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Broward 100
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Section I - Employee Agreement
Section II - Eligibility and Documentation Requirements
Section III - Pre-Tax Health, Dental, Vision and FSA Plans
Section IV - After-Tax Supplemental Plans
Section V - Well-Being Programs
Section VI - Deferred Compensation and Retirement Plans
Section VII- Notices
Section VIII - Learning and Organizational Development Training
Section VI - Deferred Compensation and Retirement Plans
Section six - Deferred compensation and retirement plans

DEFERRED COMPENSATION (ICMA, METLIFE, NATIONWIDE)

A deferred compensation account will help you to: 

  • Reduce your current income taxes
  • Save for your retirement
  • Accumulate investment earnings on a tax deferred basis

Deferred compensation is an enhancement to retirement benefits allowing you to save money for your retirement today and defer income taxes on those savings until you make withdrawals from your account. It reduces your taxes each pay period through income deferral, and provides future benefits for retirement. (Sometimes it is referred to as a “457 Plan” since deferred compensation plans are permitted and administered under Section 457 of the Internal Revenue Code.)

If you are nearing retirement, IRS Code allows you to make up for contributions not deferred in previous years of employment. You can “catch up” for three consecutive calendar years prior to the calendar year of your declared normal retirement age. The total amount you can catch up is determined by subtracting what you have contributed from the maximum allowed by law. The maximum amount you can defer in a single year is a combination of your regular deferral for that year and any amounts allowed but not contributed since 1979. Each calendar year’s maximum, set by the IRS, differs and is subject to change. Contact Payroll for current dollar amounts and additional information.

A Great Way to Save! Deferred compensation gives you a significant tax break: 

  • Contributions to your deferred compensation account are taken from your gross salary before federal with-holding taxes are calculated (Look at the table to see what a significant difference this can make!)
  • Your deferred compensation contributions do not affect your reported earnings for retirement purposes
  • Social Security taxes are not affected by deferred compensation contributions
  • Your contributions are invested in the investment program of your choice offered by the provider you select

EXAMPLE

Without Participation in Deferred Compensation

With Participation in Deferred Compensation

Total to Invest
28% Taxes Deducted

$2,400
- $672

Total to Invest
No Taxes Deducted

$2,400
- $0

Total Invested

$1,728

Total Invested

$2,400

  • Without a deferred compensation plan, you pay taxes on income before you set any aside for savings or investments
  • You have less money to save or invest after taxes are taken out
  • With a deferred compensation plan, your contributions are made on a pre-tax basis
  • You can contribute more money to your saving/investment plan

You pay no income taxes on your contributions or investment earnings until you withdraw from the plan, allowing earnings to grow on a tax-deferred basis. For example, if you are in the 28 percent tax bracket, contribute $100 per month to your deferred compensation account and earn 8 percent interest, this account would be worth $58,902 after 20 years. In the same tax bracket, still earning 8 percent interest, but in a savings account, if you contributed $100 each month the savings account would be worth only $44,913 after the same 20 years.

When you withdraw money from the account (there are restrictions on when you may withdraw prior to retirement without penalty) you pay taxes on the amount you withdraw; you will most likely be in a lower tax bracket at that time and will likely pay less in taxes than you would have today. Deferred compensation has both unique restrictions and unique flexibility. Be sure you understand that: 

  • deferred compensation is a voluntary program
  • deferred compensation funds are subject to IRS regulations
  • there are strict IRS restrictions on withdrawals prior to retirement
  • benefit-eligible employees can begin or stop contributions to a deferred compensation account at any time
  • you must begin receiving benefit payments no later than April 1 of the calendar year following the year you reach 70½, or the year in which you actually retire, if later
  • providers and additional plan information are available from Payroll Central at 954-357-7190

Common Questions Asked about the Deferred Compensation Plan

When can I get my money out of the plan?
You can withdraw assets from your account without penalty under the following conditions:

  • retirement
  • leaving employment for any reason (funds must be “rolled” into a qualified account to prevent IRS penalties) 
  • You can also withdraw assets from your account, but will pay IRS mandated penalties, in the event of an “Unforeseeable Emergency” as defined by strict IRS regulations

Note: You must begin receiving benefit payments no later than April 1 of the calendar year following the year you reach 70½, or the year in which you actually retire, if later.

Who can participate and how do I get started?

Benefit eligible employees can start a deferred compensation account at any time. Contributions to your deferred compensation account are made through payroll deductions. While all deferred compensation plans follow the rules set by Section 457 of the IRS code, within those regulations each deferred compensation plan administrator designs plans that vary in a number of areas; be sure to review the details of any plan in which you are interested. The following are available from Payroll Central and directly from provider representatives:

  • information about the plan 
  • information about the providers
  • enrollment applications
  • payroll deduction authorization forms

How do I change or stop my deferred compensation deduction?

Contact Payroll Central at 954-357-7190 or your provider representative.

How safe is my deferred compensation account?

You make all investment and withdrawal decisions, subject (of course) to plan and IRS provisions.  Your assets will be held in a trust fund set up solely for that purpose. This protects your assets from:

  • any claims of the County’s creditors
  • any claims from your own creditors

RETIREMENT

Who Is a “Retiree?”

A retiree for benefit purposes is defined as an employee who leaves County employment and meets the FRS retirement requirement for the plan they are enrolled in:

PENSION PLAN  

  • Normal Retirement Requirement:
      - FRS employment prior to July 1, 2011: six years of service and age 62 or 30 years of FRS service
      - FRS employment on or after July 1, 2011: eight years of service and age 65 or 33 years of FRS service
  • Early Retirement
  • Disability Retirement

INVESTMENT PLAN 

  • Normal Retirement Requirement:
      - FRS employment prior to July 1, 2011: six years of service and age 62 or 30 years of FRS service
      - FRS employment on or after July 1, 2011: eight years of service and age 65 or 33 years of FRS service

If you leave employment under any other circumstances, you are NOT considered to be a “retiree” for benefit purposes even if you later apply for, and receive, a benefit from FRS.

Retiree Benefits

At the time of your separation from the County as a “retiree,” you may elect to continue the health (including pharmacy), dental, vision and life insurance coverage that you were enrolled at the time of your retirement. You cannot elect coverage for a plan you were not enrolled in at the time of retirement. Retiree coverage can continue as long as you continue to pay the required premiums by the due date and otherwise meet plan eligibility requirements. Waiver or nonelection of a plan upon retirement or during a subsequent annual open enrollment will result in the retiree not being able to reenroll in the waived plan at a future date.

Retiree Health Insurance Premiums

Health insurance premiums are billed by our Third Party Administrator, WageWorks. After the initial two payments, retirees can elect to have their health (including pharmacy), dental or vision premium deducted from their FRS check. Partial premium payments through FRS will not be accepted.

Moving Out Of Service Area

If you move outside of the service area covered under your current insurance plan, you must change to another health insurance plan which services your new area.

NON-RETIREE BENEFITS

If you are not considered to be a retiree at the time of separation of employment, you are eligible to continue health (including pharmacy), dental and vision coverage (as enrolled at the time of separation) under COBRA for a maximum of 18 months in most circumstances.

You are also eligible to convert your Basic and/or Optional life insurance to an individual policy by contacting the Group Life Insurance Company within 31 days of your employment ending.

FRS HEALTH INSURANCE SUBSIDY

Retirees enrolled in a health plan (including Medicare) are eligible for a monthly Health Insurance Subsidy (HIS) from FRS of $5 for each creditable year of FRS service. FRS will request periodic proof of other coverage. Retirees must apply for the HIS subsidy directly through FRS. Subsidy application will not be accepted by FRS prior to retirement. FRS will automatically send this form after retirement.

NOTE: Investment Plan members are not eligible for the HIS until they take a distribution.

What happens when I become age 65? While you are employed by the County and covered by a County health plan, you or your covered dependents are not required to participate in Medicare at age 65. However, as a retiree, once you or your covered dependent(s) become eligible for Medicare, the Medicare eligible person(s) must enroll in Medicare Part B as health insurance claims will automatically be paid as if the member were enrolled in Medicare Part B.

As a retiree, once you become eligible for Medicare Part B, you must contact Social Security and arrange enrollment for the coverage. As a retiree with Medicare Part B, you have the following options: 

  • You can continue health insurance through Broward County with Medicare B as your primary insurance, the County as secondary
  • You can cancel your County health insurance and assign your Medicare part B to an insurance company of your choice
  • You can cancel your County health insurance and purchase a supplemental insurance plan

Medicare D Prescription Insurance: Retirees canceling coverage through the Broward County health plan will not be able to re-enroll in a Broward County health plan (including prescription drug coverage) at a later date.

Participants who drop or lose health coverage with Broward County and don’t join a Medicare drug plan within 63 continuous days after their current coverage ends, may pay a higher premium (a penalty) to join a Medicare drug plan later.

Life Insurance as a Retiree: At the time of your retirement, you may elect to continue all or some of the term life insurance in effect at the time of your retirement. You may decrease the amount of life insurance in $25,000 increments, but cannot increase the level of coverage. Enrollment or increases to life insurance cannot be made at a later date.

The County will bill the retiree for life/dependent life insurance on an annual basis in late November/early December of each year. If premiums are not received by the County within the grace period, coverage will terminate as of the last payment received.

Retiree Continuation of Other Benefit Plans:

PLAN

CONTINUATION OPTION

FSA – Medical Expense

May be continued through the end of the calendar year of retirement on an after-tax basis (under COBRA)

FSA – Dependent Care Account

Cannot be continued past termination or retirement date

AFLAC Personal Protection Plans

May be continued through direct bill from AFLAC. Contact AFLAC at 1-800-992-3522

Legal Insurance

May be continued through direct bill from U.S. Legal Services. Contact U.S. Legal at 1-800-356-5297

Life Insurance

May be continued through annual billing from the County

Long-Term Care Insurance*

May be continued through direct bill from CNA. Contact CNA at 1-877-777-9072.

Long-Term Disability Insurance

Cannot be continued past termination or retirement date

Deferred Compensation Program (457 Plan)

If you have the Deferred Compensation Program (457 plan), you must contact your provider directly (ICMA, MetLife, or Nationwide) to arrange disbursement of your account. Contact Payroll Center for assistance at 954-357-7190.

* Long-Term Care insurance has a vested benefit after three years of enrollment. Call CNA for more information.

FLORIDA RETIREMENT SYSTEM - FRS

Retirement benefits are provided to eligible employees in full-time, PT20-plus and PT19 positions based on the following:

  • If you have earned FRS credited service through other public employment, all service credit earned automatically combines into one account under your name and Social Security number (over 900 other public employers in the state of Florida are also members of FRS).
  • Effective July 1, 2011 employees in full-time, PT20-plus and PT19 positions are required to contribute 3 percent of their earning to the FRS system (with the exception of employees enrolled in the DROP program).
  • Employees beginning FRS employment after July 1, 2011, have new vesting and retirement rules under the Pension Plan.

EMPLOYMENT WITH THE AN FRS-COVERED EMPLOYER

INVESTMENT PLAN

PENSION PLAN

When You Vest in Employer
Contributions

1 year

  • Six years for members first employed by an FRS employer prior to July 1, 2011
  • Eight years for members first employed by an FRS employer on or after July 1, 2011

Benefit Payable

Your account balance at the time of termination. Multiple payout options are available, including rollovers, lump sum distributions, distributions on demand, guaranteed annuity payments, or any combination of the above distribution options.

Your lifetime monthly benefit calculation is based on your average final compensation multiplied by the years of creditable service multiplied by the benefit accrual rate. A monthly payment is the only distribution option (except under DROP).

Death Benefits

You can name anyone as your beneficiary.

Your beneficiary designation may be limited. Only a beneficiary who qualifies as a joint annuitant (spouse, dependent children, etc.) is eligible for a continuing lifetime benefit. You may name any beneficiary to receive a time certain monthly benefit if you should die within 10 years of retirement.

Early Retirement Benefit

Your account balance is payable at any age (tax penalties may apply). You will not be eligible for leave payout and benefits as a retiree unless you meet the normal retirement requirement based on your FRS employment date.

Your benefit is either reduced or not immediately payable if you choose "early retirement" as defined by the FRS.

Normal Retirement

Your account balance is payable at any age (tax penalties may apply). You will be eligible for leave payout and benefits as a retiree if you meet the normal retirement requirement for the Pension Plan based on your FRS employment date.

If first employed by an FRS employer prior to July 1, 2011:

  • Regular Class: Age 62 with six years or 30 years of service regardless of age.
  • Special Risk: Age 55 with six years or 25 years of service regardless of age

If first employed by an FRS employer on or after July 1, 2011:

  • Regular Class: Age 65 with eight years or 33 years of service regardless of age.
  • Special Risk: Age 60 with eight years or 30 years of service regardless of age.

Reemployment after Retirement

You are considered retired when you complete your retirement application and terminate employment with all FRS-covered employers. If you participate in DROP, your retirement is finalized when you terminate employment. Returning to work during the first 12 calendar months after retiring may void your retirement and require you to repay retirement benefits received.

You must wait six calendar months after retiring or after your DROP termination date before you return to work in any position with an FRS-covered employer. If you return to work, you must suspend receipt of Pension Plan benefits
for each month employed during this period and repay any benefits received that should have been suspended.

You are not eligible for renewed FRS membership.

12 Calendar Months After Retiring
Once 12 calendar months have passed since retiring, you can receive monthly Pension Plan benefits even if reemployed by an FRS employer.

You are considered retired by FRS once you terminate FRS-covered employment and request a distribution (including a rollover) from your FRS Investment Plan account. A distribution may not be issued until you have been terminated for three calendar months (except that if you have met the normal retirement requirements of the Investment Plan you may receive a one-time distribution of up to 10% of your account balance after one calendar month). If you are reemployed with an FRS employer prior to receiving a distribution of your benefits, you will not be considered to have terminated.

You must wait six calendar months after taking a distribution before you return to work in any position with an FRS-covered employer. If you return to work, no additional Investment Plan distributions are permitted until you terminate employment or complete 12 calendar months of retirement.

You are not eligible for renewed FRS membership.

After 12 Calendar Months
Once 12 calendar months have passed since retirement, you can receive further Investment Plan distributions even if you are reemployed by an FRS employer.

Renewed
Membership

You are not eligible for renewed FRS

You are not eligible for renewed FRS membership.

 

If you have questions or need more information, call the MyFRS Financial Guidance Program at 1-866-446-9377, Option 2.

Two FRS RETIREMENT Plans To Choose From

Eligible employees may choose between the FRS Pension Plan and the FRS Investment Plan. New hires (full-time, PT20 and PT19 employees) to FRS employment must make an election within the first five months of FRS eligibility. If a plan election is not made, the employee will automatically be enrolled in the Pension Plan.

The FRS Pension Plan takes a traditional pension approach. It provides a fixed benefit at retirement based on a formula guaranteed for life. Eligible employees vest based on their FRS employment date and it is fully portable to another FRS employer.

The FRS Investment Plan is a nontraditional pension plan. The benefit is not fixed and is based on the investment funds in the plan. Eligible employees are vested after one year of service and it is fully portable to another FRS employer or an employer outside the FRS umbrella.

Note: once any distribution is taken from the Investment Plan, if you return to FRS employment no further retirement benefit will be earned.

Which employees are covered under FRS? Employees in most: 

  • full-time positions
  • part-time 20 plus hour positions
  • part-time 19 hour positions

When is my “normal” retirement under FRS? Retirement age is based on when you became a FRS employee. Review chart above or contact FRS at 1-866-446-9377, Option 2.

DROP (DEFERRED RETIREMENT OPTION PROGRAM)

DROP provides a way for retirees in the Pension Plan to accumulate additional savings while continuing employment for up to 60 months beyond their normal retirement date. It is a payout alternative for FRS retirement benefits. Annual leave can also be cashed out upon entering DROP (this income is reported to FRS as earnings and may result in a higher retirement benefit.) Retirees in the Investment Plan are not eligible to participate in the DROP program.

Note: Enrolling in DROP does not change participants’ employment status in any way. Participants may quit and the County may terminate them in the same manner as before DROP participation.

How does DROP work?

  1. You “retire” for FRS purposes at your normal retirement date based on your FRS employment date.
  2. You continue to work for a preselected period of time (up to 60 months).
  3. You continue to receive a salary from the County up to the date you preselected to end participation in DROP.
     a. You do not earn additional credit for retirement while participating in DROP.
     b. Your monthly FRS retirement benefit is paid into your DROP account, where it earns interest and is tax deferred while you participate in DROP, instead of being paid directly to you.
  4. When your selected DROP period ends you must terminate employment, at which time you will:
     a. Receive your accumulated DROP benefit.
     b. Begin to receive a FRS monthly retirement benefit – in the same amount as determined at retirement – and annual cost-of-living increases.

Who is eligible for DROP?

All vested members of FRS who have reached normal retirement age based on their FRS employment date or attained 30 years of service in the FRS Pension Plan (as long as they choose to participate within their eligibility window.)

When can I begin DROP?

A vested FRS Pension Plan member may elect to participate in DROP for a maximum of 60 months following the date on which he/she first reaches normal retirement date (including members who are on a leave of absence or on workers’ compensation). While a member may apply for DROP up to six months before reaching his/her normal retirement date or DROP deferral date, the election to participate in DROP must be made within 12 months of first reaching the normal retirement date. A member’s normal retirement date is reached: 

  • FRS employment date prior to July 1, 2011: when the member is either age 62 and vested, or reaches 30 years of service prior to age 62.
  • FRS employment date on or after July 1, 2011: when the member is either age 65 and vested, or reaches 33 years of service prior to age 62.

A member who reaches his/her normal retirement date based on years of service before age 57 may defer his/her DROP election. He/she may elect to enter DROP anytime from the member’s initial eligibility date through the month he/she attains age 57 and participate for a full 60 months. (The member could also make the deferred DROP election at any time during the 12 months after the month in which he/she reaches age 57, but his/her participation period would be shortened accordingly.)

Contact Employee Benefit Services for additional information about DROP eligibility and enrollment.



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