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Retirement Planning


 

The process of planning for retirement is a long one. The process of retiring is not something that happens in a single day, nor is it a single decision that can be made easily. Ideally, you should begin thinking about retirement early in your career.

We realize that the process of planning for retirement is highly individualized; however, the general process of retirement planning and saving is going to be the same for most people. The specifics and details of a retirement plan will be different for everyone.

In our Countdown to Retirement Guide we’ve outlined steps to take throughout your career and at various times during your countdown to retirement. We realize everyone has a different situation and a different definition of a successful retirement. We hope you find this guide helpful in planning the retirement of your dreams.

As a PERA member, you contribute to your retirement or pension with every single paycheck. We have resources to help you maximize your efforts to save and plan for retirement. There are many items that need to be completed to prepare for your retirement.

We have resources to guide you through to make completing the tasks as easy as possible.

Preparing for Retirement

Ballpark E$timate®

Planning financially for retirement is not a one-size-fits-all exercise. The Employee Benefit Research Institute (EBRI) has created a short exercise to help individuals determine if they are in the rough “ballpark” in saving sufficiently for their future retirement.

E$timate Interactive Ballpark E$timate Worksheet

Survivor Options Fact Sheet

Under Internal Revenue Service (IRS) regulations, you may name any person as your survivor; however, if you designate someone other than your spouse, there are restrictions on the age difference between the member and the person designated when selecting the 100 and 75 percent options. If you name your spouse as your survivor, there are no age restrictions.

How the survivor options work using the IRS formula

Do It Yourself Retirement Toolkit

If you like to Do It Yourself, you’ll find everything you need to apply for PERA retirement benefits here on this one page.

Do It Yourself Toolkit

 

Conferences and Workshops

To provide members with information about PERA and your benefits, we have a variety of educational programs for you. We have three opportunities for educational programs. In every program, we review your benefit options, the process to apply for your retirement benefits, and show features of MY PERA. Register two weeks in advance. To find out more click the link below.

Educational Conferences and Workshops

 

Any other forms you may need in regards to planning for retirement you can find here.

If You Leave Before Retirement

If your public service ends after three or more years of service but before age 55, you may leave your contributions with PERA and qualify for a deferred pension at age 55.

When you terminate PERA-covered employment and leave your contributions in the fund rather than take a refund, PERA calculates a pension amount based upon your years of service and average salary at termination. If you left public service prior to January 2012, the amount of your monthly benefit will continue to increase the longer it is deferred and can begin any time after age 55. Deferred pensions for members leaving public service after 2011 will be solely based upon benefits earned at the date of termination.

If you were hired before July 1, 1989 and have 30 or more years of public service, you may begin to receive a pension at any time. You may also qualify for the Rule of 90 (age plus years of service equal 90 years) as a deferred member. Even though you are no longer in public service, you are a month closer to the Rule of 90 for every month your contributions remain with PERA.

 

Phased Retirement Option

The Phased Retirement Option (PRO) is a tool that allows employers to meet their workforce needs while employees transition into full retirement. The PRO permits an active member of the General Plan, who is at least age 62, to receive a PERA retirement annuity without a formal termination of employment. However, members must substantially reduce their work hours while participating in the PRO agreement. Availability of positions under this program is at the discretion of the employing unit. Any earnings under the PRO position are not subject to the post-retirement annual earnings limits. The PRO program expires June 30, 2019.

The PRO program expires June 30, 2019: The law allows for anyone already working under the terms of a PRO agreement on or before June 30, 2019, to continue working under the PRO for a maximum of five years. It does not allow for new participants to enter the program on or after July 1, 2019.

Phased Retirement Option FAQ

Do I contact PERA in order to enter a Phased Retirement Option (PRO) Agreement?

No, please contact your employer.  It is the discretion of your employer to offer Phased Retirement to you.

Will I lose my PERA life insurance if I enter into a Phased Retirement Agreement?

No. If you wish to continue your PERA life insurance, PERA will deduct your monthly premium from your pension check.  Your employer will no longer deduct the insurance payments from your paycheck.

If I reached my normal retirement age, can I still enter a PRO Agreement?

Yes, provided your employer offers you a PRO Agreement and you meet all other PRO eligibility criteria.

If I am in a part-time position now, am I eligible for a PRO Agreement?

Yes, provided you have worked at least 1,044 hours per year for the past five years and you meet all other PRO eligibility criteria.  When you begin the PRO, you must reduce your hours by at least 25% and you cannot work more than 1,044 total hours per PRO agreement one year period.

Why are elected officials not eligible for the PRO?

An elected position does not fit the provisions authorizing the PRO outlined in Minnesota Statutes § 353.371. A PRO agreement is available when the eligibility requirements of Minnesota Statutes § 353.371, subd. 1, are met. In addition, the governing body of the governmental subdivision must have the sole discretion to determine whether a PRO will be offered and the terms and duration of the PRO Agreement under Minnesota Statutes § 353.371, subd. 3 and 4.  As an elected official, the voters, not the governing body, have discretion over the position. Additionally, Minnesota Statutes § 353.371, subd. 1, includes eligibility requirements regarding hours worked that are inconsistent with how elected positions are monitored or compensated.

 

Do I have to start work under my PRO position within 30 days of terminating PERA membership?

No. When you begin working after terminating membership is largely between you and your employer.  However, you must begin working under the PRO within six months of terminating membership in PERA.

 

Can I work full-time for a certain period and then not work at all for the remainder of a year covered by a PRO Agreement?

 No.  You must reduce your regularly scheduled hours of work by at least 25% and not exceed 1,044 hours for the PRO agreement one year period.

  • Example 1: if you were scheduled to work 80 hours per pay period prior to the PRO, you may work 40 hours per pay period for the PRO one year agreement.
  • Example 2: if you were scheduled to work 80 hours per pay period prior to the PRO and the PRO agreement is one year in length, you may not work more than 60 hours in any pay period covered by the PRO for the first 6 months and not work more than 20 hours in any pay period for the remaining 6 months (as you may not work more than 1,044 total hours for the year).
Will I accrue vacation and sick leave or be covered by employer health insurance while working under a PRO Agreement?

Perhaps.  You will need to discuss this with your employer. PERA has no authority to direct what, if any, other benefits will be made available. Employers participating in PERA each have their own “other employee” benefit provisions, either through collective bargaining or personnel agreements.

If my employer allows me to accrue vacation, sick and holiday leave while working under the PRO, will the hours associated with the leave pay, when taken, count towards the maximum number of hours I may work under the PRO?

Yes.  The hours you take off from work, for which you receive pay, will count towards the maximum number of hours you may work under the PRO agreement.

 

Will I be eligible for disability benefits from PERA if I become disabled while working under a PRO Agreement?

 No.  By accepting/receiving a retirement benefit, you are no longer eligible for disability benefits.

If I currently have employment in more than one position covered by PERA membership and want to continue working for these employers, do I have to enter a PRO with each PERA-covered employers?

Yes, if you wish to continue employment for each position. To participate under the PRO agreement and also start your PERA pension, you must either:

  • Terminate the employment not covered by a PRO Agreement and remain out of that employment for at least 30 days with no agreement to return.
  • Enter a PRO Agreement for each position you intend to maintain during the PRO Agreement. However, you must reduce each position by at least 25% and total work hours combined under all PRO agreements must not exceed 1,044 hours.
When I enter into and begin my PRO agreement, can I take a position with my current employer that is different than my current position?

Yes, provided all other eligibility criteria and PRO requirements are met.

 

Can a PERA-covered employer other than my current employer offer me a PRO Agreement?

Yes, but the PRO Agreement must be entered prior to any termination of employment with your current employer.  The PRO agreement must adhere to the employment hour reduction requirement (reduce hours by at least 25% based on your pre-PRO employment hours and will not exceed 1,044 hours per PRO agreement one year period) and all other PRO eligibility criteria.

Can I enter a PRO Agreement to take a position covered by another Minnesota public retirement pension plan?

No.  The employment under a PRO agreement must be a position that would be covered by PERA membership.

“I am more comfortable now in my decision to retire.”

“The presentation increased my confidence for retiring and making the correct choices.”

“I am very happy I attended and I’m not so scared to retire anymore.”