Guide to Retirement Louisiana State Employees’ Retirement System Welcome to LASERS Guide to Retirement. This publication was created by the Louisiana S Welcome LASERS Guide to Retirement should be used to assist you in making more informed decisions pertaining to your retirement. Think of this information as your personal retirement handbook and guide through the sometimes confusing maze of retirement planning. There is a checklist in this booklet that will alert you of items to address monthly as you approach retirement. In some cases, the month is very important; and in others, the listed item is there simply to remind you that these items need your attention before your retirement date. We also have provided space for making notes that are specific to you. Retirement is a personal adventure. It’s YOUR personal adventure! You are responsible for contacting your agency and knowing when it is time for you to retire. You will be responsible for accurately completing all applicable forms. Consider it your challenge to securing your future. Congratulations on your impending retirement! We hope this guide helps make your venture in this life-changing experience one of organized transition. LASERS staff is here to facilitate your retirement process. Please contact us if we can provide information or assistance on any topics of concern. The LASERS Staff and Board of Trustees September 2009 State Employees’ Retirement System to assist you with your preparations for retirement. Table of Contents Planning for Retirement.................................................................... Retirement Options............................................................................ Estimate Example ............................................................................... Member Self Service .......................................................................... Active Members ....................................................................................... Retired Members ..................................................................................... General Information........................................................................... Rollover of Assets..................................................................................... Address Change........................................................................................ Submit Retirement Application in a Timely Manner................... W-4P Tax Information............................................................................. Payment of Retirement Benefits...................................................... DROP/IBO Accounts............................................................................ Tax Information......................................................................................... Office of Group Benefits Insurance.................................................. Changes in Payment to Retiree or Beneficiary.............................. Payroll Deductions.............................................................................. Retirement Organizations ................................................................ Re-employed Retirees........................................................................ The Monthly Retirement Planner..................................................... Retirement Recap................................................................................ Forms (in order of use)....................................................................... 4 6 7 8 8 9 10 10 10 10 11 12 14 16 17 17 18 19 20 23 27 28 Helpful Websites Louisiana State Employees’ Retirement System Info Louisiana Louisiana Department of Civil Service Louisiana Department of Insurance Louisiana Department of Revenue Louisiana Deferred Compensation Plan Office of Group Benefits Internal Revenue Service (IRS) Social Security Administration Benefits CheckUp National Council on the Aging Retired State Employees Association www.lasersonline.org www.louisiana.gov www.dscs.state.la.us www.ldi.state.la.us www.rev.state.la.us www.louisianadcp.com www.groupbenefits.org www.irs.gov www.ssa.gov www.benefitscheckup.org www.ncoa.org www.rseala.org Planning For Retirement 01 02 Investigate purchases, actuarial transfers or reciprocal recognitions of service. You may be able to increase your years of service by: Review your annual and sick leave. Most agencies will pay leave based on your hourly rate at termination. Any remaining leave may be applied to your retirement or you may choose to be paid the actuarial value (not the hourly salary rate) in a lump sum. • repaying a refund. • purchasing military time, in-state service, leave without pay, furlough time, certain service as a Legislator, or “Air Time.” • transferring service from another system. • entering into a reciprocal agreement with another system. You may find out more information by reviewing the forms, booklets and fact sheets on the LASERS website. 4 You must repay, purchase, transfer or reciprocate service prior to your date of retirement. Delaying submission before retirement will result in a delay in your retirement date. All payments must be made in a lump sum. Federal and state law mandate that you can purchase a maximum of five years for time not worked. 03 Get an estimate of your benefits about a year before you plan to retire. You may request an estimate of your benefits by completing Form 5-01, Request for Retirement Benefit Estimate. This form lists all of the different types of estimates available. If applicable, include the estimated amount of unused leave you will have at retirement, less the 300 hours of annual leave payable by your agency. You must know that the calculations that will be provided to you are estimates. All calculations are subject to change once final verifications are received at the time of your actual retirement. 04 For individual retirement counseling, you may contact LASERS Member Services Division or the Human Resources office at your agency for available dates in your area. 05 Select the retirement date which will be the most advantageous to you. Make sure you consider all the factors which might affect the amount of your retirement check. 06 When you plan to retire, notify your agency’s Human Resources office and obtain a retirement application. You are responsible for contacting your agency and knowing when it is time for you to retire. You will be responsible for accurately completing all applicable forms. Your agency will certify your application and mail it to LASERS. 07 Copies of your Social Security card and birth certificate and your beneficiary’s Social Security card and birth certificate are required at the time of retirement. Other certified legal documents should also be submitted at this time (i.e. certified divorce decree, community property settlement, death notices, etc.). You will not receive any retirement benefits from LASERS until all required documents have been received. Your application should be received by LASERS at least 90 days before your retirement date. Late submission of your application and all required forms could delay your retirement check. 5 Retirement Options When you retire you must select a retirement option and a beneficiary(ies). You can name anyone as a beneficiary. However, a married member must choose a retirement option which provides a benefit for their spouse that is at least fifty percent of the benefit payable to the retiree. A member may choose a payout with no survivor annuity or name another beneficiary, if the spouse agrees with this choice and signs form 4-04, Spousal Consent in the presence of a Notary Public. Depending on the retirement option chosen, your beneficiary may receive a lifetime benefit in the case of your death. Below are the seven retirement options: 1. Maximum Option pays the maximum monthly benefit to you for your lifetime. This option does not 1. pay a monthly benefit to a beneficiary(ies). Should you die before your member contributions are depleted, your beneficiary(ies) will receive a lump sum payment of your remaining member contributions. Contributions are typically exhausted within two to three years. 2. Option 1 pays you a slightly reduced monthly benefit for your lifetime. The benefit reduction is based on your employee contributions and your age and life expectancy at the time of your retirement. It does not pay a monthly benefit to a beneficiary(ies). Should you die before your member contributions are depleted, your beneficiary(ies) will receive a lump sum payment of your remaining member contributions. Your contributions are depleted at an actuarially reduced rate and are typically exhausted within eight to ten years. This option is not available to members who choose the Initial Benefit Option (IBO). 3. Option 2A pays you a reduced monthly benefit for your lifetime. The benefit reduction is based on the ages of you and your beneficiary at the time of your retirement. Upon your death, your beneficiary will receive a lifetime benefit of the same monthly amount for their lifetime. 4. Option 2B is only available to members with a mentally handicapped child or children and pays you a reduced monthly benefit for your lifetime. The benefit reduction is based on the ages of you, your beneficiary, and your mentally handicapped child/children at the time of your retirement. Upon your death, your beneficiary will receive the same amount for their lifetime. At the beneficiary’s death, a benefit is paid to the legal guardian of any mentally handicapped child/children. You must submit Form 6-03, Option 2B Mentally Handicapped Designee, along with your retirement application. This form must be certified by a physician. 5. Option 3 pays you a reduced monthly benefit for your lifetime. The benefit reduction is based on the ages of you and your beneficiary at the time of your retirement. Upon your death, your beneficiary will receive 50 percent of your benefit for their lifetime. 6. Option 4A is only available to members who have been married at least two years at the time of their retirement. Only your spouse may be named as your beneficiary. This option pays you 90 percent of the Maximum Option benefit for your lifetime. Upon your death, your spouse will receive 55 percent of your Maximum Option benefit for their lifetime. This option is not available to disability retirees. 7. Option 4B pays you a reduced monthly benefit for your lifetime. The benefit reduction is based on the ages of you and your beneficiary at the time of your retirement. Upon your death, your beneficiary will receive 55 percent of your Maximum Option benefit for their lifetime. You may have the choice to change your option to Maximum if your beneficiary predeceases you. Should you divorce in your retirement years, you may be able to request the Maximum Retirement Option at an actuarial reduction. There is a $150 actuarial fee charged for calculating the actuarial reduction. Legal documents such as a death certificate, court decree, and property settlement are required for documentation. A former spouse must irrevocably relinquish all rights in and to any benefit to which they may be entitled. Ultimately, it is your responsibility to inform LASERS about a death or a divorce of your beneficiary. 6 Self-Funded COLA (Act 270 of 2009) At the time of retirement, IBO, or entry into DROP, you may elect to receive an actuarially reduced retirement allowance plus a two and one-half percent cost-of-living adjustment (COLA) which will be paid annually on your retirement anniversary date. If you are not 55 at the time of retirement or entry into DROP, you are eligible to select the COLA but the COLA will not be payable to you until the anniversary date after you turn age 55. If you choose a retirement option which leaves your spouse a monthly benefit, the Self-Funded COLA will be added to their monthly benefit after your death. However, if you name a non-spouse beneficiary the Self-Funded COLA will not be added to their monthly benefit after your death. This option is not available for Disability retirement. Estimate Example The Retirement Options table below shows an estimate of a member who is 55 years old with 25 years of service and has a spouse who is 53 years old. The example shows a monthly and a yearly benefit under each retirement option. The actual pension benefit you are entitled to as a member of LASERS is determined by applicable laws as well as finalized service credit, earnings, and leave balances at the time you retire. Retirement Options Maximum Member Retirement 100% Payment Monthly $ 1,066.67 Yearly $ 12,800.04 When I die, Beneficiary Lump sum of receives remainder of unused employee contributions only, if contributions remain Monthly Yearly Possible to Change Yes Beneficiary Number of Beneficiaries More than one My Retirement Option Choice Option 1 Option 2 Option 3 Option 4A Option 4B Reduced amount from maximum Reduced amount based on age at retirement Reduced amount based on age at retirement 90 percent of maximum Reduced amount based on age at retirement $ 1060.22 $ 964.89 $ 1,013.23 $ 960.00 $ 1008.18 $ 12,722.64 Lump sum of remainder of unused employee contributions only, if contributions remain $ 11, 578.68 Same amount $ 12,158.76 50 percent $ 11,520.00 55 percent of maximum $ 12,098.16 55 percent $ 964.89 $ 506.62 $ 586.67 $ 554.50 $ 11, 578.68 $ 6, 079.44 $ 7,040.04 $ 6,654.00 Yes No No No No More than one Only one Only one Spouse only Only one 7 Member Self-Service (www.lasersonline.org) Active Members: Once at the LASERS website, click on Active Members and then Active Member Self-Service. You will need to enter your social security number, date of birth and zip code. You will then be asked to create a User ID, password and security question. Once registered you will be able to access your information: You can generate your own benefit estimate by clicking the Create Benefit Estimate link. You can get estimates for Regular Retirement, IBO, DROP, and payment for unused annual and sick leave. These estimates are not guaranteed benefits. These calculations are merely estimated, and the actual pension benefit you are entitled to as a member of LASERS is determined by applicable laws as well as finalized service credit, earnings, and leave balances at the time that you retire. You can generate your own repay refund estimate by clicking the Create Repay Refund Estimate link. This estimate will give you an idea of how much it might cost to repay those years that you previously refunded. Any repay refund or purchase of service must be completed before processing your retirement. Remember, these calculations are merely estimates. 8 Retired Members: Once at the LASERS website, click on Retired Members and then Access Retiree Self-Service. You will need to enter your social security number, date of birth and the net amount of your last check. You will then be asked to create a User ID, password and security question. Once registered you will be able to access your information: 9 General Information Rollover Of Assets Recent legislation has broadened the acceptability of funds from certain qualified plans or IRAs under section 401(a) of the Internal Revenue Service Code. Form 2-13 LASERS-Acceptance Letter of Rollover of Assets is available only from LASERS and facilitates LASERS acceptance of these monies from the qualified plans. This form is used by active/eligible members choosing to purchase, repay, or transfer service credit into LASERS. A rollover is not a withdrawal of funds, but an transfer of funds from one qualified trust to another qualified trust authorized by an active/eligible employee. Any rollovers must be completed in advance of retirement so as not to cause a delay in the effective retirement date. By delivering assets to LASERS, you and your financial institution, in releasing these funds, acknowledge and certify that: 1) the distribution qualifies as an IRS eligible rollover from a qualified plan or entity; 2) that no required minimum distributions are being rolled over; and 3) that the rollover, once made, is irrevocable. Please contact a financial professional such as a CPA, tax attorney or certified financial planner for advice on this topic. Address Change Keep your address current with LASERS to ensure that you receive all retirement related information. Active Members: Any address change must be completed through the Human Resources office at your agency. The information will then be submitted from your agency to LASERS. Do not contact LASERS directly to change your address. Retired Members: Should you wish to update your mailing address, change your tax deductions, or alter your direct deposit information, you may download the necessary forms from the LASERS website at www.lasersonline.org/ Forms. If you do not have Internet access at home, you can visit the nearest public library or any educational institution which allows public access to its online resources. You may also call or write LASERS and we can mail you the appropriate form(s). If you change your account number or banking institution, you will have to submit a new Form 4-05, Authorization for Direct Deposit. Submit Application In A Timely Manner You are encouraged to submit your retirement application in a timely manner. Retirement is effective the day the application is received at LASERS, or the day after termination, whichever is later. If there is a break in service between your date of termination and your effective date of retirement, your monthly benefit may be reduced. 10 W-4P Tax Information When filling out your retirement paperwork with your Human Resources office, make sure you complete Form W-4P, Withholding Certificate of Pension Annuity Payments, indicating whether you wish to have federal income taxes deducted from your retirement check. Unless otherwise indicated by receipt of the W-4P, federal taxes must be withheld from your retirement check. You will receive from LASERS a 1099R Distribution Form showing your taxable income. If you have already paid taxes on part of your contributions to LASERS, you will receive a credit on your 1099R. If you live in Louisiana, you need to file a Schedule “E” form with the Louisiana Department of Revenue (DOR). Visit the website for more information. The address is www.rev.state.la.us. 11 Payment Of Retirement Benefits Direct Deposit A member of LASERS with a retirement date effective on or after January 1, 2000, is required to use direct deposit to receive retirement benefits. This requirement resulted with the passage of Act 21 in the 1999 Legislative Session. The Electronic Fund Transfer (EFT, or direct deposit) of your retirement check is fast since it is automatic, uninterrupted and electronic--and your funds are available on the first business day of the month--two to five days sooner than checks sent through the U. S. Postal Service. Upon retirement, your first check will be mailed to your home address while we pre-notify your bank of an electronic fund transfer. The following month, your funds will be automatically deposited into your account. An account statement similar to a check stub will be furnished to you upon establishment of the EFT and at any point thereafter when a change is made in the amount to be deposited. If an exception to this payment method is needed, contact LASERS for information. Mailed Retirement Benefit Checks LASERS delivers monthly retirement benefit checks to the U.S. Post Office on the last business day of each month. Upon delivery to the post office, LASERS has no method of retrieving or tracking delivery of the checks. If your retirement check is not received within a reasonable amount of time, you may contact your nearest post office to inquire about tracking the check. If you do not receive your retirement check by the fifth working day of the month, please send a signed notification, including your Social Security number and a telephone number, to: LASERS Post Office Box 44213 Baton Rouge, Louisiana 70804-4213 to initiate the steps necessary to stop payment on the check and have it reissued. 12 13 DROP/IBO Accounts LASERS DROP/IBO account funds may be paid to you monthly, yearly, in a lump sum, or rolled over to an IRA or other qualified plan. The money in your DROP/IBO account must be withdrawn within your expected lifetime in accordance with IRS rules. Tax penalties may apply depending on the withdrawal method selected. It is recommended that you contact a tax advisor prior to making your withdrawal selection. You may view your account information on the LASERS website through Retiree Self-Service under the DROP/IBO Activity Report tab. Self Directed Plan DROP/IBO Accounts The LASERS Self-Directed Plan (SDP) is a 401(a) retirement plan. Once the DROP accumulation period ends or the IBO has been set up, retirees will be able to choose from a menu of investment options in which to allocate their DROP/IBO balances. Provider The Great-West Retirement Services is the administrator under contract with LASERS to provide various asset classes with different holdings, management styles, and risk factors for investment purposes. You are able to diversify your investments as you work with the Great-West representatives. Please be aware that participation in the SDP may result in the risk of loss of principal or earnings and each participant agrees that neither the State of Louisiana nor LASERS are obligated for any loss in account funds. Enrollment Any LASERS member who becomes eligible for and enters DROP or who becomes eligible for retirement and selects the Initial Benefit Option (IBO) on or after January 1, 2004, will be required to enter the Self-Directed Plan (SDP). Members entering DROP must complete the DROP accumulation period before entering. Participation Certain DROP/IBO participants may have the option to remain in the current LASERS DROP/IBO account or choose the Self-Directed Plan (SDP). By entering the SDP you make an irrevocable election. You will be able to transfer 100 percent of your balance to the SDP upon completion of the DROP accumulation period. The Self-Directed Plan is an optional choice for the following members: 1. All persons who entered DROP or select the IBO prior to January 1, 2004. 2. Persons eligible for regular retirement prior to January 1, 2004, who continue to work, and later choose to take the IBO. 3. Spousal beneficiary(ies) of a DROP/IBO account. 4. Members who were eligible to retire on or before December 31, 1995, who may enter DROP at any time. 14 Investment Option Choices For the Self-Directed Plan A wide array of fixed and variable investment options are available. Each option is explained in the Great-West Retirement Services booklet and fund data sheets. You can begin receiving your SDP benefits after you have retired or severed employment by contacting Great-West Retirement Services. Distribution Option 1. Receive: • Periodic payments; • Fixed annuity payments; • Partial lump sum with remainder paid as periodic payments or annuity payments; • A lump sum. 2. Roll over your account balance to an eligible governmental 457(b), 401(k), 403(b) or 401(a) plan or to an IRA. 3. Defer the start of payments from your account until April 1 following the calendar year in which you attain age 70 1/2. Taxes on Withdrawals and Account Balance at Death Distributions from the SDP are exempt from Louisiana state income tax. Ordinary federal income tax will apply to any benefit received during the calendar year. Some penalties may apply for early withdrawal. Contact your Great-West Retirement Services representative for additional information. Your designated beneficiary(ies) will receive the remaining value of your account, if there is a balance. Beneficiary(ies) must contact Great-West Retirement Services. Contact Information Visit the website at www.LouisianaDCP.com or call KeyTalk toll-free at (800) 701-8255. The website provides information regarding the SDP, financial education information, financial calculators and other tools to help you. Great West Retirement Services 2237 S. Acadian Thruway, Suite 702 Baton Rouge, LA 70808 225.926.8082 or toll free 800.937.7604 15 Tax Information for DROP/IBO Accounts If you are under age 55 you will need to read the information below before you decide how to receive your benefits from LASERS. This is in addition to the “Special Tax Notice Regarding Plan Payments” incorporated in our Form 9-03 Request for Withdrawal from DROP/IBO Account. If you choose to have a DROP/IBO distribution that is eligible for rollover PAID TO YOU: • You will receive only 80 percent of the payment. LASERS is required to withhold 20 percent of the payment and send it to the IRS as income tax withholding to be credited against your taxes. • You will be taxed in the current year unless you do a Trustee-to-Trustee rollover. • You can roll over the payment by paying it to your traditional IRA or to another qualified employer plan that accepts your rollover within 60 days after you receive the payment. The amount rolled over will not be taxed until you take it out of the traditional IRA, or qualified employer plan; however, you will lose your state income tax exemption. • If you want to roll over 100 percent of the payment to a traditional IRA or to another qualified employer plan, you must find other money to replace the 20 percent that was withheld. If you roll over only the 80 percent that you received, you will be taxed on the 20 percent that was withheld and not rolled over. • A Trustee-to-Trustee rollover will not be taxed when transfer occurs and 100 percent of your balance will be rolled over. If you receive a payment before you reach age 55 and you do not roll it over to a qualified plan then, in addition to the regular income tax, you may have to pay an extra tax equal to 10 percent of the taxable portion of future payments if you withdraw any funds prior to 59 1/2 The additional 10 percent generally does not apply to: 1. Payments that are paid because you retire due to disability. 2. Payments that are paid as equal (or almost equal) payments over your life or life expectancy (or you and your beneficiary’s lives or life expectancies). 3. Payments that are paid directly to the government to satisfy a federal tax levy. 4. Payments that are paid to an alternative payee under a qualified domestic relations order. 5. Payments that do not exceed the amount of your deductible medical expenses. See IRS Form 5329 for more information on the additional 10 percent tax. LASERS encourages its members to seek a tax advisor or financial consultant regarding their finances. 16 Office of Group Benefits Insurance If you have questions regarding your insurance coverage, contact your employing agency. In the event you cannot obtain the necessary information from your agency, please contact: Office of Group Benefits: Mailing Address: P.O. Box 44036 Baton Rouge, Louisiana 70804 Street Address: 7389 Florida Blvd. Suite 400 Baton Rouge, Louisiana 70806 Website: www. groupbenefits.org Telephone: Toll-free: 800.272.8451 or 225.925.6625 LASERS will continue to make the deduction of your premium in accordance with information received from the Office of Group Benefits office. We do not have access to your insurance records. Changes in Payment to Retiree or Beneficiary System Generated COLA A system generated cost-of-living adjustment (COLA) is possible only when the LASERS Employee Experience Account contains sufficient monies to fund an increase. The funds in the Experience Account come from excess revenues generated by the LASERS investments program. Fifty percent of investment earnings above the legislatively mandated 8.25 percent minimum return are deposited into the Experience Account each year until the balance is sufficient to fund a system generated COLA. Eligibility for a system generated COLA for LASERS retirees is defined by state statute, La. R.S. 11:542C(4). To be eligible, a regular LASERS retiree must have reached the age of 60 as of June 30th of the year that a system generated COLA is authorized by the legislature. In addition, you must have been retired effective June 30th of the previous year. A disability retiree must have reached the age of 60 as of June 30th of the year prior to a system generated COLA being authorized by the legislature. A beneficiary is eligible if the deceased retiree would have turned 60 as of June 30th of the year the system generated COLA is authorized, and if retiree or survivor benefits have been paid since June 30th of the previous year. Insurance Premium Changes Retirees that have health insurance coverage maintained through their former employer are subject to possible increases or decreases each fiscal year. 17 Upon Death By law, monthly retirement benefits stop upon death. Any benefit check delivered after death must be returned to LASERS. Your designated beneficiary may have certain benefits entitlements. Your beneficiary must apply to LASERS for benefits after your death before payments can begin. In the event that you survive your designated beneficiary, you may either: 1. Designate a new beneficiary(ies), if you chose the Maximum Option or the Option 1 retirement benefit option and some of your contributions still remain; or 2. Change your retirement option to the Maximum Option, which allows for a larger monthly payment. You must submit either request in writing along with a copy of the deceased beneficiary’s death certificate. The change will be effective on the first day of the month following the date of death. Payroll Deductions Credit Union and Insurance Vendor Information As a service to you, LASERS is able to provide payroll deductions for the Credit Unions and Insurance Vendors listed below. If you chose to have your insurance premiums or credit union payments deducted from your retirement benefit, you will need to contact the insurance company and/or credit union and submit the proper authorization to the vendors. Visit their websites for additional information. If you do not find your insurance company or credit union listed, LASERS will be unable to provide the automatic payroll deduction from your benefit. This list is subject to change periodically. Credit Unions Include: Department of Corrections Credit Union District 62 Highway Federal Credit Union Eagle Louisiana Federal Credit Union (formerly LA State Credit Union) LA CAP Federal Credit Union LA DOTD Federal Credit Union LA Employment Security Federal Credit Union (LES Credit Union) LA Wildlife and Fisheries Credit Union Pelican State Credit Union Third District Highway Federal Credit Union Insurance Vendors Include: AFLAC Colonial Life & Accident Insurance Company Columbia Universal Life Insurance (formerly Hill Country) 18 Payroll Deductions, (continued) Insurance Vendors, (continued) Conseco Health (formerly Capital American) DINA Dental Insurance Guaranty Income Life Insurance LSU A D & D Insurance LSU Definity Health LSU Health and Life Insurance New York Life Insurance Office of Group Benefits Health and Life Insurance Starmount Dental Insurance Transamerican Life Insurance Company Retired State Employees Association of Louisiana The Retired State Employees Association (RSEA) dues may also be deducted, if you wish. Retirement Organizations RSEA Retirees, as well as active LASERS members, may join the Retired State Employees Association of Louisiana (RSEA) to keep up to date with retirement issues and concerns. For more information, call (225) 930-0961, toll-free (866) 938-0961, or visit the website www.rseala.org. LA Deferred Compensation Plan For information regarding the Louisiana Deferred Compensation Plan, please call (225) 926-8082, or toll-free (800) 937-7604, or visit the website www.louisianadcp.com. Social Security Employees of the State of Louisiana who are members of LASERS are not required to pay Social Security tax (certain exemptions do apply). However, if you were previously employed in a position that required payment of Social Security taxes, or you are the spouse or widower of such persons, you may be entitled to a benefit from the Social Security Administration (SSA). If you receive a retirement benefit from LASERS, Social Security benefits may be reduced. The type of Social Security benefit you receive determines the formula used to calculate the reduction to your Social Security benefit. The Government Pension Offset (GPO) is used for a spouses benefit. The Windfall Elimination Provision (WEP) is used for an earned benefit. If you have any questions regarding Social Security, please contact the Social Security office nearest you, or visit the Social Security website, www.ssa. gov, for more information. An informational brochure explaining the possible Social Security benefit reductions may be found on the LASERS website under “Publications & Reports - Brochures and Fliers” 19 Re-employed Retirees If you want to return to work... If you are retired and wish to return to work with a LASERS member agency, you must select one of three options listed below when you are rehired. The option selection is irrevocable and is effective for the full term of your employment. You and your agency must notify LASERS immediately by completing Form 10-2, Re-employment of Retiree if: 1. 2. 3. 4. 5. you are hired as a re-employed retiree; you select the option for reemployment purposes; your starting salary has been set and/or changed; you know the estimated duration of your employment; and you know the date of your termination of employment. Re-employed Retiree Options Option 1 You may elect to limit earnings in any fiscal year to approximately 50 percent of your annual retirement benefit for such fiscal year. You cannot select this option if your estimated earnings for the fiscal year will exceed your earnings limit. If your actual earnings exceed the limit, your retirement benefits will be reduced by the amount that your earnings exceed the limit. When computing your earnings limitation, an annual adjustment is made based on the Consumer Price Index (CPI) for the preceding year. You are responsible for monitoring this earnings limitation. Exceptions: Option 1 • You have 30 years of earned service credit with LASERS and are age 70, OR • You have been retired one year and are appointed by the Secretary of State to fill the position of Commissioner of Elections. Option 2 You may regain membership in LASERS by repaying all retirement benefits received plus interest at the actuarial rate. This option allows you to restore prior service credit and return to active member status as if you had not retired. If you participated in the DROP or IBO program or took early retirement, you cannot choose this option. 20 Option 3 You may suspend your retirement benefits effective on your reemployment date and again become a contributing member of LASERS based on your current employment. Employee and employer contributions must be paid under this option and there is no limit on earnings. Upon subsequent retirement, your retirement benefit will be resumed. Exceptions: Option 3 • You have 30 years of earned service credit with LASERS, have been retired one year and are appointed by the Governor in an unclassified position. In addition, if you work for at least 36 months, a supplemental benefit will be calculated for your additional employment based on your service credit and average compensation for that time. If you work less than 36 months, your employee contributions will be refunded. If you should die during this period of employment, benefits will be paid to your named beneficiary based on the retirement option you selected at retirement. You cannot purchase prior service credit or participate in DROP while re-employed. If you have any rehired retiree questions, contact LASERS Member Services Division at (225) 922-0600 (in the local Baton Rouge area), or toll-free (800) 256-3000. 21 Disability Retiree Information If you are a disability retiree, you can go back to work for a six month trial period. During this time, your benefit will be suspended. If you terminate state service prior to the six month period, your disability benefits will be reinstated from the date of your termination. If you continue working for six months or longer, your disability benefits will be terminated. (Act 165 of 2002 reactivated La. R.S. 11:416 and enacted La. R.S. 11:416.1) 22 The Monthly Retirement Planner Here is a guide to assist you month by month as you approach retirement. Any address changes, name changes, insurance changes, beneficiary additions and/or changes must be done with each agency or company that maintains your records. Do not assume that changes recorded with LASERS are changed with LA Deferred Compensation or Group Benefits, or other companies. Also, do not assume that your Human Resources office or LASERS will handle everything for you. Follow up on steps taken between you and your agency. Make copies of everything!!! Important Dates to Remember Last Date of Service Service Retirement Date Anniversary Date My account number is my Social Security Number 12 NOTES Attend a Pre-Retirement Education Program (PREP). A schedule and online application are located on the LASERS website www.lasersonline.org under Seminars. Create a file folder entitled “LASERS Retirement.” Complete Form 5-01, Request for Retirement Benefit Estimate. Arrange an appointment with a LASERS benefit analyst to review your retirement benefits by calling (800) 256-3000 (toll-free) or (225) 922-0600 (local B.R. number). Review your projected expenses at retirement. Review health care plan options: medical, dental, vision, long-term care. Months Prior to Retirement 11 Talk to your Human Resources office to resolve questions about purchasing service credit or transfers of credit. NOTES Meet with your retirement planning advisors about individual retirement accounts. Check with Social Security, if applicable, about other retirement issues. Review insurance plan. Meet with an attorney to discuss estate planning issues: wills, trusts, living wills, property settlements, etc. Months Prior to Retirement If you are going to pay back refunded service time to use toward retirement, you will need to complete Form 2-11 Application for Repayment of Refunded Service. You can find this form on the LASERS website, www.lasersonline.org, under “Forms.” 23 10 NOTES Continue to meet with retirement planning advisors. Begin collecting names of organizations where you may wish to volunteer or work after retirement. Months Prior to Retirement 09 NOTES Review LASERS re-employment guidelines. Complete process for purchasing service credit. Prepare to move any money needed to pay for purchase. Review your expenses and reconcile with your income. Set up a retirement income budget. Months Prior to Retirement 08 Months Prior to Retirement 24 NOTES Read Re-employed Retiree fact sheet located on the LASERS website www.lasersonline.org, under “Retired Employees” or under “Publications & Reports/Fact Sheets.” Contact LASERS Member Services Division with any questions. 07 NOTES Verify your retirement time frame: When does your current health care coverage end? Submit a letter to Social Security to determine your eligibility for Medicare or Medicaid. Update beneficiary or guardian on important accounts. Name or update a guardian for minor children. Select trusted friends, family, or relatives to carry out your estate plans. Sign Power of Attorney for health care and financial matters. A copy of the form is located on the LASERS website, www.lasersonline.org. Months Prior to Retirement 06 NOTES Begin all of your retirement paperwork with your human resources office. Request retirement application from your Human Resources office Examine which option will work best for you and your family. Choose the method for receiving unused sick leave and annual leave. Obtain Form 4-04 Spousal Consent, if needed. Check with LASERS about community property laws and divorce decrees, if applicable. Update all beneficiaries in all areas of legal process. Months Prior to Retirement 05 NOTES Review your application for retirement. Review need for health care coverage and complete all necessary forms. Determine federal tax withholdings. Complete Form W-4P Withholding Certificate for Pension or Annuity Payments. Check with your financial advisor, if applicable. Analyze your debts or future purchases. Review your estate plan. Months Prior to Retirement 25 04 NOTES Begin updating your resume if you plan to work after retirement. Research physical fitness and wellness programs: local groups, Council on Aging, YMCA, YWCA, etc. Research and set aside a fund for hobbies, travel, academics, and other retirement opportunities. Months Prior to Retirement 03 NOTES Complete your application for retirement, if you haven’t already done so, and return it to your agency’s Human Resources office for certification. An acknowledgment letter will be mailed to you after your paperwork has been received at LASERS. Enclose a copy of your Social Security card and your birth certificate. Also, include a copy of each beneficiary’s Social Security card and birth certificate. Set up Direct Deposit Form 4-05 Authorization for Direct Deposit, if you have not done so already. Record and keep all important mailing addresses, hours of service, and phone/fax numbers accessible in one location. Months Prior to Retirement 26 Retirement Recap Define your retirement objectives. Do not assume anything is being done for you; YOU are responsible for your own retirement process. Begin your retirement paperwork with your Human Resources office. Obtain an estimate of benefits from LASERS. Meet with a retirement benefits analyst at LASERS. Learn about estate planning and how you can benefit. Update beneficiaries/guardians on important accounts. Name or update guardian for minor children. Select trusted friends or relatives to carry out your estate plans. Draft personal trust agreements, if necessary. Draft a will. Sign Powers of Attorney for health care and financial matters. If applicable, consider using the $10,000 annual gift exclusion while still living. Visit the website at www.rev.state.la.us for more information. Create a Living Will. List important people to contact: LASERS; person in charge of your estate; attorney; trustee; family members, etc. 27 Forms (in order of use) Regular and 20-year Retirement 5-01 6-01 or 6-01A or B 4-05 4-04 6-02 W-4P 1-02 1-06 1-07 10-02 Request for Retirement Benefit Estimate Application for Retirement or Application for Retirement with Initial Benefit Option (IBO) Authorization for Direct Deposit Spousal Consent Form Insurance Premium Deduction Authorization Federal Tax Notice - Special Tax Notice Regarding Plan Payments Withholding Certificate for Pension or Annuity Payments Change of Address Designation of Beneficiary Change of Name Re-employment of Retiree DROP/IBO Retirement (All the forms above plus the following form) 9-03* Request for Withdrawal from DROP/IBO Account * If you are in the Self-Directed Plan you must request a withdrawal form from Great-West Retirement Services. DROP Retirement 5-01 9-01 or 9-01A 4-04 28 Request for Retirement Benefit Estimate Application for Deferred Retirement Option Plan (DROP) Spousal Consent Form Notes: 29 Notes: 30 Notes: 31 Contact Information Location: 8401 United Plaza Blvd. • Baton Rouge, LA 70809 Mail: P.O. Box 44213 • Baton Rouge, LA 70804-4213 Phone: (toll-free) 800.256.3000 • (local) 225.922.0600 Web: www.lasersonline.org This public document was published at a total cost of $12,590. Ten thousand copies of this public document were published in this second printing at a cost of $8,390. The total cost of all printings of this document, including reprint is $12,590. This document was published by the Louisiana State Employees’ Retirement System, P.O. Box 44213, Baton Rouge, LA 70804-4213, to disseminate plan benefit information to its members and to Louisiana policymakers under authority of La. R.S. 11:511 et seq. This material was printed in accordance with the standards for printing by state agencies established pursuant to La.R.S. 34:31.
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