tmrs basics 2007, texas municipal retirement system. 2007 annual training seminar
TRANSCRIPT
TMRS Basics
2007, Texas Municipal Retirement System.
2007 Annual Training Seminar
Topics
About TMRS
Membership
Account balance
Refund
Retirement
Retirement Benefits
What is TMRS?
A statewide retirement system providing benefits to city employees
821 cities132,927 employees30,089 retirees*
* As of December 31, 2006
Texas Participating Retirement Systems
Texas Municipal Retirement System
Texas County and District Retirement System
Teacher Retirement System of Texas
Employees Retirement System of Texas
Judicial Retirement System of Texas
City of Austin Employees Retirement System
What Makes TMRS Different?
Most other systems provide the same plan across the state. Defined Benefit Plan
TMRS provides each city with their own plan. Over 821 different plans
Joining TMRS
Cities elect to join TMRS Cities choose from a menu
of retirement plan provisions
Every city has its own unique plan!
Mandatory Enrollment Employees must join TMRS if they are employed
in a permanent, full-time position that normally requires 1,000 hours of work in a year.
City determines eligibility based on the 1,000-hour rule.
Seasonal or temporary employees and volunteer firefighters are NOT eligible.
Member’s Personal Account
Account entirely in member’s name
Similar to savings account
Protected by law—NO ONE CAN TOUCH IT!!
How Much Goes in a Member’s Personal Account?
City Council adopts one of three levels: 5, 6, or 7%
Payroll deduction based on gross compensation
Tax-deferred All employees in a city
participate at the same level
How Does Member’s Money Grow?
Payroll deduction 1 deposit = 1 month service
Interest Approved annually by
TMRS Board of Trustees Paid every December 31 Compounding interest
Two sources of income:
Does the City PutMoney in Member Accounts?
City money is paid only at retirement
Member only receives city money when retiring
NO! Each city has its own TMRS account.
How Much Does the City Match?
Three levels of match 1 1 1.5 1 2 1
Applied toward total account balance
City Council chooses level
Option 1: QUIT and Request Refund
Forfeit right to future retirement benefit
Receive only member’s money — NO CITY MONEY!!
How Can Member Get to Money?
Does Member Have to Refund?
If member is not vested 5-year window
If member is vested, money can be left until retirement
NO!
What Is Vesting? Vesting with TMRS means
the member has worked enough years to retire at some time in the future.
In most TMRS cities, employees are vested when they have 5 years of service.
Vesting does not mean the employee owns the city’s matching funds.
Option 2: Death
Beneficiary receives refund; OR
Monthly payment if member was vested
How Else Can Member’s Money Be Paid?
Option 3: Retire
Only way to receive City’s matching funds!
How Else Can MemberGet to Money?
When Can a Member Retire?
Age 60 with 5 years of service, or age 60 with 10 years of service
20 years of service at any age, or 25 years of service at any age
Depends on which option your city has chosen:
The Member’s Retirement Date…
There is no best time of year to retire. Prorated interest on
accounts
Retirement date must be the last calendar day of the month.
Retirement payments begin the last day of the month following retirement date.
Monthly Payment Plans7 Payment Plans
All plans pay an annuity for retiree’s lifetime
All plans ensure return of member’s accumulated deposits and interest
All plans are equal in value
Retiree Life Only Option
Calculated on member’s life only
No survivor benefits
The highest monthly option
Survivor Lifetime Options
Retiree Life – 100% Survivor Benefits
Retiree Life – 75% Survivor Benefits
Retiree Life – 50% Survivor Benefits
Monthly payments for member and beneficiary’s lifetimes
Note: Only 1 beneficiary may be named under these options
‘Pop-Up’ Provision
If a retiree…
Has selected a survivor lifetime option
AND
Beneficiary dies before retiree
Then – monthly payments increase to Retiree Life Only option
Guaranteed Term Options
Retiree Life – 5-year guarantee
Retiree Life – 10-year guarantee
Retiree Life – 15-year guarantee
Guarantee payments for member’s life, but only for fixed number of years for beneficiary after retirement
Note: Up to 3 beneficiaries may be named with these options
Partial Lump-Sum Distribution
Members may choose partial lump-sum distribution (PLSD) when they retire!
Do PLSD Payments Reduce Monthly Payments?
Yes – but city’s matching is not reduced!
Member $ City $
75% cap
PLSD and Taxes PLSD payments are
income
20% withheld unless rolled over
10% penalty if under 59½ Exception for retiree
age 55 or older!
Taxable $ can be rolled over (all or part)
Cost of Living Increases
Optional provision — Must be approved by city
Cost of living increases are given only to retirees
Amount is based on Consumer Price Index
Applying for Occupational Disability Retirement
Employee may apply anytime.
Retirement date must be last day of calendar month after all deposits received at TMRS.
How is Eligibility for Occupational Disability Retirement Determined?
No minimum length of service or age required to be eligible.
The cause of disability does not have to be job-related.
The TMRS Medical Board must find that:
The member is mentally or physically incapacitated from performing the duties of his or her occupation; and
The incapacity is considered to
be permanent
What Forms Need to Be Completed?
Review Occupational Disability Forms checklist: Application for Occupational Disability Retirement Selection of Retirement Plan City Statement Member’s Statement Physician’s Statement Selection of Partial Lump Sum Distribution
Member must be eligible for service retirement to receive a PLSD.
Electronic direct deposit authorization Proof of birth for employee. Proof of birth for beneficiary, if applicable. Name Certification (if names on proof of birth and
TMRS records do not match) Withholding election form (W4-P)
Other TMRS Provisions Supplemental Death Benefit Service credits
Restricted Prior Service Credit Military credit
Special purchases Buy-back Proportionate buy-back
Questions & Answers
HOW TO CONTACT TMRS:Toll-free: 800-924-8677Web: www.TMRS.comE-mail: [email protected]