
      Beneficiary Form and submitting to the Office of Pensions

• Payment is taxable to the beneficiary(ies)
 Health Insurance
• Health benefits are available with the ―State Share‖ paid by the
  State of Delaware for the following employees:
    • Hired prior to 7/1/1991
    • Disability Pensioners
    • Employees on Long Term Disability benefits paid by the Hartford

• For employees hired on or after 7/1/1991, the following portion
  of the ―State Share‖ will be paid by the State of Delaware:
    •   Less than 10 years of credited service 0%
    •   10 years – 14 years 11 months          50%
    •   15 years – 19 years 11 months          75%
    •   At least 20 years                      100%

• Pensioners will continue to pay the ―Employee Share‖ of health
  care
Health Insurance (continued)
• All plans coupled with prescription plan coverage
    • Current provider is Medco
    • Benefits as a retiree are the same as extended to active employees

• Changes in coverage can be made once a year during the open
  enrollment period in May, changes are effective July 1
    • Life changing events allow a change in coverage throughout the
      year (e.x. marriage, birth, retirement, etc.)

• Automatic payroll deduction

• Health & Prescription Plans, as well as State & Pensioner costs,
  are subject to change
Health Insurance Changes for 2011 Legislation
• Employees hired on or after 1/1/07:
    • Subject to a change in the number of years to vest for the state share of
      retiree healthcare
        • Less than 15 years of credited service                      0%
        • 15 years – 17 years 5 months                               50%
        • 17 years 6 months – 19 years 11 months                     75%
        • At least 20 years                                        100%

• Employees hired on or after 1/1/2012:
    • Eliminate Double State Share for employees hired or who become benefit
      eligible on or after this date

• Employees and pensioners effective 7/1/2012:
    • Eliminates free Basic Plan through Blue Cross/Blue Shield
    • Establishes a fixed cost percentage for the State health insurance plans
    • Current Double State Share employees will pay a $25 monthly charge for
      each non-Medicare supplemental contract
Medicare Coverage
• Medicare becomes primary insurance through Social Security
  when eligible
   • Part A: Hospital Insurance
       • Free to most employees

   • Part B: Medical Insurance
       • Has a monthly premium
       • Contact the Social Security Administration for cost and payment
         details

   • Part D: Prescription Drug Plan
       • Required coverage through Social Security if you do not have
         comparable prescription coverage
       • Cannot enroll in Part D and continue prescription through the State

• Parts A and B cover approximately 80% of the employee’s total
  health care costs
Medicare Coverage (continued)
• The Office of Pensions provides a Medicare Supplement
   • Helps to cover the additional 20% of health costs not
     covered by Parts A and B
   • ―State share‖ will be paid by the State of Delaware based on
      employee’s date of hire and years of creditable service for
      employees who retire on or before 7/1/2012
       • Employees who retire on or after 7/2/2012 will be responsible
         for paying 5% of the total cost of the supplement

   • Supplemental coverage is different than the health plan the
     employee is currently participating in

• Mandatory for pensioners to accept Medicare Parts A and
  B when eligible and maintain enrollment in order to
  participate in supplemental health coverage offered by the
  State
Dental Insurance
• Same dental plans available to retirees and active employees
    • Dominion Dental
    • Delta Dental

• School District employees may be offered a different dental plan
  when actively employed
    • Costs will differ
    • Can stay with school dental plan for a total of 18 months under
      COBRA provisions

• Pensioner is responsible for the entire cost of dental coverage
    • Automatic payroll deduction

• Binding election – enrollment or termination during open
  enrollment period only
EyeMed
• State vision plan extended to retirees and active employees

• School District employees may be offered a different vision plan
  when actively employed
    • Costs will differ
    • Can stay with school vision plan for a total of 18 months under
      COBRA provisions


• Pensioner is responsible for the entire cost of vision coverage
    • Automatic payroll deduction

• Binding election – enrollment or termination during open
  enrollment period only
Blood Bank
• No charge to pensioner
• Covers pensioner and any eligible dependents
• When contacted by the Blood Bank
   • Pensioner can donate blood
   • Have someone donate blood for them
   • Pay for a pint of blood

• At age 75, there is no longer a blood donation or payment
  obligation and pensioner is a life-long member
• Nationwide membership
Direct Deposit
• Mandatory for pension benefits
• Retiree is responsible for ensuring routing and account numbers
  are correct on ―Deposit Authorization Form‖
   • To avoid delays in processing of your pension benefit, you can
     submit a voided check, savings statement, or letter from the bank
     to ensure accuracy

• If making a deposit with a Credit Union, you must contact them
  to specify which account(s) should be utilized
   • Some Credit Unions will require completion of a new direct
     deposit form to deposit retirement income
   • Check with your institution for their policy

• Your retirement benefit is deposited into the specified
  account(s) on the last business day of each month—advice
  mailed to home address
Taxes
• Pension benefit is taxable by the Federal Government and may
  be taxable in the state where the pensioner maintains permanent
  residence
   • Cannot withhold another state’s tax from the State of Delaware
     pension benefit


• By January 31st of each year, the Office of Pensions will mail
  pensioners a 1099-R form (the retiree version of the W-2 form)
   • Gross earnings and taxable earnings are detailed on the 1099-R
   • Withholding changes can be made throughout the year
Working After Retirement
• If receiving a pension benefit and returning to work for the
  State of Delaware, the pensioner must hold a non-pension
  covered position
   • An elected official or position appointed by the Governor and
     confirmed by the Senate allowed
   • No work restrictions if not working for the State of Delaware
   • No earnings limits
   • HR office of employing agency can confirm whether a position is
     pension creditable

• If receiving a Social Security benefit, earnings limits apply
   • Contact local Social Security office for current regulations
Post Retirement Increases (PRI)

• A PRI is a pension increase received after retirement

• Pension law does not provide for automatic increases

   • Increases granted upon Legislative approval
Ready for Retirement
• Notify supervisor/HR office, in writing, three months prior to
  retirement

• HR will contact employee for an appointment date and time to
  complete the pension packet

• Personal documents needed to take to appointment with HR for
  employee, spouse, and eligible dependents

    • Birth certificates
    • Signed Social Security cards
    • Marriage or civil union license, death certificate, or divorce decree
      as applicable
    • Medicare card showing A and B coverage if applicable
Payment of First Pension Benefit
• All State agencies and school districts, with the exception of
  some University of Delaware employees, are on lag payroll

• Pension benefits are deposited at the end of the next month
  following the effective date of pension
    • E.g. If you retire effective 7/1, your first pension benefit will be
      payable the last business day in August, retro-active to your
      pension effective date

• The first deposit will include two months of pension benefits
   • Each deposit thereafter will include only one month of pension
     benefit
After You Retire

• The Pension Office maintains pensioner records

• Notify the Pension Office in writing if your name, address or
  other personal information changes

• Contact the Pension Office with any questions or concerns
  regarding your pension
Contact the Office of Pensions
• Website: www.delawarepensions.com

• Email address:   Pensionoffice@state.de.us
   • Phone:        (302) 739-4208
   • Toll free:    ( 800) 722-7300
   • Fax:          (302) 739-6129

• Office Address: McArdle Building
                  860 Silver Lake Blvd, Ste. 1
                  Dover, DE 19904-2402

				
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