USC Benefits Administration“Taking pride in your peace of mind”

Planning for Retirement:Strategies, Options & Information

Transitions 2014

Presented by Awilda P. BregandExecutive Director, Benefits Administration

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Life Insurance

| 3Should I continue after retirement?

• Start by evaluating your family's needs. – Will there be a mortgage remaining? – Will there be outstanding medical or credit cards

bills? – Are there children who may need money for

college? • Bear in mind that usually as retirement savings

increase the need for life insurance decreases

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What do I currently have?

• Basic Term Life Insurance – University paid–1x your annual salary –up to a maximum of $50,000 – reduces to 65% at age 65 and 50% at age 70

• Supplemental life insurance - available for employee and dependents – paid for entirely by employee–No age reduction

| 5Do you really need to continue?

• Basic Term Life – free now but will cost in retirement– Example - maximum coverage at age 65 - $32,500(65% of

$50,000)• 32.5 x 2.54 = $82.55 per month

• Supplemental Life – rates remain the same as when you were an active employee – Example -$200,000 in Supplemental coverage at age 65• 200 x 0.749 = $149.80 per month

• If you wish to continue – Contact Minnesota Life at (866) 293-6047

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Accidental Death & Dismemberment (AD&D)

| 7What do I currently have?

• $10,000 Basic Insurance – University paid– Plan C participants receive $100,000

• $100,000 Business Travel Accidental Death Insurance – University paid

• Supplemental AD&D available for employee and dependents – paid for entirely by employee– Globe Rescue Travel Assistance Program

• Automatically included with Basic AD&D coverage• www.LifeBenefits.com/travel or call (815) 516-5433

• Continue? Personal decision, is very inexpensive but why? None of the ancillary add-ons (travel assistance, etc.) continue just the monetary benefit

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Long Term Care

| 9Long-Term Care vs. Long-Term Disability?

• Long-term care insurance - insurance that will help defray the costs of long-term care services– Medicare only covers specified number of days

• Long-term disability insurance – income replacement if you are unable to work due to illness or non-occupational injury.– Long-term disability insurance does not provide

benefits for long-term care services

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Why Long Term Care Insurance?

• The need for long term care can be caused by conditions such as broken or fractured bones, Parkinson's disease, stroke, Alzheimer's, or other chronic conditions.

• Long term care services are often required when you need assistance with activities of daily living, such as using the bathroom, taking a shower, dressing, or moving in and out of a bed or chair.

• Care can be provided in different settings, including your home, an assisted living facility, a residential care facility, or a nursing home

• Having Long Term Care could allow you to:– Stay in your home as long as possible– Protect your savings and other assets– Relieve the burden of care from friends and family– Maintain flexibility in care options– Preserve your quality of life

| 11Cost of Care

| 12Continuing your USC LTC coverage

• Simply contact John Hancock or Genworth and arrange to pay the premiums directly.

• Payments can be made either quarterly or twice a

year.

• Contact information:• John Hancock -1-888-524-6167• Genworth – 1-800-416-3624

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• Need more help?– California Department of Aging’s Health Insurance

Counseling and Advocacy Program (HICAP) has developed a consumer guide to long term care which is included in our enrollment package. Additional counseling available from HICAP: 1-800-927-HELP.

| 14I do not have Long Term Care Insurance!

• Some pre-retirees/retirees may have saved enough money to “self insure” for these type of services; meaning they have enough money saved to cover these type of services, if needed– This is fine but is that what you really earmarked your money for?

• If you don’t have LTC insurance and feel you might need LTC (based on your personal health situation/family history) research the USC offering to determine whether you can qualify (there are underwriting requirements) and/or whether you can afford the premium which are age based– Another option is to work with an insurance broker to see whether

an individual plan might be the way to go• Contact Genworth for an enrollment kit or use their website to

enroll

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RetirementPlans

| 16Getting your money

• Defined Contribution Plan - Make sure to review the Distribution Instructions and Distribution Options forms in your packet and then contact your applicable vendor(s) to discuss your options– You do not have to move your money

• Be careful of “salesmen” trying to sell you a better vehicle for your money; USC has incredibly low fees whereas another product might not. READ THE FINE PRINT!

– Employees hired in 2012 may need to satisfy vesting to receive 100% of the university’s matching contribution

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• The Defined Benefit Plan requires you to select an annuity option at time of retirement. This is an irrevocable election that will lock in your monthly lifetime pension payment.

– Straight Life - Payments are made to you, for the remainder of your lifetime. Because there is no survivor benefit, this option yields the greatest monthly benefit.

– 10 Year Certain - If you should die within the first 10 years of receiving the benefit, your beneficiary would receive the payments for the remaining years left in the 10 year period

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– 50% Spousal Survivor+* - Your monthly benefit is reduced so that your surviving spouse will receive lifetime payments of 50% of your monthly benefit upon your death.

– 75% Survivor Annuity* – Your monthly benefit is reduced so that your surviving spouse will receive lifetime payments of 75% of your monthly benefit upon your death.

– 100% Spousal Survivor* - Your monthly benefit is reduced so that your surviving spouse will receive lifetime payments of equal value upon your death.

*These options are for married participants only. + Surviving spouse benefit if you should die before electing an annuity option

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HealthInsurance

| 20Under Age 65

• Elect COBRA for yourself and your dependents for whichever plan you were enrolled in as an active employee. COBRA may continue for the maximum allowable period (18 or 36 months) or until you reach age 65, whichever comes first.

• COBRA for dental and vision is available for 18 months only.

• BUT COBRA may or MAY NOT bridge you to Medicare eligibility (age 65) so plan carefully!

| 2165 or older

• Common point of confusion for those continuing to work after age 65:– Since I am 65 (or older) do I need to enroll in

Medicare if continuing to work? No!!!• Once enrolled in all parts of Medicare (A, B &

D) you must decide if you want to purchase a Medicare supplement insurance or turn over your Medicare for HMO-style coverage

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• There are many Medicare (Medigap) options, research very carefully!– USC Senior Care is one option

• Very Important:– Notify all your providers of when Medicare will

become your primary insurance and not USC; a mess to clean up after the fact!

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• Another common questions we get is “What happens if my dependent(s) is not eligible for Medicare?”

• Spouses: (18 or 36 months)– COBRA (as long as it bridges them to age 65) or– eHealthinsurance @ www.ehealthinsurance.com or– Covered California @ https://www.coveredca.com

• Children:– COBRA or– eHealthinsurance @ www.ehealthinsurance.com or– Covered California @ https://www.coveredca.com– Student Health (if applicable)

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IMPORTANT UPDATE• AARP® Essential Premier Health Insurance Plans,

Insured by Aetna are no longer available to new applicants as of September 2, 2013.– As a result of the many health coverage options and

policies available under the ACA, AARP will not be co-branding a 50-64 health insurance product for sale in the 2014 Exchange marketplace.

| 25Three Months Prior to Retirement

• Retirement Accounts– Contact your vendor(s)

• Discuss distribution options– TIAA participants – if you have a Traditional account you must make

a decision regarding those funds within 120 days of retirement; other wise your choices will be limited

– Once you decide to begin your distribution• Contact your vendor(s) and receive appropriate paperwork• Once you have completed your paperwork submit to Benefits Office for

final authorization– DO NOT SEND BACK TO VENDOR!

– We will return to vendor for final processing– We cannot process until you show “retired” in the Payroll system;

make sure your department processes your paperwork in a timely manner

| 26Retiree Health Insurance

• Medicare Eligible Retirees– USC Network participants:• Contact Medicare to begin enrollment process

for Parts B & D (Part A also if you did not enroll at age 65)– Remember that your USC coverage stops at the end of the

month in which you retire

• Again, notify your doctors that your USC insurance will be ending and Medicare will be primary• Begin researching Medigap plans–USC Senior Care is one option

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• Anthem Blue Cross HMO (CaliforniaCare)– Contact Blue Cross of California directly to enroll

in their Senior Secure Plan – www.bluecrossca.com

• Kaiser Permanente– Contact Kaiser directly to enroll in their Senior

Advantage Medicare product – www.kp.org

Final Steps| 28

Final Steps

• Faculty – Immediate retirement - notify your department as soon as

you know your date – Phased Retirement – contact the Provost’s Office

• 2 years (3 years max with Provost approval)• Reduce work schedule to 50-99% time

– Health benefit eligibility will continue until end of phased retirement period if you are working at least 50% time

• Give up tenure (at beginning or end of phase period)• Retirement funds will be available as an in-service distribution

– Must be at least 59 ½ and have given up tenure to access all funds

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• Staff– Notify your department/school as soon as

possible– Common courtesy is 2-3 weeks to allow for

replacement strategies

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Questions?Contact the HR Service Center

213-821-8100uschr@usc.edu

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Disclaimer

This summary of USC’s benefit plans has been designed to acquaint you with some of the basic features of the plans, and every attempt has been made to summarize these programs and policies accurately. However, this summary is not designed to serve as your reference for the details of these benefits. Please refer to the Benefits website for more information, including details about limitations of benefits and your legal rights. The actual provisions of each benefit plan will govern if there is any inconsistency between this summary and USC’s formal plans and contracts. This summary does not constitute a contract for any benefit; USC reserves the right to modify or terminate its benefit plans.