rc presentation 2019 - opers.ok.gov · 6 cost of funding additional year of benefits $3,335.33...

2019 Retirement Coordinator Training

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RETIREMENTCOORDINATOR

TRAINING

PRESENTED BY OKLAHOMA PUBLIC EMPLOYEES RETIREMENT SYSTEM

Updated Manual

• PDF available on Coordinator’s Corner.

• Second page highlights changes in 2019.

www.opers.ok.gov/coordinators‐corner


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Presentation Overview

• Recent Developments

• Did You Know? Facts & Figures

• Roles of the Retirement Coordinator

• The Essentials: OPERS DB Plan

• The Essentials: Pathfinder DC Plan

• Looking Ahead

• Questions & Answers

Recent Developments


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2019 Legislation

• Light session for OPERS

• COLA being studied for 2020

Staffing Changes

OPERS Contact Information on of the Manual.

www.opers.ok.gov/staff‐directory

Don’t know who to ask?

The OPERS Contact Center

can help!


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New Coordinator Orientation

• First orientation was held in April 2019 for state employers.

• Local version will be held in early 2020.

Updated OPERS Forms

• Withholding Preference Certificate

• Post‐Retirement Employment Election

• Application for Disability Retirement Benefits

• Retirement Application (and Packet)


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Did you know?

Did You Know?

• OPERS administers two types of retirement plans:• Defined benefit (DB) plans• Defined contribution (DC) plans

• Defined benefit plans administered by OPERS:• OPERS (State & Local Government, Hazardous Duty, and Elected Officials)

• Uniform Retirement System for Justices and Judges

• Defined contribution plans administered by OPERS:• SoonerSave• Pathfinder


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Retirement Plans

• Oklahoma Public Employees Retirement System (OPERS)

• $8.9 billion total assets

• 78,000 active, vested, and retired members

• 285 State/County/Local Participating Employers

• $612 million paid to benefit recipients

Retirement Plans

Uniform Retirement System for Justices and Judges (URSJJ)

• $311 million total assets

• 550 active, vested, and retired members

• $18.6 million paid to benefit recipients

• Single‐employer plan


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Retirement Plans

SoonerSaveOklahoma State Employees Deferred Compensation Plan & Savings Incentive Plan

• $1.1 billion total assets

• 33,000 participants

• Voluntary deferred compensation plan for State employees

• $25 Employer Contribution

Retirement Plans

Oklahoma Pathfinder • $63.9 million total assets

• 9,000 participants

• Mandatory defined compensation plan for State employees after November 1, 2015

• Employer Match• 6% or 7%


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Roles of the Retirement Coordinator

Roles of the Retirement Coordinator

• Multiple Plans, Varying Responsibilities• Maintaining records

• Enrolling new employees

• Reporting contributions• Providing information on multiple plans

• Keeping your employees informed


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Maintaining Records

• Long‐term relationship between OPERS and your employees• OPERS will frequently request missing information.

• Keep employee records as accessible as possible.

• Learn where your old records are hiding, do not get rid of that information unless you can recreate it.

Enrolling New Employees

• Online enrollment available at OPERS Online • Please enroll employees before first payroll report and enroll even those who leave immediately.

• Call OPERS regarding prior participation.• Please encourage members to complete beneficiary designations at enrollment.

• Members cannot withdraw, vest or retire without enrolling.

https://connect2.opers.state.ok.us


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Membership Requirements

• Position is permanent, not seasonal or temporary.

• Position requires at least 1,000 hours work per year (rolling 12 months after first day of employment).

• The salary must be equal to or greater than the minimum wage.

State employees who first become employed by a participating employer on or after November 1, 2015, and have no prior participation in OPERS will participate in the mandatory Pathfinder defined contribution plan.

Rolling 12‐Month Calendar

April 80 hours

May 85 hours

June 65 hours

July 95 hours

August 85 hours

September 85 hours

October 80 hours

November 60 hours

December 80 hours

January 60 hours

February 85 hours

March 85 hours

April 95 hours

May 95 hours

June 95 hours

July through June: 1,000 total hours

OPERS eligible

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Reporting Contributions

• Retirement contributions begin for:• New members ‐ 1st day of month following hire date

• Previous members ‐ 1st day on the job

• Verify prior participation• Call OPERS. The Contact Center can verify when contributions need to begin.• Do not email Social Security numbers.

Membership Requirements

• “Probationary” periods are still reportable • Periods of “initial employment” cannot be exempted from OPERS contributions.

• Delinquent service is costly and avoidable.


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Reporting & Data Integrity

• Make sure to enter hours and salary correctly for each member.

• Do not copy and paste without checking the hours.

• This can cause problems at retirement.

• OPERS may not be able to process a member’s retirement until errors are resolved.

Employer Website Transactions

• Enroll new members

• Payroll reporting

• Update member name

• Update member address

• Final Employer Certification



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Updating Member Information

• Updating Name Changes• Name changes occur through the reporting of payroll.

• This event marks a good time to request copies of the marriage license, divorce decree (first page and signatures), etc. which verifies the name change.

• Provide copies to OPERS for the member’s file. We will likely ask for these documents at retirement.

Updating Member Information

• Updating Addresses• You may update a member’s address on the employer website at https://connect2.opers.state.ok.us.

• Members may complete a Change of Address form and submit it to OPERS directly. (515‐160‐10)


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Providing Information to OPERS

• Serve as liaison between OPERS and your employees.

• Keep employees informed on OPERS information.

• Assist employees with OPERS forms.

OPERS is happy to share information and advice with Retirement Coordinators

The EssentialsOPERS – Defined Benefit Plan


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Four Possible Paths

• Retire and start receiving a lifetime benefit

• Vest your retirement and receive a lifetime benefit at a future date

• Withdraw contributions and cancel service

• Leave contributions in OPERS and pick back up when you return to a participating employer

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Important Dates ‐ What They Mean

• Last day on payroll

• Last day physically on the job

• Termination date

• Last day insurance was paid by agency

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Your Role at Retirement

• Encourage your employees to attend an OPERS Pre‐Retirement seminar when they are within two years of eligibility.

• Assist employees with the Retirement Application in order to meet the 60‐day notice requirement.• You complete Part 8

• Final Employer Certification• Online submission within 10 days after the retirement date


Before November 1, 2011Age 62 with 6 years FTE

OR

80 points (age + service) before July 1, 1992

OR

90 points (age + service) after July 1 , 1992

On or after November 1, 2011Age 65 with 6 Years FTE

OR

90 points (age + service)At least 60 years of age

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Normal Retirement Eligibility

*Elected officials and hazardous duty members may have additional and varying requirements


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Before November 1, 2011Age 55 with 10 years of service

On or after November 1, 2011Age 60 with 10 years of service

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Early Retirement Eligibility

Permanent reduction based on age at retirement

*Elected officials and hazardous duty members may have additional and varying requirements

The Essentials: OPERS DB Plan

• Defined Benefit Formula• Final Average Salary

• Before 7/1/2013 – Highest 3 years out of the last 10 years

• After 7/1/2013 – Highest 5 years out of the last 10 years

• Service Credit• Members who begin on or after November 1, 2012 will be credited with full years and months of participation.

• Computation Factor (2%)


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Retirement Application Packet

Includes:

• Retirement Instructions and Checklist

• Retirement Application

• Beneficiary Designation ‐ Retiree Death Benefits

• Direct Deposit Authorization

• Withholding Preference Certificate

Retirement Application

Part 8 – Retirement Coordinator Verification• Last date physically on job• Last date on payroll• Unused sick leave• Hazardous duty service dates

• (DOC only)

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Retirement Options

• Maximum No Survivor Benefits

• Option A Reduced Benefit + ½ Survivor Annuity

• Option B Reduced Benefit + 100% Survivor Annuity

• Option C Reduced Benefit with 10‐year term certain

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Unused Sick Leave

• May be added to member’s service credit.

• An increase in service due to USL will result in a bill for the employer.

• Timely reporting of USL is greatly appreciated to expedite service to retiring members.

HOURS OF UNUSED SICK LEAVE

MONTHS OF OPERS SERVICE CREDIT

0 – 159 0

160 – 319 1

320 – 479 2

480 – 639 3

640 – 799 4

800 – 959 5

960 (maximum) 6

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Unused Sick Leave

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When it adds a year:

21 years 0 months Service Credit

+ 6 months Unused Sick Leave

21 years 6 months Service (before rounding)

22 years Total Service Credit

When it does NOT add a year:

21 years 9 months Service Credit

+ 6 months Unused Sick Leave

22 years 3 months Service (before rounding)

22 years Total Service Credit

Rounding eliminated for members who begin participation on or after

November 1, 2012. These members will be credited with full years and

months of participation.

Cost of Unused Sick Leave

• Employers are only invoiced for USL if it increases the member’s service.

• Three primary cost drivers:• Final average salary of the member;

• Higher salary = higher cost

• Difference between the member’s current age and their retirement age at invoicing; and,• Closer to retirement age = higher cost

• Life expectancy.


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Cost of Unused Sick LeaveRounding to an Additional Year (Pre 11/1/2012)

Example 1Current age: 50

Retirement age 62


Retirement age 62

1 Final Average Salary $40,000.00 $60,000.00

2 Retirement Benefit Computation Factor (2.0%) x 0.02 x 0.02

3 Annual Benefit Per Year of Service $800.00 $1,200.00

÷ 12 ÷ 12

4 Monthly Benefit Per Year of Service $66.67 $100.00

5 Reserve Factor x 50.03 x 106.08

6 Cost of Funding Additional Year of Benefits = $3,335.33 = $10,608.00

Cost of Unused Sick LeaveAdditional Months of Service (Post 11/1/2012)


Retirement age 62


Retirement age 62

1 Final Average Salary $40,000.00 $60,000.00

2 Retirement Benefit Computation Factor (2.0%) x 0.02 x 0.02

3 Annual Benefit Per Year of Service $800.00 $1,200.00

÷ 12 ÷ 12

4 Monthly Benefit Per Year of Service $66.67 $100.00

5 Reserve Factor x 50.03 x 106.08

6 Cost of Funding Additional Year of Benefits $3,335.33 $10,608.00

÷ 12 ÷ 12

7 Cost of Funding Additional Month of Benefits $277.94 $884.00

8 Actual Number of USL Months Added x 3 x 3

9 Cost of Funding Additional Service = $833.83 = $2,652.00

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Unused Sick Leave Policy

• Section 913(B)(7) of Title 74:• The total participating service credit of a member who retires or terminates employment and elects a vested benefit shall include not to exceed 130 days of unused sick leave accumulated subsequent to August 1, 1959, during the member's employment with any participating employer. Such credit shall be added in terms of whole months. Twenty days of unused sick leave shall equal one month for purposes of participating service credit. If unused sick leave entitles a member to an additional year of service credit, the member's employer shall reimburse the System for the cost of funding the additional service.

• Please inform OPERS immediately if you have a change in your unused sick leave policy.• Verification of Unused Sick Leave Policy • Available on Coordinators Corner

Retirees Returning to Work

• One‐year “cooling‐off” period• An OPERS retiree is prohibited from returning to work with the same employer from which he/she retired for a period of one year without waiving benefits.

• No pre‐arranged employment agreements• Pre‐retirement employment agreements that permit a member to retire then be rehired by same employer on any basis are prohibited by state law and IRS Code.


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• You may return to work for a non‐participating employer at any time without affecting your retirement.

• If you return to a different participating employer, you must wait at least one month following your retirement date or your benefit will be cancelled.• Complete Post‐Retirement Employment Election form to continue benefits or waive benefits and be eligible to retire again after three years

• Continue paying contributions• Benefit increases every additional 2,076 hours worked


OPERS‐Participating Employer & OPERS Retirement Benefit

• Benefit subject to Social Security earnings limitation

• Complete Status of Post‐Retirement Employment form• When you approach Social Security earnings limitation

• Choose to continue or terminate employment

Social Security Administration (SSA) Earnings Limitation• Will not reach SSA Full Retirement Age in 2019 ‐ $17,640

• Up to the point you reach SSA Full Retirement Age in 2019 ‐ $46,920

• Once you reach SSA Full Retirement Age ‐ No Limit


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The EssentialsPathfinder – Defined Contribution Plan

For State Agencies Only

The Essentials: Pathfinder DC Plan

• Participation eligibility• First hired by a State agency on or after November 1, 2015, no prior service in OPERS.

• Full‐time‐equivalent position.

• Any position less than full‐time but more than half‐time that includes employee benefits.

This determination shall be made by the employer and exclusively relied upon by OPERS.


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• Plan comprised of a 401(a) plan and a 457(b) plan• 401(a) – Employee mandatory contributions and employer matching contributions

• 457(b) – Employee additional contributions

Pathfinder Contributions

401(a) Plan 457(b) Plan

• Employee mandatory (4.5%)• Employer matching (6% or 7%)

• Employee voluntary above 4.5%.


Additional employer contributions will go to the OPERS defined benefit plan.

Person A – Receives a 6% employer match in Pathfinder

OPERS required employer contribution (DB) 16.5%

Pathfinder employer match (6.0)%

Remainder to OPERS 10.5%

Person B – Receives a 7% employer match in Pathfinder

OPERS required employer contribution (DB) 16.5%

Pathfinder employer match (7.0)%

Remainder to OPERS 9.5%


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Contribution Changes

• Participants can change contribution rate online or through KeyTalk

• Agencies on OMES payroll:• OMES receives a file from Empower and the payroll file is updated

• Agencies are not notified of contribution changes

• Agencies not on OMES payroll:• Pathfinder receives a file from Empower

• Pathfinder will notify the agency to update payroll


Vesting

• Participant is 100% vested in employee contributions at all times.

• Participant progressively vested in employer contributions based on the following vesting schedule:

Vesting Period Vesting Percentage

1 Year 20%

2 Years 40%

3 Years 60%

4 Years 80%

5 Years 100%


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Vesting

• Vesting begins as of date of hire, not participation date

• Vesting calculated based on complete years • 365 days elapsed = 1 complete year toward vesting

• Days, not months (no rounding)

• Termination is the only thing that “stops the clock,” not breaks in service • Participation no longer a matter of hours


• Participants have investment discretion over all contributions, matching funds, and the gains or losses on those amounts. • www.okpathfinder.com

• KeyTalk at (844) 465‐7284. 59%

40%

<1%

Vanguard Balanced Fund

Stocks Bonds Cash


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• Beneficiary Designation(s)• May have separate beneficiaries for each plan

• May update beneficiaries by completing a form or logging into their account(s) through www.okpathfinder.com


Enrollment Process

• Provide the Enrollment Guide to new employees• Enrollment form to choose contribution rate

• Do not submit enrollment form to OPERS or Empower Retirement

• Need only be maintained in participant’s personnel file

• Once account is created by Empower, participants will receive a PIN letter (after first payroll).

• Changing agencies requires a new enrollment form• Enrollment form allows participant to change contribution rate.


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Leaving Employment

• No forms to complete

• Participants maintain control of vested deferrals and investment income

• Can withdraw funds once leave employment (not required)

• No additional deferrals once they leave state employment, but funds may still be rolled into Pathfinder

• Funds may be left in the plan and withdrawn at a later date

Looking Ahead


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Future Plans at OPERS

• New pension administration system

• Improvements to the Employer Website

• Redesign and improvements to the public website

Online Resources

• Coordinator’s Corner

• Forms (to print or order)

• Pre‐Retirement Seminar Schedule

• Current and Archived Publications

• Benefit Estimator


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Member Education

Pre‐Retirement Seminars

• Seminars are provided in the following cities:• Ardmore

• Enid• Lawton• McAlester

• Oklahoma City

• Tulsa• Woodward

• Weatherford

Schedule is available online:

www.opers.ok.gov/confidence

Contact OPERS to register at

(800) 733‐9008


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Annual Statements

• Information as of June 30, 2019

• Contains information regarding:• Accumulated contributions

• Beneficiary(ies)• Retirement Coordinator contact information

• Retirement eligibility requirements

• Death benefits

• Retirement Coordinators will receive the “dead‐end” statements.

Updating Coordinator Information

• Contact Stephanie White with coordinator changes.• [email protected] or (405) 858‐6768

• There are two forms to complete:• Employer and Retirement Coordinator Verification

• Add/delete/update employer or coordinator information

• Online User Enrollment • Add/delete/update access to the employer website.

• https://connect2.opers.state.ok.us

rc presentation 2019 - opers.ok.gov · 6 cost of funding additional year of benefits $3,335.33...

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