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					PSPRS Benefits
    101
      Today’s Webinar
Discuss types of benefits offered through The
 PSPRS.
Eligibility Requirements for Benefits
 Overview of how benefit types are calculated
Q & A




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            Most Important
            Responsibility
• Decide all questions of eligibility and service
  credits, and determine the amount, manner
  and time of payment of any benefits under the
  plan. (A.R.S. § 38-847, (D)(1)).
        •The local board secretary or HR
        representative may perform the necessary
        calculations and prepare the necessary
        paperwork for the local board’s review and
        approval.
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      How Do You Determine
     Eligibility For Retirement
               Benefits?
•Need to know what type of benefits are available:
        NORMAL
        DISABILITY
        DEFERRED ANNUITY
        SURVIVOR
        GUARDIAN/CHILD
        DEATH BENEFIT
        DEFERRED RETIREMENT OPTION PLAN
         (DROP)


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        Normal Retirement
• Member must meet one of the following for
  normal retirement :
  20 years of service
  15 years of service and age 62 (at time of
   termination)




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 Amount of Retirement Pension
Pension is calculated as follows:
• Retirement with 20 years credited service: 50% of average
  monthly compensation
• Retirement with more than 20 years credited service, but less than
  25 years: 50% of average monthly compensation, plus
  additional 2% for every year and fractional year over 20.
• Retirement with more than 25 years of credited service: 50% of
  average monthly compensation, plus additional 2.5% for every
  year and fractional year over 20.
           • Maximum benefit is 80% average monthly
             compensation (32 years of credited service)
           • Retirement with 20 years service, but less than 20 years
             credited service: reduction of 4% for each year and
             fractional year under 20 years credited service.
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           Disability Retirement
• Temporary Disability – total and presumably temporary
  disability incurred in performance of duty, prior to normal
  retirement, preventing performance of a reasonable range of duties,
  payments terminate after 12 months
• Accidental Disability – total and permanent disability incurred in
  performance of duty, preventing performance of a reasonable range
  of duties
• Catastrophic Disability – physical, and not a psychological,
  condition incurred in performance of duty, which totally and
  permanently prevents engaging in any gainful employment
           •Ordinary Disability – physical condition: total and
           permanent disability, preventing performance of a
           reasonable range of duties prior to normal retirement
           mental condition: total and permanent disability preventing
           any substantial gainful activity.

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Amount of Disability Pension
Accidental Disability:
  – If member has less than 20 years of service
    Calculated as if they achieved 20 years of
    service, 50% of average monthly
    compensation.
  – If the member has twenty or more years of credited
    service: Pension calculated in the same manner as a
    normal pension based on credited service.




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Amount of Disability Pension
Ordinary Disability:
• Member only qualifies if they have less than 20 years of
  credited service: Calculated as a fraction of a member’s
  normal pension. Fraction factor is the result of member’s
  actual credited service divided by 20.
• Ex: 15 years of credited service, $3,000 calculated average
  monthly compensation
              Factor calculation: 15/20= .75
              Pension calculation: $3,000x50%= $1,500
              $1,500x.75= $1,125.00 monthly benefit



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Amount of Disability Pension
Temporary Disability:
  • A member awarded a temporary disability
    pension receives monthly: one-twelfth of 50%
    of their annual compensation received
    immediately prior to the date on which the
    disability was incurred. Note, that pension
    payments for a temporary disability shall not
    exceed 12 payments.




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  Amount of Disability Pension
Catastrophic Disability:
• A member awarded a catastrophic disability pension
  receives:
   – For the first 60-months, 90% of their average monthly
     compensation.
   – After the 60th month (if eligibility is still maintained),
     62 ½ % of member average monthly compensation or
     computed in the same manner as a normal pension
     whichever is greater.




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         Deferred Annuity
• A member with at least 10 years of credited service,
  who terminates employment, may elect to leave
  their contributions in the system and receive a
  deferred annuity, commencing at age 62.
      No survivor allowance
      No benefit increase
      No 2% tax equity
      No insurance subsidy




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            Survivor Benefit
• Surviving spouse of a non-retired member:
  Married at the time of death
  Benefit is 80% of the pension the deceased active member
   would have been paid for an accidental disability retirement
  If the member was killed in the line of duty, the benefit is
   100% of the deceased member’s average monthly benefit
   compensation

       •Surviving spouse of a retired member:
           Married for at least 2 years at time of death
           Benefit is 80% of retired members pension at time
           of death

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      Guardian/Child Benefit
• Guardian: Same as the spouse’s pension. Payable only during
  periods no spouse is being paid and there is at least one
  eligible child.
• Child: One-tenth of member’s pension (equal shares
  of two-tenths if more than two children). Eligible
  child must be unmarried, a dependent of the
  surviving spouse or guardian and either under the
  age of 18 or 23, if a full-time student or under a
         disability which began before age 23




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               Death Benefit
• Accumulated contributions remaining in the system
  at the date of the member’s death shall be paid to the
  member’s refund beneficiary or the member’s
  contingent refund beneficiary, if the primary
  beneficiary is not surviving at the time of death.
• If both the primary and contingent beneficiary
  predecease the member, then any accumulated
  contributions remaining in the system shall be paid
  to the member’s nearest of kin as determined by the
  local board.




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                         DROP
• A member with 20 or more years of credited service
• The member must voluntarily and irrevocably elect
  to enter into the program with his employer for a
  period of up to 60 months
• Payment made at the end of the DROP period at the
  same time/manner as the normal pension




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      What Is The Difference
   Between DROP & Retirement?
• The local board would calculate the DROP just like a
  retirement.
• The accumulated dollar amount will be pre tax, and allowed to
  grow at an assumed earnings rate, currently 8.25%, which is
  compounded monthly for a period of up to five years while the
  member continues to work.
• When the member retires, they begin receiving their monthly
  pension, as well as a lump sum of the accumulated DROP
  account.




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  Effective Dates of Benefits
• All benefits become effective the 1st of the
  month following:
  – Termination Date (Retirements)
  – Date of participation (DROP)
  – Date of Death (Survivor benefits, Death Benefits
             All Benefits are paid the last
              business month of effective
                      eligibility.
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   Determining The High 3 Years
• Use a period of 3 consecutive years within the last twenty completed
  years of credited service which yield the highest average
• A period of nonpaid or partially paid industrial leave or qualified
  military service leave under USERRA shall be considered based on
  compensation the employee would have received in the employee’s job
  classification if the employee was not on industrial or qualified
  military service leave.
• Remember to record prior service.
• Remember to record any leave without pay and industrial in member’s
  record.
          •Note: The Benefits staff will review the salary reported by the
          local board and check it against the member’s contributions paid
          into the system for the dates submitted, however if it looks like
          there are higher contributions paid into the system that are not in
          the high 3-year calculation as submitted by the local board, the
          Benefits staff will ask for a second review of the salary by the
          local board.
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       What is Compensation?
•    "Compensation" means, for the purpose of computing retirement benefits, base
    salary, overtime pay, shift differential pay, military differential wage pay and holiday
    pay paid to an employee by the employer on a regular monthly, semimonthly or
    biweekly payroll basis and longevity pay paid to an employee at least every six
    months for which contributions are made to the system pursuant to section 38-843,
    subsection D. Compensation does not include, for the purpose of computing
    retirement benefits, payment for unused sick leave, payment in lieu of vacation,
    payment for compensatory time or payment for any fringe benefits. In addition,
    compensation does not include, for the purpose of computing retirement benefits,
    payments made directly or indirectly by the employer to the employee for work
    performed for a third party on a contracted basis or any other type of agreement
    under which the third party pays or reimburses the employer for the work
    performed by the employee for that third party, except for third party contracts
    between public agencies for law enforcement, criminal, traffic and crime suppression
    activities training, wildfire, emergency medical or emergency management activities
    or where the employer supervises the employee's performance of law enforcement,
    criminal, traffic and crime suppression activities, training, fire, wildfire, emergency
    medical or emergency management services. For the purposes of this paragraph,
    "base salary" means the amount of compensation each employee is regularly paid
    for personal services rendered to an employer before the addition of any extra
    monies, including overtime pay, shift differential pay, holiday pay, longevity pay,
    fringe benefit pay and similar extra payments.



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          Deadline For Retirement
                Paperwork
• Submit retirement paperwork for all benefits by the 10th of
  each month
• Ensure paperwork is filled out correctly and completely:
    Fill in the final contribution amount (estimate if needed) on the Form 11
    Check for all signatures by the member and local board/employer
    Include all supporting documents to include medical documentation for children listed as
     disabled and full-time school enrollment for eligible children 18-22
    Tax forms need to be marked correctly (Note: Accidental, Temporary, and Catastrophic
     disability benefits under 20 years of service are not included as taxable income).
    Copy of minutes and IME need to be submitted with all disability applications
    Copy of the divorce decree papers (Certified copy if applicable).


                    Note: Please make sure you are using
                       most current forms! All online
                    spreadsheets can be accessed via our
                           website www.psprs.com
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              Best Practice
• Submit estimates (Form 11) for review before the
  member signs paperwork
• Print out the statutes and retirement instruction
  manual from the website for reference
• Use the electronic spreadsheets to process
  retirements versus manually filling in each
  individual form…It will save time!




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      Electronic Spreadsheets
• Use for all types of retirements
    Spreadsheets change annually so be sure to download the most current
     version available on website
    DROP has its own spreadsheet
• Just fill in the Input Sheet and the rest of the forms are filled
  in automatically
• Save the file and email to our Benefits Staff to review the
  estimate. Don’t forget to mail in the original signed
  forms!




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            Website Resources
                      www.psprs.com
• General:
    Statues, Summary of Benefits, FAQs, Legislation
• Members:
    DROP Estimator, Retirement Estimator, Common Forms,
      Members Only (secure site), Insurance Information
• Employers/Local Boards:
    Forms, Spreadsheets, Oath of Office
• Slides:
    Cancer Insurance, Local Board Training
        •Learn About:
            Taxation of Pension Amounts
            Survivors (Links to resources – also on main menu)
            Disability Slides

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       Benefits Group
•   Bonnie Brown (Manager of Benefits Group)
•   Joann Lowey (Team Lead/DROP)
•   Tara Davis (Team Lead/Retirements)
•   Della Hieb (Retirements)
•   Lilian Leung (Retirements)
•   Don Mineer (Retirements)




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Questions?



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