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Common Retirement Questions for HR
- 1. Preparing for Retirement UAMS HumanResources Benefits and Retirement
- 2. 1. Thinking aboutretiring? Clearance process? 2. What benefits change if my work status changes? 3. What will it cost me for health insurance? 4. Benefits After UAMS 5. Retirement Options from TIAA/Fidelity/APERS 6. Start Social Security early or later? 7. Medicare and UAMS Retiree Benefits 8. Do I still need life insurance? 9. Do I need to save for long term care? We’ll cover these questions. Others?
- 3.
- 4. • Notify bothyour supervisor and Human Resources at least one month in advance of your intent to retire or resign your current position. Notification can be done one of three ways: – Complete online form through Employee Self Service (PREFERRED) – Hand deliver written statement to Human Resources – Email Askhr@uams.edu • Then on your last day give your badge, key, any other equipment to your department HR Administrator. They will notify you of the additional separation clearance steps • Vacation and holiday balances, up to 240 hours max, will be paid in a lump sum via paper check mailed to your home. • Exit Survey- recommended exit feedback form. Form completed online. • Update your address with UAMS and benefit vendors. Log into ESS to update • As soon as you set your retirement date, contact our office to set up an appointment to meet with the Benefits and Retirement HR Consultants. – Dawn Wieda- Retiree Healthcare Benefits – Aeriel Wright- Retirement Savings w/ Fidelity and TIAA What is the clearance process?
- 5.
- 6. • Change inwork status from full-time to part-time? Refer to benefits package for rates information. • 75-100% Time worked • 50-74% Time worked • <50% Time worked (no benefits) • Faculty Group Practice (FGP) members • Resident Physicians • Active employees age 59 ½ may request access to their retirement funds. Employee contributions only! (will talk more later) Phased Retirement
- 7. Eligibility is the“10-70 rule” The definition of a “retiree” for insurance purposes is someone who at the time they leave the University’s employment: • Has been covered under the insurance plan for the past ten consecutive years; • Has worked for the University of Arkansas for ten consecutive years; and • Has a combined age and continuous years of University of Arkansas service equal to 70 or more. Modified “65-5” rule effective 1-1-2017 In addition to the guidelines above, medical and/or dental insurance will be offered to employees who retire at age 65 or older and immediately prior to retirement completed 5 or more consecutive years of UA service and had 5 or more consecutive years of continuous coverage under the plan. Insurance for Retirees - “forever COBRA”
- 8. If you meetthe “ retiree” criteria, you may keep three of your plans: • Medical – If you are under age 65 and not yet eligible for Medicare, you may keep your UA employee coverage under the Classic plan. – If you are Medicare-eligible (age 65 or older), you may enroll in the UA United Healthcare Medicare Advantage plan. This is an “open access” PPO plan, meaning you can see any doctor or provider that accepts Medicare, regardless if they are in or out of United’s network. • Dental (same as UA employee plan) • Life Insurance - $10,000 life insurance policy (must meet the 10-70 rule) What insurance may I continue? What does it cost? Refer to the benefits rate sheets (2019 retiree rates- next two slides) As a retiree you would pay 100% of the total premium. Please note that these rates are subject to change and may be different when you retire. If you currently work full-time, your department is paying a portion of your premiums.
- 10. • Especially importantto do this at least one month ahead of time if you are age 65+ when you retire • And you’ve got 5 years of service and were covered under the UA health insurance the last 5 years • You are eligible to enroll in the UA United Healthcare Group Medicare Advantage plan, a Medicare Part C plan. You enroll directly through United Healthcare. • You MUST be enrolled in original Medicare, both parts A and B, to be eligible. Your medical premium cost will be the amount below PLUS your Part B premium that you pay to Social Security. If you’re eligible for RETIREE insurance…
- 11. * The ConsolidatedOmnibus Budget Reconciliation Act of 1986 (COBRA) is a federal law which mandates continuation of group health care insurance plans, at workers’ expenses, after a worker leaves an employer. The University of Arkansas outsources COBRA benefits administration to: WageWorks P.O. Box 226101 Dallas, TX 75222-6101 PHONE (toll-free): 1-877-722-2667 INTERNET: mybenefits.wageworks.com COBRA Continuation of UAMS Medical, Dental or Vision
- 12. Accessing Your UAMSRetirement Savings
- 13. Meet with aconsultant to discuss retirement benefit options Fidelity Investments www.getguidance. fidelity.com or call 800-642-7131 Susan Screeton, Consultant TIAA www.TIAA.org/ schedulenow or call 800-732- 8353 Angie Cutler, Consultant
- 14. Access Your RetirementSavings • You can initiate a “distribution” any time after you are totally off the payroll. • Can’t be part-time. A distribution can be: o Periodic withdrawals (how much do you need a month?) o Annuity (guaranteed amount for life) o Rollover to an IRA o Lump sum (not available for some investments) • But after your start receiving your TIAA or Fidelity benefits, ok to be rehired as part- time. • If you’re age 59 ½, you can access your contributions (not the University’s) while still working, called “in-service withdrawal”. Loan option also available. Plan does not honor hardship distribution requests. • “32 day form” (next slide) required if you’re wanting to access your TIAA and/or Fidelity funds immediately and you haven’t been gone at least a month.
- 16. • 65 usedto be the full retirement age/eligibility age for both Medicare and Social Security. Not any more. • Medicare eligibility remains age 65 • But you may not be eligible for “full” Social Security benefits until age 67. Depends on year you were born. • Visit www.ssa.gov for details • Little Rock office: 1-866-593- 0933 (federal building) Get Social Security early or later?
- 17. • Apply 3months before you want benefits to start • Either start benefits at your “full retirement age” or later (see next slide) – You’ll receive a bigger benefit, but for a shorter period of time the longer you put off receiving Social Security • Or apply for early benefits at age 62 – Benefits permanently reduced about 30% and there’s a limit on how much you can earn each year if you continue to work – You’ll receive a smaller benefit for a longer period of time Social Security (cont’d)
- 19. • Eligible fororiginal Medicare the month you turn 65 o Part A helps pay for hospital admission o Part B helps pay for doctor visits and outpatient care • If you’re still working when you turn 65 o Just sign up for Part A. It’s free. Your UA medical coverage is primary. • If you retire after age 65 o Sign up for Part B the month before, so it’s in effect by the first day you no longer have UA medical insurance as an active employee • No penalty if sign up within 8 months, “SEP” (special enrollment period) • You pay $$$$ @ month (more if income over $85,001, up to $428 @ month). Deducted from your Social Security benefit or billed to you. Medicare
- 20. • Part Cis a Medicare Advantage plan o Medicare contracts with individual insurance companies to administer Medicare benefits along with supplemental benefits o “all in one” plan, often with rx benefits o UA Medicare Advantage Plan through UnitedHealthcare is a Part C plan • Part D is prescription drug coverage o Get ready for full mailbox of offers o About 50 plans in AR o Most have “donut hole” coverage gaps o Meant for those who don’t have drug coverage elsewhere, or who have a Medicare supplemental/gap plan that doesn’t cover rx Other parts of Medicare
- 21. • Perhaps. TheUniversity doesn’t offer a long term care plan, but there are many on the market. Research! Check with AARP and other older adult sites. • Following are quotes from Feb 2018 Forbes news article: Chances are 50/50 that you will need some type of long term health care. But maybe not assisted living center or nursing home. Only 25% of people need long term care for more than 2 years, and the probability of needing it for more than 5 years is only 2% for men, 7% for women. You will probably get the best buy and greatest odds of having enough coverage by sticking with a policy that pays benefits for no more than 5 years, preferably for 2 or 3. How much will you spend for long-term care? That is going to depend a lot on the type of care you need and the area of the country in which you live. According to Morningstar, the average end-of-life cost in a patient's last five years is $217,820 without dementia and $341,651 with dementia. This would indicate that a policy with a daily benefit of $125 to $200 for five years would have a high probability of being adequate. Best to apply when you are in your 50s. Do I need to save for long term care?
- 22. How to finddetails of retiree insurance on our website
- 23. Visit these 3sites. Lots of information!
- 24. Questions later? Drop byour office on 4C, Central Building. 7:30-4:30, Monday-Friday. Call us at (501) 686-5650. Email us at AskHR@uams.edu. Visit our website, www.hr.uams.edu.
Editor's Notes
- #5 No more running around campus for several hours to clear the various checkpoints. Online! Once the clearance process is complete, Payroll will process the check on the next payroll cycle. The check will be mailed to your home. This payout could take between 3 – 4 weeks after the clearance process is complete. If your vacation/annual leave is paid out, the employee will not be able to return to University employment until the number of days for which he/she received additional compensation has expired. Employees rehired or transferring to another State agency or institution may transfer all accrued annual leave. Please refer to Administrative Guide 4.6.04. Final terminal vacation checks and W2s will be mailed to the address on file wit UAMS.
- #7 Early retirement is honored but not promoted. Contact HR office if you are thinking about retiring early.
- #8 For example, if you are age 48 and have worked at UAMS for 25 years, and have been covered under the benefit plans for at least the last ten years prior to leaving, you would be eligible for retiree insurance. Your reason for leaving doesn’t have to be retirement. If you do not meet the retiree criteria, you would still be eligible to continue your medical, dental and vision coverage for up to 18 months under COBRA which we will talk next. It’s called retiree insurance. But your reason for leaving doesn’t have to be retirement. I call retiree insurance “forever COBRA” Plus the retiree premiums are a little cheaper than COBRA because a 2% admin fee is added to COBRA (administered by an outside company, WageWorks)
- #9 When you meet with DAWN, this is your enrollment!!!! You will pay the full premium to keep UA coverage, including portion UAMS formerly paid.
- #10 2020 Retiree rates Life Insurance: Everyone has option to convert or port to a private policy within 31 days of leaving UAMS (detailed information on our website) But it’s very expensive; rarely chosen If others depend upon your salary for their support, life insurance is important. But do you still need lots of life insurance at retirement? Keep in mind you have your retirement savings.
- #11 We’re going to get into Medicare a little bit later and this will make more sense. The University worked with UnitedHealthcare to create a plan that was similar to our Classic plan. Actually it’s better. Has Silver Sneakers where you get free gym memberships. Maintenance drugs save you 33% if you use mail order because you pay 2 monthly copays instead of 3. Check out the info on our website about the benefits. There’s a brainshark video with voice that walks you through the benefits. We can’t enroll you in the Medicare Advantage plan Rather, we notify United Healthcare you are eligible and to send you an enrollment kit TIP: enroll over the phone (number will be in your kit). It’s quicker, plus the UHC rep will talk to you about your drugs and doctors so you know in advance what’s covered.
- #12 If you do not meet the retiree criteria, you would still be eligible to continue your medical, dental and vision coverage for up to 18 months under COBRA. 2019 COBRA rates
- #14 This is what that website looks like. You can schedule a session online anytime, 24-7. Or call during business hours if you’d prefer that method. APERS members may contact APERS at 800-682-7377
- #15 Be sure to set up an distributions while you are out if you plan to return as once you become ACTIVE, distributions are not allowed. Requests cannot be processed until the day or after termination.
- #16 Say you retire and then want to be rehired back as part time or temp. You have to lay out at least 32 days, maybe more depending on how much vacation time that was paid to you in a lump sum. If you were paid the maximum 240 hours of vac/hol in a lump sum at your retirement, you’d have to lay out for 6 weeks. State law doesn’t allow “double dipping.” If you want to be rehired sooner than that, you’d have to pay back your vacation time. This form DOES NOT initiate your request. You MUST contact the provider either by phone or online to make your request. This is an HR requirement before we can approve or release your request. it is advised that you wait at least 45 days after your final check is received to ensure all retirement funds have been deposited into your account. Otherwise, the “cash out” process may have to be completed again.
- #17 Tip: don’t call on the first or last day of the month Presentation on SS is posted on HR webpage.
- #18 The earliest you can start receiving Social Security retirement benefits will remain age 62. If you delay your retirement benefits until after full retirement age, you also may be eligible for delayed retirement credits that would increase your monthlybenefit.
- #19 Here's how it works if your full retirement age is 67. If you start your retirement benefits at age 62, your monthly benefit amount is reduced by about 30 percent. The reduction for starting benefits at age 63 is about 25 percent; 64 is about 20 percent; 65 is about 13.3 percent; and 66 is about 6.7 percent. If you start receiving spouse's benefits at age 62, your monthly benefit amount is reduced to about 32.5 percent of the amount your spouse would receive if their benefits started at full retirement age. (The reduction is about 67.5 percent.) The reduction for starting benefits as a spouse at age 63 is about 65 percent; 64 is about 62.5 percent; 65 is about 58.3 percent; 66 is about 54.2 percent; and 67 is 50 percent (the maximum benefit amount). You can get Social Security benefits and work at the same time. But if you’re younger than full retirement age, there is a limit to how much you can earn. Any earnings over $17,040… every $2 you earn, Social Security reduced by $1
- #20 You’ve been paying into Medicare with a 1.45% tax on your paycheck all your life. Time to receive those benefits. Medicare hasn’t announced the base Part B rates yet for 2018. Be ware---- may go up a little from the now $134
- #21 There’s also Medicare supplement plans that go up to letter N. So if you retire after 65, you need Medicare A + B which is original Medicare. If you get a Medigap or supplemental policy outside the University, you will also need a Part D plan to cover your prescriptions. Do some research to see what’s best for you. Most retirees will elect our plan, if nothing else than to try it out or buy more time to research other plans.
- #23 This is the HR home page, hr.uams.edu.