MCCBOA Spring Workshop March 2, 2012
-
Upload
alfreda-hughes -
Category
Documents
-
view
36 -
download
0
description
Transcript of MCCBOA Spring Workshop March 2, 2012
MCCBOA Spring WorkshopMarch 2, 2012
Steve Crippen and John Donovan
Office of Retirement Services
Office of Retirement Services
Agenda
Introductions FY2013 & FY2014 Contribution rates
Investment returns History of membership, especially regarding
Community Colleges Healthcare Cost Containment
Reform Q&A
Office of Retirement Services
Contribution Rates
Fiscal Year 2012-13 Fiscal Year 2013-14First Work
BeforeJuly 1, 2010
First Work On or After July 1, 2010
First Work Before
July 1, 2010
First Work On or After July 1, 2010
Pension Normal Cost (Prefunded) 3.47% 2.24% 3.56% 2.29%Pension Unfunded Accrued Liability 12.49% 12.49% 16.24% 16.24%Early Retirement Incentive Program 2.66% 2.66% 2.66% 2.66%Pension Total Rate 18.62% 17.39% 22.46% 21.19% Retiree Health (Cash Basis) 5.75% 5.75% 5.75% 5.75%Surcharge due to Injunction 3.00% 3.00% 3.00% 3.00%Health Total Rate 8.75% 8.75% 8.75% 8.75% Grand Total 27.37% 26.14% 31.21% 29.94%
Office of Retirement Services
What Is Driving The Rates?
Recognition of investment losses over 5 years: FY2014 still has FY2008 and FY2009 losses. FY2015 will have FY2008 and FY2009 losses FY2016 will have just FY2009 losses
Retirement Incentive of 2.66%: affects years FY2013 through FY2017
Office of Retirement Services
Loss of membership: MPSERS 2003 peak of 327,000 members 2011 membership is 236,000
Community Colleges membership 2005: 21,599 2010: 22,556
Healthcare has been managed very well
What Is Driving The Rates?
Office of Retirement Services
Declined from 327,000 in 2003 to 236,600 in 2010 (27.6% decline in 8 years).
As membership declines, the contribution rate automatically increases.
If the 2011 population had remained at 2003 levels, the larger membership pool would have resulted in an FY 2011/2012 employer pension contribution rate at least 5 percent lower than it otherwise will be.
Health Care would be at least 2% lower
Membership
Office of Retirement Services
Year Health Expenditure per
Retiree°
National Per Capita
Average
2005 $6,794 $6,827
2006 $5,974 $7,198
2007 $5,460 $7,561
2008 $5,992 $7,845
2009 $6,333 $8,086
2010 $5,380 $8,401°
Cost Containment
Office of Retirement Services
Cost Containment
Office of Retirement Services
Reform
No Legislation Introduced Yet SERS reform
Refund 3% HCC Member contributions for future service Option to elect to Defined Contribution Option to continue graded health premium or convert
to “personal healthcare fund” SERS new hires are in the personal healthcare fund
Office of Retirement Services
Working After Retirement
Core Services
1/3 Earnings Limit
Bona-fide Termination
Compensation/Earnings
Office of Retirement Services
Core Services
Employee Class Codes and Definitions
Impact To Pension and Health Subsidy
Third Party Retiree Rehire Certification
http://www.state.mi.us/dmb/ors/emp/psru/docs/R0851C-Retiree-Rehire-Certification.pdf
Reporting Instruction Manual Appendix B
Office of Retirement Services
Retiree Earnings Limit
Pre 7/1/2010 Earnings Limit
Post 6/30/2010 Earnings Limit
Earnings Versus Compensation
Annual Limit – No Proration
Office of Retirement Services
Bona-fide Termination
401a IRS - Tax Qualified Status
Pre-promise Of Re-employment
30 Day Separation
Office of Retirement Services
Member Resources
For General Retirement Questions Information and Overview
http://www.michigan.gov/orsschools Member Account
www.michigan.gov/orsmiaccount Or Call: (800) 381-5111
Pension Plus Go To: http://www.mipensionplus.org
Office of Retirement Services
Employer Resources
For General Reporting Questions Go To: http://www.michigan.gov/psru Call: (517) 636-0166 Email: [email protected]
Pension Plus Go To: http://www.mipensionplus.org
Office of Retirement Services
Questions?
Office of Retirement Services
Thanks For Inviting Us