senate bill (sb)1040 and michigan public school employees retirement system (mpsers)
DESCRIPTION
Senate Bill (SB)1040 and Michigan Public School Employees Retirement System (MPSERS). Novi MEA (Sept.13, 2012). Damon A. Wilson, CEBS [email protected]. Eastern Region Regional Manager, MEA Financial Services Registered Principal, Paradigm Equities, Inc. 1-800-946-1960 (Novi) - PowerPoint PPT PresentationTRANSCRIPT
Senate Bill (SB)1040Senate Bill (SB)1040
and Michigan Public School Employees and Michigan Public School Employees
Retirement System (MPSERS)Retirement System (MPSERS)
Novi MEANovi MEA
(Sept.13, 2012)(Sept.13, 2012)
Damon A. Wilson, [email protected]
Eastern Region
Regional Manager, MEA Financial Services
Registered Principal, Paradigm Equities, Inc.
1-800-946-1960 (Novi)
1-800-292-1950 (East Lansing)
MEA Financial Services Representatives
Steve Semenuk 248 626-8960 [email protected] Schedule Your Appointments!
Registered Representative, Paradigm Equities, Inc.1-800-292-1950 (East Lansing)
OverviewOverview
SB 1040 ReviewSB 1040 Review
Your HomeworkYour Homework
The Basics of MPSERSThe Basics of MPSERS
SB 1040 (H-3) Highlights and SB 1040 (H-3) Highlights and SummarySummary
Eliminates retire health care for employees Eliminates retire health care for employees hired after September 4, 2012 and hired after September 4, 2012 and replaces it with an employer match of up replaces it with an employer match of up to 2% of compensation into a DC Plan to 2% of compensation into a DC Plan plus a lump sum employer contribution at plus a lump sum employer contribution at retirementretirement $1000 if terminating prior to age 60$1000 if terminating prior to age 60 $2000 if terminating after age 60$2000 if terminating after age 60 Must have 10 years of serviceMust have 10 years of service
SB 1040 (H-3) Highlights and SB 1040 (H-3) Highlights and SummarySummary
Continue 3% employee contribution retiree Continue 3% employee contribution retiree health insurance health insurance
Current litigation pendingCurrent litigation pending
Use the contributions to pre-fund the Use the contributions to pre-fund the future retiree health benefitsfuture retiree health benefits
Allows an opt out of retiree health benefit Allows an opt out of retiree health benefit with an employer match of 2% of with an employer match of 2% of compensation into a DC Plan instead.compensation into a DC Plan instead.
SB 1040 (H-3) Highlights and SB 1040 (H-3) Highlights and SummarySummary
Caps employer contribution rate at 24.46% Caps employer contribution rate at 24.46% of payrollof payroll
Requires a third party study by November Requires a third party study by November 15 to include moving to a Defined 15 to include moving to a Defined Contribution Plan for new hires Contribution Plan for new hires
SB 1040 (H-3) Highlights and SB 1040 (H-3) Highlights and SummarySummary
Current Retirees and those who retire Current Retirees and those who retire January 1, 2013 or later will pay 20% of January 1, 2013 or later will pay 20% of MPSERS health premiumMPSERS health premium
Retirees who are 65 or older, who are Retirees who are 65 or older, who are Medicare eligible and have retired by Medicare eligible and have retired by January 1, 2013 will continue to pay 10% January 1, 2013 will continue to pay 10% of the MPSERS health, dental and vision of the MPSERS health, dental and vision premiumpremium
Senate SB 1040 (H-3) Senate SB 1040 (H-3) Pension ElectionPension Election
Increase contribution rates unless Increase contribution rates unless employee opts outemployee opts out
Employees will be asked to make an Employees will be asked to make an election between September 4 and election between September 4 and October 26October 26thth, 2012, 2012
Early signs indicate Early signs indicate miAccountmiAccount will be the will be the method for making an electionmethod for making an election
Do you remember when members Do you remember when members were given the CHOICE to switch were given the CHOICE to switch
from Basic to MIP? from Basic to MIP?
Two step process if you do not switch to Two step process if you do not switch to MIP:MIP:
1. No reduction in salary1. No reduction in salary
2. Invest the difference to 2. Invest the difference to add/increase retirement income.add/increase retirement income.
Senate SB 1040 (H-3) Senate SB 1040 (H-3) Pension ElectionPension Election
Option 1Option 1: Make a higher contribution to : Make a higher contribution to retirement system in order to maintain current retirement system in order to maintain current multiplier at 1.5%multiplier at 1.5% Basic: Increase from 0% to 4% (flat for everyone)Basic: Increase from 0% to 4% (flat for everyone) MIP: Increase to 7% (flat for everyone)MIP: Increase to 7% (flat for everyone) MIP members currently pay different amounts MIP members currently pay different amounts
depending on hire datedepending on hire date MIP range is currently from 3% to 6.4%MIP range is currently from 3% to 6.4%
Senate SB 1040 (H-3) Senate SB 1040 (H-3) Pension ElectionPension Election
Option 2: Option 2: Choice to make the higher Choice to make the higher contributions until attainment date (30 contributions until attainment date (30 Years), and then revert (choice) to original Years), and then revert (choice) to original contribution amount but drop to 1.25% on contribution amount but drop to 1.25% on future years of service credit earned after 30future years of service credit earned after 30
Senate SB 1040 (H-3) Senate SB 1040 (H-3) Pension ElectionPension Election
Option 3Option 3: Pay current contribution : Pay current contribution amounts, but receive a lower multiplier amounts, but receive a lower multiplier (1.25%) (1.25%) on future service credit earnedon future service credit earned
Service credit earned thus far retains the Service credit earned thus far retains the 1.5% multiplier1.5% multiplier
Senate SB 1040 (H-3) Senate SB 1040 (H-3) Pension ElectionPension Election
Option 4Option 4: Freeze existing service credit : Freeze existing service credit earned at the 1.5% multiplier and convert earned at the 1.5% multiplier and convert to a DC Plan with an employer to a DC Plan with an employer contribution of 4% of compensationcontribution of 4% of compensation
DC Plan is the “Tier 2” Plan sponsored by DC Plan is the “Tier 2” Plan sponsored by the State. Employee contributions are the State. Employee contributions are made to a 457 Plan and normal IRS rules made to a 457 Plan and normal IRS rules apply.apply.
What Can I Do? What Can I Do?
Learn about your pensionLearn about your pension The pension formula: FAC x multiplier x years of serviceThe pension formula: FAC x multiplier x years of service Survivor optionsSurvivor options MIP or BASIC: How much am I paying now?MIP or BASIC: How much am I paying now? Pension Eligibility: When can I, or will, I retire?Pension Eligibility: When can I, or will, I retire?
If considering retirementIf considering retirement Understand potential impact of service credit purchase on Understand potential impact of service credit purchase on
insurance subsidyinsurance subsidy
Utilize Utilize miAccountmiAccount for pension projections for pension projections
Simple SB 1040 (H-3) Analysis: Simple SB 1040 (H-3) Analysis: Homework Option 1 Homework Option 1
How much more will I contribute if I keep the How much more will I contribute if I keep the 1.5% multiplier?1.5% multiplier?
When do I expect to retire?When do I expect to retire?
What is my pension estimate on my What is my pension estimate on my expected retirement date? expected retirement date? Calculate estimated FAC x 1.5 x YOSCalculate estimated FAC x 1.5 x YOS Use Use miAccountmiAccount for assistance for assistance
Do the increased contribution amounts Do the increased contribution amounts justify the increase in my pension? justify the increase in my pension?
Simple SB 1040 (H-3) Analysis: Simple SB 1040 (H-3) Analysis: Homework Option 1 and 3 Homework Option 1 and 3
If I “stop” my pension at the multiplier of 1.5%, If I “stop” my pension at the multiplier of 1.5%, what will my pension be on my expected what will my pension be on my expected retirement date with my current YOS?retirement date with my current YOS?
How many more years before I plan on How many more years before I plan on retiring?retiring?
What will my pension be based on the 1.25% What will my pension be based on the 1.25% multiplier? multiplier? FAC x 1.25% x Future YOSFAC x 1.25% x Future YOS
Simple SB 1040 (H-3) Analysis: Simple SB 1040 (H-3) Analysis: Homework Option 3Homework Option 3
Combine 1.5% pension amount for current Combine 1.5% pension amount for current YOS plus 1.25% pension amount for YOS plus 1.25% pension amount for Future YOS = estimated final pensionFuture YOS = estimated final pension
Determine how much you saved by not Determine how much you saved by not paying to keep 1.5%paying to keep 1.5% NOTE SAME ANSWER AS IN OPTION 1NOTE SAME ANSWER AS IN OPTION 1
Simple SB 1040 (H-3) Analysis: Simple SB 1040 (H-3) Analysis: Homework Option 4Homework Option 4
Determine pension projection on current Determine pension projection on current years of service years of service
Project value of 4% of compensation Project value of 4% of compensation contributed to a DC Plan over remaining contributed to a DC Plan over remaining years of service (estimate return)years of service (estimate return)
Compare with Option 1 and 3Compare with Option 1 and 3
SB 1040
When does this take effect FIRST pay ending after December 1, 2012 THE BILL CALLS THIS – “Transition Date”
ExamplesHired June 1, 1992Current Age = 45MIP member – YESMIP Graded Max 4.3%Final Average Compensation (FAC) – $60,000Years of service (YOS) = 20 years (now)
Pension Calculation ( FAC x YOS x multiplier (.015 or .0125)
Regular Retirement at age 55 with 30 YOSContribution Percentage 2.7% (4.3 + 2.7 = 7.0%)
30 years total– Pension at 1.5(Option 1) = $27,000 (FAC $60,000 x .015 x 30 years)
30 years total– Pension (Option 3) $25,500 (FAC $60,000 x .015 x 20 years = $18,000) +(FAC $60,000 x .0125 x 10 years =$7,500)
Pension $1,500 year for life difference– Option 3It cost you $1,620 dollars annually (ten years $16,200) if you want Option 110 to 11 years to get your money back
Example Continued
Option 4 Pension would be Frozen at 20 years = $18,000 at age 60 $7,000 year difference for life vs option 1 $1,300 year difference for life vs option 3
Defined Contribution amount at 4 percent would be $2,400 annually (ten years)
No longer a MIP member Saved $2,580 annually (4.3% of salary)
Which Option To Chose
Tell me the best option?????? Tell me when you are going to DIE? I will tell you your best option These are mortality odds Look at the last decade of Investment Returns What is your personality for RISK Are you single Can you afford the increased contributions Will you invest on your own.
Your HomeworkAssignment Due – Sept.4, 2012 to Oct. 26,
2012 Establish your MiAccount.
Select an anticipated retirement date.
How many Years of Service (YOS) will you have at retirement?
What type of retirement are you eligible for– Regular, Reduced, Deferred.
What is your Final Average Compensation (FAC) (one amount).
What is your annual pension if all years of service are calculated at
1.5%? (FAC x YOS x .015)
What is your annual pension if some of years of service are calculated at 1.25%? (FAC x YOS x .0125) and some are calculated at 1.5%
What the difference in annual pension?
What is the annual salary amount to maintain the 1.5% factor?
Your HomeworkAssignment Due – Sept.4, 2012 to Oct. 26,
2012 If necessary, get help!
Make an informed decision.
Submit your pension choice (via MiAccount) between Sept. 4, 2012 and October 26, 2012
SummarySummary
Educate yourself about your pensionEducate yourself about your pension
Take advantage of ORS and Take advantage of ORS and miAccountmiAccount
ORS has 4.7 million dollars to implement ORS has 4.7 million dollars to implement SB 1040 – Look for tools on the websiteSB 1040 – Look for tools on the website
Start your homework nowStart your homework now
Your Retirement Plan Summary
Date of Retirement Age 55 (Prior to Age 62) Gross Amount
Type of Funds Annual Monthly
Pension % %
Investments % %
$ Subtotal % %
Age 62 Social Security
Type of Funds Annual Monthly
Pension % %
Social Security % %
Investments % %
$ Subtotal % %
Goal: 75 percent of income prior to retirement Steve Semenuk 248 626-8960
ORSORSOffice of Retirement ServicesOffice of Retirement Services
MPSERSMPSERS
Michigan Public School Michigan Public School Employees Retirement SystemEmployees Retirement System
DefinitionsDefinitions
ORS:ORS: Office of Retirement Services Office of Retirement Services
MPSERS:MPSERS: Michigan Public School Employee Michigan Public School Employee Retirement SystemRetirement System
FAC: FAC: Final Average CompensationFinal Average Compensation
YOS: YOS: Years of Service Credit EarnedYears of Service Credit Earned
Multiplier:Multiplier: Percentage factor in calculating Percentage factor in calculating your pension i.e. FAC x your pension i.e. FAC x 1.5%1.5% x YOS x YOS
Premium Subsidy:Premium Subsidy: What the State will pay What the State will pay towards your retiree health care premiumtowards your retiree health care premium
PreparationPreparation
Read information published by Read information published by MPSERS: www.michigan.gov/orsMPSERS: www.michigan.gov/orsEnroll in Enroll in miAccountmiAccountWatch tutorials on MPSERS WebsiteWatch tutorials on MPSERS WebsiteAttend a seminarAttend a seminar
For Those Applying for For Those Applying for RetirementRetirement
According to ORS….According to ORS….
Retirement application forms have been Retirement application forms have been removed from the websiteremoved from the website
Retirement paper applications will not be Retirement paper applications will not be accepted after March 31, 2012 unless already accepted after March 31, 2012 unless already in progressin progress
Use Use miAccountmiAccount only after March 31, 2012 only after March 31, 2012
Customer Information Customer Information CenterCenter
Connect directly to a retirement representative to answer Connect directly to a retirement representative to answer questions and handle most retirement related issues.questions and handle most retirement related issues.
The Toll Free Number isThe Toll Free Number is
1-800-381-51111-800-381-5111
www.michigan.gov/orsschoolswww.michigan.gov/orsschools
mimiAccountAccount
mimiAccountAccount. On this secure site you can . On this secure site you can view and print your personal account view and print your personal account information, make changes, and information, make changes, and correspond securely with ORS. correspond securely with ORS.
mimiAccountAccount is available to you seven days is available to you seven days a week from 5 a.m. to 12 a.m. a week from 5 a.m. to 12 a.m.
Go to Go to www.michigan.gov/orsschoolswww.michigan.gov/orsschools to to registerregister
Understand Who You AreUnderstand Who You Are
BasicBasic
MIPMIP
Pension Plus: Hired After July 1, 2010Pension Plus: Hired After July 1, 2010
Understand How Much You PayUnderstand How Much You Pay
Basic: Currently 0%Basic: Currently 0%
MIPMIP
MIP GradedMIP Graded
MIP PlusMIP Plus
Pension Plus Pension Plus
Pension EligibilityPension EligibilityRequirements for MIP and BasicRequirements for MIP and Basic
Eligibility depends upon 3 Eligibility depends upon 3 factors…factors…
Your Your years of serviceyears of service
Your Your ageage and and
Whether you are a member of the:Whether you are a member of the: BasicBasic Retirement Plan Retirement Plan
oror Member Investment Plan Member Investment Plan (MIP)(MIP)
Basic PlanNon-Contributory
Options
Retirement Age Years
Regular*55 30
60 10
Reduced* 55 15**
Deferred***
60 10 quit
60 less 21 quit
60 greater 21 quit*
Final Average Compensation (FAC)
• Highest 60 consecutive months
Pension does not increase
* Insurance Coverage**Penalty Provision***Previously terminated public school employment (Less than 21 years of service no insurance, more than 21 years, eligible for insurance)
Member Investment Plan (MIP) Contributory
Options
Retirement Age Years
Regular*46 30
60 5
Reduced* 55 15**
Deferred***
60 10 quit
60 less 10 quit
60 greater 21 quit*
* Insurance Benefits**Penalty Provision***Previously terminated or quit public school employment (Less than 21 years of service no insurance, more than 21 years of service eligible for insurance
What you’re paying for:
1. Retire earlier
2. Final Average Compensation (FAC) – Highest 36 consecutive months
3. Three (3%) increase each year
Regular RetirementRegular Retirement
10 Years of Service10 Years of ServiceMIP or Basic Plan—at age 60MIP or Basic Plan—at age 60
30 Years of Service30 Years of ServiceMIP ——— age 46MIP ——— age 46Basic —— age 55Basic —— age 55
Regular RetirementRegular RetirementMIP Members OnlyMIP Members Only
Age 60 with 5 years of service Age 60 with 5 years of service creditcredit
Must have at least .1 year of credited Must have at least .1 year of credited service in each of five previous school years. service in each of five previous school years. If hired after July 1, 2008, health insurance If hired after July 1, 2008, health insurance premium subsidy not available with less than premium subsidy not available with less than 10 years of credit10 years of creditMust work within the month of your 60Must work within the month of your 60thth BirthdayBirthday
Early Reduced Early Reduced RetirementRetirement
15 Years———at age 55*15 Years———at age 55*Retire and begin receiving benefits Retire and begin receiving benefits earlier. Your benefit payment will be earlier. Your benefit payment will be permanentlypermanently reduced by 1/2% for each reduced by 1/2% for each month your age is month your age is less than 60less than 60..
*with .1 year of credited service in*with .1 year of credited service in each of five previous school yearseach of five previous school years.
Early ReducedEarly Reduced RetirementRetirement
Example:Example:Age — 57 years, 6 monthsAge — 57 years, 6 monthsMonths to age 60 — 30 monthsMonths to age 60 — 30 monthsReduction per month — 1/2%Reduction per month — 1/2%
30 MONTHS X 1/2 % (.005) =30 MONTHS X 1/2 % (.005) =Permanent 15% Permanent 15%
ReductionReduction
Deferred RetirementDeferred Retirement
• 10 Years of Service10 Years of Service• Has not yet reached age 60Has not yet reached age 60
A deferred member should contact theA deferred member should contact theRetirement System before terminatingRetirement System before terminatingEmployment and determine impact on Employment and determine impact on insurance benefitsinsurance benefits
Retiree Health SubsidyRetiree Health Subsidy
Subsidy defined as what the State will pay Subsidy defined as what the State will pay towards your total Insurance Premiumtowards your total Insurance Premium
If your subsidy amount is less than a If your subsidy amount is less than a fellow retiree, this does not affect your fellow retiree, this does not affect your coveragecoverage
SUBSIDY AMOUNTS
Current Subsidy amounts as of Jan 1, 2012
Just note – Employee portion is going to double
Retiree Health SubsidyRetiree Health SubsidyHired Before July 1, 2008Hired Before July 1, 2008
Active member at time of retirementActive member at time of retirement
Retire under 30 YOS Basic or MIP; 10 Retire under 30 YOS Basic or MIP; 10 YOS basic or MIP; Early Reduced with 15 YOS basic or MIP; Early Reduced with 15 YOS; MIP 5 YOS and age 60YOS; MIP 5 YOS and age 60
Full Subsidy Applies (90%)Full Subsidy Applies (90%)
However…..However…..
Retiree Health SubsidyRetiree Health SubsidyHired Before July 1, 2008Hired Before July 1, 2008
Initiate a service credit purchase Initiate a service credit purchase AFTERAFTER July 1, July 1, 2008 that allows you to retire earlier than if you 2008 that allows you to retire earlier than if you had not bought the service credithad not bought the service credit
If purchase allowed the member to retire early, If purchase allowed the member to retire early, he/she would pay full insurance premium until he/she would pay full insurance premium until he/she would have been otherwise eligiblehe/she would have been otherwise eligible
This is called a This is called a “Delayed Subsidy”“Delayed Subsidy”
Example: Delayed SubsidyExample: Delayed Subsidy
Service Credit Purchase MIP 46 w/ 30: Service Credit Purchase MIP 46 w/ 30: Purchased 3 years after July 1, 2008Purchased 3 years after July 1, 2008 Retire with 30 years of service (27 earned)Retire with 30 years of service (27 earned) Age 52Age 52 Wait 3 years for subsidyWait 3 years for subsidy Would not have been eligible until 55 without Would not have been eligible until 55 without
the purchased 3 years the purchased 3 years
Purchase Health InsurancePurchase Health Insurance
If a delayed subsidy applies, you can still If a delayed subsidy applies, you can still enroll in the health, dental, and vision enroll in the health, dental, and vision insurances; you will have to pay the full insurances; you will have to pay the full premium until the subsidy begins. premium until the subsidy begins.
The subsidy will begin when the number of The subsidy will begin when the number of years equal to your purchased time used years equal to your purchased time used to qualify has passed, or at age 60, to qualify has passed, or at age 60, whichever occurs first.whichever occurs first.
What about a Deferred Retiree? What about a Deferred Retiree?
Pension begins at age 60Pension begins at age 60
Deferred retirees will need a minimum of 21 Deferred retirees will need a minimum of 21 years of service to receive a partial subsidyyears of service to receive a partial subsidy
Subsidy is increased 10%Subsidy is increased 10% for each full year of for each full year of credited service obtained beyond 20 years, up to credited service obtained beyond 20 years, up to a maximum of 90%a maximum of 90%
Retiree Health SubsidyRetiree Health SubsidyHired After July 1, 2008Hired After July 1, 2008
Graded Premium AppliesGraded Premium Applies
3% per year for first 10 years3% per year for first 10 years
4% per year thereafter up to 25 years4% per year thereafter up to 25 years
Delayed subsidy rules still applyDelayed subsidy rules still apply
Pension CalculationPension Calculation
Pension Benefit CalculationPension Benefit Calculation
Final Average Compensation
X1.5% (.015)
XYears of Service Credit
=Your Annual Pension w/o
Survivor Options
Final Average CompensationFinal Average Compensation
MIP MembersMIP Members: highest consecutive : highest consecutive three years’(36 months) salarythree years’(36 months) salary
Basic MembersBasic Members: highest consecutive : highest consecutive five years’ (60 months) salaryfive years’ (60 months) salary
Pension OptionsPension Options
Option 1: Straight LifeOption 1: Straight Life Pays the largest pensionPays the largest pension Does not provide beneficiary survivor pension Does not provide beneficiary survivor pension
or health insuranceor health insurance
Option 2: 100% SurvivorOption 2: 100% Survivor
Option 3: 50% SurvivorOption 3: 50% Survivor
Option 4: 75% Survivor Option 4: 75% Survivor
Survivor PensionsSurvivor PensionsAs a retiree, who can be my survivor As a retiree, who can be my survivor
pension beneficiary?pension beneficiary?
Spouse Spouse (automatically the named survivor, unless spouse consents to (automatically the named survivor, unless spouse consents to another named beneficiary)another named beneficiary)
Brother or Sister*Brother or Sister*
Parent or Adult Child, including an adopted child*Parent or Adult Child, including an adopted child*
Survivor will receive the pension for as long as that Survivor will receive the pension for as long as that person is alive (children until age 18)person is alive (children until age 18)
*DEPENDENCY IS REQUIRED*DEPENDENCY IS REQUIRED
MIP Post-Retirement Pension MIP Post-Retirement Pension IncreasesIncreases
MIP MemberMIP Member: after one full year of : after one full year of retirement, will received a fixed 3% retirement, will received a fixed 3% increase in monthly pension, credited in increase in monthly pension, credited in the month of Octoberthe month of October
BASIC MemberBASIC Member: : potential for a 13potential for a 13thth check check
Consider your pension option Consider your pension option carefully!carefully!
You You cannotcannot make a change make a change once pension payments once pension payments
begin!!begin!!
Service Credit PurchaseService Credit Purchase
Available to Basic and MIP membersAvailable to Basic and MIP members
Employees hired after June 30, 2010 are Employees hired after June 30, 2010 are not eligible to purchase service credit with not eligible to purchase service credit with two exceptionstwo exceptions Repayment of Refundable Service CreditRepayment of Refundable Service Credit Intervening Military ServiceIntervening Military Service
Service Credit Purchase OptionsService Credit Purchase Options(check online for more details)(check online for more details)
• Weekly workers compensation Weekly workers compensation • Repayment - contribution refundRepayment - contribution refund• Out-of-system public educationOut-of-system public education
• Sabbatical leave of absenceSabbatical leave of absence
• Active duty military serviceActive duty military service
• Non-public educat. employmentNon-public educat. employment
• Universal buy-inUniversal buy-in
• Maternity/paternity/child-rearingMaternity/paternity/child-rearing • State of Michigan employmentState of Michigan employment
Reasons to Purchase Service Reasons to Purchase Service Credit: Credit:
Increase final pension amountIncrease final pension amount Weigh cost of credit against increase in your Weigh cost of credit against increase in your
pensionpension
Qualify for retirement soonerQualify for retirement sooner Remember Delayed SubsidyRemember Delayed Subsidy
Insurance Benefits
Blue Cross Blue Shield Preferred Provider OrganizationDedicated BCBSM MPSERS Phone Number: 1-800-422-9146Coverage typically starts when you retire
If you wait to apply you could be subject to a 6 month waiting period - See ORS for further details.Check with your employer to verify when your current coverage expires.Application deadline is the month before you want coverage to begin.When you or your spouse are eligible sign up both Parts A and B under Medicare
Important Points About MPSERS Insurance
Current Insurance Co-pays
Medical deductibles are $500 per person Coinsurance Maximum $800 per person Prescription Drug- Catalyst Rx National Pharmacy Network
• Drug copay 20% of Rx Cost if drug is on the approved formulary list: Min $7/Max $36 out of pocket cost—retail, Min. $17.50/Max $90—mail order – 90 day supply Medco
• Drug copay 40% of Rx cost if not on formulary with no generic available or 20% co-pay plus the difference in cost between the brand name and generic drugs when a generic is available
• $1000 prescription drug annual co-pay maximum for each (retiree and spouse)
MPSERS Out of Pocket Costs
Living Well Non Living Well
Annual Deductible $400 $500
Annual Co-pay Maximums
$700 $800
Prescription Drug Catalyst RX National Pharmacy Catalyst RX National Pharmacy
Co-pay - Local Pharmacy $7 minimum/$36 maximum $7 minimum/$36 maximum
Co-pay – Medco (mail order plan)
$17.50 minimum/$90 maximum $17.50 minimum/$90 maximum
Annual Prescription Co-pay Maximum
$900 $1,000
Questions and Thank Questions and Thank YouYou
SummarySummary
Educate yourself about your pensionEducate yourself about your pension
Take advantage of ORS and Take advantage of ORS and miAccountmiAccount
Start your homework nowStart your homework now
Mutual Funds and Variable Annuities are subject to market risk which may cause value to fluctuate including loss of principal. For more information, please call MEA Financial Services/Paradigm Equities, Inc. at (800) 292-1950 for the specific mutual fund prospectus or a variable annuity contract and underlying sub account fund prospectuses. Both the contract prospectus and the underlying fund prospectuses contain information relating to the product's investment objectives, risks, charges and expenses as well as other important information. Please carefully read the prospectus and carefully consider the investment objectives, risks, charges, expenses and other important information before investing because these factors will directly affect future returns. Investor may incur penalties if funds are withdrawn early.
Guarantees and/or payments of the insurance feature of an annuity are based on the claims-paying ability of Issuer and not on the value of the securities within the account.
Taxes are due upon withdrawal. For non-qualified or prior to age 59 ½ withdrawals, earnings are taxed as ordinary income to account owner, plus a 10% penalty.
*Individual fund expenses apply. See the individual fund prospectus for applicable expenses.
MEA Financial Services/Paradigm Equities, Inc. does not give tax or legal advice. The comments regarding the law and tax treatment simply reflect our understanding of current interpretations of such laws. Since laws are always subject to interpretation and possible changes, we recommend that you seek the counsel of an attorney, accountant or other qualified tax advisor regarding these matters as it applies to your particular situation.
Securities are offered through Paradigm Equities, Inc.* a wholly owned subsidiary of MEA Financial Services. Paradigm Equities, Inc., Member of FINRA and SIPC 1480 Kendale Blvd., East Lansing, MI 48823 (800) 292-1950
Important Disclosures
Important Disclosures- Variable Important Disclosures- Variable AnnuitiesAnnuities
Variable annuities are subject to market risk which may Variable annuities are subject to market risk which may cause value to fluctuate including loss of principal for cause value to fluctuate including loss of principal for variable accounts. variable accounts. Both the contract prospectus and the underlying fund Both the contract prospectus and the underlying fund prospectuses contain information relating to the product's prospectuses contain information relating to the product's investment objectives, risks, and charges and expenses as investment objectives, risks, and charges and expenses as well as other important information.well as other important information. For more information For more information about Variable Annuities , please call MEA Financial about Variable Annuities , please call MEA Financial Services at 800-292-1950 for the contract prospectus and Services at 800-292-1950 for the contract prospectus and the underlying sub account fund prospectuses.the underlying sub account fund prospectuses. Please Please carefully read the prospectus and carefully consider the carefully read the prospectus and carefully consider the investment objectives, risks and charges and expenses investment objectives, risks and charges and expenses and other information before investing because these and other information before investing because these factors will directly affect future returns.factors will directly affect future returns.Guarantees and/payments are based on the claims-paying Guarantees and/payments are based on the claims-paying ability of Issuer and not on the value of the securities within ability of Issuer and not on the value of the securities within the account. the account.
Important Disclosures – Mutual Important Disclosures – Mutual FundsFunds
Investments in the Mutual Funds are subject to Investments in the Mutual Funds are subject to market risk which may cause value to fluctuate market risk which may cause value to fluctuate including loss of principal. including loss of principal. For more complete information about a specific fund For more complete information about a specific fund including objectives, risks, and its charges and including objectives, risks, and its charges and expenses, please call 1-800-292-1950 for a product expenses, please call 1-800-292-1950 for a product prospectus.prospectus. Please carefully read the prospectus and Please carefully read the prospectus and carefully consider the investment objectives, risks and carefully consider the investment objectives, risks and charges and expenses and other information before investing charges and expenses and other information before investing because these factors will directly affect future returns.because these factors will directly affect future returns.