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What is different
between the current plan and the GSEPS plan?
·
The
current plan (generally for those who became members of ERS
on or after July 1, 1982) is a Defined Benefit plan – employees that
vest (10 year minimum) have a specific monthly pension (based on salary
and years of service) guaranteed by the state. The current retirement
has an employee cost of 1.5%, which includes .25% paid toward
Group Term Life Insurance coverage.
The pension benefit formula is 2% x years of service x highest average
salary*. No 401(k) plan with employer match is included in the current
retirement plan. For more information on the current Defined Benefit
Plan, download the
ERS Handbook.
·
The
GSEPS plan will have two components –
o
a
traditional Defined Benefit plan component (guaranteed by the state),
and
o
a
Defined Contribution plan component, otherwise known as a 401(k) savings
plan.
·
The
GSEPS Defined Benefit Plan has a pension benefit formula of 1% x years
of service x highest average salary* and does not include Group Term
Life Insurance therefore the employee contribution is correspondingly
reduced from 1.5% to 1.25%. Vesting remains at 10 years minimum.
·
Current
employees who are ERS members as of December 31, 2008 may
opt-in to GSEPS at any time on or
after January 1, 2009
*Average of the
highest 24 consecutive calendar months of salary while a member of the
retirement system.
How will the new GSEPS
plan work?
It’s really simple. GSEPS is a combination Defined Benefit/Defined
Contribution plan and works as follows:
·
The
Defined Benefit (DB) plan component:
is mandatory
– with a cost to the employee of 1.25 % of salary (same as the current
plan). The benefit multiplier is 1% for each year of service. Vesting
has the same requirement as the current plan (10 years). The cost to
the state is based on actuarial requirements (same as the current plan).
·
The
Defined Contribution (DC) plan component:
will be implemented
utilizing the Peach State Reserves 401(k) Plan. New employees will be
automatically enrolled* to contribute 1% of their compensation.
The state will match 100% of the employee’s initial 1% of salary.
Employees can elect to contribute up to an additional 4% and the
state will match 50% of the additional 4% of salary. Therefore, the
state will match 3% against the employee’s 5% total savings.
Employees may contribute more than 5%, subject to federal
rules, with no match. State matching contributions to the Defined
Contribution plan will vest over 5 years at 20% per year. The
employee’s own savings amounts are always 100% vested.
*Employees can choose to “opt-out” of this contribution and forego any
match. Once enrolled, they will have 90 days to discontinue
participation and receive a refund of contributions. After 90 days,
employees may still discontinue and reenroll at any time, however no
refund of contributions will be made.
Why does the state
need a new retirement plan?
The State of Georgia employs a diverse and multi-generational
workforce. In order to become competitive in the marketplace for talent
and become an employer of choice, the state must take steps to appeal to
varying sets of employee values, attitudes and compensation
expectations. Simply put, we should have competitive benefits that
attract the best and the brightest to state government, and employees
want “portable” retirement plans that can travel with them throughout
their careers.
The new Georgia State Employees’ Pension and Savings Plan (GSEPS) will
accomplish both goals – it is competitive in today’s marketplace, and it
is portable. The Defined Benefit component allows us to retain
employees that choose to make state government their career – the more
years of service, the higher their monthly pension. The 401(k) savings
plan allows us to attract new employees to state government with a
matching employer contribution – the more the employee saves, the higher
their retirement savings. Together, the new GSEPS plan offers an
attractive, competitive and portable pension and savings plan that meets
the needs of today’s emerging workforce.
I’m a relatively new
state employee. Is it possible for me to become a member of GSEPS?
Yes. Current employees who are ERS members as of December 31, 2008 may
opt-in to GSEPS at any time on or after January 1, 2009. Over the
course of the year we will have more information available on this
website to help you make an informed decision. In addition,
workshops will be held statewide in November and December to educate
employees about GSEPS. Review the
GSEPS Opt-In
webpage for more information.
Will Appellate court
judges continue to have the optional benefits provided in Code Section
47-2-244 in lieu of GSEPS?
Yes. Any “appellate court judge” (any Judge, Presiding Judge, or Chief
Judge of the Court of Appeals and any Associate Justice, Presiding
Justice, or Chief Justice of the Supreme Court) shall be entitled to
receive the benefits under provisions of Code section 47-2-244 in lieu
of any retirement allowances otherwise available under this retirement
system and in lieu of the appointment to or the holding of any emeritus
office upon written notice of same to the ERS Board of Trustees within
60 days after the commencement of the judge’s term of office. The
election is irrevocable. Such judge shall resign from office as an
appellate court judge on or before the day upon which he or she attains
75 years of age or on the last day of the term in which such appellate
court judge is serving when he or she attains age 70, whichever is
later. After ten years of service as an “appellate court judge”, such
judge shall be entitled to receive during life a retirement benefit
payable monthly equivalent to 75 percent of the salary of an appellate
court judge then serving in the office from which such judge retired.
The monthly employee contribution is 8.5% of the judge’s earnable
compensation for each pay period and an additional .50% for group term
life insurance.
Will Law Enforcement
Personnel continue to have special benefits under GSEPS?
Yes.
Line of Duty Disability for any member in service in the Uniform
Division of the Department of Public Safety, a conservation ranger or
deputy conservation ranger of the Department of Natural Resources, a
parole officer employed by the State Board of Pardons and Paroles, an
officer or agent of the Georgia Bureau of Investigation, an alcohol and
tobacco officer or agent of the Department of Revenue, and a probation
officer employed by the Department of Corrections.
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Injury occurred in
the line of duty
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Benefit equal to
the greater of, 24% of monthly salary plus $150, or 1% x service
at age 55 x monthly salary
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Maximum payable
for life of member only – no optional allowances for survivor
Early Service Retirement for any member in service in the Uniform
Division of the Department of Public Safety as an officer,
noncommissioned officer, or trooper, an officer or agent of the Georgia
Bureau of Investigation, a conservation ranger of the Department of
Natural Resources, an alcohol and tobacco officer or agent lf the
Department of Revenue, or an officer or agency of the Special
Investigations Unit of the Department of Revenue.
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Must have minimum
10 years of creditable service
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Must be at least
age 55
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Benefit equal to
1% x years of service x average of highest 24 consecutive calendar
months of salary while a member of the retirement system
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Choice of maximum
plan payable for life of member only or optional allowance
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