Allegheny Intermediate Unit Education Association Retirement

Workshop

March 4, 2013McGuffey Room, AIU

Keynote Speaker: Ralph Butera

Past President of AIUEAGuest Speakers:

Denise Croyle and Dan Carey

When will I be able to retire?

Regular Retirement

• 35 years of service, retire at any age

• 30 years of service, retire at age 60

• Age 62, retire with 1 year or more  of service

Early Retirement

• After 25 years of service, and a minimum age 55, with a penalty of 3% per year under 35 years with a 15% maximum penalty.

• After 10 years of service with a penalty of 7% with no maximum cap.

Section 83 - Retirement Benefits

The AIU values the experience of its veteran teachers and in no way wishes to hasten their retirement.

An employee at age 55 with ten (10) years of AIU service, who elects to retire after July 1,

2007, under this provision, shall be eligible for the continuation of the following benefits in

effect at the time of retirement:

- Choice of Allegheny County Schools Health Insurance Consortium standard health insurance plans, consistent with Section 74

for the individual employees and dependents, if any.

- Dental

- Vision

- Life Insurance, if carrier permits

Health Insurance Benefits Paid by the AIU

Nine (9) years of benefits for retirement in the 2011-2012 and 2012-2012 school years and eight (8) years for retirement in the 2013-2014 school year or Medicare eligibility

Employee Insurance Purchase

The employee may purchase health insurance for

- Three (3) years at the end of the nine (9) year benefit period provided for retirement in the 2011-2012 and 2012-2013 school years and the end of eight (8) year benefit period provided for retirement in the 2013-2014 school year.

- At the Allegheny Intermediate Unit group rate.

The monthly stipend from PSERS will go to the employee, not to the AIU.

HOP

• This is the Health Options Program offered by PSERS once an individual reaches Medicare eligibility.

• It is a health program such as Highmark Freedom Blue

• Find more information and options @www.hopbenefits.com

PSERS Premium Assistance- For those who qualify, during the nine (9) or eight

(8) years of insurance benefits, the monthly stipend of $100 from PSERS will be mailed to the employee, who will in turn render it to AMCA Systems.

- Must write a check for the monthly bill, cannot use a draft or credit card.

- During the three (3) year period of employee insurance purchase, the monthly stipend of $100 from PSERS will be kept by the employee and not sent to AMCA Systems.

Premium Assistance

• You are eligible for Premium Assistance if you are a retiree who meets one of the following requirements: – You have at least 24½ years of credited

service regardless of age, or – You terminate school employment and

retire at or after reaching age 62 with at least 15 years of credited service, or

– You are receiving a disability retirement benefit from PSERS.

Premium Assistance

• Even if you meet the eligibility requirements, you cannot receive Premium Assistance if you do not choose a medical plan offered through HOP or if you do not continue to participate in your former school employer’s plan.

Premium Assistance

- For an employee who qualifies, he/she receives $100 monthly insurance benefit from PSERS.

- Each month, the employee remits $100 + the premium share to AMCA Systems.

Premium Share

• The employee shall contribute 5.5% of the health insurance premium with caps of $70 for individual coverage and $145 for family coverage in the 2012-13 school year and 7.25% of the health care premium with caps of $70 for individual coverage and $145 for family coverage plus the amount the retiree is eligible to receive from the PSERS Health Care Supplement.

• For individuals who retire, the contribution and caps for health insurance will stay at the fixed rate of the year of retirement.

Rate Increases- All rate increases that occur in the foregoing

benefits shall be shared by the Allegheny Intermediate Unit and the employee in the first nine (9) years in the 2012-2013 school year (employee pays 5.5%) and in the first eight (8) years in the 2013-2014 school year (employee pays 7.5%) of the employee’s retirement or Medicare eligibility.

- The employee’s share of the premium will not be greater than the cap as established at retirement.

DART Employees

For DART Employees who retire after June 30th due to the stretch calendar, retirement benefits will be granted per the school year for which the DART stretch calendar is being completed.

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Continued Benefits - Should the employee pass away prior to

exhausting the benefit, the insurance for spouse/dependents shall continue for the remainder of the benefit time period of the employee.

- Thereafter, the employee’s spouse/ dependents may purchase insurance for a period of up to three years at the Allegheny Intermediate Unit group rate.

Spousal Buyout- An employee may elect to withdraw from

the Health Insurance benefit program provided by the Collective Bargaining Agreement.

- In lieu thereof, the employee will receive a payment of $3,000.00 spousal buyout for each school year that the employee does not participate in the aforesaid insurance program.

Retirement Timeline

- To be eligible for the retirement benefits, employees shall notify the Allegheny Intermediate Unit no later that March 30th of each year of their intent to retire at the end of that school year.

- Retirement at any other time requires 60 calendar days notice to be eligible for retirement benefits.

Early Retirement Incentive

In the event that an early retirement incentive is offered by the Commonwealth of Pennsylvania after March 30th deadline, employees will be afforded the opportunity to retire regardless of age and receive the benefits of Section 83 without penalty.

FAQs

What should be included in my retirement letter? See the website http://aiuea.psealocals.org and click on the Tenure to Retire tab.

Dr. Michael Brinkos

Assistant Executive Director of

Operations and Educational Services

Allegheny Intermediate Unit

475 East Waterfront Dr.

Homestead, PA 15120

 

Dear Dr. Brinkos

 

Please be advised that this notification is my official letter of intent to retire at the end of

the 2012-2013 school year. My last day of work with the Allegheny Intermediate Unit will

be June 22, 2013 (note your date). My retirement will be effective June 23, 2013 (note your

date). This letter of intent to retire is contingent upon receiving the benefits listed under

Section 83 – Retirement Benefits of the current Collective Bargaining Agreement. Thank

you for your cooperation in this matter.

                                                                                                  

Respectfully yours,

Upon what date shall I make my retirement effective?

• Date your retirement as the day after your last day of school.

• If not sure of your last day of school, state in your letter ‘…….effective the day after the last day of school’.

• Your retirement date determines the calculation of your PSERS payment.

What if I teach until August as in the DART Program?

Retirement still occurs during the current school year.

What if I am working in ESY?

- Still notify the IU that you intend to retire.

- Notify PSERS that you have extenuating circumstances.

- It is possible to retire from AIU and PSERS on different dates.

How do I guarantee that my retirement letter has been received?

- General mail delivery followed by an email to michael.brinkos@aiu3.net asking for confirmation of receipt of the correspondence.

- We recommend using certified mail with a signature required.

May I rescind a letter of retirement?

–No

– Extenuating circumstances will be addressed on an individual basis.

What if I miss teaching?

Act 63:– Can substitute– Can coach– Note that if you are receiving Social

Security benefits, you are allowed to earn $15,120.00 and maintain your full benefit for 2013. If you earn more, you will lose a portion of your Social Security benefit.

Is my spouse covered by my health benefits?

- Benefits are tied to the employee.

- If your spouse is older…….

S/he is covered as long as you are.

- If your spouse is younger……..

S/he is eligible for COBRA or a HOP Program.

Is my dependent child covered by my health benefits?

- Benefits will continue for all children until the 1st day of the month after the child turns 26 years of age (Effective July 1, 2011)

- Certified every 6 months by AMCA Systems. You will receive a correspondence from AMCA Systems.

Defined BenefitPSERS

Retirement is paid in two components

1)Employee contributions and interest are paid in a lump sum: Move to a rollover: i.e. IRA, 403B, etc. In a defined benefit plan, a retiree can take none, part or all of their contribution.

2)State and IU contributions are paid out monthly as per your option choice. The monthly benefit is based on the option chosen.

Association Membership

PSEA – Retired- Membership continues your Member Benefits

- Advocates for retirees- One time membership fee of $682.00. Several payment options are available.

Pennsylvania Association of School Retirees (PASR) is not affiliated with PSEA/NEA.

Recommended Procedure

1)Contact PSERS to obtain a retirement estimate form. The form is available on the PSERS website. www.psers.state.pa.us

2)Schedule an exit interview with PSERS.3)Complete a retirement application with the

assistance of the PSERS staff.4)Schedule an appointment with Janet

Breiding at the AIU.

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Social SecurityHow to Apply:

1.) You must be 62 years of age and retired to receive the early reduced benefit or wait until you are 66 years of age, or older for the full benefit.

2.) You can apply 3 months before your 62nd or 66th birthday.

3.) If you take the early benefit at age 62 your lifetime benefit will be 80% of the benefit at age 66* and you are only allowed to earn $15,120.00 for 2013 without losing benefits.

4.) You can apply online and complete with a telephone interview or you can go in person to a Social Security Office.

5.) For more information go to: http://www.ssa.gov/

Advantage:

You will earn about $78,000.00 in benefits between ages 62 and 66. You will have more money while you are young and can enjoy it. If you wait until age 66, or your normal retirement age with a higher benefit, you must live until you are 78 years of age to recoup this same amount of benefit.

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403B Tax Sheltered Annuity• It is a long term savings account.

• You must be 59.5 years of age before you can withdrawal without penalty under normal circumstances and work in public education, the medical field, or in the U.S. Postal Service.

• You can invest up to 16% of your annual salary into this account.

• You can start a 403B with a bank, an insurance company, or an investment firm that has been approved by the AIU3 Board.

• You must begin to make withdrawals by age 70.5.

• This is tax deductible. When you file your federal taxes the amount you pay is based on the amount taxed AFTER this money has been placed into your account.

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403B Example:You make $100.00 per pay and you contribute $15.00 per pay to

a 403B. Your net taxable take home pay is $85.00 per week.

$100.00

-$ 15.00 403B contribution

$ 85.00 net taxable pay

*Your contributions ($15.00 per pay) are not taxed until you withdraw them after age 59.5* years of age.

**The advantage is a long term savings account with compounding of interest

***With a Roth IRA the taxes are paid before going into your account and never again.

Contact Information

PSERS900 Sarah Street Suite 208 Southside412.488.2031www.psers.state.pa.us

Janet Breiding - AIUjanet.breiding@aiu3.net412.394.5848