Option to Retain Grandfathered Normal Retirement Date for the State Employees Retirement System Q & A's

Question    Answer
1. What does grandfathered normal retirement date mean?   This is the normal retirement eligibility date prior to July 1, 2022. It is either age 60 and 25 years of service or age 62 with 10 years of service. The additional contributions paid under Attachment F are to allow employees who won't reach normal retirement age before that to maintain those retirement ages after that date if they choose.
  
2. What if I leave and defer my retirement date?    If you make the election to pay the additional contributions, you retain the current normal retirement age regardless of when you leave.
  
3. Does this election have any impact on my early retirement date?   The SEBAC Agreement did not change the early retirement age rules. (Age 55). The actuarial discount reduction (now 6% per year) is computed against the current normal retirement age for anyone who retires before July 1, 2022, or for anyone who pays the additional contributions who retires after that date. Those who don't pay the additional contributions, and who retire on or after 7/1/2022, have their actuarial discount reduction computed on the new ages.
  
4. What if I have already reached normal retirement age by 7/1/2022 but still keep working?   You will retain that normal retirement age and NOT be subject to the post 2022 retirement age. There are no additional contributions due under Attachment F.
  
5. What if I have not yet reached normal retirement age but want to retire early prior to 7/1/2022?    You will be subject to the early retirement rules currently in place computed off of the current normal retirement ages (60 or 62) NOT the post 2022 retirement ages because those ages don't take effect until 7/1/2022.
  
6. What happens if I make this election and want to retire early on or after 7/1/2022?   Again, if you make the election to pay the additional contributions, you retain the current normal retirement age regardless of when you leave.
  
7. What happens if I make this election and then stay past my grandfathered normal retirement date?   If you stay past the grandfathered normal retirement date and leave after your post 2022 normal retirement date, you will receive all of your additional contributions back but without interest. If you stay past your grandfathered normal retirement date but leave prior to your post 2022 normal retirement date, you will not receive your contributions back but your benefit will be calculated under the grandfathered normal retirement date provisions.
  
8. For how long will these additional contributions be deducted out of my paycheck?   Your additional contributions continue as long as you are in state service unless you work until the new normal retirement age. Once you hit your new normal retirement age, your additional contributions are returned without interest.
  
9. Does this affect employees who recently transferred to SERS Hybrid from the Alternate Retirement Plan (ARP) which is available to higher ed professional employees?   Anyone that was employed on 7/1/2011 that is now in the Hybrid plan can make that election if they choose.
  
10. How do I calculate the "actuarial costs" associated with the election to grandfather my retirement date?   The Form CO-1094 is where you will be able to calculate the actuarial cost of grandfathering your retirement age via the table on the form.
  
11. All Tier II and Tier IIA active employees must fill out this form regardless of whether or not they elect to grandfather their retirement date or not. Is that correct?   All Tier II and Tier IIA non-hazardous duty active members must fill out this form. The one exception to this is if one of the above employees reach their normal retirement date prior to 7/1/2022. Those employees are automatically grandfathered. Tier II or IIA employees who are not on the active payroll on July 1, 2013, but who become reemployed prior to July 1, 2022 must make this election upon reemployment or they will be subject to the new age rules.
  
12. Can you clarify exactly what happens if I don't fill out this form?  In other words, I take no action. Do I automatically get charged for taking the grandfathered option or is it assumed that I am NOT taking the grandfathered option?  If no form is returned, it will be considered as opting OUT of the election and no additional contributions will be deducted from your paycheck.
  
13. Is this deduction going to be pre-tax?   Yes, the additional contributions will be taken on a pre-tax basis.
  
14. If I make the election to maintain my grandfathered retirement age expecting to retire at age 60 but have to take a voluntary early retirement pending a disability retirement, how is it handled?   As you have made this election and had been contributing the additional amount, you maintain your grandfathered retirement date and the reduction is taken accordingly.
  
15. If an employee were to pass away prior to retiring, would their beneficiary receive a refund of their additional contributions? If the employee passes away after 25 years of service or was over age 55 with 10 or more years of service, the employee's pension beneficiary receives the SERS pension, and no contributions would be refunded. Otherwise the employee's pension beneficiary receives no monthly pension, but would get a refund of all their contributions, including these additional ones.
  
16. What happens if someone is currently in ARP and transfers to the Hybrid after 7/1/2013? Can they take advantage of the grandfather provision? Upon transfer to the Hybrid plan, an employee has 30 days to elect to grandfather their retirement age.
  
17. What happens if someone is currently hazardous duty but transfers to a non-hazardous duty position in the future? Can they take advantage of the grandfather provision?   Upon transfer to a non-hazardous duty position, an employee has 30 days to elect to grandfather their retirement age. The issue of whether and how retroactive contributions will be required is still being reviewed.
  
18. If someone is in ARP and awaiting the SAG award to get back to Tier II, what are his/her options? If they transfer back to Tier II in the future, can they still make the elections?  Is there a way to preserve past Tier II credit prior to being in ARP? Current ARP employees are not eligible for this election. However, should they transfer back into Tier II in the future; they can make this election within 30 days of the transfer. Past Tier II service is already protected as this change does not affect service prior to July 1, 2011.
  
19. Are people who attain their normal retirement age during the month of June 2022 grandfathered in?  There is some conflict in the agreement. People who will attain their normal retirement age in the month of June 2022 are grandfathered.
  
20. What does the statement in the Important Notice mean that says "The higher normal retirement ages apply only to years of service worked on or after 7/1/2011." What is meant by this?   This means that pension calculations for state service prior to 7/11/2011 are made as if the current normal retirement of age (age 60 with 25 years of service or age 62 with 10 years of service) still applies. Only the pension calculations for years of service after that date of 7/1/2011 until retirement would reflect the new normal retirement age (age 63 with 25 years of service or age 65 with 10 years of service).
  
21. What happens to a person's additional contributions if they were laid off or fired?   This would be treated the same as question #2. If you leave and are vested you do not receive your additional contributions but retain the grandfathered retirement age. If you are not vested you will receive a refund of the additional contributions without interest.
  
22. What if an employee opts in and then has gotten a disability retirement prior to attaining their grandfathered age. Will that person receive a refund of those contributions? Will it depend on whether or not it is prior to 7/1/2022? They will receive a refund only if they are still on disability retirement when they reach the new normal retirement (age 63 with 25 years of service or age 65 with 10 years of service.
  
23. Are part time lecturers or non-credit lecturers eligible? Summer employees? Would this apply to them if their employment is seasonal (hired semester to semester)?   The option is open to those Tier II, Tier IIA and Hybrid employees in a pension eligible position. If their position is not pension eligible, then they cannot make this election.

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