2023-02-22 CC Packet - REVISED - Laserfiche WebLink

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administrative fees, medicare and social security ADMINISTRATIVE FEES PERA charges two plan administration fees: • Two percent of the employer contributions to DCP (2 cents for each $1.00 contributed by the employer), and 2 0.25 percent of the value of the participant's shares (this asset -based annual charge amounts to $2.50 for each $1,000 of the participant's account value). MEDICARE DCP members elected or appointed after March 31, 1986, are required to participate in Medicare. other considerations DISCONTINUING DCP PARTICIPATION Depending on your position, you may or may not be able to discontinue participation in the DCP. See the table below: Plan Discontinue DCP? Elected officials' Yes Physicians No City Managers' Yes Ambulance emergency services Yes Rescue squad emergency services No Certain volunteer firefighters No Please note, discontinuing participation in the DCP plan does not entitle an active public employee to a distri- bution, unless you are 65 or older and have a balance of $5,000 or more. ' Elected officials who discontinue DCP participation can choose to rein- state coverage at any time. ' City managers who discontinue DCP participation have the option to choose no PERA coverage, or with approval of the city council, to partici- pate in the General Plan prospectively. SOCIAL SECURITY With limited exceptions, members are excluded from par- ticipating in Social Security. For some positions, however, a Section 218 agreement between the federal government and either PERA or a single governmental unit may require Social Security participation. For details, contact your governmental unit's human resources office or PERA. DCP members who do not have Social Security taxes withheld from their salary may have future Social Security benefits reduced (if eligible for such benefits) because of the DCP lump -sum benefit they receive from PERA. For details, contact the Social Security Administration and request information on the Government Pension Offset and the Windfall Elimination provision. GENERAL PLAN — AN ALTERNATIVE OPTION Some individuals who are eligible for the DCP may instead choose to participate in PERA's General Plan. Eligible par- ticipants include elected officials in non -governing body positions, physicians, and city managers. The individual's annual salary must exceed $5,100. The General Plan is a defined benefit retirement plan and a 401(a) tax -qualified plan. As a General Plan member, you and your employer contribute a percentage of your gross salary to PERA. While contributions and invest- ment earnings are important, they do not determine the value of your individual benefit. Instead, the General Plan is designed to provide you a lifetime benefit based on a formula using your age at retirement, service, and salary. If you are vested in the General Plan, you have enough service to qualify for a lifetime monthly benefit. It can be distributed in the form of a single -life option, or one of four survivor options. A survivor option, while reduc- ing your monthly benefit, provides continuing benefits to your survivor upon your death. The minimum retirement age for the General Plan is 55. Another option is a lump -sum refund of your member contributions plus interest. By taking a refund, you forfeit 7