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Retirement Planning Member Guidebook

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Retirement Planning Member Guidebook Retirement Planning Pensions & Benefits Member Guidebook For members of the Public Employees’ Retirement System (PERS) and the Teachers’ Pension and Annuity Fund (TPAF) Retirement Planning PERS & TPAF TABLE OF CONTENTS MBOS Registration Information . 3 Retired Members . 9 Retirement Considerations . 3 Designation of Beneficiary . 9 Social Security . 3 Conversion of Group Life Insurance . 9 Supplemental Retirement Savings Plans . 3 Taxation of Retirement Benefits . 10 Expenses in Retirement . 4 Electronic Funds Transfer (EFT) . 10 Purchase of Service Credit . 4 Health Benefits in Retirement . 11 Retirement Benefits . 5 The Health Benefit Programs . 11 Types of Retirement . 5 Eligibility . 11 Retirement Estimates . 7 Enrollment . 11 Pension Options . 7 Medicare-Eligible Enrollees . 11 Applying for Retirement . 8 Cost of Retired Group Health Benefits Coverage . 11 Retired Loan Balances . 8 Survivor Coverage . 12 Group Life Insurance . 9 Dental Plan Costs . 12 Active Employees . 9 Contacting the New Jersey Division of Pensions & Benefits . 13 The information provided in this guidebook is a summary and not intended to provide all information . While every attempt at accuracy has been made, it cannot be guaranteed . The complete terms governing the PERS, TPAF, and the other State-administered employee benefit programs discussed on this booklet are set forth in the New Jersey Stat- utes Annotated and the New Jersey Administrative Code . If there is are differences between the information presented here and the statutes governing the plan or regulations implementing the statutes, the statutes and regulations will take precedence . If you are unsure of, or have questions about, any aspect of your PERS, TPAF, or other employee benefits, you should ask about them by contacting your employer represen- tative or a counselor at the New Jersey Division of Pensions & Benefits (NJDPB) . July 2021 Page 2 PERS & TPAF Retirement Planning MBOS REGISTRATION INFORMATION RETIREMENT CONSIDERATIONS several varieties depending on where you work, but all of them have the same goal — to help people save for a As a member of a New Jersey State-administered re- You might have some idea about how you would like to financially secure retirement . tirement system, you may access the Member Benefits spend your retirement .You may want to travel or go back Online System (MBOS) . to school .You may have a hobby that will occupy your Deferred Compensation 457 Plans allow members to time .You may have plans to embark on a second career make tax-deferred contributions directly from their pay- MBOS is a set of Internet-based applications that allow or start your own business . Or, perhaps you just plan to checks to a variety of investment options . A member registered employees and retirees access to: relax and enjoy the fruits of your labors . No matter what can contribute as little as one percent of their pay; there • Member Account Information; your goal, it will take money to attain it . However, many is also a “catch-up” provision that permits members to • Beneficiary Designation; retirees do not fully comprehend how much of their in- contribute even more as they approach retirement . come they need to replace when they retire . Because • Pension Letters and Statements; and Annuity Savings 403b Plans are available to employ- of this fact, retirees can find themselves working longer ees and are similar to 457 plans . Special tax-sheltered • Health Benefits Account Information (if applicable) . than they had planned or not having the retirement life- provisions are available to employees of boards or edu- For Employees style they had envisioned while they were working . cation or State/county colleges and universities . • Pension Loans — Estimates and Online Loan Ap- While the Public Employees’ Retirement System (PERS) • State Employees can visit the State Employees plication; and Teachers’ Pension and Annuity Fund (TPAF) are ex- Deferred Compensation Plan website at: www. cellent pension plans and provide a lifetime benefit at • Online Purchase Application; prudential.com/njsedcp or call 1-866-NJSEDCP retirement, they will probably not provide you with all of (1-866-657-3327); or get Supplemental Annuity • Retirement Estimates and Online Retirement Appli- the income you need for a comfortable retirement . The Collective Trust (SACT) information on the NJDPB cation; and truth is that most retirees from the PERS and TPAF will website, or call (609) 633-2031 . need to replace about 80 percent of their final year’s • Payroll Certifications . gross income . In some cases, they will need even more • Board of education, county and municipal employ- For Retirees than that . Where will that additional income come from? ees can get SACT information on the NJDPB web- site, or call (609) 292-7524; and should also contact • Retirement Check Information and Check History; SOCIAL SECURITY their employer’s Benefits Office to find out what ad- • Online Direct Deposit/Electronic Fund Transfer ditional supplemental savings plans are available . Social Security was never intended to be a primary (EFT) Application; source of income . It is crucial that you think of Social Defined Contribution Retirement Program – PERS or • Federal and State Income Tax Withholding; and Security as supplemental retirement income . It is also TPAF members enrolled on or after July 1, 2007, may be • Form 1099-R Information and Duplicate Request . important that you read your annual Social Security members of the Defined Contribution Retirement Pro- Statement and check it for accuracy .Your benefit will gram (DCRP) if they had salaries in excess of, or below, Before you can begin MBOS you must be registered be based upon your highest 35 years of earnings .Your certain compensation limits established under the provi- with both MBOS and the myNewJersey website .You earnings history is listed on your annual statement . For sions of P .L . 2007, c . 103 (Chapter 103) and P .L . 2008, can register for MBOS from any internet connection . To more information about Social Security please visit the c . 89 (Chapter 89) . see detailed instructions about MBOS registration, visit the Social Security website or call 1-800-772-1213 . New Jersey Division of Pensions & Benefits (NJDPB) web- site at www.nj.gov/treasury/pensions SUPPLEMENTAL RETIREMENT SAVINGS PLANS Most members of the PERS and TPAF have the op- portunity to participate in employer-sponsored supple- mental retirement savings plans . These plans come in Page 3 July 2021 Retirement Planning PERS & TPAF Elected and appointed officials are also eligible for TYPES OF SERVICE ELIGIBLE FOR PURCHASE This service is only eligible for purchase if the member DCRP enrollment . Members can contact the DCRP is not receiving or eligible to receive retirement benefits at: 1-866-NJDCRP1 (1-866-653-2771) or visit: Temporary Service from the out-of-state public retirement system . Leaves www.prudential.com/njdcrp of absence from out-of-state employment are not eligi- Members are eligible to purchase service credit for tem- ble for purchase . Other supplemental investment options include IRA ac- porary, provisional, certain intermittent, or substitute counts, life insurance annuities, stocks, bonds, and mu- employment if the employment was continuous and Note: Purchases of Out-of-State Service requested af- tual funds funded with after-tax savings . immediately preceded a permanent or regular appoint- ter November 1, 2008, cannot be used by members of Before you enroll and invest your money in any invest- ment . the PERS or TPAF to qualify for State-paid or employ- ment plan, be sure you understand the potential risks er-paid health care benefits in retirement . Leave of Absence without Pay and plan details . U.S. Government Service (Full Cost) Members are eligible to purchase service credit for offi- EXPENSES IN RETIREMENT cial leaves of absence without pay up to a maximum of PERS and TPAF members are eligible to purchase up to After you retire, some of your expenses may be lower or two years for personal illness, and a maximum of three 10 years of credit for civilian service rendered with the go away altogether . These include: months for personal reasons . U .S . Government provided the service rendered would have been eligible for membership in a New Jersey • Pension Contributions; • Three months is the maximum period of purchase State-administered retirement system . This service is for maternity leave unless certified by a physician • FICA Taxes; only eligible for purchase if the member is not receiving that a disability has occurred as a result of the preg- or eligible to receive retirement benefits from the federal • Contributions to Supplemental Savings; nancy . government based in whole or in part on this service . • Contributory Life Insurance premiums; • Child-care leave is eligible for purchase as a leave Note: Purchases of U .S . Government Service request- • Union Dues; for personal reasons . ed after November 1, 2008, cannot be used by mem- • Unemployment or Disability Insurance premiums; Former Membership Service bers of the PERS or TPAF to qualify for State-paid or • State Income taxes (depending on where you employer-paid health care benefits in retirement . choose to live in retirement); and Members are eligible to purchase service credited un- der a previous membership in any of the defined benefit Military Service Before • Work-related expenses . retirement systems administered by the NJDPB — ex- Enrollment (Full Cost) It is important to understand how your expenses will cept the Alternate Benefit Program (ABP) or the DCRP . Members are eligible to purchase credit for up to 10 change as you prepare for retirement .You can do this years of active military service rendered prior to enroll- on your own or with the help of a professional financial Out-of-State Service ment . planner . Members are eligible to purchase up to 10 years of pub- Additional information regarding eligible service is avail- lic employment rendered with any State, county, munici- PURCHASE OF SERVICE CREDIT able on our website .
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