Milwaukee Public Schools EmployeesPre-Retirement Planning

City of Milwaukee Employes’ Retirement System

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Getting the most from retirement Use the ERS Website – www.cmers.com

Member Self Service (MSS)- From the CMERS.COM home page, active members are able to set up a user account by registering with our website. To register, you will need to select a user identification and password, know your email address, social security number, first and last name as it appears on your paycheck, and date of birth. The entry of your private information is protected by VeriSign security.

Once registered, members can sign in using their secret user identification and password.

MSS features include: Viewing your personal profile, Viewing information about your member account (contributions and service credit) Calculating and printing a pension benefit estimate using information ERS has on file,

or using information you enter. NOTE: You will still need to contact ERS before you retire for an estimate from us. These MSS estimates are not saved in your record.

The following forms can be downloaded from our website: Beneficiary Change Form-Pension Benefits, and Benefit Estimate Request. NOTE: the group life insurance beneficiary form on the website is not the form for changing your MPS group life insurance beneficiary.

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ERS Benefits

Age 60

orAge 55 with at least 30 years of service

No limit on outside earnings

Service retirement You can retire with non-reduced benefits at Service Retirement Age:

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How monthly pension benefits are calculatedService Retirement Benefit Formula

(Years of Creditable Service* x 2.0%) = Multiplier

(Multiplier x Final Average Salary**) = Annual Pension Benefit

Annual Pension Benefit / 12 = Monthly Pension Benefit

* Creditable service is based on pension hours per year as reported by your employer

**Final Average Salary: 3 Highest Years of Pensionable Earnings divided by 3

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ERS Benefits

Early Retirement (Immediate Retirement Allowance)You can retire with reduced benefits at age 55 or later with at least 15 years of serviceA financial penalty applies

Until age 60, your benefit may be further reduced for outside earnings (up to certain limits)

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How monthly pension benefits are calculatedEarly Retirement Benefit Formula(Years of Creditable Service* x 2.0%) = Multiplier

(Multiplier x Final Average Salary**) = Annual Pension Benefit

Annual Pension Benefit x Reduction Factor = Reduced Annual Pension Benefit

Reduced Annual Pension Benefit / 12 = Monthly Pension Benefit

* Creditable service is based on pension hours per year as reported by your employer

**Final Average Salary: 3 Highest Years of Pensionable Earnings divided by 3

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Final Average Salary

Final Average Salary (FAS) shall mean the average annual earnable compensation of a member computed on the 3 years of creditable service preceding their date of retirement during which their earnable compensation was the highest. Twelve-month employees are 2080 hour basis employees for

pension purposes. ERS collects 78 pay periods prior to the effective date of retirement

Uses the pay periods when base salary was the highest– Over-time is not included

Ten-month employees are 1600 hour basis employees for pension purposes. ERS collects 4800 hours (1600 x 3) of salary data to calculate the FAS.

Earnable Compensation shall mean the annual regular base salary that would be payable to a member if he or she worked the full normal working time for his or her position.

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Final Average Salary – 1600 (4800 hours) / 2080 (78 pay periods)

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Creditable Service calculation for 1600 hour

employee

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Creditable Service calculation for 1600 hour employee

HOURS BASIS: 1600       55/30       REMARKS YEAR HOURS QUALIFY YRS MOS DAYS 0 1986 270.0 0.17 0 2 1   1987 1110.0 1.00 0 8 10   1988 1092.0 1.00 0 8 6   1989 1122.0 1.00 0 8 13   1990 1122.0 1.00 0 8 13   1991 1128.0 1.00 0 8 15   1992 1134.0 1.00 0 8 16   1993 1129.5 1.00 0 8 15   1994 1139.0 1.00 0 8 17   1995 1177.8 1.00 0 8 26   1996 1174.0 1.00 0 8 25   1997 1120.5 1.00 0 8 13   1998 1028.0 1.00 0 7 22   1999 1207.5 1.00 0 9 2   2000 1134.0 1.00 0 8 16   2001 1134.0 1.00 0 8 16   2002 1103.0 1.00 0 8 9   2003 1191.5 1.00 0 8 29   2004 1111.0 1.00 0 8 11   2005 742.0 0.47 0 5 18   2006 1409.5 1.00 0 10 18   2007 691.5 0.43 0 5 6     0.0 0.00 0 0 0                 23,470.8   20.07   TOTAL YEARS, MONTHS, & DAYS = 14 8 13

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Estimating your monthly benefitExample: Service Retirement Monthly Benefit

Assumptions: Age 60

30 Years of Creditable Service

Final Average Salary (FAS): $45,000

30 Years of Creditable Service x 2.0% = 60%

60% x $45,000 FAS = $27,000

$27,000 / 12 = $2,250.00* Monthly Pension Benefit

*This is a gross monthly figure. Benefit is subject to federal and state of Wisconsin tax

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Estimating your monthly benefitExample: Early Retirement Monthly BenefitAssumptions: Age 55 (Reduction Factor: 0.5935

–actual age – bonus year cannot be used to lessen the reduction)

20 Years of Creditable Service

Final Average Salary (FAS): $45,000

20 Years of Creditable Service x 2.0% = 40%

40% x $45,000 FAS = $18,000

$18,000 x 0.5935 Reduction Factor = $10,683

$10,683 / 12 = $890.25* Monthly Pension Benefit

*This is a gross monthly figure. Benefit is subject to federal and state of Wisconsin tax

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Retiring from ERSYour payment optionsMaximum Retirement Allowance/

No survivorship benefit

Survivorship Options: Provide reduced lifetime benefit for you; guarantee continuing benefits to your named survivor

Option 2: 100% Survivorship Option 3: 50% Survivorship Option 4: Variable Survivorship

75% Shown for Comparison

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Assumptions: Retiree - Age 60Spouse - Age 57Monthly Pension Benefit: $2,250

Payment Option Retiree Surviving Spouse Max. Ret. Allowance $2,250 $0 100% Survivorship .8733 Red. Factor

$1,964.93 $1,964.93

50% Survivorship .9323 Red. Factor Spouse (5%)

$2097.68

$ 2,137.50

$1,048.91

$1,068.75 75% Survivorship .9019 Red. Factor

$2,029.20 $1,521.90

Example: How Payment Option Affects Monthly Benefit

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Assumptions: Retiree - Age 60

Spouse - Age 60

Monthly Pension Benefit: $2,250

Payment Option Retiree Surviving Spouse Max. Ret. Allowance $2,250 $0 100% Survivorship .8868 Red. Factor

$1,994.63 $1,994.63

50% Survivorship .93.98 Red. Factor Spouse (5% Red.)

$2,114.55

$2,137.50

$1,057.28

$1,068.75 75% Survivorship .91.24 Red. Factor

$2,052.88 $1,539.66

Example: How Payment Option Affects Monthly Benefit

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Protective Survivorship OptionProtective Survivorship Option (PSO)Guarantee survivor income if you continue working

beyond Service Retirement Age and die before retirementSame options available as for retirement survivorship

optionsCan be elected only during 6 months before you reach

Minimum Service Retirement Eligibility – becomes effective when you reach this eligibility

Once chosen, cannot be cancelled unless survivor dies before retirement or you divorce spouse survivor before retirement

If you select a PSO, you will be locked into this option when you do retire

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5% Lump Sum Bonus Hired prior to 1/1/2000 5% x Maximum Retirement Allowance x Factor Payable when you begin retirement allowance – paid out the

end of the month after you get your first benefit payment

Example: Assumptions: Age 60 (Factor: 9.8147)

Max. Ret. Allowance: $18,000

5% x $18,000 x 9.8147 = $8,833.23 Lump Sum Bonus

Military Service Credit Extra service credit for pre-ERS active service

1 year for every 3 years active military service up to 3 years– Must have at least 10 months active military service– Must provide DD-214 to ERS

Global Pension Settlement Benefits (GPS)

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COLAs (Cost of Living Adjustments)

1.5%: Second, third, fourth retirement anniversaries 2.0%: Fifth and following anniversaries

Example: $2,250 Monthly Pension Benefit

Global Pension Settlement Benefits

Retirement Anniversary Date

Annual COLA

New Monthly Benefit

Year 1 N/A $2,250 Year 2 (1.5% of $2,250) = $33.75 $2,283.75 Year 3 (1.5% of $2,283.75) = $34.26 $2,318.01 Year 4 (1.5% of $2,318.01) = $34.77 $2,352.78 Year 5 (2% of $2,352.78) = $47.06 $2,399.84 Year 6 (2% of $2,399.84) = $48.00 $2,447.84

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Retiring from ERSApplying for RetirementRequest Pension Estimate

Call ERS 6 months prior to planned retirement date – Phone: 286-3557

Provide requested information about you and your pension survivor

You will receive estimate in about 4 - 6 weeks

Schedule Retirement Counseling Appointment Must take place 30-90 days before retirement date Bring required documents for verification: Certified

Birth Certs, Marriage Lic, SS Cards Bring completed ACH Direct Deposit Authorization

Form (ERS will provide this).