Davis School District
Retirement Benefits
Orientation
Tier 2 Retirement Benefits
Welcome Employees – Tier 2
 If you were newly hired into a retirement eligible position at any
Utah Retirement Systems (URS) employer on or after July 1, 2011
you are on Tier 2.
 If you were hired into a retirement eligible position before July 1, 2011
your are on Tier 1 and will want to view that presentation.
Utah Retirement Systems
Choose Your Path
Hybrid Plan
Two Parts: 10% Retirement Package
Pension
 Guaranteed lifetime benefit
 Basic benefit is based on a formula:*
 Years of Service x 1.5% x Average of 5
highest years) = Basic Annual Benefit
 Minimum age and service requirements*
 You are fully vested after 4 years of eligible
employment
+
401(k)
 10% of salary will be split between the
Pension and the 401(k)
 The “Contribution Rate” goes to the pension
 The difference between the contribution
rate and the 10% employer contribution
goes to the 401(k)
 4 year vesting = Manage investment
options after 4 years
 During the 4 year vesting period funds will be
invested in the Medium Horizon Fund.
*See “How Much Will My Pension Pay?” and “When
Can I Retire?” for more information on the Pension.
Hybrid Contribution Rates
2013-2014
Employer Contribution
10%
Pension Rate
=
401(k) Contribution
8.41%
=
1.59%
Hybrid Contribution Rates
Example 1
Example 2
Employer Contribution
10%
Employer Contribution
10%
Pension Rate
=
401(k) Contribution
8.1%
=
1.9%
Pension Rate
=
401(k) Contribution
11%
=
0%
Possible Employee Contribution:
If the contribution rate ever exceeds 10%,
the employee pays the difference.
Employee Contribution = 1.0%
How Much Will My Pension Pay?
Pension Benefit Calculation
Example
Number of Eligible Years of Service
X
1.5%
X
Average Salary
(average of 5 highest years salary)
=
Basic Annual Benefit
/12
=
Basic Monthly Benefit
35 Years
X
1.5% (=52.5%)
X
$40,000
(average of 5 highest years salary)
=
$21,000/year
/12
=
$1,750/month
When Can I Retire?
 Your pension eligibility depends on your
age and years of service. Here are the
minimum qualifications:
 65 with at least 4 years of service
 62 with at least 10 years of service*
 60 with at least 20 years of service*
 Any age with at least 30 years of service*
(only with service purchase)
 Any age with at least 35 years of service
*There is an early age reduction if you retire under age 65
with fewer than 35 years of service
Early Age Reduction
If you have fewer than 35
years of service credit and
retire before age 65, your
monthly benefit will be
reduced by approximately
7% for each year between
the ages of 60 and 63 and
approximately 9% for each
year between the ages of
64 and 65.
Defined Contribution Plan
 10% of salary will be contributed to the 401(k) each month
 4 year vesting period
 You can choose the investment options after 4 years
 During the 4 year vesting period funds will be invested in the Medium
Horizon Fund.
 Amount of Money Received at Retirement is Based On:
 Contributions
 Investment Performance
 Payout Period
Which Plan is Right for You?
Hybrid
 Guaranteed monthly income for life (Pension
payment)
 Lower risk
 Professional investment managers
 Cost of living adjustment (COLA)
 Possible 401(k) contribution if pension rate is
below 10%
 Required contribution if rate ever exceeds
10%
 Guaranteed monthly payout options for
spouse
Defined Contribution
 Not guaranteed - Your income is based on
investment performance
 Higher risk
 You manage your investments
 No COLA
 Full 10% of your salary will be contributed to
your 401(k)
 You will never be required to contribute to the
plan
 Pass on 401(k) balance to spouse or other
beneficiary(ies)
All 401(k) investments will default to the
Medium Horizon Plan for the first 4 years.
After the 4 year vesting period you will be able
to choose where your contributions are invested.
Please see the URS “Investment Options” brochure
for more information on your different options.
Choosing Your Path
 Consider the advantages and disadvantages of each plan
 Choose your plan at www.urs.org
 You have one year from your hire date to decide which
plan you want
 You can change your mind anytime during the first year
 After one year you cannot change plans!
If you do not choose a plan within the first year,
your plan will default to the:
HYBRID PLAN!
Employee Contributions (Voluntary)
1  401(k)
2  457
3  403(b) – Annuities
4  Traditional IRA
5  Roth IRA
You can contribute to none, one or more. The choice is yours.
Which Investment Plan
Should I Choose?
Consider your tax bracket before and after retirement:
 Pre-tax Deductions
 Lower your taxable income now
•
•
•
•
401(k)
457
403(b)
Traditional IRA
 Post-tax Deductions
 Pay your taxes now
• Roth IRA (Tax free growth)
Authorized Annuity Companies
For a complete listing of the Annuity companies and representatives
that are authorized to provide 403(b)’s and other investment
options to Davis School District employees, please contact the
Payroll Department at 801-402-5282.
www.urs.org
If you have questions about the
URS website or online enrollment,
call 801-366-7750
The URS website has a lot of
information available on the two
Tier 2 plan options to help you
choose the best plan for YOU.
Your Account Number will be included
with your URS Enrollment Packet ,
which URS will mail to your home.
Once you have made a plan selection you can come to this screen to change your selection
ANYTIME prior to the deadline, which will be reflected above in the (DATE) field.
During your first year you will be defaulted to the Hybrid Plan for the full year –
even if you have selected the Defined Contribution Plan.
Once your deadline has passed URS will get you permanently set up in the plan of your choice.
Questions?
Call Payroll: (801) 402-5282
 Personal Leave and Sick Leave
 Twyla: (801) 402-5326
 Extended Leave and Catastrophic Leave
 Marilyn: (801) 402-5327
 Flexible Spending
 Elizabeth: (801) 402-5236
 Retirement and 401(k)
 Holly: (801) 402-5176
 Cindy: (801) 402-5324
Thank You!
If you would like step-by-step
instructions for accessing
MyDSD Payroll Management
(where you can enter your
Direct Deposit and W-4 information,
make changes to Payroll and Personal
Profile information, and view/print
your pay stubs and W-2’s),
please see the
MyDSD Payroll Management
Orientation.