PENSION

1
NC STATE UNIVERSITY

• PENSION SUPPLEMENTAL RETIREMENT PLANS

2
Is this how you see retirement?

• A financially secure retirement requires
  foresight, planning, disciplined saving and
  investing, and professional advice.
• Retirement planning CANNOT be left to chance.

3
We expect to have the same or higher standard of
living

• Youre still going to need an income to pay the
  bills.

4
Plan Ahead !!!

• You will have a better chance of retiring at a
  comfortable standard of living by applying the
  key elements of saving
• Save Early Regularly
• Save Smarter
• Save Tax Advantaged

5
You may live longer than expected

• Average 55 year old man lives to 84
• Average 55 year women lives to age 87

6
To plan for your retirement,

• you need to know what YOUR pension will provide.

7
If you retire w/30yrs, your pension will be appr
54 of your avg compensation

• You become a member of the North Carolina
  Teachers and State Employees Retirement System
  on your date of hire if you are permanent and
  work at least 30 hours per week for nine months
  per year.
• Employee and employer contributions plus the
  investment earnings on total contributions pay
  the cost of providing your retirement benefits.

8
Contributions to the pension plan are MANDATORY!!

• Your share of the cost, which is automatically
  deducted from your paycheck, is 6 of your wages
  on a pre-tax basis.
• The Universitys share of the cost is based on
  the calculations prepared by an actuary, so that
  benefits will be funded properly.

9
Your annual retirement benefit is based on this
formula

• 1.82 of average final compensation
• TIMES
• years and months of creditable service.
• Creditable service means any period during which
  you contribute to the System plus unused sick
  leave.

10
Payment Options(have you thought about your
beneficiaries ?)

• Maximum Payment
• Option 4- SS Leveling
• (Receive larger monthly payments until age
  62)

• Option 2- 100
• Option 3 - 50
• Option 6-2 - 100
• Option 6-3 - 50

11
How will your family survive without you?

• Will their monthly income be enough to manage all
  the bills if your income stops?
• Do you have life insurance to provide protection
  for your families financial future?

12
The value of your life is the most important
asset!

• Life insurance protects your loved ones when they
  need it most.
• And
• It can provide financial security when you
  retire.

13
The State does NOT provide life insurance for
retirees.

• If you die while in active service (while being
  paid a salary) after 1 yr of as a contributing
  member, your beneficiary will receive a single
  lump sum payment. The pmt equals the highest 12
  months in a row during the 24 months before you
  die, but not less than 25,000.00 and no more
  than 50,000.00

14
What is a 401-K plan ?

• A 401(k) is an employer sponsored retirement
  savings program that allows employees to save and
  invest for retirement on a tax deferred basis

15
The 401(k) plan is sponsored by the state of
North Carolina

• The Plan is governed by the Dept of State
  Treasurer and the Plans Board of Trustees which
  contracted with BBT to be the Plan Administrator.

16
A 401(k) Plan Participant may

• Contribute up to the lesser of 80 of his/her
  annual gross salary not to exceed maximum
  contribution limits.
• Contribute as little as 20.00 per month

17
The NC 401(k) plan offers you a variety of
investment options, each option being either a
BBT bank investment or a mutual fund.

• Bank Investments offer investors the choice of a
  variable rate or fixed rate of return.
• (similar options outside the plan you would have
  to meet min bal requirements)
• A mutual fund is an investment company that
  combines the of many people whose investment
  goals are similar and invests in a wide variety
  of securities.

18
Tax Sheltered Annuities

• Also known as 403(b), is a retirement income
  vehicle enabling employees of public schools to
  save and invest for retirement on a tax deferred
  basis

19
A 403(b) Plan Participant may

• Contribute up to the lesser of 100 of his/her
  annual gross salary not to exceed the maximum
  annual contribution limit.
• Contribute as little as 20.00 per month

20
We have seven 403(B) vendors

• Fidelity
• Lincoln
• Nationwide
• Prudential

• Valic
• TIAA-CREF
• Metropolitan Preference Plus

21
Deferred Compensation

• Section 457 allows employees of state and local
  governments to defer a portion of their income in
  a deferred compensation plan that is not taxable
  until a distribution is made.

22
The 457 Plan Administrator is Great-West Life
Annuity Ins Co

• You can contribute up to the lesser of 100 of
  your salary, not to exceed the maximum annual
  contribution limits.
• The minimum contribution is 20.00 per month.

23
457 Deferred Compensation

• Also Offers
• Fixed Investment Options
• AND
• Variable Investment Options

24
Well, whats the difference between the three
plans?

• The premise of the plans are basically the same
  but the features vary slightly
• Pay-out options
• Loan provisions
• Catch-up provisions
• Portability (transferring of funds when you
  leave)

25
A GOOD RULE OF THUMB

• DIVERSIFICATION
• Spread your money across several different kinds
  of investments

26
When planning for retirement, you must determine
what your needs are first, then adjust your
savings.

• In the early retirement years, some expenses may
  go up while some may actually decrease.

27
Expenses that may change

• Your taxes should be lower
• Your basic living expenses may actually stay the
  same or increase
• If you own your home, it may be paid off
• Most importantly, your healthcare expenses will
  likely rise

28
So how much should you be saving?

• Unfortunately, there is no one size approach that
  fits all but it is good to plan to have between
  65 to 85 of your current income to maintain
  your present lifestyle in retirement.

29
Inflation will also impact your retirement savings

• A gallon of gasoline in 1968 was .33

30
(No Transcript)
31
Applying for Retirement Benefits

• Applications for retirement can be signed as
  early as 90 days before your planned date.
• Retirement is always effective the first day of
  any month
• Be prepared to provide beneficiarys name and
  birth date.
• Direct Deposit of your State Retirement Benefit
  is required.
• Payments are deposited on the 25th of each month.

32
For those of you who are NOT planning on
Post-retirement employment

• You may just find yourself in a new profession if
  you do not PLAN for Retirement!!!