MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM

MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM WELCOME TO THE RETIREMENT INFORMATION SESSION JULY 12, 2007

WELCOME MR. JACK L. HOHREIN EMPLOYEES’ RETIREMENT SYSTEM MANAGER

INFORMATION SESSION AGENDA 12:30 – 1:15 PENSION BENEFITS Milwaukee County Retirement Staff 1:15 – 1:30 QUESTIONS 1:30 – 2:15 HEALTH, DENTAL AND LIFE INSURANCE Thomas MacAlpine, Cambridge Advisory Group 2:15 – 2:30 BREAK 2:30 – 3:00 SOCIAL SECURITY AND MEDICARE Karyl Richson, Social Security Administration 3:00 – 3:30 DEFERRED COMPENSATION Marco Gruchalski, Great West Retirement Services 3:30 – 4:30 QUESTIONS

OVERVIEW OF ERS PRESENTATION • ERS Staff • Pension Board Members and ERS History • Membership in ERS • Reciprocity • Funding • ERS Benefits • ERS Distributions and Forms of Payment • Backdrop • Pension Calculation • Retirement Process

MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM WHO WORKS IN RETIREMENT AND WHAT DO THEY DO?

Jack Hohrein Retirement System Manager/Pension Board Secretary Gordon Mueller Fiscal Officer Administrative Specialists Vivian Aikin Robert Shupe Denise McCaskill Veronica Britt Retirement System Coordinator Clerical Specialists Tracy Jackson MILWAUKEE COUNTY RETIREMENT STAFF

MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM WHAT IS THE HISTORY AND STRUCTURE OF MILWAUKEE COUNTY’S ERS?

PENSION BOARD MEMBERS • 5 Citizen Members • Linda Bedford • Donald Cohen • Michael Ostermeyer • Sarah Peck • Thomas Weber • 3 Employee Members • Dean Roepke (Chairman) • John Martin • John Parish • 1 Member Elected by Retirees • Marilyn Mayr

ROLE OF THE PENSION BOARD • Monitor Investment of Funds • General Administration • Proper Operation of ERS

MILWAUKEE COUNTY RETIREMENT SYSTEM HISTORY • ERS (Employee Retirement System) Established in 1937 • OBRA (Omnibus Budget Reconciliation Act) Established in 1992 • Pension Board established in 1937 • Milwaukee County General Ordinance Chapters 201 and 203 • Milwaukee County Retirement Rules “Appendix B and B1”

MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM HOW DO I BECOME A MEMBER OF THE ERS?

MEMBERSHIP • ERS is Milwaukee County’s primary retirement system • ERS participation is automatic with the exception of: • Excluded employees (i.e., board and commission members) • Optional employees • Seasonal employees These employees participate in OBRA and can contact ERS at 414-278-4143 for details

MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM WHAT IS RECIPROCITY AND WHO IS ELIGIBLE?

RECIPROCITY • Special provisions are available for individuals who have participated in either of these systems: • State of Wisconsin Retirement System • City of Milwaukee Employees’ Retirement System (City/County Transfer) • Pension credits in one or more of these systems may increase your total benefits payable from Milwaukee County • Members with credits in either of these systems should contact Milwaukee County ERS at 414-278-4143 for additional information

MILWAUKEE COUNTY EMPLOYEES’ RETIRMENT SYSTEM IF I GET LAID OFF HOW DOES IT AFFECT MY RETIREMENT?

LAY-OFFS • If eligible for retirement contact ERS immediately for retirement date planning • Retirement applications must be completed while in active employment status • Deferred Retirements non-eligible for: • Backdrop • Rule of 75

MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM HOW IS THE ERS FUNDED?

FINANICAL INFORMATION

CUSTODIAN • Pension Board has the authority to select a custodian • Pension Board had delegated custody to Mellon Trust

ERISA EMPLOYEE RETIREMENT INCOME SECURITY ACT • ERISA imposes funding, vesting disclosure and fiduciary requirements on certain pension plans • ERISA does not apply to governmental plans (i.e., ERS and OBRA) • ERISA guidance may be helpful in some contexts

TAX QUALIFICATION • One of the IRS requirements is Code 415 • Favorable determination letter • Internal Revenue Code (“The Code”) and Treasury Regulations contain requirements for tax qualification • Importance of tax qualified status • IRS tax ID Number 39-6146761

FINANICAL SUMMARY • Healthy Plan • High Quality Custodian • Tax Qualified

MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM WHAT BENEFITS ARE OFFERED BY THE ERS?

ERS BENEFITS • Death Benefit • Payable upon death of an active employee • Disability Benefits • Accidental (injury on the job at specific time and place • Ordinary (mentally or physically incapacitated for duty) *Special provisions apply for Deputy Sheriffs killed in the line of duty

ERS BENEFITS CONT’D • Separation Benefits • Withdrawal of contributions (prior to 1971) • Deferred vested benefits status • Monthly Annuity Benefit (normal retirement allowance)

MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM HOW DO I BECOME ELIGIBLE FOR RETIREMENT AND WHAT TYPE OF PENSION BENEFIT WILL I RECEIVE?

PENSION BENEFITS • Normal retirement pension • Employment terminates on or after age 55 and 30 years of service • Employment terminates on or after age 60 • Rule of 75 (special rules apply for reciprocity) • Early retirement pension • Employment terminates on or after age 55 and 15 years of service • Reduced monthly benefits

PENSION BENEFITS (CONT’D) • Deferred vested retirement pension • Eligibility requirements • May begin at normal retirement age or, if earlier, at age 55, if member has 15 years of service • Accidental disability retirement • Disabled as the result of a work-related injury • Other eligibility requirements apply • Payable at 60% or 75% of FAS (Final Average Salary) unless normal pension is greater

PENSION BENEFITS (CONT’D) • Ordinary disability retirement • Disabled as the result of a non-work-related injury or illness • Other eligibility requirements apply • 15 years of service credit • Payable at 25% of FAS unless normal pension is greater

PENSION BENEFITS (CONT’D) • Survivor benefits (Spouse and children) • Sheriff’s • Others

MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM WHAT ARE THE FORMS OF DISTRIBUTION AND WHAT OPTIONS DO I HAVE?

ERS FORMS OF DISTRIBUTION • Normal form of benefit is an annuity for the member’s lifetime • Before benefits begin, a member may select a form of payment under ERS

FORMS OF PAYMENT • Maximum Benefit • This is the maximum benefit allowed • No beneficiary is designed when the maximum is chosen • Option 1: Reduced monthly benefit for life of member; upon members death beneficiary gets any amount remaining in member’s membership account

FORMS OF PAYMENT CONT’D • Option 2: 50% joint and survivor annuity • Option 3: 100% joint and survivor annuity • Option 4: 25% joint and survivor annuity • Option 5: 75% joint and survivor annuity

FORMS OF PAYMENT (CONT’D) • Option 6: 10 year certain annuity • Option 7: A member can apply to receive benefits in any other form • Subject to Pension Board’s approval • Rule 1013 describes process • The Pension Board has restricted lump sum requests and joint surviors options less than 25% • Members will incur fees for option 7 request that require actuarial calculations

MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM WHAT IS A BACKDROP AND WHO IS ELIGIBLE FOR IT?

BACK DROP BENEFIT • Eligibility Requirement • Must be eligible for an early or normal retirement • Eligibility dates are determined by union contract agreements • Must work one year beyond eligibility date • Special rules for represented employees • 2-Part Benefit • Lump sum DROP benefit • Monthly DROP benefit

MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM HOW IS MY PENSION CALCULATED?

ERS PENSION CALCULATION • Calculation of Normal Pension Benefit (General Formula) • General formula takes into account FAS, years of service and multiplier (i.e, 1.5% of FAS x years of service) • Other Factors Include • 80% of FAS maximum • Post retirement adjustments

ERS PENSION CALCULATION • Calculation of Normal Pension Benefit (Recruitment and Retention Incentives) • Recruitment and retention incentives may increase Normal Pension Benefit • Recruitment and retention incentives include • Pension benefit multiplier • Bonus to FAS • Backdrop

PENSION BENEFIT MULTIPLIER • Eligibility Requirements • General eligibility rule –initial ERS membership began on or after 1/1/82 • Special eligibility rules for represented employees, non-represented deputy sheriffs and elected officials • Pension multiplier is credited with an additional .5% of member’s FAS • Only applies to certain years of service credit • 80% of FAS limit applies

FAS “BONUS” • Eligibility Requirements • General eligibility rule – initial ERS membership began prior to 1/1/82 • Special eligibility rules for represented employees and non-represented deputy sheriffs • FAS is increased by 7.5% for each year of pension service earned after 1/1/01 • Maximum of 25% of pre-bonus FAS • 80% of FAS limit applies

MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM WHAT STEPS DO I TAKE IF I AM THINKING ABOUT RETIREMENT?

RETIREMENT CALCULATOR • Milwaukee County Intranet Site (http://172.31.1.4/MCnet) • Fields to be entered: • Social Security Number • Last Day of Pay • Backdrop Date (Optional) • Beneficiary Birth Date

REQUESTING AN ESTIMATE • Estimate Request Provided • Within six months of anticipated retirement date • Request mailed to your home within three to four weeks of your request • Contact ERS • Phone (414-278-4143), letter or email • Information Needed • Social Security Number • Estimated date of retirement • Beneficiary Date of Birth • Contact Information • Backdrop date

SICK ALLOWANCE • In accordance with current union contracts and ordinances • Exception for deputy sheriffs • Pension service credit • Separate lump sum check less taxes • Taxed at 39.15% • Sick pay cannotbe rolled over into an IRA • Eligible employees who die (while working) their sick allowance is paid in a lump sum to the spouse/designated beneficiary

VACATION TIME • Vacation Time • Personal Time • Accrued Overtime • Accrued Holiday • May be run out in bi-weekly payments • Paid in lump sum less taxes (39.15%) • End of year retirements do not require you to work into the new year • If you have full pay up to the end of year, vacation time, three personal days, and holidays (up to retirement date) will be granted for the new year (If bi-weekly payments were chosen)

ERS INDIVIDUAL RETIREMENT SESSION • Scheduled 2nd Tuesday of each month • Sick Allowance/Vacation Payout (if applicable) • Retirement Option Chosen • Beneficiary Designation • Official Retirement Date • Federal and State Withholdings (W4P) • Direct Deposit • Date of 1st Pension Check • Date of Backdrop Check (if applicable)

PENSION CHECK • The 1st retirement check is mailed the the 3rd week of the following month in which you retire • Checks are mailed one day before the last business day of each month • Direct deposits are deposited on the last business day of each month. Effective July 1, 2007, all retirees were required to have their checks directly deposited • Annual Increase (2% of your original pension amount on the anniversary of your retirement)

THANK YOU ERS STAFF

MILWAUKEE COUNTY EMPLOYEES’ RETIREMENT SYSTEM