City Council Study Session Agenda and Packet 2017 05 09

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Statewide Defined Benefit Plan for members of affiliated Social Security Employers Payment Options All FPPA Social Security Supplemental Plan benefits are calculated using the average of the highest 3 years' base salary. A member does not elect the payment options until shortly before the benefit is paid to ensure that the beneficiary and payment option factors are accurate. Normal Option The retiree receives a full, unreduced pension benefit for their life. No monthly benefits are paid to a beneficiary following the retiree's death. However, if at the time of the member's death, they have has not recouped in pension payments the amount of the member contributions (including all funds paid in to purchase service credit), the remaining funds plus 5% as interest would be paid to the member's beneficiary or estate as a lump sum. Option 1 100% Survivor Benefits Under Option 1, a reduced normal, deferred, early or vested retirement pension will be paid from the effective date of the retiree's retirement or later in the case of a deferred retirement. The reduced pension will continue for the life of the retiree. Upon the death of the retiree, the same reduced pension will be paid to the retiree's designated beneficiary for life. If a member elects a non -spouse beneficiary who is significantly younger than the member, certain restrictions may prohibit the election of this payment option or may require an additional calculation to be made in order to comply with US Treasury Regulations. Please contact FPPA for more information. The table below* can be used to estimate the benefit amount anticipated if Option 1 is elected. Age of Retiree 55 56 57 58 59 60 61 62 63 64 65 45 0.842 0.831 0.819 0.807 0.794 0.781 0.768 0.754 0.740 0.726 0.711 46 0.846 0.835 0.823 0.811 0.799 0.786 0.772 0.759 0.745 0.730 0.716 47 0.850 0.839 0.828 0.816 0.803 0.790 0.777 0.764 0.750 0.735 0.721 48 0.855 0.844 0.832 0.820 0.808 0.795 0.782 0.769 0.755 0.740 0.726 49 0.859 0.848 0.837 0.825 0.813 0.800 0.787 0.774 0.760 0.746 0.731 50 0.864 0.853 0.842 0.830 0.818 0.806 0.793 0.779 0.766 0.751 0.737 51 0.869 0.858 0.847 0.835 0.823 0.811 0.798 0.785 0.771 0.757 0.742 52 0.873 0.863 0.852 0.841 0.829 0.817 0.804 0.791 0.777 0.763 0.748 u 53 0.878 0.868 0.857 0.846 0.834 0.822 0.810 0.797 0.783 0.769 0.754 c 54 0.883 0.873 0.862 0.851 0.840 0.828 0.816 0.803 0.789 0.775 0.761 m 55 0.888 0.878 0.868 0.857 0.846 0.834 0.822 0.809 0.796 0.782 0.767 5 56 0.893 0.883 0.873 0.862 0.851 0.840 0.828 0.815 0.802 0.788 0.774 & 57 0.897 0.888 0.878 0.868 0.857 0.846 0.834 0.822 0.809 0.795 0.781 a 58 0.902 0.893 0.884 0.874 0.863 0.852 0.840 0.828 0.815 0.802 0.788 59 0.907 0.898 0.889 0.879 0.869 0.858 0.847 0.835 0.822 0.809 0.795 60 0.911 0.903 0.894 0.885 0.875 0.864 0.853 0.841 0.829 0.816 0.803 61 0.916 0.908 0.899 0.890 0.880 0.870 0.859 0.848 0.836 0.823 0.810 62 0.921 0.913 0.904 0.896 0.886 0.876 0.866 0.855 0.843 0.831 0.818 63 0.925 0.917 0.909 0.901 0.892 0.882 0.872 0.861 0.850 0.838 0.825 64 0.929 0.922 0.914 0.906 0.897 0.888 0.878 0.868 0.857 0.845 0.833 65 0.933 0.927 0.919 0.911 0.903 0.894 0.885 0.875 0.864 0.853 0.840 Example of Option 1 The following example is based on these assumptions: • A member is age 55. • The designated beneficiary is age 53. • The member has completed 25 years of service credit. • The average highest three years' base salary is $50,000.00 per year. • $50,000.00 X 28.75% = $14,375.00 annually; • $14,375.00 X .878 = $12,621.25 or $1,051.77 monthly * The table above is an estimate and for illustrative purposes only and shows some of the factors used to calculate the option. The factors shown are rounded. When implementing the calculation, the retirement age is rounded up or down to the nearest whole age. Tables may be revised periodically. Your benefit will be determined by the exact tables in effect at the time you elect your payment option and begin to receive your benefit or in the case of participation in DROP, when the pension is paid into the DROP account.