Unclassified Employees Retirement System

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 UNCLASSIFIED EMPLOYEES RETIREMENT SYSTEM

As an Unclassified employee, one of the first decisions that you will have to make is to decide which of the City’s two Unclassified pension plan options you would like to join. The two plans are:

  • the City’s Unclassified Employees and Elected Officials Retirement System, which is a defined benefit plan;
  • Defined Contribution Retirement Plan,which may be selected by joining one of our plan providers 401(a)Qualified Plans. Currently, our two plan providers are ICMA and Nationwide.

The Unclassified Employees and ElectedOfficials Retirement Systemprovides a benefit at age 60, after tenyears of vested service. Your pension benefit will be equal to your finalaverage monthly earnings (FAME), times your years of vested service, times3%, up to a maximum of 80%. There will be a non-compounding 11/2% cost of living increase each October 1st. Your FAME is defined as 1/12 of yourannual earnings during your final 12 months of employment. The base salaryincludes your base pay and longevity pay; it does not include additionalcompensation such as Section 5 or overtime.

Your contributionto this systemwill be 10% of your base salary. If you leave the City prior to or evenafter being vested, you may withdraw all of your pension contributions, plus your contributions times 10% for each year of service up to a maximumof 100%, plus interest on your contribution.

For example, if you were hired atage 45 and left at age 56, had contributed $38,000 into the pensionsystem during your eleven years of employment, and your three highestyears’ base salary earnings were $44,800, $47,900 and $52,200 your optionswill be:

Stay vested and receive a pensionbenefit at age 60. Your monthly pension benefit would be:

$44,800 + $47,900 + $52,200 = $144,900 ?3 = $48,300 (average annual salary)

$48,300 x 11 years x 3% = $15,939 ? 12 = $1,328.28.

OR

Withdraw your contributions and receiveno further pension benefits. Your withdrawal amount would be $38,000+($38,000 x 100%) {10% peryear x 11 years to a maximum of 100%} = $76,000 + 3% per year intereston your $38,000 contribution.

The Defined Contribution RetirementSystemwill not provide a specific retirement amount. You will beeligible to receive distribution at age 55 and upon your separatingfrom the City. You will not need a minimum number of years of participation.

Upon separating from the City, you willbe eligible to choose from the following:

  • Receive distribution at age 55 withno penalty.
  • Roll over to another qualified plan without penalty or tax consequences regardless of age.
  • Receive “non-lifelong” annuity distributionprior to age 55 with 10% penalty.
  • Receive lifelong annuity distributionat any age with no penalty.
  • Let you account grow with no furthercontribution until you choose one of the above options.

Your contributionto this plan willbe 10% of your base salary and the City will match your contribution.The 20% will be forwarded each pay period to the plan provider you havechosen (ICMA or Nationwide) and invested in the funds you have chosenon your ICMA or Nationwide enrollment form. You will be able to changeyour fund allocations in the future in accordance with your plan providersguidelines.

Additionally the City will pay the costof employee disability retirement insurance equal to 2/3 of an employee’sFAME. The retirement benefit is the value of an annual annuity thatcan be purchased with the account value.

The employee may direct the investmentsunder each plan manager’s portfolio. Any cost of administration andall gains or losses from investment of the 401A are the employee’s.

Your final benefit will depend on: yourbalance as a result of the amount you and the City have contributedand the rate of growth your chosen funds have returned; and, the methodof distribution you will choose. You will be able to convert your balanceinto an annuity, receive a chosen determined amount at predeterminedperiods, or withdraw the total amount in one lump sum.

 ICMA-RC – 1-800-669-7400

 Nationwide – 1-877-677-3678

For more detailed information concerningpension benefits, contact the Pension Office, 1st Floor of City Hall,Finance Department, phone 673-7437. For more information concerningthe 401A Plan Contact the Human Resources Department, 3rd Floor of CityHall, phone 673-7520.

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