Countdown to Retirement: 3 … 2 … 1 … and They’re Off!

Are you planning to retire this July 1? The Employee and Retiree Service Center (ERSC) can assist you in planning your retirement and ensuring that your transition from employee to retiree goes smoothly. Each winter, For Your Benefit offers retirement-planning resources to help you. Let’s begin with a countdown of the top three actions to take to prepare for your retirement.

3. Ask the Experts at a Retirement Informational Session

ERSC retirement experts present essential information and are available to answer questions during Retirement Informational Sessions. Designed for employees who are considering retiring within the next two years, ERSC staff discusses a retirement timeline, eligibility, benefit formulas, leave payoff, continuing health insurance into retirement, and more. Many people find that bringing a spouse or attending more than once is helpful. Once you have attended an Informational Session, you will have the tools you need to make a successful transition to retirement.

After you have made the decision to retire, you also may want to attend a Forms Workshop, where ERSC staff offer a review of the necessary retirement forms, explain how to complete them, and answer questions.

To register for an Informational Session or Forms Workshop, log in to Professional Development Online (PDO) and search for “Retirement.” See below for dates, times, and locations of upcoming events. Be sure to check the ERSC website prior to attending an event, as the information is subject to change. The website includes information on additional sessions in case of weather-related cancellations.

Members of the State core pension plan also should attend a Maryland State Retirement Agency (MSRA) Pre-Retirement Planning Seminar. State seminars are day-long events and cover topics such as Social Security, legal considerations, and financial planning. You must register to attend an MSRA seminar. As soon as updates are made available, you will find a registration form that lists upcoming state seminars on the ERSC website. These sessions fill quickly, so register early.

In addition, state representatives offer personal counseling sessions for members of the State core plan who are planning an imminent retirement. Counseling sessions must be scheduled online in advance by visiting the MSRA Online Appointment Scheduler.

2. Obtain a Retirement Benefit Estimate

A retirement benefit estimate is a must-have tool in preparing for your retirement, as it provides more personalized, detailed information than your yearly retirement benefit statement. How you obtain a retirement benefit estimate depends on your core membership.

If you are an MCPS county core and/or supplemental plan member, predetermined benefit estimates based on your early or normal retirement date are available via PenPoint. In addition, if you choose to estimate your retirement benefit based on any other date, you can run a personalized estimate on PenPoint.

If you are a State core plan member, you should request a retirement benefit estimate from MSRA 9 to 12 months before your planned retirement date. Allow enough time to receive your estimate—current response rates are from two to three months. During the spring and early summer—retirement season—the response time is as much as four months. See current wait times for receiving your MSRA estimate.

Keep in mind that any unused earned sick leave you may have at retirement will not be included in your retirement estimate. For that reason, your final benefit may be higher than indicated on your estimate. After your retirement date, your final unused earned sick leave balance is recertified and reported to MSRA. If you use sick leave in the period between submitting your retirement forms and your retirement date, the final unused earned sick leave balance may result in a recalculation of your retirement benefit.

When you retire, you will be able to choose one of several different payment options that affect both how much you will receive for your lifetime and, if you choose, how much your beneficiary will receive in the event of your death. A retirement benefit estimate can help you determine which payment option to choose by providing personalized figures based on your age and your beneficiary’s age for each option, something your annual retirement benefit statement does not provide.

Knowing this information may help you make—or confirm—some of your major retirement decisions. For example, you may be planning to choose a payment option that allows you to leave a portion of your pension benefit to a beneficiary, such as your spouse, after your death. However, you may not realize how much this option will change your monthly retirement benefit. Your retirement benefit estimate will detail every option so you can be better prepared to make retirement decisions that are best for you and your family.

Access PenPoint from the Retirement Planning web page
To get there, search for “Retirement Planning” from any MCPS web page and select Retirement Planning from the recommended links on the next screen. Once there, click on the log-in button under the PenPoint logo and enter your MCPS username and password—the same username and password you use to log in to your MCPS Outlook e-mail and ePaystub.

1. Meet Important Deadlines

Once you have received answers to your retirement questions and determined your pension payment option, you will need to consider the following important retirement deadlines:

• Three months prior to your retirement date:
  • Additional service credit—Final deadline to apply for active duty military service credit or purchase of additional service to increase the amount of your retirement benefit and perhaps allow you to retire at an earlier date. For details about active duty military service credit, see page 5 of Understanding Your Retirement. For more information about purchasing service, see page 6 of Understanding Your Retirement, or “Did You Spend Time Working Outside MCPS” in this issue of For Your Benefit.
  • Medicare—Deadline to begin the Medicare application process if you or a covered dependent will be eligible for Medicare at the time of your retirement (see “Who is Eligible for Medicare” at the bottom of the “Healthcare in Retirement” article in this issue of For Your Benefit). Participants in MCPS retiree benefits are required to be enrolled in Medicare Parts A and B in order to maintain MCPS medical and prescription retiree benefits. If you and/or your spouse became Medicare-eligible while covered under the active employee medical plan, you and/or your spouse should have enrolled in Part A and deferred Part B when you became Medicare-eligible. If you and/or your spouse deferred Medicare Part B until your retirement, begin the process of enrolling in Part B three months prior to your retirement date. Note: If you deferred Part B until retirement, you MUST send a copy of your Medicare card with Parts A and B to ERSC at least 60 days prior to the effective date of your Medicare coverage.
• March 29, 2018: Deadline for Montgomery County Education Association (MCEA) unit members retiring July 1, 2018, to submit retirement forms to ERSC and be eligible for payment of 35 percent of unused earned sick leave. Submitting your retirement forms after March 29, 2018, will result in sick leave payout at 20 percent. Note: Since the Social Security Administration does not allow an individual to enroll in Medicare until three months prior to his/her retirement date, you are not expected to submit your Medicare card with Parts A and B by the March 29 deadline. For additional details on the sick leave payout, please see our MCEA sick leave payout flyer.
• One month prior to your retirement date:
  • Retirement forms—Final deadline for submitting all retirement forms to ERSC. For employees who are planning to retire on July 1, 2018, all paperwork must be submitted to ERSC by May 31, 2018. Visit the ERSC Forms web page to find and download your retirement application forms or simply click on your core plan membership to access them:
    • MCPS Core Pension Plan
    • State Core Pension Plan

Final retirement forms received between June 1 and June 30, 2018, will delay the effective date of your retirement to August 1, 2018. Please be advised: if you are a member of the State core pension plan and retire on August 1, 2018, and there is a cost-of-living adjustment (COLA) effective July 1 of each year, you will not receive this COLA to your State pension benefit until July 1, 2020. The state requires that you be retired for at least one year before you are eligible for a COLA on your State core pension benefit. The one-month delay in your retirement will delay your first COLA by 11 months.

• • Leave payout forms—Deadline to complete and submit leave payout forms to ERSC, if you wish to make contributions to your 403(b) or 457(b) retirement savings plans from payments of accumulated unused earned sick or annual leave. You will find the leave payout forms listed as “Additional Related Forms” at MCPS Core Pension Plan or State Core Pension Plan.

Visit these retirement resources to learn more:

• Understanding Your Retirement walks you through the retirement process, timeline, and pension calculation formulas.
• Retiree Benefit Summary informs you of benefits options for retirees, including costs and enrollment process.
• Retirement Planning web page offers links to these and other essential resources.

An abbreviated retirement timeline is available in this issue of For Your Benefit. For a complete list of necessary actions, please visit the ERSC website.