Yes. Participants enrolled in the ERS are required to contribute a percentage of base pay for each pay period. The contributions vary by plan. For information on each plan please refer to the
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The ERS is the Commission’s primary retirement system for its employees. The ERS was established July 1, 1972, and has been periodically amended. It is a defined benefit plan, qualified in accordance with the IRS Code, Section 401(a). The ERS consists of five Plans: A, B, C, D; and E. Plans A, B and E are for general employees and Plans C and D are for park police.
This means the retirement benefit paid is a guaranteed benefit, based on your salary and your credited service in the ERS. It does not depend on the contributions paid to the ERS, nor the amount of investment income the ERS has earned.
The Commission is required to make contributions to the ERS that are actuarially determined to be required to provide for the benefits under the ERS.
You do not have to pay any income tax on your contributions to the ERS until you receive a benefit from the ERS. This is called an “Employer Pickup” provision. You do not pay taxes on the Commission’s contributions, nor on interest and investment income earned by the ERS, until you receive a benefit.
The ERS is administered by the Board of Trustees in accordance with the Trust Agreement between the Board and the Commission. The Board sets the policy and hires an administrator and staff to manage the day-to-day operations of the ERS. The Board is composed of appointed and elected officials.
The Board of Trustees selects investment managers responsible for investing plan assets. The ERS’ custodian bank holds these investments for separately managed accounts. Various custodian banks hold the assets for the commingled accounts. The ERS staff accounts for all the assets and payments of the ERS. An independent accounting firm audits the ERS every year. The ERS has received the highest possible evaluation for its accounting and internal controls.
Although your benefit does not consider your contributions in the formula, an amount equivalent to your contributions is usually paid back to you, by your monthly annuity benefits, within the first three years. After that, funds used to pay your benefits have been accumulated from the earnings of the ERS and the Commission’s contributions.
Yes. There is a maximum amount of credited service that can be earned and it varies by plan as follows:
Plan A – 40 years
Plan B – 35 years
Plan C – 30 years
Plan D – 32 years
Plan E - 35 years
Income taxes are due as soon as you begin receiving benefits. You may have taxes withheld by the ERS, and then you would file once per year, as most active employees do. You may choose to have no taxes withheld, but you are then required to file estimated taxes quarterly, and may owe the government a penalty if you do not pay sufficient taxes on time. You may be entitled to a monthly tax exclusion on part of your annuity for contributions that were taxed (contributions paid before January 1, 1984). The ERS calculates this amount, and our custodian bank records it on your 1099R Income Tax Statement issued each year.
You can receive additional credited service for your earned, but unused sick leave. For every 176 hours of sick leave you have at retirement, you receive one month of additional credited service. A remainder of at least 120 hours or more qualifies you for an additional month. You may use a maximum of 14 months to qualify for early or normal retirement. However, this credit cannot be used to meet the minimum retirement eligibility requirements for age.
The ERS does not allow loans or partial withdrawals under any circumstances. You can only withdraw contributions upon termination of your employment with the Commission.
If a participant or vested member dies and does not leave a surviving spouse or children eligible for the survivorship benefit, the designated beneficiary shall be entitled to a lump sum cash payment in an amount equal to the sum of the following: (a) 50% of his/her average annual earnings; plus (b) his/her total contributions to the ERS, with interest thereon at a rate of 4.5% per annum.
You can expect to receive your first retirement check within six weeks of your retirement date provided adequate notice was provided to the ERS of your intention to retire.
Approximately two months prior to retirement, you need to contact the ERS to make an appointment for your final retirement counseling session. Usually the appointment is made for the following month. You must also submit a formal letter of retirement to your direct supervisor and sign a Personnel Action Form (PA-2) form for retirement. Please check with your department for specific requirements.
Retirees and survivors who have been receiving an annuity for at least six months may have a cost-of-living adjustment (COLA) applied to their retirement benefit as of each July 1st. It is based on the change in the Consumer Price Index (CPI), as of the preceding December 31st – All Items Annual Average, Urban Index For Major U.S. Cities. The maximum COLA varies by service dates.
No. However, upon the death of a retired member, a $10,000 lump sum death benefit is paid to the designated beneficiary and is taxable.
There is not necessarily a “best” time to retire; however, you may want to consider several things when making your decision to retire:
Cost-of-living adjustments (COLAs) are issued each July 1 to retirees and beneficiaries who have been receiving a payment for at least six months. Therefore, if you retire by January 1 of any given year you are entitled to a COLA July 1 of that same year. If you retire after January 1, you are not eligible until July 1 of the following year.
Payout for Annual Leave, Holiday and Comp Time
If you are considering retiring at the end of the year, you should remember that you may receive annual leave, holiday pay and comp time in the pay period following your last pay period. You may want to consider delaying your retirement to January 1, so that this payoff is made in the following tax year.
There are only five deductions taken from your retirement check: medical (which includes medical, dental, vision and prescription), credit union, legal resources, state tax and federal tax.
Yes. In fact, the ERS strongly encourages all retirees and beneficiaries to sign up for direct deposit.
Effective August 1, 1982, disability retirement benefits were discontinued under the ERS in favor of a comprehensive Commission sponsored Long-Term Disability Insurance Plan. Members receive free credited service until their normal retirement date so long as they qualify for the disability insurance benefits.