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EARLY RETIREMENT/ SEPARATION FREQUENTLY ASKED QUESTIONS (Faqs)

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EARLY RETIREMENT/ SEPARATION FREQUENTLY ASKED QUESTIONS (Faqs) EARLY RETIREMENT/ SEPARATION FREQUENTLY ASKED QUESTIONS (FAQs) UPDATED 8/14/20 GOLDEN HANDSHAKE (2-YEAR CALPERS RETIREMENT INCENTIVE) PROGRAM QUESTIONS Please explain how the CalPERS Golden Handshake program works. 1 Question The CalPERS retirement incentive program adds two years of service credit to each eligible employee. The City is currently contracted with PERS to only offer this program to non-sworn employees. Employees who elect this early retirement program must retire within a time period set by the City Council (which is yet to be determined). Employees are eligible for this program if they meet the following criteria: *Must be an employee with five (5) full years of service with a CalPERS member agency. *Currently (or will be) at least age 50 (Classic miscellaneous members) or 52 (PEPRA miscellaneous nswer members) on the date of retirement, which needs to occur in the defined retirement window (a 90 to 180- A day period to be determined). **Please note: Your retirement formula is based on a retirement age (55 for Classic miscellaneous, 62 for PEPRA miscellaneous). If you are eligible to retire, but have not reached your formula's retirement age, your pension formula will be reduced. Please use this link to learn more about this topic and contact CalPERS with any specific questions. https://news.calpers.ca.gov/how-your-calpers-retirement-is- calculated/ How is my CalPERS retirement calculated? 2 Question Your pension amount is calculated by taking: Service Credit Years X Benefit Factor X Final Compensation = Unmodified Pension Allowance Service credit is earned on a fiscal year basis, which is July 1 through June 30. If you are paid on a monthly basis, 10 months of full-time employment will equal one year. Your benefit factor, also known as “age factor,” is the percentage of pay you’ll receive for each year of service credit earned. It is determined by your retirement formula and age at retirement. For example, if you are a Classic non-safety member and are 55 years old or older, your Beverly Hills formula provides for a 2.5% benefit factor. nswer See this CalPERS video for more information on benefit factor. https://youtu.be/MDGWhr6s9TA If you A worked for other CalPERS agencies, you may have different benefit factors for those years of service. Final compensation is determined based on your membership classification. If you are a Classic non- safety member, generally your final compensation is calculated from your highest 12-month period. If you are a PEPRA non-safety member, generally your final compensation is calculated from your three-year average highest compensation. If you have particular questions for your individual scenario, please contact CalPERS. For more information and short videos on how your retirement is calculated, please use the link below. https://news.calpers.ca.gov/how-your-calpers-retirement-is-calculated/ How can I estimate my retirement pension? 3 Question 1. You can use CalPERS Retirement Calculator found here https://www.calpers.ca.gov/page/active- members/retirement-benefits/service-disability-retirement/retirement-estimate-calculator OR 2. To run a more specific estimate calculation based on your latest CalPERS data, you can log into nswer your my|CalPERS account A https://my.calpers.ca.gov/web/ept/public/systemaccess/selectLoginType.html OR 3. If you are within a year of retirement, you can also request official estimates to determine what your final benefit compensation will be through my|CalPERS. I am a Classic member and not yet 55 years of age, if I retire, how will this impact my retirement formula? 4 Question Am I still entitled to the full 2.5% per service credit year? If you are eligible to retire, but have not reached your formula's retirement age, in this case 55, your nswer pension formula will be reduced. Please use this link to learn more about this topic and contact CalPERS A with any specific questions. https://news.calpers.ca.gov/how-your-calpers-retirement-is-calculated/ I am a PEPRA member and not yet 62 years, if I retire, how will this impact my retirement formula? Am I still 5 Question entitled to the full 2.0% per service credit year? If you are eligible to retire, but have not reached your formula's retirement age, in this case 62, your nswer pension formula will be reduced. Please use this link to learn more about this topic and contact CalPERS A with any specific questions. https://news.calpers.ca.gov/how-your-calpers-retirement-is-calculated/ I received the City survey and indicated that I am or might be interested in retiring through this program, 6 Question what is next? 1. After indicating your interest, your respective Department Head was provided a list of all employees who expressed interest to review and determine operational impacts. The City Manager’s Office and Department Heads will then evaluate which job classifications will be offered the CalPERS early retirement incentive (Golden Handshake) option based on an evaluation of operational impacts. 2. City Management will make the final decision as to which classifications will be offered the nswer Golden Handshake. The cost of this will be prepared by Finance and evaluated by an A independent consultant and brought before the City Council for approval. 3. Upon Council approval, a designated time period will be established, which is 90-180 days in length. 4. During this 90-180 day window of time, employees in the eligible job classes need to finalize their retirement paperwork with CalPERS and establish a retirement date and communicate it to their Department Head and Human Resources. I indicated I was interested in the Golden Handshake option. What happens if my job class is not 7 Question selected? If your job class is not selected, you will not be eligible to receive the 2 additional years of service credit if Answer you retire. You may still retire without receiving the additional service credit. Why can’t all employees interested in the Golden Handshake be allowed to retire with this option? 8 Question CalPERS allows employers to utilize this program to reduce budgeted payroll costs by offering this incentive option to voluntarily reduce the work force and labor costs due to impending mandatory transfers, layoffs, or demotions. As part of the program requirements, the City must eliminate a corresponding number of Answer positions from its budget (the same or different positions). Based on an evaluation of positions, services provided, and service levels, City Management will select which classifications are eligible and which positions may be eliminated in order to ensure continuity of City services and operations. Is there any possibility of increasing the service credits for the Golden Handshake Program? 9 Question No. The Golden Handshake Program only allows for two additional years of service credit, per section Answer 20903 of the California Public Employees’ Retirement Law (PERL). How does the timing work for this early retirement program? 10 Question After City Council approves the designated classifications, they will also designate a period of time between 90 to 180 days in duration, which is the retirement window. This means if you are eligible and nswer electing to retire under this program, you must do so during this designated period of time. For A example, if Council designates the retirement window as October 1, 2020 through December 31, 2020, if you are eligible and electing to retire under this program, you must do so between these dates. I have worked in a part-time capacity at the City (or other agency) prior to becoming a full-time 11 Question CalPERS member and would like to buy back that time. What is the cost and what do I need to do? You may be eligible to purchase Service Prior to Membership (SPM) service credit if… • You worked for a CalPERS-covered employer as a seasonal, temporary, part-time, or intermittent employee, but were not a CalPERS member. • You are able to provide CalPERS with documentation from your employer certifying your dates of service, hours worked, and earnings information. nswer A Please contact CalPERS for further information on your individual situation. For information on this and other buy back options, please refer to the CalPERS Service Credit Purchase Options guidance: https://www.calpers.ca.gov/docs/forms-publications/service-credit-purchase- options.pdf Is this Golden Handshake being offered to sworn (police and fire) employees? 12 Question No. At present, the City of Beverly Hill’s current CalPERS contract only provides the two-year service Answer credit option to non-sworn (miscellaneous) employees. If I indicated that I would be interested in the two year option, but this is not granted, can the cash 13 Question option be taken? Yes, the cash option is available to all employees. Answer If the offer of a golden handshake is accepted, could that be combined with a cash incentive? 14 Question No, at present, the City Council has only authorized these separation incentive programs separately. Answer They are not being offered in combination with one another. Can you provide an example of how the Golden Handshake program would work? 15 Question Employee X joined the City prior to 1/1/2013 and is considered a Classic CalPERS member and has a retirement formula of 2.5% at 55 years of age. Employee X is 55 years old and has 15.0 service credit years with Beverly Hills and CalPERS. This employee’s current retirement formula would be 2.5% * 15.0 nswer service credit years = 37.5% of their single highest year’s compensation. If this employee were to take A the CalPERS retirement incentive, they would receive an additional two years (2.5% * 2 = 5%) or 5% toward their retirement formula.
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