Agenda - Council Work Session - 05/23/2017

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Phased Retirement Option - Public Employees Retirement Association o... http://www.mnpera.org/index.asp?Type=B_BASIC&SEC={83D786D0-... Back to Web Site Public Employees Retirement Association of Minnesota Administering and Promoting Sustainable Retirement Plans Phased Retirement Option Legislation passed in 2009 allows Coordinated and Basic members age 62 and over the option to begin receiving a PERA pension without formally resigning. However, the decision to make Phased Retirement available to members is strictly up to the employer, and participants must agree to substantially reduce the hours they work. In order to qualify for Phased Retirement, a number of requirements must be met. Requirements First, the members employer or another PERA-covered employer has sole discretion on offering the phased retirement option to an employee. The initial offer must not exceed one year, but it can be renewed for periods of up to a year for a total of five years. An employer is under no obligation to renew a phased retirement agreement. To qualify, a member must: • Meet all other requirements for a pension from PERA; • Be at least 62 years of age; • Have worked a minimum of 1,044 hours (half time) in each of the five years immediately prior to beginning phased retirement; and • Not be eligible for the State Employee Postretirement Option program (for PERA members who are state employees). In addition, the member must also agree to a reduction of hours worked of at least 25 percent, not to exceed 1,044 hours per year --essentially half time or less. To participate, the member and employer must file a Phased Retirement Agreement form with PERA. The Benefit If mutually agreeable between the member and his or her employer, the member may begin collecting a PERA benefit without the normally required 30-day break in service and prohibition against having any agreement to return to work with the current employer. Participants are also exempt from PERA's earnings limits that apply prior to full Social Security retirement age. In addition, neither the member nor the employer are required to make any further contributions to PERA. Since the member is now receiving a pension, he or she will cease to earn service credits and there will be no future adjustment to the high -five average salary. Upon the completion of the phased retirement, a member must meet the requirements normally applied to someone who is terminating public service, including the prohibition of any future employment agreement, and the minimum 30-day break in public service. If the retiree later returns to PERA-covered employment, the earnings limits would apply. A current retiree cannot participate in the program. The option is set to sunset June 30, 2019. Links Phased Retirement Brochure 1 of 6 5/17/17, 4:23 PM