Getting Ready for Retirement
Transcript of video:
Slide 1: Congratulations! You've almost made it to retirement. This presentation will cover some important information you need to know about your NHRS benefits as you approach the end of your career.
Slide 2: During this presentation, we will go over an overview of NHRS retirement benefits, tools to help you plan for retirement, death benefits available after retirement, the Age-65 Adjustment to the pension for Group I members, insurance information, what you need to know about working after retirement, and how to stay in touch with NHRS during retirement.
Slide 3: NHRS is a contributory, multi-employer, defined benefit plan established in 1967. We provide retirement, disability, and death benefits, as well as a post-retirement Medical Subsidy to eligible members and their beneficiaries. Once members attain eligibility they can receive a guaranteed lifetime pension. Pension benefits are funded through employee and employer contributions, and investment returns. Investment returns have historically provided the majority of funding for pension benefits.
Slide 4: The New Hampshire retirement system is governed by statute. We have administrative rules that are promulgated by our Board of Trustees, and we also have to adhere to the Internal Revenue Code.
Slide 5: NHRS active members include Group I: Employee and Teacher members of the State, school districts, municipalities, counties, and other political subdivisions; and Group II: Police and Fire members. Retirees of all these groups, or their beneficiaries, receiving pensions from the Retirement System.
Slide 6: NHRS offers four types of retirement: service, disability, early service, and vested deferred retirement. Different benefit provisions apply to Group I (Employee and Teacher) and Group II (Police and Fire) members. Different benefit provisions also apply for members vested prior to January 1, 2012, members in service prior to July 1, 2011 but not vested prior to January 1, 2012, and members hired on or after July 1, 2011.
Slide 7: Pension benefits are determined by statutory formulas that consist of three components: creditable service, average final compensation, and a benefit multiplier. More detailed information on each specific benefit formula is available on our website: www.nhrs.org. Recorded benefit presentations can be accessed from the link on this page.
Slide 8: When a member is approaching retirement, they may request a benefit estimate from the New Hampshire Retirement System. Or, they may schedule an appointment with a Benefits Specialist at the retirement system office. Application materials are available as a printable PDF on www.nhrs.org, at a personal appointment, and via the mail upon request. There is also an online application form on My Account, our secure online portal, which we will discuss in greater detail later in this presentation.
Slide 9: Retirement is not the same as your last day of employment. A member must meet certain filing deadlines and file an application for retirement with the New Hampshire Retirement System in order to be considered “retired” and to start collecting a pension. When a member is filing for retirement, he or she must file their application with the New Hampshire Retirement System office 30 to 90 days prior to the effective date of retirement. The member’s effective date of retirement is always the 1st of a month. The member must also terminate NHRS-covered employment prior to the effective date of retirement.
Slide 10: At retirement, a member may leave a post-retirement death benefit, known as a survivorship option, to a beneficiary. When choosing a survivorship option, the member is choosing to leave a lifetime pension to someone after they pass away. When choosing a beneficiary, a member may select any one person, or may select multiple beneficiaries. However when choosing multiple beneficiaries, members are restricted to choosing their children and/or their spouse. The survivorship option will result in a reduced pension. The reduction is based on the member’s age at retirement, and the age of the primary beneficiary.
Slide 11: At 65, Group I members will experience an approximate 10% reduction in their pension amount. This reduction will happen regardless of the member’s effective date of retirement. This reduction is not linked to eligibility for Social Security benefits.
Slide 12: Health insurance benefits for eligible State of New Hampshire retirees are administered by the New Hampshire Department of Administrative Services, Risk Management Unit. Please contact the Department of Administrative Services at (603) 271-1432 or RetireeHealth@nh.gov to discuss health insurance benefits. Non State of New Hampshire employees by law may elect health insurance coverage with their last NHRS-covered employer at retirement. Contact your employer prior to retirement for details.
Slide 13: NHRS should be informed if: the retiree changed their address; if the retiree or the beneficiary dies (especially if a survivorship option has been chosen at retirement. Adjustments may need to be made to the benefit to ensure that the proper amount is being paid and to the appropriate person); if the retiree gets divorced; or if the retiree becomes eligible for Medicare.
Slide 14: Federal tax tables may change annually. If there is a change to the tax tables, retirees may see a change in their monthly pension amount if they have taxes deducted. Retirees can update the amount of taxes being withheld from their pensions at any time by completing a new IRS W-4P form. Questions regarding taxation should be directed to a tax consultant or the IRS.
Slide 15: Members who would like to work after retirement may work for any non-NHRS employer with no restrictions. They may not occupy an NHRS covered position and receive a pension at the same time. Retirees may work part-time for an NHRS-covered employer. NHRS retirees working part-time for retirement system participating employers are restricted to working a maximum of 1,352 hours per calendar year. There is a financial penalty for any retirees exceeding the statutory limits on annual hours worked. If retirees exceed the 1,352-hour limit, they will lose the state Annuity portion of their pension for 12 months. The State Annuity portion is, on average, about 50% of the pension benefit, although it could be more or less. There is a 28-day separation from service. Retirees have to wait 28 days from their effective date of retirement before beginning work in a part-time capacity for any NHRS-covered employer. The 28-day period begins on the retirement date, which is always the 1st of a month, not on the members last day of employment.
Slide 16: Keeping track of your personal benefit information has never been easier thanks to My Account, the retirement system’s secure online portal where users can access their personal account information from any computer. My Account provides members with access to information such as: account summaries and balances, beneficiary designations, contact information, and member annual statements. Members may also use the online estimator to calculate an estimate of future retirement benefits based on various scenarios, such as retirement date and survivorship options. My Account provides retirees with access to information such as: account balances, beneficiary designations, year-to-date retirement benefit summaries, deductions, direct deposit status, and federal withholding information. In addition, My Account users no longer have to submit a paper form to notify NHRS if they move or change their telephone number or email address. Simply use the Update Personal Information form under the NHRS Online Forms section of My Account.
Slide 17: NHRS is here for you. We want you to stay in touch with us. Some of the best ways to do that are: visit our website at www.nhrs.org for detailed information on retirement benefits; receive news updates and information with our group email list, NHRS Email Updates; connect with us on social media: Facebook, Twitter, YouTube, and LinkedIn. Thank you for listening to this presentation. Please contact the New Hampshire Retirement System office with any questions you may have.