Retirement Planning

As you near retirement, you'll have questions and need information.

The SEBAC 2011 Agreement increased the age of normal retirement as shown below:
 
Normal Retirement Age
Years of Service Up to 7/1/2022 Starting 7/1/2022
25 or more 60 63
Less than 25 62 65

Employees who reach their normal retirement age by 7/1/2022 retain their eligibility for a normal retirement and are not impacted by the change. All employees who would be impacted by the change were provided a one-time irrevocable option to grandfather the current provisions by paying the actuarial cost through biweekly payroll deductions.

The SEBAC 2017 Agreement revised the COLA formula when the annual increase in the Consumer Price Index – Wages (CPI-W) is 2% or less as shown below:
 
COLA Formula for Retirement Dates Prior to 7/1/2022 COLA Formula for Retirements Starting 7/1/2022
When CPI-W annual increase is greater than 2%
COLA Formula for Retirements Starting 7/1/2022

When CPI-W annual increase is 2% or less

60% of annual increase in CPI-W up to 6%
Plus
75% of annual increase in CPI-W above 6%Minimum: 2%
Maximum: 7.5%

60% of annual increase in CPI-W up to 6%
Plus
75% of annual increase in CPI-W above 6%

Minimum: 2%
Maximum: 7.5%

100% of the annual increase in CPI-W

Minimum: 0%

The SEBAC 2017 Agreement also changed the effective date of the first pension check as shown below:
 

First COLA Payable for Retirement Dates Prior to 7/1/2022 First COLA Payable for Retirement Dates Starting 7/1/2022
Earlier of January 1 or July 1 following 9 pension payments 30 months after retirement*

*If during the first 18 months of retirement the CPI-W increases by more than an annualized 5.5%, this payment will include an additional COLA (Formula minus 2.5%, multiplied by 1.5 to cover the 18 month delay)

The SEBAC 2017 Agreement changes the medical premium share paid by retirees at their normal retirement age for all Anthem coverages as shown below:
 
Average Retiree Premium Share at Normal Retirement Age
Retirement Dates prior to 7/1/2022 Retirement Dates Starting 7/1/2022
Non-Hazardous Duty:
<25 years of service
3% 5%
25 or more years of service
1.5% 5%
Hazardous Duty
1.5% 3%

Please note that there are no changes to the medical premium sharing for early retirees. There are also no changes to the dental premium sharing.

Retirees and their spouses who are age 65 or older have one medical plan option at retirement, the United Healthcare Medicare Advantage Program. To qualify for coverage, the member must be enrolled in Medicare Part A and Medicare Part B in retirement. The federal government charges a premium for enrollment in Medicare Part B, which is reimbursed by the State. The SEBAC 2017 Agreement changes the State’s reimbursement of Medicare Part B premiums with retirements starting 7/1/2022 as shown below:
 
State’s Reimbursement for Medicare Part B Premiums
Paid by Retiree/Spouse to Federal Government
Retirements Prior to 7/1/2022 Retirements Starting 7/1/2022
Base Rate
100% 100%
Income Related Monthly Adjustment Amount (IRMAA)
100% 50%

 

Tools from the Office of the State Comptroller

Estimate Your Pension Benefit, Review Online Workshops/Videos, Reference Retirement Plan Summaries
Social Security Estimator and Online Tools
2020 Retiree Health Care Options Planner
Learn More About Retirement Savings Programs

Information from Human Resources

A Guide to Retirement Benefits
Retirement Checklist and Timeline

Employees who retire prior to their normal retirement pay a higher share of the premium each month until they reach their normal retirement age. The percentage of the premium they pay is based on their years of service and how early they are retiring, as is shown in the chart below.

Percentage of Total Premium Paid by Early Retirees
Years Early
Years of Service 5 or more
4
3
2 1
15 or less 40.0 32.0 24.0 16.0 8.0
16
37.0 29.6 22.2 14.8 7.4
17
34.0 27.2 20.4 13.6 6.8
18
31.0 24.8 18.6 12.4 6.2
19
28.0 22.4 16.8 11.2 5.6
20
25.0 20.0 15.0 10.0 5.0
21
22.0 17.6 13.2 8.8 4.4
22
19.0 15.2 11.4 7.6 3.8
23
16.0 12.8 9.6 6.4 3.2
24
13.0 10.4 7.8 5.2 2.6
25 or more
10.0 8.0 6.0 4.0 2.0

The premium percentages are prorated by months. The percentage at retirement applies to all years early (no adjustment each year).

After you identify your percentage from the chart above, you multiply it by the Total Premium. Below is the chart that reflects the total monthly premiums for the 2020-2021 plan year. Retirees can change their option each year during the annual open enrollment. Please note that these are the premiums for persons who are under age 65. Select the column based on the number of persons you are covering who are under age 65. Note: Persons age 65 and older will have a different plan, which is described in the section Retirees/Spouses Age 65 or Older.

2020-21 Total Monthly Premiums for Persons Under the Age 65
Anthem Blue Cross Blue Shield
1 Person 2 Persons 3+ Persons
POS $1,127.22 $2,479.89 $3,043.49
POE $1,109.82 $2,441.61 $2,996.51
POE-G $1,099.85 $2,419.67 $2,969.59
Preferred $1,209.59 $2,661.10 $3,265.89
Out of Area
$1,209.59 $2,661.10 $3,265.89
Prime POS
$1,027.91 $2,261.41 $2,775.36

It’s important to note that if your result is more than 25% of your actual monthly pension benefit, you will pay 25% of your monthly pension benefit (Cap), unless you work less than full time. The actual pension benefit will be prorated for employees who are less than full time.

Sample Calculation
Employee retires 2 years early with 20 years of service and is enrolled in the Anthem POE family coverage and has an actual pension benefit of $1,400/month.
Maximum Payable: $1,400 (actual monthly pension) x 25% = $350
Factor from Table: 10% (payable for 2 years prior to normal retirement age)
Total Premium from Chart for Anthem POE: $2,996.51
Monthly Premium: $2,996.51 x 10% = $299.65 (below the maximum)

Retirees have an open enrollment each year in which they can make changes to their elections. The State provides employees with the Retiree Health Care Options Planner each year, which includes the monthly costs. Below are the premiums paid by employees for the medical options at normal retirement age.

2020-2021 Monthly Retiree Premiums for Participants Under Age 65 at Normal Retirement
Coverage Level Prime POS POE-G POE POS Preferred Out of Area
Retirees with 25 or more years of service and Hazardous Duty retirees
1 person $14.98 $0 $0 $16.04 $17.10 $0
2 persons $32.96 $0 $0 $35.28 $37.61 $0
3+ persons $40.45 $0 $0 $43.30 $46.16 $0
Retirees with less than 25 years of service
1 person $29.96 $15.58 $15.73 $32.07 $34.19 $17.06
2 persons $65.91 $34.28 $34.60 $70.56 $75.23 $37.54
3+ persons $80.89 $42.07 $42.46 $86.59 $92.32 $46.07

Retirees and their spouses who are age 65 or older have one plan option in retirement, the United Healthcare Medicare Advantage Program. To qualify for this plan, the person must be enrolled in both Medicare Part A and Medicare Part B. The United Healthcare Medicare Advantage Program is a full replacement to Medicare and was designed to closely resemble the out-of-pocket costs of the active employee coverage. There is no premium required for this plan and the State will reimburse the retiree for the Medicare Part B premiums (employee and spouse). Medicare Part A is free.

Below is a chart that shows what the federal government will charge participants for Medicare Part B (to be reimbursed each month by the State).

Yearly Income in 2019 Participants pay each month (in 2021)
File Individual Tax Return
File Joint Tax Return
File Married & Separate Tax Return
Base Rate
IRMAA
Total
88,000 or less $176,000 or less $88,000 or less $148.50 $0 $148.50
above $88,000 up to $111,000 above $176,000 up to $222,000 Not applicable $148.50 $59.40 $207.90
above $111,000 up to $138,000 above $222,000 up to $276,000 Not applicable $148.50 $148.50 $297.00
above $138,000 up to $165,000 above $276,000 up to $330,000 Not applicable $148.50 $237.60 $386.10
above $165,000 up to $500,000 above $330,000 up to $750,000 above $88,000 up to $412,000 $148.50 $326.70 $475.20
$500,000 or above $750,000 and above $412,000 and above $148.50 $356.40 $504.90

Information about the United Healthcare Medicare Advantage Program can be found here.

Retirees have the same dental options as active employees, but they pay a higher share of the cost. There is an annual open enrollment period in which retirees can change their dental elections. The premiums are published in the annual Retiree Health Care Options Planner. Below are the monthly rates for the 2020-2021 plan year.

2020-2021 Monthly Retiree Dental Premiums
Coverage Level Basic Enhanced DHMO
1 person $38.43 $31.46 $23.89
2 persons $76.86 $62.93 $52.55
3+ persons $76.86 $62.93 $64.50

Request Retirement Forms – The information you submit on the following request will be used by Human Resources to prepare your retirement forms for your signature. Please do not submit the request if you are unsure of your retirement date or if you have not decided which SERS payment option you are electing, such a Straight Life, 50% Spouse or 100% Spouse/Annuitant (Does not apply to ARP retirements).

 
What Happens to Your Payroll Deductions at Retirement