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Employees’ Retirement SystemUnderstanding Your RetirementPlan and Options2019Retirement Systems of Alabama
Employees’ Retirement SystemERS is a Defined Benefit Plan Guaranteed lifetime benefit for member Benefit level established by law Benefit calculated using a formula Retirement benefits NOT dependent upon theinvestment returns earned on members’contributionsCOLAs are not guaranteed!Retirement Systems of Alabama
Employees’ Retirement SystemTier 1 MembersRegular members contribute7.5% of earnable compensationFull time, Certified Firefighters,Correctional Officers, and LawEnforcement Officers contribute8.5% of earnable compensationRSA participation is mandatoryRetirement Systems of Alabama
Employees’ Retirement SystemTier 2 MembersRegular members contribute6.0% of earnable compensationFull time, Certified Firefighters,Correctional Officers, and LawEnforcement Officers contribute7.0% of earnable compensationRSA participation is mandatoryRetirement Systems of Alabama
Employees’ Retirement SystemDeath of a Member Prior to Retirement Tier 1Member AgeYears of Service CreditPreretirement Death BenefitUnder 60or60 and olderBetween 1 and 25Member contributions, total interest earned, plus an amountequal to the member’s salary for the prior fiscal year (October 1 September 30)Any ageLess than 1 year, deathwas job-relatedMember contributions, total interest earned, plus an amountequal to the member’s salary at time of deathAny ageLess than 1 year, deathwas not job-relatedMember contributions, total interest earned, plus an amountmatching the contributions and interest but limited to amaximum of 5,000Ineligible to RetireBetween 1 and 10Eligible to Retire or 25 Years of ServiceAny ageor60 and olderRetirement Systems of Alabama25 or more10 or moreChoice of:1. Option 3 monthly benefit (50% of member’s retirement benefit)to the spouse or beneficiary (this choice is not available formultiple beneficiaries)Or2. Member contributions, total interest earned, plus an amountequal to the member’s salary for the prior fiscal year (October 1 September 30)
Employees’ Retirement SystemDeath of a Member Prior to Retirement Tier 2Member AgeUnder age 62or62 and olderYears of Service CreditPreretirement Death BenefitBetween 1 and 10Member contributions, total interest earned, plus an amountequal to the member’s salary for the prior fiscal year (October 1 September 30)Ineligible to RetireAny ageLess than 1 year, deathwas job-relatedMember contributions, total interest earned, plus an amountequal to the member’s salary at time of deathAny ageLess than 1 year, deathwas not job-relatedMember contributions, total interest earned, plus an amountmatching the contributions and interest but limited to amaximum of 5,000Eligible to Retire62 and olderAge 56 forFLCRetirement Systems of Alabama10 or moreChoice of:1. Option 3 monthly benefit (50% of member’s retirement benefit)to the spouse or beneficiary (this choice is not available formultiple beneficiaries)Or2. Member contributions, total interest earned, plus an amountequal to the member’s salary for the prior fiscal year (October 1 September 30)
Employees’ Retirement SystemTypes of Service Available to Purchase Military Serviceo May purchase up to 4 years during first yearor after 10 years of service Withdrawn Service Previous Serviceo With a city, county, town, public or quasipublic organization Out-of-State Service TRS Support Personnel, Teacher Aide,Job Corps, and Teacher CorpsInformation is provided in your ERS HandbookRetirement Systems of Alabama
Employees’ Retirement SystemBecoming Vested A member is vested when he or she has 10 yearsof creditable service. Being vested qualifies you for a monthlyretirement check once you reach age 60 underTier 1 or age 62 (56 FLC) under Tier 2, even if youhave not worked for a participating agency in awhile, provided you have not withdrawn yourretirement contributions when you leftemployment with a participating agency and yourcontributions have not been withdrawn.Retirement Systems of Alabama
Employees’ Retirement SystemWhen Can I Retire or Collect My Benefits?Tier 1After 25 years of creditableservice, regardless of ageorRetirement Systems of AlabamaAt age 60 with at least 10years of creditable service
Employees’ Retirement SystemWhen Can I Retire or Collect My Benefits?Tier 2At age 62 (age 56 for FLC) with atleast 10 years of creditableserviceRetirement Systems of Alabama
Employees’ Retirement SystemDisability Benefits Must have 10 years of creditable service in thesystem Must be in service or on official leave of absencefor no more than 2 years RSA Medical Board must determine the member tobe permanently incapacitated to perform duties ofjob Disability benefits calculated identically to benefitsfor service retirementRetirement Systems of Alabama
Employees’ Retirement SystemHow Will My Retirement Benefit Be Calculated?AverageFinalSalary*Years &Months ofServiceBenefitFactor(.020125)12Maximum Monthly Benefit*The average of the highest THREE years of salary out of the last 10 yearsthe member made contributions.*Refer to your Member Handbook, page 22, for examples of maximum benefit amounts.Tier 1Retirement Systems of Alabama
Employees’ Retirement SystemHow Will My Retirement Benefit Be Calculated?AverageFinalSalary*Years &Months ofServiceBenefitFactor(.0165)12Maximum Monthly Benefit*The average of the highest FIVE years of salary out of the last 10 yearsthe member made contributions.*Refer to your Member Handbook, page 18, for examples of maximum benefit amounts.Tier 2Retirement Systems of Alabama
Employees’ Retirement SystemRetirement Benefit ChoicesThis choice is only made at time of retirement: Maximum Monthly Benefit Option 1 Option 2 Option 3Under each of these plans, the member willreceive a benefit for life.Retirement Systems of Alabama
Employees’ Retirement SystemMaximum Monthly Benefit Largest available monthlybenefit Benefits cease completely attime of retiree’s death Designated beneficiary(ies)receive a one-time proratedbenefit covering the days of thelast month the retiree waslivingRetirement Systems of Alabama
Employees’ Retirement SystemOption I Monthly benefit slightly less than maximum monthlybenefit Lifetime benefit for retiree on a monthly basisIf retiree dies prior to receiving annuity paymentsexceeding his or her account balance, the remainingbalance will be paid to the designated beneficiary(ies).Retirement Systems of Alabama
Employees’ Retirement SystemOption II100% Survivor Benefit Reduced monthly benefit over lifetime of retiree Benefits based on ages of retiree and beneficiaryOnly 1 beneficiary may be designated to receive thesame lifetime benefit after the retiree’s death.No changes of beneficiary (to receive a monthly benefit)are allowed after retirement, unless beneficiarypredeceases retiree or a divorce between retiree andbeneficiary.Retirement Systems of Alabama
Employees’ Retirement SystemOption III50% Survivor Benefit Reduced monthly benefit over lifetime of retiree Benefits based on ages of retiree and beneficiaryOnly 1 beneficiary may be designated to receive one-half of the retiree’s benefit after the retiree’s death.No changes of beneficiary (to receive a monthly benefit)are allowed after retirement, unless beneficiarypredeceases retiree or a divorce between retiree andbeneficiary.Retirement Systems of Alabama
Employees’ Retirement SystemPreparing for Retirement A successful retirement requires a lot ofplanning and preparation. You have time to plan, so get started!Retirement Systems of Alabama
Understanding Your Retirement Plan and Options 2019. Employees’ Retirement System Retirement Systems of Alabama ERS is a Defined Benefit Plan Guaranteed lifetime benefit for member Benefit leve
