member handbook teacher - mainepers · understanding of benefits available to members of maine...

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Member Handbook

October 2014

MainePERS Benefits for Teachers

mainepers.org

Maine Public Employees Retirement System (October 2014)

MainePERS Benefits for Teachers

A general summaryofthebenefitsavailabletoyou

asaMainePERSmember

ApublicationofMAINEPUBLICEMPLOYEESRETIREMENTSYSTEM

P.O.Box349Augusta,ME04332-0349

Telephone:(207)512-3100Toll-free:1-800-451-9800

Fax:(207)512-3101TTY:(207)512-3102

www.mainepers.org

TheinformationinthishandbookisintendedtogiveyouageneralunderstandingofbenefitsavailabletomembersofMainePublicEmployeesRetirementSystem(MainePERS).ThecontentsarenotthebasisofanyrightsbetweenMainePERSandanyparty,nordoesthishandbookprovideallofthedetailofthelawsandrulesthatgovernMainePERSmembershipandrelatedrights.TherearefrequentchangestothestatutesandrulesrelatingtoMainePERS,andthemostrecentlawmaynotbereflectedinthishandbook.Beforemakingadecisionrelatingtoyourrightsandbenefits,youshouldreviewcurrentlaw,andconsultwithMainePERSstaffandyourownadvisers.


Contents:

WelcometoMainePERS............................................................................ 1

Membership................................................................................................ 1

HowServiceCreditAccumulates............................................................ 2 • ServiceCreditWithMoreThanOneEmployer

ReceivingAdditionalServiceCredit....................................................... 5 •AdditionalServiceCreditGranted •AdditionalServiceCreditAvailableforPurchase

LeavingYourMainePERS-CoveredJob................................................. 7 •LeavingYourContributionswithMainePERS •TakingaRefund

OtherBenefits............................................................................................. 8 •DisabilityRetirementBenefit

DeathBenefits............................................................................................. 9 •OrdinaryDeathBenefit •AccidentalDeathBenefit •DesignatingaBeneficiaryforYourAccidentalDeathBenefits •GroupLifeInsurance

ServiceRetirement.................................................................................. 12 •TerminatingEmployment •NormalRetirementAge •EligibilityforaServiceRetirementBenefit(BeingVested) •QualificationtoReceiveaServiceRetirementBenefit •CalculationofYourServiceRetirementBenefit •SelectingaBenefitPaymentOption •DesignatingaBeneficiaryatRetirement •ChangingYourBeneficiaryAfterYouRetire •ReceivingYourFirstBenefitPaymentQuickly: PreliminaryBenefitPayments

OtherServiceRetirementProvisions.................................................... 20 •Cost-of-LivingAdjustment(COLA) •RetirementIncentives •UnusedSickandVacationLeave •YourMinimumBenefit

SocialSecurity........................................................................................... 22 ReturningtoWorkAfterRetirement.................................................... 23


WelCome to maine PubliC emPloyees RetiRement system

MainePERSwasestablishedin1942toensurethatcertainbenefitsareavailabletoStateemployees,teachers,andemployeesofparticipatinglocaldistricts(PLDs)intheStateofMaine.Thisbookletisintendedtoassistyoutounderstandyourbenefits.Ifyouhavequestions,pleasecontacttheRetirementServicesUnitatMainePERS.We welcome calls from members.

membeRsHiP

Ifyouareapublicschoolemployeeandyourpositionfallsunderthelegaldefinitionof“teacher,”membershipinMainePERSismandatoryfromthefirstdateofemployment.Thereisanexceptionforsubstituteteachers,forwhommembershipisoptional.Whenhiredasasubstitute,youmakeaone-time,irrevocableelectionwhethertoparticipateinMainePERS.Youmakeanelectionwitheachseparateemployerthathiresyouasasubstitute.Yourelectionappliestoallcurrentandfutureoptionalmembershippositionswiththatemployer,evenifyouterminateandarelaterrehiredinadifferentoptionalmembershipposition.Ifatanytimeyouholdapositioninwhichmembershipismandatory(e.g.tutororclassroomteacher),MainePERSmembershipforthatpositionwillbeginfromthefirstdayofemployment.

Thelegaldefinitionofteacherincludesanyoneinapositionthat:

(a) isonetheDepartmentofEducation(DOE)requiresbefilled byapersonwhoholdsappropriatecertificationorlicense forthatpositionandyouholdthatcertificationorlicense,or

(b)hasasitsprincipalfunctionintroducingnewlearningto students.

ThereareexceptionstothisforAdultEducationteachersandcoacheswhoareexcludedfrommembershipunlesstheyhaveanotherbasisforMainePERSmembership.Youareconsideredtohave“anotherbasis”formembershipifyouarealreadymakingcontributionsinanotherpositionasaStateemployeeorteachermember,orpreviouslycontributedinanotherpositionandstillhavecontributionsonaccountatMainePERS.

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Asamember,youcontribute7.65%ofyourearnablecompensationtoMainePERS,andthesecontributionsearninterestataratesetbyMainePERSBoardofTrustees.YouremployeralsocontributesanamounttoMainePERSthatisapercentageofyourtotalearnablecompensation.Thispercentagevariesfromyeartoyear.

IfyourpositiondoesnotmeetthestandardsforMainePERSteachermembership,youmustbecoveredunderSocialSecurity;aMainePERSParticipatingLocalDistrictPlan,ifapplicable;oranalternativequalifyingretirementplanprovidedbyyouremployer.

Foradditionalinformationonmembershipeligibility,contacttheMainePERSRetirementServicesUnit.

HoW seRViCe CReDit aCCumulates

Asafull-timeemployee,youreceiveayearofservicecreditforayearofwork.Youmaynotearnmorethanayearofservicecreditinayear.

Forpurposesofaccumulatingservicecredit,a“full-timeemployee”works100%ofwhatisdefinedasfull-timeforaparticularjob.Ifyouworkless,youearnservicecreditbasedontheratioofthetimeyouworktothetimeworkedbyafull-timeemployee.Forexample,ifafull-timeteacherworksone-halfofaschoolyearheorsheearnsone-halfofayear(6months)ofservicecredit.Likewise,ifahalf-timeteacherworkstheentireschoolyearheorsheearnsone-halfofayear(6months)ofservicecredit.

Ifyouareaper-diememployee(e.g.substituteteacher)youreceiveservicecreditbasedontheratiooftheamountoftimeyouworkedcomparedtowhatisdefinedasfull-time.

example:Asubstituteteacherpaidatadailyratereceivesservicecreditbasedontheratioofdaysworkedcomparedtothenumberofdaysintheschoolyear.Ifyouworkasasubstitutefor45fulldaysduringa180-dayschoolyear,youwouldearnone-fourthofayear(.25)ofservicecredit.

Ifyouareanhourlyemployee(e.g.tutor,educationaltechnicianIIorIII)youreceiveservicecreditbasedontheratiooftheamountoftimeyouworkcomparedto900hours,whatMainePERSconsiderstobefull-time.

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Example:Atutorpaidbythehourwhoworks900ormorehoursinaschoolyearreceivesafullyearofservicecredit.Atutorwhoworks450hoursreceivesone-halfofayear(.50)ofcredit.

Ifyouearnlessthanfull-timeservicecreditduringanyschoolyearinwhichyoualsoholdaco-curricularorathleticstipendposition,youreceiveservicecreditintheamountof2monthsand20daysforeachdistinctco-curricularorathleticstipendpositionheld.Youmaynotearnmorethanayearofservicecreditinaschoolyear.

Example:Ifyouholdahalf-timeteachingpositionandalsocoachanathleticactivityforwhichyoureceiveanannualstipend,inadditiontotheserviceearnedasahalf-timeteacher(.50),youwillreceive2monthsand20days(.222)ofservicecreditforthecoachingposition.

IfyouareonaleaveofabsencewhilereceivingWorkers’Compensationbenefits,youmustpayyourMainePERScontributionsbasedonthewagesportionofyourWorkers’Compensationbenefits.Youwillreceiveservicecreditduringthisperiod.IfyoudonotpaytherequiredMainePERScontributionswithin30daysofreceivingyourWorkers’Compensationbenefits,youwillberesponsibleforaccruedinterestuntilcontributionsarepaid.ForWorkers’CompensationbenefitsreceivedpriortoJanuary1,2004,MainePERScontributionsareoptional,butifyoudonotpaythecontributionsplusanyaccruedinterest,youwillnotreceiveservicecreditforthetimethatyouwereonaWorkers’Compensationleaveofabsence.

service Credit with more than one employer

Inadditiontoprovidingcoverageforpublicschoolteachers,theRetirementSystemprovidescoverageforemployeesoftheStateofMaine,legislators,judgesandemployeesofparticipatinglocaldistricts(PLDs).PLDsaremunicipalitiesandotherpublicentitiesthatparticipateinMainePERS.WhileteachermembersandStateemployeesarecoveredbythesameretirementplan,someplanprovisionsdifferforlegislators,judgesandPLDemployees.

IfyoustopworkingasateachermemberanddonotwithdrawyourcontributionsfromMainePERS,theservicecredityouearnedwillremain“onaccount”atMainePERS.IfyousubsequentlyearnadditionalservicecreditasateacherorwithanotherMainePERS-


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coveredemployer,itwillbeaddedtoyouroriginalamountofserviceaslongasyoudonotwithdrawyourcontributions.ThismeansthatyoucanworkformorethanoneMainePERS-coveredemployerandstillearntheservicecreditneededtobeeligibletoreceiveaMainePERSserviceretirementbenefit.

HowyourserviceaccruesandhowyourbenefitisdetermineddependonthecategoriesofotherMainePERS-coveredpositionsinwhichyouearnservicecreditinadditiontoyourpositionasateachermember.Forinstance,servicecredityouearnasaStateemployeeisequivalenttoservicecredityouearnasateachermemberforretirementeligibilityandbenefitdeterminationpurposes.Whileservicecredityouearnasalegislator,orPLDemployeeisaddedtoyourserviceasateachermemberorStateemployeetodetermineretirementeligibility,MainePERSmaycalculateyourretirementbenefitinseparateportions,usingtheaveragefinalcompensation(AFC)andservicecreditapplicabletoeachposition.IfyouareemployedasateachermemberatthesametimeyouareajudgeorPLDemployee,youmaynotcombineyourrespectiveservicecreditamountstodetermineyoureligibilitytoretire.IfyougoonaleaveofabsencetoserveintheMaineLegislature,yourmembershipinMainePERSwillcontinueduringyourlegislativeservice,providedyouremainonanapprovedleave.

IfyouhavecontributedorarecurrentlycontributingtoMainePERSasaStateemployee,legislator,judgeorPLDemployee,youmaywanttocontactourRetirementServicesDepartmenttodeterminehowthatservicecreditrelatestotheservicecredityouearnasateachermember.


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ReCeiVinG aDDitional seRViCe CReDit

additional service Credit Granted

Youmaybeeligibletoreceiveadditionalservicecreditunderthefollowingcircumstances:

MilitaryService:Ifyoustopworkingtoentermilitaryservice,yourdischargefromthisserviceisnotdishonorable,andyoureturntoMainePERS-coveredemploymentwithin90daysafterleavingtheservice,youmayreceivecreditforupto5yearsofsuchmilitaryservice.Thisserviceisgranted,providedyoumeetallothereligibilityrequirementsandyoudonotwithdrawyourMainePERScontributions.

UnpaidLeaveofAbsence:Youwillcontinuetoearnupto30daysofcreditableserviceperyearforanunpaidleaveofabsencefromyourMainePERS-coveredemployer.

Unused,UnpaidLeaveTime:Uponyourfinalterminationbeforeretirement,youwillreceiveservicecreditforupto90daysofunusedandunpaidsickand/orvacationleaveforwhichyouarecreditedbyyouremployer.

SabbaticalLeave:Ifyoutookasabbaticalleaveandwerepaidapercentageofyourfullcontractamountduringtheleave,youwillreceiveservicecreditbasedontwicetheamountthatyouwerepaid.Forexample,ifyoureceivehalfofyourannualcontractsalaryyouwillreceiveafullyearofservicecredit.


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additional service Credit available For Purchase

Youmaybeeligibletopurchaseadditionalservicecreditinthefollowingcategories:

note:Therearespecificeligibilityandverificationrequirementstomakethesepurchases.ContactMainePERS’RetirementServicesUnitformoreinformation.


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leaVinG youR mainePeRs-CoVeReD Job

IfyoustopworkingforyourMainePERS-coveredemployer,youmayleaveyourcontributionsandinterestonaccountatMainePERS,oryoumaytakearefundofyourcontributionsandinterest.

leaving your Contributions with mainePeRs

IfyoustopworkinginaMainePERS-coveredjobanddonottakearefund,yourcontributionscontinuetoearninterest.Youmaywithdrawyourcontributionsatalaterdateorapplyforaretirementbenefitifandwhenyouqualify.YoucannotborrowagainstthefundsyouleaveinyourMainePERSaccount.Ifyouarenotvested,youraccountbalancemaybeautomaticallyrefundedtoyouthreeyearsafteryouterminate.

taking a Refund

IfyouterminateallMainePERS-coveredemployment,youmayapplyforarefund.Therefundapplicationpacketincludesinformationtoconsiderbeforedecidingtorequestarefund.Byrefundingyourcontributions,yougiveupyourrightstoanyMainePERSbenefits.Sinceitmaynotbeinyourbestinteresttowithdrawyourcontributions,wesuggestyouinvestigatetheprosandconsoftakingarefund.

Certainconditionsapplytorefunds,includingthefollowing:

MainePERScannotgiveyouapartialrefund.Wemustrefund•allofyourcontributionsandinterest.

Youcanreceivearefundofonlyyourowncontributionsand•interest,includingcontributionsthatyouremployerhas “picked-up”foryou.(“Pick-upcontributions”aremembercontributionstoMainePERSthatareassumedandpaidbytheemployerthroughareductionofthemember’ssalary,inaccordancewithInternalRevenueCodeSection414[h].)

Youmayrolloveralloraportionofyourrefundtoanother•employerplanthatacceptsrolloversortoanIndividualRetirementAccount/Annuity(IRA),withcertainrestrictions.


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Alloraportionofyourrefundmaybesubjecttostateand/or•federaltaxes.

IfyoureturntoMainePERSmembership,youmaypayback•toMainePERStheamountofyourrefund,plusapplicableinterest.Ifyoupaybackthisamount,youwillreceiveservicecreditforthetimecoveredbyyourrefund.

Ifyoutakearefund,yougiveupyourrightstoallMainePERS•benefits.

otHeR beneFits

Disability Retirement Benefit

YoumaybeeligibleforadisabilityretirementbenefitifyoubecomementallyorphysicallydisabledwhileyouareinMainePERS-coveredserviceandarepermanentlyunabletoperformthedutiesofyourposition.Theamountofyourdisabilitybenefitiseither662/3%or59%ofyourAverageFinalCompensation(AFC),dependingonwhetheryouareinthe“age-limited”disabilityplanorthe“no-age-limit”disabilityplan:

Youareinthe• age-limitedplanifyouwerehiredandbecameaMainePERSmemberbeforeOctober16,1992,wereemployedonthatdate,anddidnotelecttochangetotheno-age-limitplan.Underthisplan,youareeligibletoapplyforadisabilitybenefitbeforeyoureachyournormalretirementage.Thebenefitunderthisplanis662/3%ofyourAFC.

Youareinthe• no-age-limitplanifyouwerehiredandbecameanMainePERSmemberonorafterOctober16,1992,orifyouwerehiredbeforethenandyouelectedtochangefromtheage-limitedplantotheno-age-limitplan.Underthisplan,youcanapplyforadisabilitybenefitatanyage.Thebenefitunderthisplaniscurrently59%ofyourAFC.

YourdisabilitybenefitmaybereducedbybenefitsyoureceiveforthesamedisabilityfromothersourcessuchasWorkers’CompensationorSocialSecurity.YoumustinformMainePERSwheneveryoureceivethesebenefits,andyoumayhavetoreimburseMainePERSifyoureceiveretroactivepaymentsorlump-sum


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settlementsfromtheseprograms.Dependingonthecircumstances,theremaybeotherlimitationsonyoureligibilitytoreceiveadisabilitybenefit.

Ifyouwouldlikemoreinformationaboutyourdisabilitybenefit,contactMainePERSDisabilityServicesUnitorsee“AnOverviewofDisabilityBenefits”-availableinhardcopyoronlineinthePublicationssectionatwww.mainepers.org.

DeatH beneFits

Ordinary Death Benefit

Ifyourdeathoccursbeforeyouretire,anordinarydeathbenefitisavailableundertheeligibilityguidelinesexplainedbelow.Thisbenefitisavailableasoneofthefollowingthreeoptions:

(1)Alump-sumrefundofyourcontributionsandinterest. Thisoptionisavailabletothefirst-listedofthefollowing personswhosurviveyou:yourdesignatedbeneficiary(ies) or,intheeventyounamednobeneficiaryorhe/she predeceasesyou,yourspouse,child(ren),orolderparent.If noneofthesepersonssurviveyou,thelump-sumrefundis paidtoyourestate.

Thisoptionisavailableif,uponyourdeath,youare:inserviceasaMainePERSmember;•nolongerinserviceasaMainePERSmember,but•youhavenottakenarefundofyourcontributions;orreceivingaMainePERSdisabilitybenefit.

(2)Amonthly“survivorbenefit.”

Thisoptionisavailabletothefirst-listedofthefollowing personswhosurviveyou:yourdesignatebeneficiary(ies) or,intheeventyounamednobeneficiaryorhe/she predeceasesyou,yourspouse,child(ren),orparent(s).The amountofthemonthlysurvivorbenefitissetbylawbased ontherelationshipofyourbeneficiary(ies)toyou.


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Thisoptionisavailableif,uponyourdeath,youare:inserviceasaMainePERSmember;or•receivingaMainePERSdisabilitybenefit. •

(3)Amonthlypaymentcalculatedasthoughyouretiredunder retirementOption2(seepage16).

Thisoptionisavailabletothefirst-listedofthefollowing personswhosurviveyou:yourdesignatedbeneficiary(ies) or,intheeventyoudidnotnameabeneficiaryorhe/she predeceasesyou,yourspouse,child(ren),orparent(s).

Thisoptionisavailableif,uponyourdeath,youare:inserviceasaMainePERSmember;•nolongerinserviceasaMainePERSmember,but•youhavenottakenarefundofyourcontributions,andyouareeligibletoreceivebutarenotyetreceivingaMainePERSretirementbenefit;orreceivingaMainePERSdisabilitybenefit.•

Accidental Death Benefit

Yourspouseand/ordependentchild(ren)maybeentitledtoreceiveamonthlyincomeifyourdeathoccurs(1)whileyouareinserviceasaMainePERSmember,orreceivingadisabilitybenefitand(2)astheresultofaninjurythataroseoutofandinthecourseofyouremployment.

Dependentchildrenarethosewhoare:[a]underage18andunmarried;[b]underage22,unmarried,andfull-timestudents;or[c]permanentlydisabledbyamentalorphysicalcondition.

Ifyouhaveadependentchild(ren),theamountofthisbenefitisthesameasyouraveragefinalcompensation(AFC).Ifyoudonothaveadependentchild(ren),itistwo-thirdsofyourAFC.AnaccidentaldeathbenefitisreducedbyanyWorkers’Compensationbenefitsthatyourspouseand/ordependentchild(ren)receive.

note:Iftheaccidentaldeathbenefitisavailable,yourspouseand/ordependentchild(ren)willhaveachoicebetweenthisbenefitoranordinarydeathbenefitasdescribedonpage9.


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Designating a Beneficiary for Your Accidental Death Benefits

WhenyoubecomeaMainePERSmember,youhavetheopportunitytocompletea“DesignationofBeneficiary,Pre-RetirementDeathBenefit”form,whichyouremployerfileswithMainePERS.

Thisformgovernsbothyourordinaryandaccidentaldeathbeneficiary(ies).Ifyouwouldliketoverifyorchangeyourbeneficiary(ies),orifyouhaveanyquestionsaboutyourdeathbenefits,contactMainePERS’SurvivorServicesUnit.Youmaychangeyourbeneficiary(ies)atanytime.

Youmaydesignatemorethanonebeneficiaryforyourordinarydeathbenefit.However, if you designate more than one beneficiary, certain ordinary death benefits may not be available.Forexample,ifyourdesignatedbeneficiariesareyourspouseandanon-dependentchild,thesurvivorbenefitoptionwillnotapply.

Anaccidentaldeathbenefitwillnotbeavailabletoyourspouseand/ordependentchild(ren)ifyoudesignatesomeoneotherthanyourspouseand/ordependentchild(ren)asyourbeneficiary(ies)anddieasanactiveMainePERSmemberorwhilereceivingaMainePERSdisabilitybenefitandyourdeathistheresultofaninjurythataroseoutofandinthecourseofyouremployment.

Group life insurance

MainePERSalsoadministersaGroupLifeInsuranceProgram,separatefromtheretirementplan.Thisprogramprovidestermlifeinsuranceandaccidentaldeathanddismembermentinsurancetoeligibleteachermembersandretirees.Youmaychoosetopayforbasiclifeinsurancecoverage(equaltoyourannualsalaryroundeduptothenext$1,000),supplementalinsuranceand/ordependentinsurance.Retireecoverageisbasedonyouraveragefinalcompensationattimeofretirement,andreducesovertimeto40%ofyourAFC.

IfyouwouldliketolearnmoreaboutGroupLifeInsurancebenefits,contactMainePERS’SurvivorServicesUnit.ToviewtheGroupLifeInsuranceCertificateofCoverage,visitthePublicationssectionofwww.mainepers.org.


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seRViCe RetiRement

Thissectionprovidesageneraloverviewaboutreceivingyourserviceretirementbenefit.Whenyouarepreparingtoretire,contactyouremployertobesurethatyouhavealloftheinformationthatyouneedtoaddresstheseissues.

terminating employment

Inordertoretire,youmustfirstterminateemploymentfromyourMainePERS-coveredposition(s).Ifyouqualifytoreceivearetirementbenefit,yourbenefitwillbeeffectiveonthefirstdayofthemonthfollowingyourtermination,unlessyouelectalaterdate.IfyouagainacceptMainePERS-coveredemploymentbeforetheeffectivedateofyourretirementbenefit,youcannotreceiveabenefituntilyouterminatecoveredemploymentagain.

normal Retirement age

Yournormalretirementageistheageatwhichyoucanretirewithoutyourbenefitbeingsubjecttoanearlyretirementreduction.Yournormalretirementageis60,62or65,dependingonwhichofthefollowingappliestoyou:

your normal retirement age is 60if,beforeJuly1,1993,youhad: •atleast10yearsofservicecreditor, •reachedage60andhadatleastayearofservicecredit immediatelypriortoreachingage60.

your normal retirement age is 62 if: •beforeJuly1,1993,youhad: ○lessthan10yearsofservicecreditand ○notreachedage60withatleastayearofservicecredit. AND •beforeJuly1,2011,youhad: ○atleast5yearsofservicecreditor, ○reachedage62andhadatleastayearofservicecredit immediatelypriortoreachingage62.


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your normal retirement age is 65 if,beforeJuly1,2011,youhad: •lessthan5yearsofservicecreditand •notreachedage62withatleastayearofservicecredit.

Note:IfbeforeJuly1,1993,youwereeligibletopurchaseenoughadditionalservicecredittogiveyou10yearsofservicecredit,andyoupurchasethatservicecreditbeforeyouretire,yournormalretirementagewillbe60.

IfbeforeJuly1,2011,youwereeligibletopurchaseenoughadditionalservicecredittogiveyou5yearsofservicecredit,andyoupurchasethatservicecreditbeforeyouretire,yournormalretirementagewillbe62.

Eligibility for a Service Retirement Benefit (Being Vested)

IfyourfinalterminationfromMainePERS-covered•employmentwasbeforeOctober1,1999,youmusthaveatleast10yearsofservicecredittoqualifyforabenefit.

IfyourfinalterminationfromMainePERS-covered•employmentisafterSeptember30,1999,youmusthaveatleast5yearsofservicecreditinordertobeeligibletoqualifyforabenefit.

Ifyoureachnormalretirementage(age60,62or65)andhave•beeninserviceatleastoneyearimmediatelybeforethen,youareeligibleforabenefitattermination.

Qualifying to Receive a Service Retirement Benefit

Youqualifytoreceiveabenefit:

onceyouhaveatleast25yearsofservicecredit;•uponreachingyournormalretirementageof60,62or65,•whetherornotyouareinservice,providedyouhaveearnedcreditableserviceof5or10years,whicheverappliestoyou;oruponreachingyournormalretirementageof60,62or65,•providedyouhavebeeninserviceforatleastoneyearimmediatelypriortoyourretirement.


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HoW mainePeRs DeteRmines youR seRViCe RetiRement beneFit

Yourretirementplanisa“DefinedBenefit”(or“DB”)plan.Definedbenefitplansuseaspecificformulatocalculatethebenefitamount.Thisformula,whichissetbylaw,isbasedonthreefactors:

(1) AverageFinalCompensation(AFC).Thisistheaverage ofyourthreehighestyearsofearnablecompensation. Earnablecompensationisthesalaryorwagesyouearn foremployment.Certainpaymentsdonotcounttowards earnablecompensation.

(2) ServiceCredit.Thisis:credityoureceiveforthetimeyouspendworkingin•aMainePERS-coveredemploymentposition,credityoureceivefortimeduringwhichyoureceive•aMainePERSdisabilityretirementbenefit,andadditionalcredityoumayreceiveundercertainother•conditions,asoutlinedbeginningonpage6.

(3) AccrualRate.Theaccrualrateis2%.Thisisthepercentage ofyourAFCthatyouwouldreceiveasabenefitforeach yearofcreditableserviceearned.

Yourserviceretirementbenefitiscalculatedasfollows:

AFCxYearsof AnnualServiceRetirementBenefit ServiceCredit= undertheFullBenefitoptionat XAccrualRate NormalRetirementAge (e.g.2%or.02) (seeexplanationofbenefitoptions beginningonpage16)

Forexample,assumethatyouretireatyournormalretirementagewith25yearsofservicecredit.Yourthreehighestannualamountsofearnablecompensationwere$35,000,$36,000,and$37,000.YourannualserviceretirementbenefitundertheFullBenefitoptionwouldbe:


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1. AverageFinalCompensation(AFC): $35,000 36,000 + 37,000 $108,000÷3years=$36,000AFC

2.Benefit: $36,000AFCx25yearsx.02=$18,000annualbenefit (or$1,500monthly)

note:Ifyouhaveatleast25yearsofservicecreditanddecidetoretirebeforeyoureachyournormalretirementageof60,62or65,MainePERSmustreduceyourbenefitbasedonhowoldyouareinrelationtoyournormalretirementage.Ifyournormalretirementageis60,yourreductionwouldbeapproximately2¼%foreachfullyearyouareyoungerthanage60.Ifyournormalretirementageis62or65,yourreductionwouldbe6%foreachfullyearyouareyoungerthanyournormalretirementage.

Selecting a Benefit Payment Option

Whenyouretire,youcanchoosetoreservethemaximumamountofyourbenefitforyourself,ortakeoneofseveral“reducedbenefit”paymentoptions.Areducedbenefitisawayforyourbeneficiarytocontinuereceivingapaymentafteryourdeath.Sinceit’snotpossibleforMainePERStofullyunderstandeachmember’suniquecircumstances,wedonotadvisemembersonwhichoptiontoselect.Ourstaffcanhelpyourdecisionprocessbyexplainingeachbenefitpaymentoptioninmoredetail.

Thefirststeptowardreceivingyourserviceretirementbenefitistorequestanestimateofyourbenefitwhenyouarewithin6to12monthsofyouranticipatedretirementdate.MainePERSwillprovideanestimateofyourretirementbenefitforeachoftheretirementbenefitpaymentoptionsavailabletoyou.Youchoosethebenefitpaymentoptionunderwhichyouwillreceiveyourserviceretirementbenefit.


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note:UnderOptions1through8,youreceiveareducedbenefitpaymentbecausesomelevelofbenefitwillbepaidtoyoursurvivingbeneficiary(ies)uponyourdeath.Underthoseoptions,wefirstdetermineyourserviceretirementbenefitbasedontheFullBenefitoption,thenadjustbasedonseveralfactors,includingwhichoptionyouchoose.

Theserviceretirementbenefitoptionsareasfollows:

FullBenefit

Providesyouwiththehighestretirementbenefit,butnothingforabeneficiary.Allbenefitsstopeffectivethefirstofthemonthfollowingyourdeath,regardlessofthenumberofbenefitpaymentsyoureceived.(Options1-8arereducedfromthisamount.)

Option1

If,atthetimeofyourdeath,anyofthecontributionsyoumadetothesystem,ortheinterestaccruedonthosecontributions,remainonaccount,aone-timelump-sumpaymentwillbemadetoyoursurvivingbeneficiary(ies).Theamountoftimeittakestouseallofyourcontributionsdependsonyourageatretirement.Yourcontributionsarereducedequallyeachmonthoveraperiodoftimebasedonyourlifeexpectancy.

Option2

Thesameamountyouarereceivingatthetimeofyourdeathcontinuesuntilthedeathofyourdesignatedbeneficiary(ies).Underthisoption,ifyourbeneficiary(ies)diesfirst,youcontinuetoreceivethesameamountyouwereatthetimeofhis/herdeath.

Option3

Onehalfoftheamountyouarereceivingatthetimeofyourdeathcontinuesuntilthedeathofyourdesignatedbeneficiary(ies).Underthisoption,ifyourbeneficiary(ies)diesfirst,youcontinuetoreceivethesameamountyouwereatthetimeofhis/herdeath.


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Option4

Apercentageofthebenefityouarereceivingatthetimeofyourdeathcontinuesuntilthedeathofyourbeneficiary(ies).Youdesignatethepercentagetocontinuetoyourbeneficiarywhenyouretire.Underthisoption,ifyourbeneficiary(ies)diesfirst,youcontinuetoreceivethesameamountyouwereatthetimeofhis/herdeath.

Option5

Amonthlybenefitthatissharedbyyouandyourbeneficiarywhileyoubothareliving.Eachmonthyoubothreceiveapercentageyoudesignateatretirement.Followingthefirstdeath,whetheritbeyoursoryourbeneficiary’s,thepaymentofthesmallerpercentagestopsandthesurvivorcontinuestoreceivetheremaining(higher)percentagefortheremainderofhis/herlifetime.Note:Thepercentageyoudesignatetoyourbeneficiarycannotbemorethan49%.

Option6

LikeOption2,exceptyourbenefitwillincreasetotheFullBenefitamountintheeventthatyourbeneficiarydiesbeforeyou.

Option7


Option8



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Designating a Beneficiary at Retirement

IfyouselectanyoftheOptions1through8,youwilldesignateabeneficiarywhowillreceiveabenefituponyourdeath.

(1)Option1:ThereductionfromyourFullBenefitamount isbasedonyouragewhenyouretireandonthe accumulatedcontributionsinyouraccountwhenyouretire.

(2)Options2through8:ThereductionfromyourFullBenefit amountisbasedonyourageandyourbeneficiary’sage whenyouretire,andthebenefitamountthatyour beneficiarywillreceivewhenyoudie.

IfyouselectanyofretirementbenefitpaymentOptions1through4,youmaychoosetodesignatemorethanonebeneficiary.

(1)Option1:Thenumberofbeneficiariesthatyoudesignate willnotimpacttheamountbywhichyourbenefitisreduced. ThisisbecausethereductionfromyourFullBenefitamount underthisoptionisnotbasedonwhomyoudesignate asyourbeneficiary.

(2)Option2,3or4:Thenumberofbeneficiariesyoudesignate willaffecttheamountofreductionfromFullBenefit.Thisis becausethereductionfromyourFullBenefitamount underanyoftheseoptionsisbasedinpartontheageofeach beneficiaryandthelevelofbenefittobepaidtoeach survivingbeneficiaryuponyourdeath.Thus,each additionalbeneficiarythatyoudesignatewillincreasethe reductionfromfullbenefit. IfyouaremarriedonthedatethatyourretirementbecomeseffectiveandselecttheFullBenefitpaymentoption,oranyofOptions1through8,anddesignateabeneficiaryotherthanyourspouse,Mainelawrequiresthatyounotifyyourspouseofyourselection.Ifthissituationappliestoyou,MainePERSmusthaveproofyounotifiedyourspousebeforeweprocessyourfirstbenefitpayment.


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Changing Your Beneficiary After You Retire

IfyouselectOption1,youmaychangeyourbeneficiarydesignationatanytime.

IfyouselectanyofOptions2through5,designateyourspouseasyoursolebeneficiary,andyourspousediesandyouremarry,youmaychangeyourretirementbeneficiarydesignation.

IfyouselectanyofOptions2through8,anddesignateyourspouseorformerspouseasyoursolebeneficiaryandyouaredivorced,orgetdivorced,andyourformerspouseagreestogiveupallrightsasyourbeneficiary,youmaychangeyourretirementbeneficiarydesignation.

AchangeofbeneficiaryunderOptions2through8willresultinachangeinyourbenefitamount.Ifyourequestachangeofbeneficiaryunderoneoftheabovecircumstances,wewilltellyoutheamountofthechangebeforeyoumakeyourdecision.

IfyouselectanyofOptions2through8,anddesignatesomeoneotherthanyourspouseorformerspouseasyoursolebeneficiary,youwillbeallowedtomakeaone-timechangeinyourretirementbeneficiary,underthefollowingcircumstances:

(1)Thebeneficiaryyounamedwhenyouretiredmuststill bealive.

(2)Youcannotchangeyourpaymentoption.Yournew beneficiary’sbenefitamountwillbethesameasyour originalbeneficiary’s. (3)Becauseyouandyournewbeneficiary’sbenefit amountswillnotchange,theamountremainsbased uponyourageandtheageoftheoriginalbeneficiary. Paymentofabenefittoyournewbeneficiarycannotbe morethanwhatwasexpectedtobepaidtoyouroriginal beneficiary.

Therefore,ifyounameanewbeneficiary,itispossiblethatabenefitwillnotbepaidforthenewbeneficiary’slifetime.Ifyouasktochangeyourbeneficiary,wewilltellyouwhenthebenefittothenewbeneficiarywillstop.Ifthenewbeneficiarydiespriortothatdate,theirbenefitswillstopimmediately.


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ReCeiVinG youR FiRst beneFit Payment:Preliminary Benefit Payments

Todeterminetheactualamountofyourretirementbenefit,MainePERSmustreceiveyourfinalpayrollinformationfromyouremployer.Ifthisdoesnothappenpromptly,orifthedetailsofyourservicecreditorcompensationarecomplex,anumberofmonthsmaypassbeforeyoureceiveyourfirstfullmonthlyretirementpayment.Inordernottodelaythestartofretirementbenefits,MainePERSwillbeginpayingyoua“preliminary”monthlypayment.Thegrossamountofeachpreliminarybenefitpaymentwillbeanestimatedmonthlyretirementbenefitundertheretirementoptionyouselected,basedonearningsreportedtousatthetimeofyourfirstpreliminarybenefitpayment.MainePERScannotmakepreliminarypaymentsinsomesituations.

otHeR seRViCe RetiRement PRoVisions

Cost-of-Living Adjustment (COLA)

IfyourNormalRetirementAge(NRA)is60,youareeligibletoreceiveanyCOLAafteryouhavereceivedretirementbenefitpaymentsforatleast12months.YourCOLAbeginstheSeptemberafteryoumeetthisrequirement.Forexample,ifyourretirementdateisonorbeforeSeptember1ofanyyear,youwillreceiveanyCOLAeffectiveinSeptemberofthefollowingyear.

Ifyournormalretirementageis62or65,youwillreceiveanyCOLAeffectivethefirstSeptemberthatisatleast12monthsafteryoureachyournormalretirementage.

TheCostofLivingadjustmentmatchestheConsumerPriceIndexforallUrbanConsumers(CPI-U),anindexcompiledbytheUnitedStatesDepartmentofLabor’sBureauofLaborStatistics.WhentheCPIisnegative,therewillbenoCOLA.COLAisapplicabletothefirst$20,000ofyourretirementbenefit(indexed).


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Cap on earnable Compensation used in Calculating average Final Compensation (AFC)

TherearetwocapsontheamountofearnablecompensationthatwillbeincludedinyourAFC:earningsincreasesgreaterthan

(1)5%peryearovertheprioryearand (2)10%overthehighestthreeyears.

AmountsofearnablecompensationthatexceedthesecapsarenotincludedinyourAFCunlessyouremployerpaysthecosttoincludesuchcompensation.

Retirement incentives

Ifyouremployerprovidesyouwithasignificantpaymentoraward(suchasmoneyoradditionalservicetime)toinduceyoutoretireortomakeyoueligibletoretire,thatpaymentorawardisconsideredaretirementincentive.RetirementincentivesarenotincludedinyourAFC.

unused sick and Vacation leave

Forsomemembers,paymentforupto30daysofunusedsickand/orvacationleavecanbeincludedinthecalculationoftheirAFC.Forpurposesofthisprovision,a“day”isconsideredyournormalworkingday,uptoamaximumofeighthours.

Thisappliesifyouhad:

10ormoreyearsofserviceasofJuly1,1993,or•reachedage60beforeJuly1,1993,andhadbeeninservicefor•atleastoneyearbeforeJuly1,1993.

note:Ifyoureceivethistypeofpayment,itisincludedaspartofyourfinalyear’searningstodetermineifthecaponearnablecompensationapplies.

Ifsuchapaymentwasmadeasaretirementincentive/bonus/stipend,itcannotbeincludedintheamountofearnablecompensationusedinthecalculationofyourAFC.


Your Minimum Benefit

Ifyouhaveearned10ormoreyearsofcreditableservice,yourserviceretirementbenefitundertheFullBenefitoptionwillnotbelessthan$100permonth.

RetuRninG to WoRK aFteR RetiRement

Definition of “Restoration to Service”

Asateachermember,youareconsideredrestoredtoserviceifyouretire,beginreceivingyourMainePERSserviceretirementbenefit,thenreturntoworkforthe“same”employer.ReturningtoworkforthesameemployermeansthatyouhaveacceptedemploymentinapositioncoveredbytheStateEmployeeandTeacherRetirementProgram.

Youmustwaittoreturntoemploymentwiththe“sameemployer”untilafterthelaterof:

•30daysafterterminationofemployment and •TheeffectivedateofyourMainePERSretirement.

IfyoureturntoworkbeforeyourNRA,MainePERSmustsuspendyourretirementbenefitifyou:

•discussornegotiateareturntoworkwiththe“same employer”priortoyourtermination;or •provideservicestothe“sameemployer”formorethan90 daysinoneyear.

ThesuspensioncontinuesuntilyoueitherstopworkingorreachyourNRA,whicheverfirstoccurs.Yourbenefitpaymentwillthenbereinstatedatanincreasedamountthataccountsfortheperiodofsuspension.

IfyouretiredeffectiveSeptember1,2011orafterandreturntoemploymentwiththe“sameemployer”afteryoureachyourNRA,statelawlimits:

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Ifyoudonotreturnasaclassroom-basedemployee:

•compensationto75%oftherateestablishedfortheposition; and •theperiodofrestorationto5years.

Ifyouretirefromaclassroom-basedpositionandreturnasa classroom-basedemployee:

•theperiodofrestorationatanindividualschool administrativeunittonomorethan5one-yearcontracts, and •theperiodofrestorationatthesameschooladministrative unitforamaximumof10years:

►5yearsunderone-yearcontractswithcompensation setat100% and ►5yearswithcompensationsetat75%.

WhetheryouretirebeforeorafterNRA,asaretiree,youdonotearnadditionalservicecredit,nordoyourearningsaffecttheamountofyourretirementbenefit.

Note:YoumayworkinanypositionnotcoveredbytheStateEmployeeandTeacherRetirementprogramandstillreceiveyourmonthlyMainePERSretirementbenefit.Therearenolimitationsonthelengthoftimeyoucanwork,oroncompensationyoucanearn.

soCial seCuRity

IfyouareeligibletoreceiveSocialSecuritybenefitsinadditiontoyourMainePERSserviceretirementbenefit,SocialSecuritymayreduceyourSocialSecuritybenefitsinsomecircumstances.

PleasecontacttheSocialSecurityAdministrationdirectlywithanyquestionsyouhave.YoucanfindthelocationandphonenumberofyourlocalSocialSecurityofficeinthephonebookunder“UnitedStatesGovernment-HealthandHumanServices,”oryoucancalltheSocialSecurityAdministrationofficetoll-freeat800-772-1213;orvisittheirwebsiteatwww.ssa.gov.

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A publication of

MAINE publIc EMployEEs RETIREMENT sysTEM

www.mainepers.org

ContaCt us!

mainePeRs46StateHouseStationAugusta,ME04333-0046

Direct line to Retirement services:(207)512-3158main line:(207)512-3100toll-free:(800)451-9800

Fax:(207)512-3101email:[email protected]

Office HoursMondaythroughFridayfrom8:00a.m.to5:00p.m.,

withtheexceptionofrecognizedholidays.

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