Delaware Public Employees' Retirement System State Employees

							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