retirement system review - fairfax county, virginia · 5/22/2018 · may 22, 2018 retirement...
TRANSCRIPT
May 22, 2018
Philip Hagen
Budget Services Coordinator
Department of Management and Budget
Retirement System Review
Board of Supervisors Personnel Committee Meeting
Agenda
▪ Background
▪ System Funding Status
▪ Options Considered by Workgroup
▪ Proposed Package
▪ Minimum Retirement Age of 60 (ERS) and 50 (URS/PORS)
▪ Rule of 90 (ERS)
▪ 5-Year Salary Averaging Period (All)
▪ Eliminate Pre-Social Security Supplement (ERS/URS)
▪ Eliminate 3% Formula Increase (All)
▪ Increase Employee Contribution Rate (All)
▪ Questions
2May 22, 2018 Retirement System Review
Background / Why We’re Here
▪ Continued Board commitment to Defined Benefit plans
▪ Sustainability of County plans
▪ General Fund employer contributions more than doubled from FY 2010 to FY 2018
▪ Retirees are living longer
▪ Peer jurisdictions, including those that are covered by VRS, have made
changes to their retirement benefits
▪ Proposed retirement benefits will continue to be strong compared to peer
jurisdictions and the private sector
▪ Impact of proposed changes to employees is mitigated by longer tenures
3May 22, 2018 Retirement System Review
Changes to date
▪Shift in asset allocation strategies to provide greater protection from market downturns
▪Plan design changes effective for new employees hired on or after January 1, 2013
▪Succession planning during DROP period
▪Retirement education for employees
▪Surveying Employees
▪ New Hires
▪ Exit Interviews
4May 22, 2018 Retirement System Review
Employees’ System History and Projections
May 22, 2018 Retirement System Review 5
Funding Ratios and Contribution Rates
5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%6% 6% 6% 6% 6%
8% 8% 9% 10% 10% 10%
15%17%
19% 19% 20%22% 23%
25% 27% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28%
10% 10%
109%
58%
70%
104%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Fiscal Year
FY 2000 through FY 2034
EE Contribution ER Contribution Funding Ratio
Uniformed System History and Projections
May 22, 2018 Retirement System Review 6
Funding Ratios and Contribution Rates
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
19% 20% 19%22% 23% 24% 25% 26% 26% 26% 26%
31%34% 35% 36% 38% 39% 39% 39% 39% 40% 40% 40% 40% 40% 40% 40% 40% 40% 40% 40% 40% 40%
20% 19%
107%
64%
81%
100%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Fiscal Year
FY 2000 through FY 2034
EE Contribution ER Contribution Funding Ratio
Police Officers System History and Projections
May 22, 2018 Retirement System Review 7
Funding Ratios and Contribution Rates
12% 12% 12% 12% 12% 12% 12% 12% 11% 10% 10% 10% 10% 10% 10% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9%
18%
26%22%
17% 18% 18% 18% 20% 21% 22% 23%
28%31%
33% 34% 37% 38% 39% 39% 40%42% 42% 42% 42% 42% 42% 42% 42% 42% 42% 42% 42% 42%
21% 20%
106%
66%
83%
100%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Fiscal Year
FY 2000 through FY 2034
EE Contribution ER Contribution Funding Ratio
General Fund Employer Contributions
May 22, 2018 Retirement System Review 8
History by Retirement System
$33.1$45.2
$56.5 $63.2 $64.9 $68.8$79.0 $85.2
$95.9$38.4
$42.3
$47.2$50.5 $53.8
$57.7
$60.8$64.4
$65.8
$23.8
$29.0
$32.2
$35.3$36.5
$38.7
$41.1
$44.9
$45.2
$0
$50
$100
$150
$200
$250
FY 2010AdoptedBudget
FY 2011RevisedBudget
FY 2012RevisedBudget
FY 2013RevisedBudget
FY 2014RevisedBudget
FY 2015RevisedBudget
FY 2016RevisedBudget
FY 2017RevisedBudget
FY 2018RevisedBudget
Ge
ne
ral F
un
d E
mp
loye
r C
on
trib
uti
on
s Millio
ns
Employees Uniformed Police
Drivers ($ in Millions)Actuarial Valuation/Experience Study $42.0
Amortization/Funding Policy $40.6
Compensation Adjustments $36.8
Benefit Enhancements $6.5
New Positions/Reductions/Budgetary Experience ($14.5)
Total $111.5
Options Considered by WorkgroupPercent Change in Employer Normal Cost*
Potential Change for New Hires Employees’ Uniformed Police Officers
1a MINIMUM RETIREMENT AGE: Increase Minimum Retirement Age in ERS from age 55 to age 60 (2.9%) -- --
1b MINIMUM RETIREMENT AGE: Increase Minimum Retirement Age in ERS from age 55 to age 57 (0.9%) -- --
1c MINIMUM RETIREMENT AGE: Establish a Minimum Retirement Age of 50 in URS/PORS -- (1.6%) (3.9%)
1d MINIMUM RETIREMENT AGE: Establish a Minimum Retirement Age of 47 in URS/PORS -- (0.5%) (0.4%)
2 RETIREMENT ELIGIBILITY: Increase retirement eligibility from Rule of 85 to Rule of 90 in ERS (1.0%) -- --
3a SALARY AVERAGING: Increase Salary Averaging Period from 3 Years to 5 Years (4.7%) (5.2%) (4.4%)
3b SALARY AVERAGING: Increase Salary Averaging Period from 3 Years to 4 Years (1.8%) (2.6%) (2.2%)
4 ELIMINATE PRE-SOCIAL SECURITY SUPPLEMENT: Eliminate Pre-Social Security Supplement in ERS/URS (7.5%) (5.7%) --
5LIMIT PRE-SOCIAL SECURITY SUPPLEMENT: Limit Pre-Social Security Supplement to 5 Years for Employees’
system and 7 Years for Uniformed system(1.7%) (1.7%) --
6 LIMIT RETIREE COLA: Limit Application of the Retiree COLA to the first $30,000 in benefits (1.2%) (6.6%) (6.1%)
7 REDUCE MULTIPLIER: Reduce base multiplier (2.0% in ERS, 2.5% in URS, and 2.8% in PORS) by 0.1% (7.3%) (5.1%) (4.4%)
8 ADD LONGEVITY STEPS: Add 5% longevity steps at 25 and 30 years in Pay Plans in URS and PORS -- 1.1% 0.6%
9ELIMINATE 3% FORMULA INCREASE: Eliminate the provision that increases the calculated retirement annuity by
3%(4.4%) (3.8%) (3.6%)
10 INCREASE EMPLOYEE CONTRIBUTION RATE: Increase the employee contribution by 1.0% (10.6%) (5.6%) (5.2%)
9May 22, 2018 Retirement System Review* In most cases, changes in Employer Normal Cost are
not additive. Packages must be calculated by the actuary.
Proposed Package
Potential Change for New Hires 3/13/18 Package
1aMINIMUM RETIREMENT AGE:
Increase Minimum Retirement Age in ERS from 55 to 60R
1cMINIMUM RETIREMENT AGE:
Establish a Minimum Retirement Age of 50 in URS/PORSR
2RETIREMENT ELIGIBILITY:
Increase from Rule of 85 to Rule of 90 in ERSR
3aSALARY AVERAGING:
Increase Salary Averaging Period from 3 Years to 5 YearsR
4ELIMINATE PRE-SOCIAL SECURITY SUPPLEMENT:
Eliminate Pre-Social Security Supplement in ERS/URSR
9ELIMINATE 3% FORMULA INCREASE:
Eliminate the provision that increases the calculated retirement annuity by 3%R
10INCREASE EMPLOYEE CONTRIBUTION:
Increase the employee contribution rate from 5.33% to 6% (ERS), from 7.08% to 8% (URS), and from 8.65% to 10% (PORS)R
Employees’ System Percent Change in Employer Normal Cost (24.68%)
Uniformed System Percent Change in Employer Normal Cost (20.41%)
Police Officers System Percent Change in Employer Normal Cost (18.63%)
Total Projected GF Savings when Fully Realized based on Current Payroll $16.38m
May 22, 2018 Retirement System Review 10
Final package considered, but not supported, by Retirement Workgroup
Rule of 90 (ERS)Minimum Retirement Age 60 (ERS)Minimum Retirement Age 50 (URS/PORS)Potential Plan Design Changes for New Hires
11May 22, 2018 Retirement System Review
Retirement Eligibility Comparison
Jurisdiction Retirement Eligibility Minimum Retirement Age
Fairfax County Employees Retirement System (ERS)
Plans C/D
Rule of 85 (Proposed: Rule of 90)
-or-
Age 65 with 5 Years of Service
55 (Proposed: 60)
Virginia Retirement System (VRS) Hybrid Plan
(Alexandria, FCPS, Loudoun, Prince William)
Rule of 90
-or-
Normal Social Security Retirement Age with 5 Years of
Service
None
Federal Government (FERS)
Minimum Retirement Age with 30 Years of Service
-or-
Age 60 with 20 Years of Service
-or-
Age 62 with 5 Years of Service
55 - 57
Arlington County
Rule of 80
-or-
30 Years of Service
-or-
Age 62 with 5 Years of Service
None
May 22, 2018 Retirement System Review 12
General Employees
Retirement Eligibility Comparison
45
50
55
60
65
70
75
80
18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70
Earl
iest R
etire
men
t A
ge
Age at Hire
Earliest Retirement Age by Age at Hire
VRS Hybrid ERS C/D Rule of 90/Minimum Age 60
May 22, 2018 Retirement System Review 13
General Employees – Rule of 90 and Minimum Retirement Age 60
Retirement Eligibility Comparison
Jurisdiction Retirement Eligibility Minimum Retirement Age
Fairfax County Uniformed Retirement System (URS)
Plan E
25 Years of Service
-or-
Age 55 with 6 Years of Service
None (Proposed: 50)
Fairfax County Police Officers Retirement System
(PORS) Plan B
25 Years of Service
-or-
Age 55
None (Proposed: 50)
Virginia Retirement System (VRS) Plan 2
(Loudoun, Prince William)
25 Years of Service
-or-
Age 60 with 5 Years of Service
50
Federal Government (FERS) 20 Years of Service 50
City of Alexandria
25 Years of Service
-or-
Age 55 with 5 Years of Service
50
Arlington County
25 Years of Service
-or-
Age 52 with 5 Years of Service
None
May 22, 2018 Retirement System Review 14
Public Safety Employees
Retirement Eligibility Comparison
40
45
50
55
60
65
70
75
80
18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70
Earl
iest R
etire
men
t A
ge
Age at Hire
Earliest Retirement Age by Age at Hire
VRS Plan 2 URS PORS Minimum Age 50
May 22, 2018 Retirement System Review 15
Public Safety Employees – Minimum Retirement Age 50
5-Year Salary Averaging Period (All)Potential Plan Design Changes for New Hires
16May 22, 2018 Retirement System Review
Salary Averaging Period
Jurisdiction Salary Averaging Period
Fairfax County Employees Retirement System (ERS) Plans C/D 3 years (Proposed: 5 years)
Virginia Retirement System (VRS) Hybrid Plan 5 years
Federal Government (FERS) 3 years
Arlington County 3 years
May 22, 2018 Retirement System Review 17
General Employees
Salary Averaging Period
Jurisdiction Salary Averaging Period
Fairfax County Uniformed Retirement System (URS) Plan E 3 years (Proposed: 5 years)
Fairfax County Police Officers Retirement System (PORS) Plan B 3 years (Proposed: 5 years)
Virginia Retirement System (VRS) Plan 2 5 years
Federal Government (FERS) 3 years
City of Alexandria 4 years
Arlington County 3 years
May 22, 2018 Retirement System Review 18
Public Safety Employees
Eliminate Pre-Social Security Supplement (ERS/URS)Potential Plan Design Changes for New Hires
19May 22, 2018 Retirement System Review
Pre-Social Security Supplement
Jurisdiction Social Security Leveling
Fairfax County Employees Retirement System (ERS) Plans C/D Supplement1 (Proposed: Option)
Virginia Retirement System (VRS) Hybrid Plan Option2
Federal Government (FERS) Supplement3
Arlington County Option4
May 22, 2018 Retirement System Review 20
General Employees
1 The pre-Social Security supplement in the Fairfax County ERS is provided to normal service retirees from the date of retirement until they reach normal Social Security retirement age. The supplement is calculated using a
benefit multiplier of 1.0%.
2 Employees covered under the VRS Hybrid Plan may elect the Advance Pension Option at retirement. Under this option, the VRS annuity is temporarily increased until an age of the retiree’s choosing, between the ages of
62 and the retiree’s normal Social Security retirement age. The VRS annuity is permanently reduced once the retiree reaches the specified age.
3 Under the Federal Employees Retirement System (FERS), an annuity supplement is paid until age 62 to retirees that qualify for an unreduced annuity. The annuity supplement is calculated by first estimating the retiree’s
Social Security benefit at age 62 based on a 40‐year career. The estimated Social Security benefit is then reduced by the fraction of a 40‐year career that was worked under FERS to determine the annuity supplement.
The annuity supplement is subject to an earnings test, and is reduced by $1 for every $2 of earnings over the Social Security minimum level of earnings. While federal employees who retiree before the age of 62 are
eligible for this annuity supplement, the basic annuity formula for those who retire at age 62 or older with at least 20 years of service uses a higher benefit multiplier than those who retire under age 62 or with less than 20
years of service.
4 Retirees in the Arlington County Employees’ Retirement System may elect a Social Security Option as an annuity payment option. Under this option, the annuity is temporarily increased either until age 62 or until the
retiree reaches normal Social Security retirement age, at which time the annuity is permanently reduced.
Pre-Social Security Supplement
Jurisdiction Social Security Leveling
Fairfax County Uniformed Retirement System (URS) Plan E Supplement1 (Proposed: Option)
Fairfax County Police Officers Retirement System (PORS) Plan B None2
Virginia Retirement System (VRS) Plan 2 Supplement3
Federal Government (FERS) Supplement4
City of Alexandria None
Arlington County Option5
May 22, 2018 Retirement System Review 21
Public Safety Employees
1 The pre-Social Security supplement in the Fairfax County URS is provided to normal service retirees from the date of retirement until they reach normal Social Security retirement age. The supplement is calculated using a
benefit multiplier of 0.3%.
2 Fairfax County police officers do not contribute to Social Security based on their employment as Fairfax County police officers, and therefore a pre‐Social Security supplement is not included in the design of the Police
Officers Retirement System.
3 Employees covered under VRS that retire with at least 20 years of hazardous duty service are eligible for a hazardous duty supplement. The supplement is currently $13,548 per year, and is payable from retirement until
the retiree reaches normal Social Security retirement age.
4 Under the Federal Employees Retirement System (FERS), an annuity supplement is paid until age 62 to retirees that qualify for an unreduced annuity. The annuity supplement is calculated by first estimating the retiree’s
Social Security benefit at age 62 based on a 40‐year career. The estimated Social Security benefit is then reduced by the fraction of a 40‐year career that was worked under FERS to determine the annuity supplement.
The annuity supplement is subject to an earnings test, and is reduced by $1 for every $2 of earnings over the Social Security minimum level of earnings.
5 Retirees in the Arlington County Employees’ Retirement System may elect a Social Security Option as an annuity payment option. Under this option, the annuity is temporarily increased either until age 62 or until the
retiree reaches normal Social Security retirement age, at which time the annuity is permanently reduced.
Eliminate 3% Formula Increase (All)Potential Plan Design Changes for New Hires
22May 22, 2018 Retirement System Review
Retirement Benefit Calculation
▪Retirement benefits became taxable by the Commonwealth of
Virginia effective with the 1989 tax year
▪ In order to offset the impact, the Board approved a 3% increase in
retirement benefits
May 22, 2018 Retirement System Review 23
3% Formula Increase
Employees’ Uniformed Police
Base Multiplier 2.00% 2.50% 2.80%
3% Increase 0.06% 0.08% 0.08%
Effective Multiplier 2.06% 2.58% 2.88%
Increase Employee Contributionfrom 5.33% to 6% (ERS)from 7.08% to 8% (URS)from 8.65% to 10% (PORS)
Potential Plan Design Changes for New Hires
24May 22, 2018 Retirement System Review
Retirement Contribution Rates
May 22, 2018 Retirement System Review 25
Components of Rates when 100% Funded
Normal Cost (ER) 7.70%
Normal Cost (ER) 16.12%Normal Cost (ER) 17.98%
Expense (ER) 0.25%
Expense (ER) 0.25%
Expense (ER) 0.40%
Normal Cost (EE) 5.33%
Normal Cost (EE) 7.08%
Normal Cost (EE) 8.65%
0%
5%
10%
15%
20%
25%
30%
35%
Employees' Uniformed Police Officers
Employee and Employer Portions of Normal Cost and Expenses (Post-2013 Plans)
40%
Employee
60%
Employer
30%
Employee
70%
Employer
32%
Employee
68%
Employer
Retirement Contribution Rates
May 22, 2018 Retirement System Review 26
Components of Rates when 100% Funded
Normal Cost (ER) 5.80%
Normal Cost (ER) 12.83%Normal Cost (ER) 14.63%
Expense (ER) 0.25%
Expense (ER) 0.25%
Expense (ER) 0.40%
Normal Cost (EE) 6.00%
Normal Cost (EE) 8.00%
Normal Cost (EE) 10.00%
0%
5%
10%
15%
20%
25%
30%
35%
Employees' Uniformed Police Officers
Employee and Employer Portions of Normal Cost and Expenses (Proposed Plans)
50%
Employee
50%
Employer
38%
Employee
62%
Employer
40%
Employee
60%
Employer
Proposed Package
27May 22, 2018 Retirement System Review
R Rule of 90 (ERS)
R Minimum Retirement Age 60 (ERS) and 50 (URS/PORS)
R 5-Year Salary Averaging Period (All)
R Eliminate Pre-Social Security Supplement (ERS/URS)
R Eliminate 3% Formula Increase (All)
RIncrease Employee Contribution from 5.33% to 6% (ERS),
from 7.08% to 8% (URS), and from 8.65% to 10% (PORS)
Potential Change for New Hires
May 22, 2018 Retirement System Review 28
Proposed PackageRule of 90
Inc Min Age
Add Min AgeAdd Min Age
5 Year Avg
5 Year Avg
5 Year Avg
Elim PreSS Supp
Elim PreSS Supp
Elim Extra 3%
Elim Extra 3%
Elim Extra 3%
Inc EE Rate
Inc EE Rate
Inc EE Rate
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
Employees' Uniformed Police
Proposed PackageReduction in Employer Normal Cost
R Rule of 90 (ERS)
RMinimum Retirement Age 60 (ERS) and 50
(URS/PORS)
R 5-Year Salary Averaging Period (All)
R Eliminate Pre-Social Security Supplement (ERS/URS)
R Eliminate 3% Formula Increase (All)
R
Increase Employee Contribution from 5.33% to 6%
(ERS), from 7.08% to 8% (URS), and from 8.65% to
10% (PORS)
Normal Cost
decreases by
24.7%
(From 7.70%
to 5.80% of
pay)
Normal Cost
decreases by
20.4%
(From 16.12%
to 12.83% of
pay)
Normal Cost
decreases by
18.6%
(From 17.98%
to 14.63% of
pay)
▪Estimated General Fund savings of approximately $16.4 million when fully implemented based on current payroll
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
$220,000
$240,000
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79
79
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80
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81
An
nu
al S
alar
y/B
enef
it
Projected Retirement Benefit Based on Average Age New Hire
Age-YearSalary Base Retirement Benefit Pre-SS Benefit Social Security Current Salary/Benefits Final Average Salary
May 22, 2018 Retirement System Review 29
Proposed Package: Average Age Hire
Employees’ Retirement System
Current Adjusted
Retirement Income Replacement (1st Year)
Base BenefitPre-SS BenefitTotal
48.7%24.4%73.1%
50.5%0.0%50.5%
Earliest Retirement Age 61.5 64
Minimum Years of Service 23.5 26
• New Hire in 2039 at Age 38, Hired at 24% of Scale
• Assume S-21 with no promotions
• Retiring at earliest age for unreduced benefits
• Does not include pension-eligible stipends or extra pay
• Estimates Social Security benefit at 30% of Final Average Salary
• Assumes 1.5% Market Rate Adjustments and full funding of pay plan
each year
• Assumes 1.5% annual County retiree COLA
• Assumes 1.0% annual COLA for Social Security
May 22, 2018 Retirement System Review 30
Proposed Package: Average Age Hire
Uniformed Retirement System• New Hire in 2030 at Age 29, Hired at Step 1
• Assume F-18 with no promotions
• Retiring at earliest age for unreduced benefits
• Does not include pension-eligible stipends or extra pay
• Estimates Social Security benefit at 30% of Final Average Salary
• Assumes 1.5% Market Rate Adjustments and full funding of pay plan
each year
• Assumes 1.5% annual County retiree COLA
• Assumes 1.0% annual COLA for Social Security
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
$220,000
$240,000
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79
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80
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81
An
nu
al S
alar
y/B
enef
it
Projected Retirement Benefit Based on Average New Hire
Age-YearSalary Base Retirement Benefit Pre-SS Benefit Social Security Current Salary/Benefits Final Average Salary
Current Adjusted
Retirement Income Replacement (1st Year)
Base BenefitPre-SS BenefitTotal
63.4%7.6%71.0%
60.7%0.0%60.7%
Earliest Retirement Age 54 54
Minimum Years of Service 25 25
May 22, 2018 Retirement System Review 31
Proposed Package: Average Age Hire
Police Officers Retirement System• New Hire in 2028 at Age 27, Hired at Step 1
• Assume O-17 with no promotions
• Retiring at earliest age for unreduced benefits
• Does not include pension-eligible stipends or extra pay
• Estimates Social Security benefit at 30% of Final Average Salary
• Assumes 1.5% Market Rate Adjustments and full funding of pay plan
each year
• Assumes 1.5% annual County retiree COLA
• Assumes 1.0% annual COLA for Social Security
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
$220,000
$240,000
18
-20
19
19
-20
20
20
-20
21
21
-20
22
22
-20
23
23
-20
24
24
-20
25
25
-20
26
26
-20
27
27
-20
28
28
-20
29
29
-20
30
30
-20
31
31
-20
32
32
-20
33
33
-20
34
34
-20
35
35
-20
36
36
-20
37
37
-20
38
38
-20
39
39
-20
40
40
-20
41
41
-20
42
42
-20
43
43
-20
44
44
-20
45
45
-20
46
46
-20
47
47
-20
48
48
-20
49
49
-20
50
50
-20
51
51
-20
52
52
-20
53
53
-20
54
54
-20
55
55
-20
56
56
-20
57
57
-20
58
58
-20
59
59
-20
60
60
-20
61
61
-20
62
62
-20
63
63
-20
64
64
-20
65
65
-20
66
66
-20
67
67
-20
68
68
-20
69
69
-20
70
70
-20
71
71
-20
72
72
-20
73
73
-20
74
74
-20
75
75
-20
76
76
-20
77
77
-20
78
78
-20
79
79
-20
80
80
-20
81
An
nu
al S
alar
y/B
enef
it
Projected Retirement Benefit Based on Average New Hire
Age-YearSalary Base Retirement Benefit Current Salary/Benefits Final Average Salary
Current Adjusted
Retirement Income Replacement (1st Year)
71.0% 68.0%
Earliest Retirement Age 52 52
Minimum Years of Service 25 25
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
$220,000
$240,000
18
-20
19
19
-20
20
20
-20
21
21
-20
22
22
-20
23
23
-20
24
24
-20
25
25
-20
26
26
-20
27
27
-20
28
28
-20
29
29
-20
30
30
-20
31
31
-20
32
32
-20
33
33
-20
34
34
-20
35
35
-20
36
36
-20
37
37
-20
38
38
-20
39
39
-20
40
40
-20
41
41
-20
42
42
-20
43
43
-20
44
44
-20
45
45
-20
46
46
-20
47
47
-20
48
48
-20
49
49
-20
50
50
-20
51
51
-20
52
52
-20
53
53
-20
54
54
-20
55
55
-20
56
56
-20
57
57
-20
58
58
-20
59
59
-20
60
60
-20
61
61
-20
62
62
-20
63
63
-20
64
64
-20
65
65
-20
66
66
-20
67
67
-20
68
68
-20
69
69
-20
70
70
-20
71
71
-20
72
72
-20
73
73
-20
74
74
-20
75
75
-20
76
76
-20
77
77
-20
78
78
-20
79
79
-20
80
80
-20
81
An
nu
al S
alar
y/B
enef
it
Projected Retirement Benefit Based on Age 21 New Hire
Age-YearSalary Base Retirement Benefit Pre-SS Benefit Social Security Current Salary/Benefits Final Average Salary
May 22, 2018 Retirement System Review 32
Proposed Package: Age 21 Hire
Employees’ Retirement System• New Hire in 2019 at Age 21, Hired at 0% of Scale
• Assume S-21 with no promotions
• Retiring at earliest age for unreduced benefits
• Does not include pension-eligible stipends or extra pay
• Estimates Social Security benefit at 30% of Final Average Salary
• Assumes 1.5% Market Rate Adjustments and full funding of pay plan
each year
• Assumes 1.5% annual County retiree COLA
• Assumes 1.0% annual COLA for Social Security
Current Adjusted
Retirement Income Replacement (1st Year)
Base BenefitPre-SS BenefitTotal
69.0%34.5%103.5%
75.7%0.0%75.7%
Earliest Retirement Age 55 60
Minimum Years of Service 34 39
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
$220,000
$240,000
18
-20
19
19
-20
20
20
-20
21
21
-20
22
22
-20
23
23
-20
24
24
-20
25
25
-20
26
26
-20
27
27
-20
28
28
-20
29
29
-20
30
30
-20
31
31
-20
32
32
-20
33
33
-20
34
34
-20
35
35
-20
36
36
-20
37
37
-20
38
38
-20
39
39
-20
40
40
-20
41
41
-20
42
42
-20
43
43
-20
44
44
-20
45
45
-20
46
46
-20
47
47
-20
48
48
-20
49
49
-20
50
50
-20
51
51
-20
52
52
-20
53
53
-20
54
54
-20
55
55
-20
56
56
-20
57
57
-20
58
58
-20
59
59
-20
60
60
-20
61
61
-20
62
62
-20
63
63
-20
64
64
-20
65
65
-20
66
66
-20
67
67
-20
68
68
-20
69
69
-20
70
70
-20
71
71
-20
72
72
-20
73
73
-20
74
74
-20
75
75
-20
76
76
-20
77
77
-20
78
78
-20
79
79
-20
80
80
-20
81
An
nu
al S
alar
y/B
enef
it
Projected Retirement Benefit Based on Age 21 New Hire
Age-YearSalary Base Retirement Benefit Pre-SS Benefit Social Security Current Salary/Benefits Final Average Salary
May 22, 2018 Retirement System Review 33
Proposed Package: Age 21 Hire
Uniformed Retirement System• New Hire in 2019 at Age 21, Hired at Step 1
• Assume F-18 with no promotions
• Retiring at earliest age for unreduced benefits
• Does not include pension-eligible stipends or extra pay
• Estimates Social Security benefit at 30% of Final Average Salary
• Assumes 1.5% Market Rate Adjustments and full funding of pay plan
each year
• Assumes 1.5% annual County retiree COLA
• Assumes 1.0% annual COLA for Social Security
Current Adjusted
Retirement Income Replacement (1st Year)
Base BenefitPre-SS BenefitTotal
63.4%7.6%71.0%
70.4%0.0%70.4%
Earliest Retirement Age 46 50
Minimum Years of Service 25 29
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
$220,000
$240,000
18
-20
19
19
-20
20
20
-20
21
21
-20
22
22
-20
23
23
-20
24
24
-20
25
25
-20
26
26
-20
27
27
-20
28
28
-20
29
29
-20
30
30
-20
31
31
-20
32
32
-20
33
33
-20
34
34
-20
35
35
-20
36
36
-20
37
37
-20
38
38
-20
39
39
-20
40
40
-20
41
41
-20
42
42
-20
43
43
-20
44
44
-20
45
45
-20
46
46
-20
47
47
-20
48
48
-20
49
49
-20
50
50
-20
51
51
-20
52
52
-20
53
53
-20
54
54
-20
55
55
-20
56
56
-20
57
57
-20
58
58
-20
59
59
-20
60
60
-20
61
61
-20
62
62
-20
63
63
-20
64
64
-20
65
65
-20
66
66
-20
67
67
-20
68
68
-20
69
69
-20
70
70
-20
71
71
-20
72
72
-20
73
73
-20
74
74
-20
75
75
-20
76
76
-20
77
77
-20
78
78
-20
79
79
-20
80
80
-20
81
An
nu
al S
alar
y/B
enef
it
Projected Retirement Benefit Based on Age 21 New Hire
Age-YearSalary Base Retirement Benefit Current Salary/Benefits Final Average Salary
May 22, 2018 Retirement System Review 34
Proposed Package: Age 21 Hire
Police Officers Retirement System• New Hire in 2019 at Age 21, Hired at Step 1
• Assume O-17 with no promotions
• Retiring at earliest age for unreduced benefits
• Does not include pension-eligible stipends or extra pay
• Estimates Social Security benefit at 30% of Final Average Salary
• Assumes 1.5% Market Rate Adjustments and full funding of pay plan
each year
• Assumes 1.5% annual County retiree COLA
• Assumes 1.0% annual COLA for Social Security
Current Adjusted
Retirement Income Replacement (1st Year)
71.0% 78.8%
Earliest Retirement Age 46 50
Minimum Years of Service 25 29
Next Steps/Tentative Timeline
▪Discussion of plan changes and direction to proceed by Personnel
Committee
▪ June 26, 2018 – Next Personnel Committee meeting
▪ Implementation of changes in code by Board
▪ Authorization to advertise public hearing
▪ Public hearing and approval of amendments to code
▪Changes effective for new hires
35May 22, 2018 Retirement System Review