SCERA TIMES
Sonoma County Employees’ Retirement Association
FALL 2015
Leaving Your Job Before Retirement Eligibility?
You Have Options
What happens to your SCERA retirement account if you
leave employment before you are eligible to retire? You
will need to make a decision, and SCERA is here to help.
SCERA is notified by the employer whenever an
employee separates from employment. If you are not
retiring, SCERA will send you a letter explaining your
options and asking you to let us know your choice.
Options vary, depending on the amount of accumulated
service credit you have when you terminate your
employment. Remember, you have contributed money to
your SCERA account, and that money, and any interest it
has earned, belongs to you.
Take a refund
Once you terminate employment, you have the option of
taking a refund of all your contributions, plus the interest
those contributions have earned. You can roll the funds
to another tax-qualified retirement account without tax
consequences, you can have the refund paid directly to
you or a combination of both. If the refund is paid to
you, all pre-tax contributions plus interest will be subject
to tax withholding per the Internal Revenue Code. The
refund process takes six to eight weeks from your last
pay date.
Establish reciprocity
Perhaps you are leaving your job in order to take a new
position with another public agency in California. If
so, establishing reciprocity between the two systems,
or linking them together, helps encourage a career in
public service. If you establish reciprocity, and when you
are eligible to retire, you must retire from both systems
on the same day. You will receive a pension from each
system based on the service credit earned in each system.
The general rules for reciprocity are that you must leave
your accumulated contributions on deposit with SCERA,
you must be a member of the new retirement system
within six months of your termination from the SCERA
employer agency, and you cannot be a member of two
retirement systems at the same time. SCERA staff is happy
to help you through this process.
Leave your funds with SCERA and retire at a future date
If you do not meet the eligibility requirements to retire, you
can leave your funds on deposit with SCERA and collect a
lifetime monthly pension at some time in the future. But just
how long will you have to wait?
That future “retirement eligible” date depends on a couple
of factors. The first factor is whether you have accumulated
five years of retirement service before leaving employment.
If you don’t have five years of retirement service, the date
you will be eligible to begin collecting a retirement benefit is
age 70.
If you do have at least five years of service credit, you may
be able to collect your benefit sooner. Your first eligible
retirement date is the day you would have been able to
retire if you had remained a full-time employee. So you
need to know the retirement eligibility rules for your Plan.
Continued on page 2
Continued from page 1
Plan A General Members
SCERA Times
SCERA Board of Retirement
Brian Williams, Chair
Neil Baker
Michael Gossman
Greg Jahn
John Pels
Christel Querijero
David Rabbitt
David Sundstrom
Joe Tambe
Bob Williamson
Board of Retirement Meetings
Meetings are generally held at 8:30 a.m.
on the fourth Thursday of the month in
the SCERA Board Room.
Executive Staff
Julie Wyne
Administrator
Kelly Jenkins
Assistant Administrator
Editorial Staff
Elizabeth Anderson
Benefits Coordinator
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Complete 10 years of service and reach age 50, OR
Complete 30 years of service regardless of age, OR
Reach age 70 regardless of the amount of service credit.
Plan A Safety Members
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Complete 10 years of service and reach age 50, OR
Complete 20 years of service regardless of age, OR
Reach age 70 regardless of the amount of service credit.
Plan B General Members
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Complete 5 years of service and reach age 52, OR
Reach age 70 regardless of the amount of service credit.
Plan B Safety Members
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Complete 5 years of service and reach age 50, OR
Reach age 70 regardless of the amount of service credit.
When SCERA sends you the letter about your options, it will include
your first eligible retirement date, and an estimate of the lifetime
monthly benefit you might be eligible to begin receiving on that date.
What happens if you come back to work for a SCERA employer
in a SCERA-covered position?
As long as you left your funds on deposit with SCERA, you will start
earning service credit again, which will add to your future retirement
benefit.
For more information on this topic, visit the Retirement Planning
pages of www.scretire.org or contact SCERA.
The SCERA Times is published for members of the Sonoma County Employees’ Retirement Association
Comments and suggestions should be directed to:
[email protected]
Or contact SCERA at:
433 Aviation Blvd., Suite 100
Santa Rosa, CA 95403
(707) 565-8100
[email protected]
www.scretire.org
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SCERA welcomes Wendy Serrano to the Member Services team.
Wendy comes to SCERA from a career with JDS Uniphase
Corporation, where she managed benefits for employees
throughout the United States. Welcome Wendy!
I’m Retired. Can I Go Back to Work?
A SCERA retiree may work for a SCERA-participating
employer without affecting your monthly retirement
benefit as long as you comply with the requirements
of California retirement law and federal tax law. These
rules have changed over the past few years, so it’s
time to take a fresh look, because the consequences of
breaking these rules are severe.
180-day break in service
General members must have a 180-day break in service
following retirement before returning to work for
a SCERA employer. A General member can return
to work before the end of the 180 days only if the
employer such as a temp agency. If the 180-day break
is not satisfied, it is a violation of the statutes governing
SCERA. Your retirement benefits already paid must be
repaid, and your benefits will be suspended until there is a
180-day break in service.
60-day break in service
The 60-day break in service has to do with the age at
which you retire, and cannot be waived. There are two
categories for the 60-day break.
The first applies to anyone who retires before normal
retirement age (58 for General members and 50 for Safety
members). For those members,
SCERA’s plan regulations
require a 60-day break following
retirement, or your retirement
benefits already paid must be repaid and your benefits will be suspended until there is a 60-day
break in service or you reach
normal retirement age.
The second category is based on federal and state tax requirements, and applies to anyone retiring prior to age 59­
1/2. If the 60-day break is not satisfied, the retiree’s retirement benefit may be subject to substantial tax penalties until you
turn age 59-1/2, or until there is a
60-day break in service.
appointment is necessary to prevent work stoppage
in an emergency and is approved by the Board of
Supervisors in a public meeting (not on the consent
calendar).
Public safety officers (the definition of “Public Safety
Officer” is pursuant to Government Code section 3301
and may differ from SCERA’s Safety classification)
and firefighters are generally exempt from the 180day separation requirement if they return to work in a
public safety officer or firefighter position.
The 180-day restriction applies to working in any
capacity — as an independent contractor, consultant,
contract employee or working through a third-party
960-hour limit
After meeting the break-in-service requirements, SCERA
retirees may continue to receive their retirement benefit
during extra help employment with a SCERA employer.
However, such employment is limited to 960 hours during
each fiscal year (July 1 to June 30).
Working for non-SCERA employers
After your retirement you may work in any occupation or
employment for an employer other than one of SCERA’s
participating employers, and there is no impact on your
SCERA benefit. The only exception is that you may not
work for another agency (such as a temp agency) and be
assigned to work for a SCERA employer.
For more information, visit www.scretire.org/After-You-Retire/Working-After-Retirement/
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The Lie that Keeps You Safe
Security is important—whether it’s your home, your money, or your identity you are protecting. But what happens
when you have set up a security system that even YOU can’t figure out? It’s like putting something away in a safe place
and then forgetting where you put it.
At SCERA, we’ve helped people who have forgotten the security system they established for access to MySCERA. We
can help to a certain extent, but when it comes to helping you figure out the answers to your challenge questions, there’s
only so much we can do.
Here’s a suggestion: For your challenge questions, use the same answer that only you will know, for every question.
For instance if the question is “What high school did you graduate from?” don’t answer with the true answer, because
that is information someone can look up on the internet. But if your answer to every question is “brown cat” no one but
you will know what that is. And it will be easier to remember just that one answer.
In an article about security on Credit.com, experts offer some advice about answering those questions.
“So what should you do? Lie. You heard me—lie through your teeth. Fabricate, prevaricate, dissemble and say things that resemble nothing that might be construed as being even the slightest bit truthful regarding the
particulars of your life. Lie like you were in a nose-growing contest with Pinocchio.
“Mark Twain once famously said, ‘If you tell the truth, you don’t have to remember anything.’ Wise advice, but he
didn’t know anything about hackers or online security questions. When creating answers to your security questions,
it’s all about consistency — not fact.” http://blog.credit.com/2014/09/keep-you-safe-from-hackers-94991/
Can You Hear Me Now?
Retirees and their covered dependents that are enrolled in VSP
through SCERA are eligible to participate in the TruHearing®
Hearing Aid Discount Program.
TruHearing is offering VSP members and their covered dependents
free access to the TruHearing MemberPlus® Program that provides
discounts on some of the most popular digital hearing aids on the
market.
The TruHearing Member Plus program includes:
• Savings of up to 50% on hearing aids
• Yearly comprehensive hearing exams for $75
• Three visits with a hearing professional after purchase
• Manufacturer’s coverage for a one-time loss or damage for
three years (replacement fee paid to manufacturer)
• Three-year repair warranty
• 48 batteries per purchased hearing aid
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VSP members may also add up to four guest
members (parents, grandparents, siblings) for a
VSP-exclusive rate of $71 each.
Learn more about this VSP member offer at
vsp.truhearing.com or call TruHearing at
877-396-7194. If you are not currently enrolled in
VSP, you can enroll during the open enrollment
period for an effective date of June 1. Look for a
mailing to come directly from VSP in the spring.
Retiree Survivor’s Checklist
Dealing with the death of a loved one may leave families overwhelmed and confused by
all the tasks to be completed. Upon the death of a SCERA retired member certain benefits
may be payable to a spouse, domestic partner, or designated beneficiaries. Here is a simple
checklist your loved ones can use to assist them during this difficult time.
P Notify SCERA of the Death
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Please contact SCERA at (707) 565-8120 to report the retired member’s death as
soon as possible.
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SCERA will ask you for the following information:
¾ Name of the retiree
¾ Your name and relationship to the retiree
¾ Date of death
P Complete and Submit Required Documents
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SCERA may require certain documents depending on the benefit option chosen at the time of retirement and
the designated beneficiary(ies). In general, this may include:
¾ An original certified copy of the Death Certificate
¾ A copy of the Marriage or Domestic Partner Certificate
¾ A copy of the beneficiary’s Social Security Card
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Upon notification of the retired member’s death, SCERA will determine what benefits, if any, are payable to
the retiree’s beneficiary, and will send the appropriate forms for completion.
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Return the completed forms and documents to SCERA.
Benefit Payment(s) if Applicable
P Receive
The retired member’s benefits ends on the day of the death. Any benefit payable would be effective the
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following day, and paid retroactively after all required documents are received.
Board to Consider Actuarial Assumptions
On November 12th the SCERA Board of Retirement will consider
results from the 2015 Triennial Experience Study presented by
its actuary, Segal Consulting. This study is performed every
three years, with the last study presented in 2012, and looks back
over three years’ worth of SCERA member/beneficiary data,
comparing actual experience with the assumptions previously set
by the SCERA Board. The study provides the SCERA Board with
information necessary to decide whether to change any of the
assumptions the actuary uses to value the liabilities of the plan.
Those assumptions include:
• Inflation
• Investment return
• Salary increases – including promotion and across the board pay increases.
• Demographic – including mortality, retirement rates, and withdrawal rates.
The decisions made by the Board at this meeting will be applied to the December 31, 2015 actuarial valuation.
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Sonoma County Employees’ Retirement Association
Retirement Planning
EARLY/MID CAREER 1 HOUR
LATE CAREER 2 HOURS
The Path to Retirement
Planning to Retire
More than 5 years from retirement
Within 5 years of retirement
TOPICS COVERED
TOPICS COVERED
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Understanding your plan
SCERA benefits
Membership milestones
Calculating your benefit
Leaving before retirement
Reciprocity
Divorce/Domestic Partner dissolution
How to estimate your own benefit
Tools and resources
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Understanding your plan
Defined benefit vs. defined contribution
Eligibility to retire
Calculating your benefit
Benefit payment options
What will your beneficiary get?
Reciprocity
Ways to increase your benefit
How to estimate your own benefit
How to apply for retirement
Your first check
Can you go back to work?
What about Social Security?
Tools and resources
Enroll through www.MySCERA.org or by calling 565-8100
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Important Dates
Retiree Pay Dates
October 30, 2015
November 30, 2015
December 31, 2015
January 29, 2016
February 29, 2016
March 31, 2016
April 29, 2016
May 31, 2016
Holiday Schedule
November 11: Veteran’s Day
November 26 & 27: Thanksgiving
Holiday
December 25: Christmas Day
January 1: New Year’s Day
January 18: Martin Luther King Day
February 12: Lincoln’s Birthday
February 15: Presidents’ Day
May 30: Memorial Day
Our office will be closed on these holidays,
but we’re still available at www.scretire.
org when you need information on our
programs and services. Our personalized,
secure website www.MySCERA.org lets
you view your account information and
conduct much of your SCERA business
online at any time.
This newsletter was prepared by SCERA
staff to help members understand issues
surrounding many aspects of their
retirement benefits. Every effort has
been made to ensure the accuracy of the
information provided. However, you
should not rely solely on the information
contained in the newsletter. If there is any
discrepancy between information in this
newsletter and legal requirements under
State or Federal law, the law will govern.
re • tire
Definition
v: To begin receiving a monthly retirement allowance
from SCERA.
R
The dictionary has many other definitions for the word
Retire. They include “to withdraw, or go away or apart,
to a place of privacy, shelter, or seclusion; to go to bed; to
withdraw from office; business, or active life.” In French, retiré
is a dance movement in which the dancer brings one foot to
the knee of the supporting leg and then returns it to the fifth
position.
At SCERA, to retire means to begin receiving your monthly
benefit allowance, once you have reached retirement eligibility.
If you leave employment before reaching retirement eligibility
and leave your accumulated contributions on deposit, you may
think of yourself as retired. But according to SCERA, you are
a deferred member until you reach that date when you begin
receiving your monthly retirement check.
Investment Update
SCERA’s investment portfolio sagged over the most recent quarter
as stocks declined amid concerns regarding global economic growth,
particularly in China, the “engine” for global growth over recent
years. On the other hand, the Plan’s returns over longer periods are in
line with long-term expectations, which are more relevant, given the
long-term nature of the system.
Performance over intermediate periods are quite robust, reflecting the
recovery after the Great Recession, with annualized returns of 9.0%
and 9.4% over 3 and 5 years, respectively. Annualized returns over
10 and 20 years are 6.0% and 7.5%, respectively, reflecting both the
peaks and troughs of complete market cycles.
The Plan’s portfolio is significantly impacted by stock market
movements, as nearly two-thirds of the Plan’s assets are invested in
stocks from around the world. This allocation is appropriate given
the long-term nature of the Plan, because although their returns are
more variable than those of the other major asset categories, stocks
have consistently delivered higher returns over the long term. Other
assets, such as bonds, real estate and farmland, are added in smaller
proportions to dampen the irregularity of total portfolio returns over
shorter periods.
Continued on page 8
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Investment Update (Continued)
While domestic and non-US stocks were down over the quarter and year-to-date, other assets delivered positive returns,
which decreased, as intended, the variability of the Plan’s total return. SCERA’s bond portfolio delivered positive, though
below average, returns for the quarter and year-to-date, while the Plan’s real asset portfolio continued to deliver above
average returns over these periods. The real asset portfolio currently includes real estate and farmland and will soon
include infrastructure. In the interest of further diversifying the Plan’s portfolio, the Board decided earlier this year to
expand the real assets portfolio to include a 3% allocation to infrastructure, making real assets 18% of total Plan assets.
Examples of infrastructure investments include toll roads, ports, pipelines and power generation. The search for an
infrastructure manager is underway and a selection is anticipated by the end of the year with funding expected over the
following one to two years.
Through the ups and downs of the market SCERA consistently maintains its long-term investment policy allocation, as
this is the principle driver of the Plan’s total return over time. As a result of the Plan’s well-diversified policy allocation
and solid long-term performance, as well as contributions from employers and members, the Plan’s portfolio has grown to
a market value of $2.3 billion as of September 30.
Sonoma County Employees’ Retirement Association
SUMMARY OF PERFORMANCE (Gross-of-Fees) As of September 30, 2015
3rd Qtr
YTD
1 Yr
3 Yrs
5 Yrs
10 Yrs
Plan Return (Gross-of-Fees)
-5.0%
-1.2%
0.5%
9.0%
9.4%
6.0%
Policy Benchmark
-5.0%
-2.4%
-0.7%
7.7%
8.5%
5.6%
Difference
0.0%
1.2%
1.2%
1.3%
0.9%
0.4%
Assumed Rate of Return 7.50%
20 Yrs
7.5%
6.9%
0.6%