Deferred Retirement Option Program (DROP) Interest Seminar
Orange County Public Schools Presented by: Office of Retirement Services 407 317-3227 www.ocps.net Retirement.Services@ocps.net (Click on departments, Retirement Services, Current Employees) DISCLAIMER If questions arise as a result of this presentation or the materials provided, Chapter 121, Florida Statutes Chapter 605 Administrative Code and the Internal Revenue Code shall remain the final authorities.
Orange County Public Schools Retirement Services Staff • Adrienne Rollins, Senior Manager • Sandra Brookins-Crudup, Retirement Specialist • Kathy Martoi, Retirement Specialist • Joanne Miller, Retirement Specialist • Olga Rivera, Secretary
Orange County Public Schools Normal/Regular Retirement • Normal retirement requires either –30 years of FRS service regardless of age OR –Age 62 with at least 6 years of FRS service whichever comes first…. Applies to anyone initially enrolled before 7/1/2011
Orange County Public Schools DROP • Must met Normal/Regular Retirement • Paper retired with FRS-no additional service or salary credit used in the calculation of benefit • No longer pay 3% from your paycheck • Insurance does not change while in DROP unless you change it • Earn Sick leave and/or Vacation leave while in DROP • Seniority does not change while in DROP • Must be in the Pension Plan
Orange County Public Schools Pension Plan Basics • Guaranteed lifetime monthly benefit • Based on a formula • Non-contributory system 1975-June 2011 • Defined Benefit Plan • No Risk to the Employee
Orange County Public Schools Purchasing Years of Service in the Pension Plan • Out-of-state & Federal Public Service • Withdrawn or Refunded Service • Leave of Absence • Military Service • OCPS pays the military leave of absence on behalf of the employee that occurred prior to 07/01/2011 • If all or part of your military leave occurs on or after July 1, 2011, you must pay any required employee contributions, plus interest -Military Leave of Absence - must provide copy of leave form, orders and DD-214 upon return to OCPS
Orange County Public Schools Service Credit • July 1 through June 30 FY • You receive service credit each month that you work/receive a check. • Less than Complete Work Year – 10 month employee (5/10 = .50) – 12 month employee (5/12 = .42)
Orange County Public Schools Value Per Year • Regular Class Service – Age 62 or 30 years 1.60% – Age 63 or 31 years 1.63% – Age 64 or 32 years 1.65% – Age 65 or 33 years 1.68% • SM Service 2.00 % • Special Risk 3.00%
Orange County Public Schools Basic Benefit Formula • Average of HIGHEST five years of salary/earnings • Years of Service x Value per Yr x AFC • = Option 1 Annual Benefit at Normal Retirement Divided by 12= (Option 1) Monthly Benefit
Orange County Public Schools Benefit Payment Options • Choose an option at Retirement/DROP Entry: – Option 1: No benefit after death – Option 2: Up to ten years guaranteed to beneficiary – Option 3: Benefit continues to joint annuitant – Option 4: Reduced continuing benefit to survivor
Orange County Public Schools Beneficiary Designation • Option 1 or 2 Can be anyone (Spouse must sign SA-1 form) • Option 3 or 4 Spouse or Joint Annuitant Everyone must have a beneficiary on file!
Orange County Public Schools DROP • Must be vested and reached normal retirement age or years Job Title Eligibility Administrators Must enter @ 30 yrs or Registered Nurses age 62 with 6 yrs to maximize PRE-K Paraprofessionals 60 months participation PRE-K Teachers Occupational Therapists Physical Therapists All Other Classified Exception-If you complete 30 yrs of service prior to age 57, you may defer until age 57 to complete 60 months of DROP. You must enter prior to age 58. If you are (K-12) Instructional/Paraprofessionals/School Psychologists/Guidance Couselors/Social Workers , once you are eligible for DROP you may enter at any time.
Orange County Public Schools DROP (cont’d) • Must establish future termination date • Maximum of 60 months or 5 years • Retirement benefits “Banked” while continuing to work • Earn 1.3% interest compounded monthly on benefit amount • Effective 07/01/2011 COLA based on years of creditable service through 06/2011
Orange County Public Schools DROP Payout Options –Cash Payout – Pay taxes –Rollover – Defer taxes –Combination Cash Payout & Rollover – You have 60 days from your DROP Exit date to make a decision in regards to your DROP money or the state will send you a cash payout minus 20% for taxes
Orange County Public Schools
Orange County Public Schools
Orange County Public Schools
Orange County Public Schools
Orange County Public Schools
Orange County Public Schools
Orange County Public Schools
Orange County Public Schools Applying For Retirement/DROP Entry • Apply for retirement/DROP 1 to 3 months in advance, at least by TERMINATION or DROP Entry eligibility date to prevent unnecessary delay, call for a group appointment with Retirement Services. • Birth Verification - one of the following: your birth certificate, naturalization papers, valid passport, or driver’s license with a gold star in the upper right, if married your spouse birth certificate, naturalization papers, valid passport or driver’s license with a gold star • Marriage License needed (option 3 or 4) • Driver’s License or State issued ID-to notarize your application • Need spousal acknowledgement, if married (option 1 or 2) • Beneficiary(s) info - (Names, SSN’s, DOB’s, Address & Phone #’s)
Orange County Public Schools
Orange County Public Schools After Retirement • Benefit is subject to withholding tax • Cost of Living Increase – Based upon years of service thru 06/2011 • Health Insurance Subsidy (HIS) added to your monthly benefit -Not applicable during DROP -Years of Service X $5.00 • Maximum Amount$150.00 • Minimum Amount $30.00
Orange County Public Schools After (cont’d) • Once a benefit payment is cashed or deposited, retirement is final – Option cannot be changed – No service may be added • Benefits paid monthly • Direct deposit required effective 7/1/2000
Orange County Public Schools Sick Leave Payout Contributions during DROP or ILR • Multiple Annual Contributions – Increasing percentage of Sick leave at end of each year of DROP 5 Year example: Year 1 20% Year 2 25% Year 3 33% Year 4 50% Year 5 100%
Orange County Public Schools Terminal Sick Leave Pay Percentage at Retirement An employee receives terminal pay as follows: • 0-3 Years * 35% • 3.01-6 Years 40% • 6.01-9 Years 45% • 9.01-12 50% • 12.01-over 100% *Based on consecutive years of service at the time of retirement. Note: Revision to contract effective 07/01/08: If the person has worked at least five consecutive years prior to retirement, previous time at the district may be counted.
Orange County Public Schools Bencor Special Pay Plan • Tax savings -Eliminate Social Security and Medicare Taxes -Defer Federal Income Taxes
Orange County Public Schools Pre-Tax Retirement Savings Plans • All Pre-Tax/Roth Retirement Savings plans with OCPS are voluntary contributions made by the employee • OCPS offers 12 different 403(B) companies • OCPS offers 11 different 457 companies • Still pay Fica & Medicare taxes • Reduce your federal withholding taxes on Pre-Tax accounts • Pay Taxes upfront on Roth/After Tax accounts
Orange County Public Schools
Orange County Public Schools
Orange County Public Schools
Orange County Public Schools
Orange County Public Schools
Orange County Public Schools
Orange County Public Schools Insurance Benefits • Upon retirement, one opportunity to continue OCPS health insurance • Can continue for your lifetime by paying premiums • Rates are negotiated annually and are effective October through September • 407-317-3245 • https://www.ocps.net/fs/risk/insurance/Pages/InsuranceB enefitsHandbook.aspx • Reminder: Please keep beneficiary information updated!
Orange County Public Schools Questions & Answers If you have questions, please email us directly at retirement.services@ocps.net Thank You Office of Retirement Services Disclaimer : If questions arise as a result of this presentation or the materials provided, Chapter 121, Florida Statutes Chapter 605 Administrative Code and the Internal Revenue Code shall remain the final authorities
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