EARLY RETIREMENT INCENTIVE GRANT MEETING February 23, 2010

EARLY RETIREMENT INCENTIVE GRANT MEETINGFebruary 23, 2010

TOPICS

• State of Idaho Early Retirement Incentive Program

• School District No. 25 Early Retirement Incentive Grant

• PERSI Workshops• Retirement Sick Leave Benefit

Early Retirement Incentive Program

• The following presentation of the State’s Early Retirement Program ASSUMES that that the procedures and criteria will be the same as in prior years. As of February 23, the Legislature has not yet approved the SDE funding request - - changes to the program may still occur.

• You can check the status of any changes at the following web address: http://www.sde.idaho.gov/financeandtechnology/default.asp

http://www.sde.idaho.gov/financeandtechnology/default.asp




Early Retirement Incentive Program

• Applies to certificated instructional staff only.

• If available, you will need to complete an application form and submit it to the State Department of Education as soon as possible (once posted) in order to meet the “usual” April 1st deadline.

Do I Qualify?

Currently contracted with an Idaho public school district for the entire 2009-2010 school year

Working in a certified but non-administrative position Will complete the current contract Eligible to be offered a contract for FY 2010-2011 Have not met the “Rule of 90” on 04/01/2010 Between age 55 and 62 before 09/01/2010 Completed ten (10) continuous full-time years with an

Idaho Public school district in a certified position PRIOR to 04/01/2009 (Current year does not count). A 50% or greater contract is considered full-time for this qualification only.

The State of Idaho Incentive(Information obtained from www.sde.state.id.us/Dept/

and Idaho Code 33-1004G)

One-time lump sum payment. Agree not to come back to work

for an Idaho public school district where you would be eligible to participate in PERSI.

For Additional Information

• Check the website : http://www.sde.idaho.gov/financeandtechnology/docs/retirement/Attention.ppt#256,1,Attention – Early Retirement Incentive Program

• Make sure you use the April 1, 2010 application form when you apply (not available as of 2/24/10)

REMEMBER!APPLICATION FORMS

• Must be postmarked on or before April 1, 2010

• Must be notarized

• Must be accompanied by proof of age (copy of driver’s license, birth certificate, passport)

• Must use the April 1, 2010 application form (if you use an old form, it will be rejected and returned to you.)

How is the $$$ Calculated?

Based on how the state would reimburse School District No. 25 for your position

Based on your personal information Based on data submitted to the State Department of Education

last fall by School District No. 25

Base Salary (I.C. 33-1004E)times Index (I.C. 33-1004A)times % according to age (I.C. 33-1004G), prorated if not working full time (based on current year’s contract)

How is the $$$ Calculated?

Current part-time employees: All calculations are based on your FTE for the

current school year. If you have been a full-time employee in the past, your benefit will still be calculated at your current part-time rate.

What is the Base Salary forFY 2009-2010?

Instructional – $24,567

Per I.C. 33-1004E

How are Indexes Calculated?

Years completed Degree claimed Additional college transcript credits

Earned beyond the degree reported AND initial certification Initial certification – issue date of the certificate Reported in semester credit hours only Do not report in-service credits in this section

Eligible staff are placed on the Experience & Education Multiplier Table based on the following:

(I.C. 33-1004A)

Education Factor

“In determining the education factor, only credits earned after initial certification, based upon a transcript on file with the teacher certification office of the state department of education, earned at an institution of higher education accredited by the state board of education or a regional accrediting association shall be allowed…”

(I.C. 33-1004A)

Experience Factor

“In determining the experience factor, the actual years of teaching service in an accredited public school or in an accredited private or parochial school shall be credited.” (I.C. 33-1004A)

In any year that a certified employee worked less than half-time, they did not earn experience on the state’s salary schedule for that year.

Experience and Education Multiplier

Year BA BA + 12 BA + 24MA BA+36

MA+12 BA+48

MA+24 BA+60

MA+36 ES/DR

0 1.00000 1.03750 1.07640 1.11680 1.15870 1.20220 1.24730

1 1.03750 1.07640 1.11680 1.15870 1.20220 1.24730 1.29410

2 1.07640 1.11680 1.15870 1.20220 1.24730 1.29410 1.34260

3 1.11680 1.15870 1.20220 1.24730 1.29410 1.34260 1.39290

4 1.15870 1.20220 1.24730 1.29410 1.34260 1.39290 1.44510

5 1.20220 1.24730 1.29410 1.34260 1.39290 1.44510 1.49930

6 1.24730 1.29410 1.34260 1.39290 1.44510 1.49930 1.55550

7 1.29410 1.34260 1.39290 1.44510 1.49930 1.55550 1.61380

8 1.34260 1.39290 1.44510 1.49930 1.55550 1.61380 1.67430

9 1.39290 1.44510 1.49930 1.55550 1.61380 1.67430 1.73710

10 1.39290 1.49930 1.55550 1.61380 1.64730 1.73710 1.80220

11 1.39290 1.49930 1.55550 1.61380 1.73710 1.80220 1.86980

12 1.39290 1.49930 1.55550 1.61380 1.73710 1.86980 1.93990

13 or more 1.39290 1.49930 1.55550 1.61380 1.73710 1.86980 2.01260

“Each instructional and administrative staff position shall be assignedAn appropriate multiplier based on the following table.” (IC-33-1004A)

What is the Percentage Based on My Age?

Measured on 09/01/2010 (I.C. 33-1004G) Age 55 = 55% Age 56 = 50% Age 57 = 45% Age 58 = 40% Age 59 = 30% Age 60 = 30% Age 61 = 20% Age 62 = 20% Age 63 = 0%

EXAMPLE

Maria is a full-time elementary teacher. She has a Masters degree plus 12 additional college credits. Maria has completed 25 years teaching and is 57 years old. The lump-sum payment would be calculated as follows:

$24,567 x 1.73710 x 45% x 1.00 FTE = $19,203.90 (gross subject to federal, state, FICA and Medicarewithholdings)

How to Apply?

If/when available, complete “Application for Early Retirement Incentive” Form (must be notarized)

Send copy of proof of age with application Drivers License, Passport, or Birth Certificate Return application to the address indicated on

the application.Postmarked on or before April 1, 2010

How Do I Get a Form?

Idaho Department of Education website

http: //www.sde.idaho.gov/financeandtechnology/default.asp

Idaho Department of Education

208-332-6845

What Happens After I Apply?

After April 1, 2010 your information will be verified with your school district.

PERSI will confirm that you have not met the Rule of 90 (etc.) The Idaho Department of Education will notify you prior to June 1st

whether your application is accepted and of the estimated gross amount based on information in database.

If you feel there is an error with your data, contact your district immediately. Changes must be submitted by your district.

In August 2010, the money will be sent to your district. The district will run the lump-sum payment through its payroll system

on August 31, 2010

What if I Choose to Withdraw My Application?

NOTIFY THE IDAHO DEPARTMENT OF EDUCATION

IN WRITING

NO LATER THAN JUNE 20, 2010.

What is the status of the district’s Early Retirement Plan?

• The district early retirement incentive grants were suspended for the current school year, 2009-2010 (see Negotiated Agreement, Appendix A, p. 40).

What About Next Year’s Contract?

• Once we receive a letter indicating that you will retire, we will submit your request at the next regularly scheduled board meeting for acceptance and in turn, we will not issue you a contract for the next school year.

• If you wish to withdraw your retirement letter, you must notify the Human Resources prior to the next regularly scheduled board meeting after you have submitted you letter.

TAX SHELTERS?

There are annual limits to the amount you can contribute to an annuity or 401(k). As a general

rule, the limit is $22,000 for employees born prior to 1960. You can calculate your limit at the following

web address: http://www.persi.idaho.gov/FAQ/choice_plan_401k.cfm

http://www.persi.idaho.gov/FAQ/choice_plan_401k.cfm

TAX SHELTERS?

Contact your tax or financial advisor. Any annuity / 401(k) changes must be

received in the Payroll Office by August 17, 2010

PERSI 505 Retirement Workshops

PERSI

This workshop is for those within 5 years of retirement. They will show you how to combine your PERSI Base Plan and Choice Plan benefits with your Social Security and other income sources when retiring. Also covered: health care costs, taxes and estate planning.


PERSI

There is a $15 Registration Fee, which is returned when you attend the workshop.

As of Tuesday, February 23, 2010 there aren’t any available workshops

in Southeastern Idaho during March & April

If interested, please check the website often – new workshops may be posted as early as next week.

Register online at:http://www.persi.idaho.gov/education/workshop_schedule.cfm


PERSI

Should you experience any difficulty using this system, please call 800-451-8228 or 208-334-3365 and ask for help with the RAB registration. Likewise, contact your local office to obtain a benefit estimate, application package and set up an appointment to finalize your paperwork.

Most classes fill up very quickly. To meet the demand, additional classes are often added.

Retirement Sick Leave (RSL)

PERSI

When you retire from the district, all of your accumulated sick leave has value that can go toward the payment of your medical insurance premiums during retirement. In fact, you can avoid paying for medical premiums out of your retirement check for several YEARS if you have a significant sick leave balance. Here’s how it works.

1. When you retire, the district informs PERSI of the number of days of sick leave you have accrued and your daily wage. You can accumulate up to 492 sick days.


PERSI

2. PERSI then multiplies the number of sick days by your daily wage, takes half of that and credits that dollar value to your sick leave account.

3. Your insurance premiums are then deducted from that account rather than your retirement check. Only after all of the money in your account has been spent will it be deducted from your retirement check.

4. Only group insurance plans sponsored by the district can be deducted from RSL funds.

5. You must retire from a PERSI employer in order take advantage of the RSL benefit.


PERSI

6. Your daily wage is based on your last contract day with the district.

7. The number of days earned per year does not fluctuate with your full-time status. You always earn the number of days allowed by the contract whether you are full-time or part-time.

8. If you are currently a part-time employee, your entire sick leave balance will be credited to your account as if you were a part-time employee for your entire career.


PERSI

9. If you have transferred into the district from another Idaho district, your entire sick leave accumulation MIGHT not be accepted by PERSI. There are provisions in Idaho Code that limits the number of days transferable between districts.

10. PERSI will determine the number of days they will accept for your RSL account. If you have more sick days accumulated than you could have possibly earned during your career, PERSI will CAP the days accepted to your RSL account to the number of days you COULD have earned. (This could also happen from #9 above.)

11. YOU MUST BE A PARTICIPANT OF THE DISTRICT’S MEDICAL PLAN THE LAST YEAR OF YOUR CONTRACT IN ORDER FOR YOU TO CONVERT RSL DOLLARS TO PAID MEDIAL PREMIUM. If you retire as a part-time employee and are receiving a Cash Benefit, Blue Shield WILL NOT allow you to enroll in the district’s medical plan and therefore, you CANNOT use your RSL account to pay for medical premiums.


PERSI

“Sick Leave Abuse” reduces your RSL Benefit(Don’t use it just because you have it!)

Annual Salary

Accrued Sick Days RSL Value1

Avg. Monthly Premium

Months of Paid

Premiums2

$50,000 300 $39,474 $400 98

$50,000 80 $10,526 $400 26

1. Annual Salary / 190 x Accrued Sick Days / 22. Average premiums will increase over time. However, after age 65, Medicare

supplemental premiums are much less expensive.

Working and Receiving Retirement Benefits

PERSI

Scenario #1 No Other Job:

PERSI Benefit $10,000

SSA Benefit $10,000

Total Benefit $20,000

This, and the following scenarios, assume that the retiree has not reached Full Retirement Age (FRA) as defined by the SSA.

Depending on the year of birth, FRA ranges between 65 and 67.


Scenario #2 Full Time Job with Non PERSI Employer:Assumes 40 Hours per Week and $10 per Hour

Dream World


SSA Benefit $10,000

Salary $20,800

Total Benefits and Salary

$40,800

Reality*


SSA Benefit $6,680

Salary $20,800


$37,480

* In 2010, salary totaling more than $14,160 will reduce your SSA Benefit:

10,000 – ((20,800 – 14,160) / 2) = $6,680

PERSI


If you are younger than full retirement age and earn more than certain amounts, your benefits will be reduced. It

is important to note, though, that these benefit reductions are not truly lost. Your benefit will be

increased at your full retirement age to account for benefits withheld due to earlier earnings.

Source: www.ssa.gov

PERSI


Scenario #3 Full Time Job with PERSI Employer:Assumes 40 Hours per Week and $10 per Hour

Dream World


SSA Benefit $10,000

Salary $20,800


$40,800

Reality*

PERSI Benefit $0

SSA Benefit $6,680

Salary $20,800


$27,480

* In 2010, salary totaling more than $14,160 will reduce your SSA Benefit: 10,000 – ((20,800 – 14,160) / 2) = $6,680

Even though you will not receive a PERSI check, you will still accrue PERSI credits.

PERSI


Scenario #4 Part Time Job with Non PERSI Employer:Assumes 20 Hours per Week and $10 per Hour


SSA Benefit $10,000

Salary $10,400


$30,400

PERSI


Scenario #5 Part Time Job with PERSI Employer:Assumes 20 Hours per Week and $10 per Hour

Dream World


SSA Benefit $10,000

Salary $10,400


$30,400

Reality*

PERSI Benefit $0

SSA Benefit $10,000

Salary $10,400


$20,400

* Even though you would not receive a PERSI check, you would still accrue PERSI credits.

PERSI


Scenario #6 Part Time Job with Non PERSI Employer*:Assumes 19 Hours per Week and $10 per Hour


SSA Benefit $10,000

Salary $9,880


$29,880

PERSI

* In some cases, you may also work for a PERSI employer if you work less than half-time. For more information, go to this website:

http://www.persi.idaho.gov/documents/Working_after_retirement.pdf

http://www.persi.idaho.gov/documents/Working_after_retirement.pdf

REMINDER LIST

If the State ERIP is available, mail your application to the State Department of Education by April 1, 2010. Contact PERSI to begin your retirement process at least 3 months prior to your anticipated retirement date. The district will not initiate the paperwork for you. Once we have issued your final check, PERSI will be notified of your sick leave balance. Notify the HR office of your intent to retire. If you choose to withdraw your application to retire, notify the HR office in writing prior to the next regularly scheduled board meeting after you submitted your application. Contact PERSI if you are interested in attending their PERSI RAB (Retirement’s a Beach) workshop.

EARLY RETIREMENT INCENTIVE GRANT MEETING February 23, 2010

Documents

Transcript of EARLY RETIREMENT INCENTIVE GRANT MEETING February 23, 2010