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Membership
and Contributions |
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1) |
Am I required to be
a member of the ERS?
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2) |
How much must I
contribute to the ERS?
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3) |
How much does
my employer contribute to the ERS?
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4) |
What happens to my
contributions?
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5) |
Can I borrow from or
withdraw my contributions?
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Service
Credit |
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6) |
How do I earn service
credit?
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7) |
Can I buy additional
service towards my retirement?
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Benefits |
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8) |
What are the
eligibility requirements and benefits for a service retirement?
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9) |
Am I entitled to
any other benefits after I retire?
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10) |
What if I become
disabled?
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11) |
What kind of benefits
am I entitled to if I become disabled?
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12) |
What kind of
benefit will my beneficiary receive if I die in service?
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13) |
Am I entitled to
any benefits if I terminate my employment?
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14) |
Can I borrow from the ERS
funds?
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1) |
Am I required to be a member of the ERS?
Yes. If you are a full-time, part-time (50% FTE or more), permanent
or temporary (more than 3 months) employee of the State or County, it is
mandatory that you become a member of the ERS immediately upon your
employment. It is not an
optional matter, except for elected officers, as the law requires your
membership as a condition of your employment.
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2) |
How
much must I contribute to the ERS?
The
law requires that you contribute via payroll deductions, 7.8% of your
monthly gross salary. If you
are a police officer, firefighter, corrections officer, investigator of
the Department of the Prosecuting Attorney or Attorney General, a
narcotics enforcement investigator, or an investigative staff investigator
with the Department of Public Safety, you must contribute an additional 4.4%
or a total of 12.2% of your monthly gross salary to the ERS.
In
addition, you are required to contribute to Social Security and Medicare
at a rate determined by Congress. Police
officers and firefighters, however, are excluded from Social Security
participation because of an agreement with the federal government.
Police officers and firefighters hired after March 31, 1986, must
contribute to Medicare.
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3) |
How
much does my employer contribute to the ERS?
Your
employer’s contributions to the ERS are actuarially determined each year
and vary in amount. The
ERS’ actuary annually evaluates the ERS’ membership profile and
financial data to determine the amount the employers must contribute.
Your
employer’s contributions to Social Security are on a matching basis.
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4) |
What happens to my contributions?
Your contributions are credited to
your ERS account and earn 4 ½% interest compounded annually as required
by law. You are sent an
annual statement of your account as of June 30 every year.
The statement is usually sent to your employer in October for
distribution
These
contributions are tax deferred until you retire or terminate employment
and request a refund of your contributions.
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5) |
Can I borrow
from or withdraw my contributions?
No. The law prohibits
personal loans even if it is your own contributions.
Your contributions may be withdrawn only upon termination of your employment or at retirement providing certain
requirements
are met.
In
certain situations of economic hardship, a one-time withdrawal of your
contributions maybe approved subject to certain provisions and
limitations.
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6) |
How do I earn
service credit?
The
length of time you work for the State or County government while a member
of the ERS determines when you will be eligible for retirement and also
affects how much your retirement benefits will be.
Service is credited on a monthly basis and if you work for 15 or
more days in any calendar month, except February when you must work 14 or
more days, you will receive one month of service credit.
Also,
if you have 60 or more days of unused sick leave when you retire, you will
receive an additional month of service credit for every 20 days of unused
sick leave. Any balance of 10 or
more days will provide an additional month of service credit.
Service credit
provided by unused sick leave is used to increase the amount of
your retirement benefit but cannot be used to determine your
eligibility for retirement.
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7) |
Can I buy additional
service towards my retirement?
You
can acquire credit for a number of specific
types of service. Generally,
this is previous service rendered as an employee of the State or County
that you are currently not credited with, service with an agency which has
since been transferred to the State, or leaves of absence with or without
pay while on professional improvement or industrial injury where
insufficient retirement contributions were made.
Maternity
leaves prior to July 1, 1973, and active military service are also
purchasable, subject to certain provisions and limitations.
You
must file a claim with the ERS. After ERS certifies the service, you
will be provided the cost and payment options to acquire the service.
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8) |
What are the
eligibility requirements and benefits for a service retirement?
Any
age with 25 years of credited service excluding sick leave OR age 55 with a minimum of 5 years of credited service.
Your
benefit will consist of a pension for life based on the formula:
2% X years of service X
average
final compensation (AFC) or salary
Example:
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Member
with 25 years of service and a monthly
AFC of $2,500
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2% X 25 years = 50% x
$2,500 = $1,250
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Member will receive a
monthly pension of $1,250
The
actual amount of your lifetime pension depends on your AFC, your credited
service when you retire and the retirement option you select.
Your
pension is reduced if you are under age 55.
Age reduction factors:
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5%
for each year below age 55
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4%
for each year below age 50
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3%
for each year below age 45
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2%
for each year below age 40
AFC
is the average of your three highest years of earnings excluding any lump
sum vacation pay if you began employment on January 1, 1971, or
thereafter. If your
employment began before January 1, 1971, your AFC will be the average of
your three highest years or your five highest years of earnings including any lump sum vacation
pay, whichever is greater.
Police
officers, firefighters, corrections officers, investigators of the
Department of the Prosecuting Attorney and Attorney General, narcotics
enforcement investigators, investigative staff investigators of the
Department of Public Safety, judges, elected officials, chief clerk and
assistant clerk and sergeant-of-arms and assistant sergeant-of-arms of
both houses of the Legislature, have a different benefit formula subject
to certain provisions and limitations.
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9) |
Am I entitled to any
other benefits after I retire?
Yes. One is the post retirement allowance, which is an automatic
annual increase of 2 ½% of your basic pension beginning the year after
your retirement on July 1 and on each July 1 thereafter. This allowance is designed to help offset the rising cost of
living and it has no ceiling.
Another
is the Health Fund benefits, primarily the medical, adult dental, vision,
prescription and life insurance plans, which are provided at no premium
cost if you retire with at least 10 years of credited service and you were
hired prior to June 30, 1996.
Coverage can also be extended to your spouse and dependent children
under age 19.
Health
Fund benefits are subject to change.
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10) |
What if I become disabled?
You
can apply for ordinary or service-connected disability retirement.
If you are incapacitated and unable to file your own application
for disability benefits, the person appointed by the family court as
guardian, can file on your
behalf.
To
qualify for ordinary disability retirement, you must be in service or on
an approved leave of absence without pay at the time an application is
filed; you must have at least 10 years of credited service excluding sick
leave credit; and the ERS Medical Board must find that you are permanently
disabled due to natural causes.
To
qualify for service-connected disability retirement, the ERS Medical Board
must find that you are permanently disabled for your job due to an
accident that happened while you were working that was not due to your
willful negligence. Also,
your employer must file an accident report with the Department of Labor
and Industrial Relations and provide the ERS with a copy.
An application for service-connected disability retirement must be
filed within two years of the accident or the date workers’ compensation
benefits stop.
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11) |
What kind of
benefits am I entitled to if I become disabled?
If
you are determined to be permanently disabled due to natural causes and
you have at least 10 years of credited service, you are entitled to an
ordinary disability pension for life of 1 ¾% for each full year of
credited service multiplied by your average final compensation (AFC) or
salary. The minimum benefit
is 30% of your AFC.
Regardless
of service, if you are permanently disabled for all gainful employment as
a result of a service-connected accident, you are entitled to a refund of
your accumulated contributions and a pension of 50% of your AFC for life.
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12) |
What
kind of benefit will my beneficiary receive if I die in service?
If your
death is due to natural causes and you are not on leave without pay, your
beneficiary will receive a payment made up of your contributions and
interest plus one-half to one year’s salary depending on your length of
service. In lieu of this lump
sum payment, your beneficiary may elect a lifetime pension if you were
eligible to retire when your death occurred.
If you were not eligible to retire but had at least 10 years of
credited service, your beneficiary may elect a reduced lifetime allowance.
These benefits are available only if one beneficiary is designated.
If your
death is due to a job-related accident, your spouse will receive a monthly
pension of one-half of your average salary until remarriage.
The
payment of in-service death benefits is governed by the designation of
beneficiary form you complete when you are first employed.
Since any change in marital status or the death of your beneficiary
nullifies this designation, it is crucial that you file a new
designation whenever such a change occurs.
Failure to do so may result in death benefits being paid to your
estate instead of to your beneficiary, as well as probate and additional
legal fees.
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13) |
Am I entitled to any benefits if I
terminate my employment?
If
you are credited with less than 5 years of service at the time of your
termination and you do not return to service within 4 calendar years, your
contributions plus interest will be refunded to you, your service credit
for this period will be forfeited, and you will not qualify for any future
retirement benefit.
However,
if you are credited with 5 or more years of service at the time of your
termination, you are considered vested and can apply for a retirement
benefit at age 55 if you leave your contributions in the ERS.
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14) |
Can I borrow from the ERS?
ERS
has a program under its investment portfolio known as the ERS Member Home
Loan Program. Under this
program, mortgage loans are available to qualified members for the purpose
of acquiring or constructing their principal place of residence.
These loans are
handled by many local banks, savings and loan associations and mortgage
finance companies. If
interested, contact these institutions.
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