ERS retiree news, 2009/Summer

ERS RETIREE NEWS - SUMMER 2009
2009 ERS Legislative Update
Below is a summary of bills passed during the 2009 legislative session that affect current and/or future retirees of the Employees' Retirement System.
House Bill 371/Act 44 -- Equity Investments:
This bill amends the retirement system's investment authority by allowing the system to increase its equity investments, effective April 21, 2009. Increases in equity investments can occur in increments over the next three fiscal years: 65% effective July 1, 2009; 70% effective July 1, 2010; and 75% effective July 1, 2011. However, no fund is authorized to increase its assets in equities through purchase by more than 20% in any fiscal year. In addition, the bill removes the 15% restriction on investments in corporations outside the United States or Canada.
House Bill 452/Act 82 -- No Pension Cost of Living Adjustments (COLA) for New Hires: This bill mandates that any employee newly hired on or after July 1, 2009 will be ineligible for a COLA after retirement. This does not apply to current retirees or active members with a membership date prior to July 1, 2009.
Cost of Living Adjustments
The ERS Board of Trustees met on June 18, 2009. No COLA was approved for July 2009. In lieu of this COLA, the Board approved a one-time bonus payment for retirees and beneficiaries who would otherwise have been eligible for a COLA on July 1, 2009. The bonus will be equal to 1.5% of the payee's annual benefit. The payment date is scheduled for October 23, 2009 and will be a separate payment from your normal retirement benefit.
You must be at least age 45 and retired for 7 months to be eligible for this one-time bonus payment. There is no age requirement for disability retirees. If you retired

early under age 60 and with at least 25 years of service but less than 30 - you are not eligible to receive the bonus until you either turn 60 years old or would have 30 years service had you continued working, whichever is earlier.
The payment will be calculated using 1.5% of each qualified payee's current annual gross benefit as of October 1, 2009. The payment cannot exceed $1,602, which is 1.5% of the 2009 Social Security Wage Base of $106,800.
Federal and state taxes will be calculated using current W-4P information on file for each payee with two exceptions: 1) No "additional amounts" will be taken, and 2) federal and state tax withholding for payees who have flat withholding amounts listed on file will be based on IRS and Georgia Revenue defaults: married with three allowances and single with zero allowances, respectively.
If payees currently have their benefit payment directly deposited, this one-time payment will also be directly deposited. Direct deposit advices will be printed and mailed to those individuals. Payees receiving paper checks will continue to receive a paper check.
While ERS is a properly funded retirement system in accordance with the law, its financial condition has been declining over the past several years. Reports of the Actuary indicate that the funded ratio of ERS has decreased from 100.5% in 2003 to 89.4% in 2008. ERS continues to study the need for additional funding of the retirement system, including:
Increased exposure to broader investment options to improve investment returns
Increased employer contributions
Increased employee contributions
For more information about ERS Financials, visit our website at www.ersga.org.

ERS General Office ERS Toll Free

404-350-6300

ERS Fax

800-805-4609

Peach State Reserves

www.ersga.org

404-350-6308 866-694-2777

HB 202 Pension Compliance
House Bill 202/Act 75 This bill updated the Georgia Statute to comply with all federal retirement plan laws, effective May 11, 2009. ERS currently complies with the federal requirements, but it was necessary to update Georgia law to mirror Internal Revenue Code Sections 401(a) and 414(d). Here is a summary of the significant changes affecting employers, members and retirees:
1. Normal Retirement Age defined [O.C.G.A. 472-110 (a)(2)] as age 60 with 10 years of service, the age of an employee on the date he or she attains 30 years of service, or for those members employed in certain law enforcement positions, age 55 with 10 years of service. From a practical standpoint, this means anyone who takes an Early Retirement* has not attained Normal Retirement Age.
2. Requirement for rehiring Early Retirees -- A bona fide termination must exist for any retiree who takes Early Retirement (i.e. less than Normal Retirement Age) and wishes to return to active employment, as indicated below:
New retirees must remain out of service for at least two months, or the retirement application becomes null and void.
As part of the retirement process, employers must now, in addition to certifying the termination date, also certify that no agreement to allow the employee to return to service exists.
All rehired retirees are subject to the 1,040 hour work limitation; however, retirees who retired on or after Normal Retirement Age (i.e. did not take Early Retirement) are only required to have a one month break in service.
*Early Retirement - retirement with less than 30 years of service and less than age 60.
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Returning to active employment now includes:
Service as or for an independent contractor. Such service may not be subject to the 1,040 hour work limitation if the state agency/employer certifies that: 1. the contracting entity has multiple employees, and
2. the contracting entity has multiple contracts and contracts are not limited to State of Georgia employers, and
3. the contractual relationship with the State of Georgia employer(s) was not created to allow a retiree(s) to continue employment in a similar position after retirement.
Employment with the Board of Regents.
Employment with a local school system, if the rehired employee retired from that school system under ERS.
ERS retirees who are currently in a contract or employment situation are not subject to these new restrictions, but will be subject to these restrictions once the current contract expires.
Employers are now required to complete a new form (Rehired Retiree Reporting Form) to notify ERS of any newly rehired retirees. The form must be submitted to ERS within 30 days of employment. If rehired retirees exceed the 1,040 hour limitation, employers must reimburse ERS for any benefits wrongfully paid in the event the employer has failed to notify ERS of the rehire.
Returning to Work After Retirement
If you are a service retiree and return to work for an employer participating in ERS, the Board of Regents, a Community Service Board, or the same school system from which you retired under ERS, you can only work 1,040 hours (roughly 6 months at full-time) during any calendar year. If you exceed that amount of hours, your ERS monthly benefit will be suspended for the rest of the calendar year. You will begin receiving your monthly benefit again in January and are allowed to work 1,040 hours before your monthly retirement benefit would again be suspended. If you go to work for a non-ERS employer or for the private sector, you may work an unlimited amount of time.
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Returning to Work After Retirement (cont'd)
If you are a disability retiree, there are earnings limitations on your retirement. All ERS disability retirees under the age of 60 are restricted in the earnings they receive from gainful employment. The earnings limitation is determined by taking the difference between the monthly salary used to calculate the disability retirement allowance at retirement and the initial gross monthly disability allowance. All disability retirees are advised of their individual earnings limitation at retirement. To the extent a disability retiree's earnings or earnings capacity exceed this limit, the monthly pension may be reduced in a like amount.
Making Changes to Your Retirement Account
Information
To date, almost 5,000 retirees are using their on-line access to check their retirement account and make changes to direct deposit, tax withholding and address. Have you registered? Many of the changes below can be completed through your secure on-line account access. Changes received by ERS after the 18th of the month may not be processed until the next month.
Address and Taxes Changes to your address, and federal and Georgia withholding taxes can be made at any time. The easiest way to change your address is to access your account on our Retiree Self-Service website at www.ersga.org and make your change on-line, or you can send a letter to ERS that includes name, social security number, new address, signature and date.
Direct Deposit The easiest way to change your direct deposit information is to access your account on-line, or download a direct deposit form from our website and fax or mail to ERS. You can change your financial institution by completing a direct deposit form. After any change in your direct deposit, the first check will be mailed to your home on the last business day of the month. Direct deposit should start with your next month's benefit.

Health Insurance ERS cannot change your health insurance coverage. There is an Open Enrollment period for retirees in the fall of each year for coverage for the upcoming calendar year. There are situations in which coverage can be changed outside of the Open Enrollment period, like divorce or death of spouse. For assistance with health insurance, call (404) 656-6322 or 1-800-610-1863.
Dental Insurance ERS cannot change your dental insurance coverage. For assistance with dental insurance, call direct at (404) 656-2730 or 1-888-968-0490.
Retirement Benefit Options Once you have retired, you can only change your retirement option under very specific circumstances. If you are unmarried at the time of retirement, you may choose an option with your new spouse as beneficiary; however, in some instances, you must make this choice within 6 months after your marriage. Contact ERS for more information.
Beneficiaries Primary Retirement Beneficiary(ies) If you chose the Maximum Plan or Option 1 at retirement, you may change your primary beneficiary(ies) at any time. There are strict limitations on changing primary retirement beneficiaries under any other retirement benefit option choice.
Secondary Retirement Beneficiary(ies) Secondary or contingent beneficiary(ies) may be changed at any time, regardless of your retirement benefit option choice.
Group Term Life Insurance Both primary and secondary beneficiary(ies) may be changed at any time.
To register for on-line account access, go to www.ersga. org and select Retiree Account Access. You'll need to establish a user account, with a password.

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Willis v. ERSGA
For information about the class action case of Willis, et al., Plaintiffs v. Employees' Retirement System of Georgia, et al., Defendants; Civil Action File No. 2007-CV-128923, contact The Garden City Group, Inc. at 1-800-893-4364 or go online to www.ERSsuit.com. The Garden City Group, Inc. is responsible for relaying all information about the case, including any proposed settlement and attorney fees. The only information ERS can provide regarding the case is related to any ongoing benefit payment changes, calculated as a result of any settlement.
In the event of any conflict between this publication and the laws, rules and regulations governing the plan, the terms of the laws, rules and regulations will have precedence.
Two Northside 75, Suite 300 Atlanta, GA 30318-7701
Get Off the Couch and Into the Great Outdoors
Georgians are fortunate to have such exceptional state parks and historic sites right in their backyard. Ranging from Amicalola Falls to Kolomoki Indian Mounds, the parks do much more than protect Georgia's environment and history; they encourage people to lead healthy, active lives. Adults who spend time in nature are more relaxed and energetic. Children who play outdoors are often more imaginative and physically fit. And visitors to historic sites go home with a greater understanding of yesteryear. There is no end to what you can do at Georgia's state parks and historic sites. To learn more about Georgia's state parks and historic sites, and follow the park system's urging to "Get Out. Get Dirty. Get Fit.," visit www. GeorgiaStateParks.org.
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