5
For years, Social Security has been encouraging Americans to plan and save for their retirement by utilizing their Social Security Statement. If you are age 25 or older and not yet receiving benefits based on your own earnings record, you should receive your Statement every year about two to three months before your birthday. But do you take the time to review it? You should. Here’s what it will give you:
• An estimate of the monthly retirement ben-efit you could receive at age 62, full retire-ment age and age 70;
• An estimate of the monthly benefit you could be entitled to if you become disabled;
• An estimate of the monthly benefit your family could receive if you die.
However, there is something government em-ployees should know. Some emem-ployees of feder-al, state and local government agencies may also be eligible for a pension based on earnings not covered by Social Security. In other words, earn-ings from government employment where Social Security taxes were not withheld. Because of a law known as the Windfall Elimination Provision (WEP), this can affect the amount of your Social
Security monthly benefits shown on your State-ment. Social Security does not
know whether you are eligible for such a pension not covered by Social Security, so we can-not automatically adjust the estimates on your Statement.
If you have had this kind of employment where your earn-ings were not subject to Social Security taxes, see our fact
sheet, Windfall Elimination Provision at: www. socialsecurity.gov/pubs/10045.html
to find out whether you might be affected. There is also a calculator available online at our website to calculate your estimate to include the Windfall Elimination Provision at: www. socialsecurity.gov/retire2/anyPi-aWepjs04.htm
The Statement provides valuable information for planning your financial future. The State-ment also gives you the opportunity to review your earnings to make sure they’ve been re-ported correctly to the IRS. To learn more about Your Social Security Statement, go to
www.socialsecurity.gov/mystatement.
Your Social Security Statement Can
Help You Save ... Cover
News Flash ... pg 2
Service Credit Purchase Brochure Now Available Contribution Rates Are Changing
Board of Retirement Update
What Now? ... pg 2
Retirement 101 ... pg 2
Death Benefits For Active, Vested Members
Executive Director’s Corner ... pg 4
Defined Benefit Plans: Setting the Foundation for a Secure Retirement
Payee Perspective ... pg 5
Identifying Your Payroll Deduction Options 2010 COLA Approved
Important Dates And Events... Back
Board of Retirement Meetings
SBCERA Board meetings are held in the Board Chambers on the first Thursday of every month at 9:00 a.m. All meetings are open to the public.
May 6, 2010 June 3, 2010 July 1, 2010
2010 San Bernardino County Open
Enrollment Meetings
Have retirement questions? SBCERA will be joining other San Bernardino County service providers at this year’s San Bernardino County Open Enrollment Meetings. Look for us on the following dates at these locations:
Holiday Schedule
SBCERA will be closed for the following holidays:
Memorial Day . . . .
May 31, 2010
Independence Day . . .
July 5, 2010
Regular office hours are Monday - Friday from8:00 a.m. to 5:00 p.m.
2010 Mid-Career Planning Seminars
SBCERA’s Mid-Career Retirement Seminars are well under-way. Don’t miss the following upcoming seminars: June 24, 2010 July 29, 2010 August 26, 2010 The Mid-Career Seminars are held on the last Thursday of each month from 5:15 to 7:00 p.m. in the SBCERA Board Chambers located on the 1st floor of 348 W. Hospitality Lane in San Bernardino. Seating is limited. To reserve a seat, call (909) 885-7980 or email us at [email protected]. PRSRT S TD U.S. POS T A GE
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Have any story ideas?
Email us at [email protected],
or call (909) 885-7980 ext. 329.
Identifying Your Payroll Deduction Options
In accordance with Government Code 31452 and Board of Retirement
Policy, retirees and beneficiaries can have various deductions taken
from their monthly SBCERA retirement benefit payment. They include:
All deductions require written authorization from members. This
can be done using an SBCERA Deduction Authorization Form or the
appropriate organization’s insurance or deduction authorization form.
For more information, go to the Post-Retirement section online at
www.SBCERA.org
or contact us at (909) 885-7980 or toll free at
(877) 722-3721.
The 2010 cost-of-living adjustment (COLA) for
SBCERA payees was approved at 2 percent by
the Board of Retirement on February 4, 2010.
The annual COLA is determined by comparing
the December consumer price index (CPI) in each
of the past two years for the Los
Angeles-River-side-Orange County area.
The local region change as of December 2009
was 1.83 percent – that is 2.0 percent when
rounded to the nearest half-percent in
accor-dance with the ’37 Act (§31870).
Therefore, current retirees and beneficiaries,
and any members who retired on or before April
1, 2010 will receive a 2% COLA this year.
For more information regarding how the
cost-of-living adjustments are
deter-mined, please refer to SBCERA’s COLA
Frequently Asked Questions (FAQs) online at
www.SBCERA.org
. If you would like the
FAQs mailed to you, call us at (909) 885-7980 or
(877) 722-3721 and we would be happy to mail
you a copy.
2010 COLA Approved:
To be reflected on April 30th payment
April 30th
May 28th
June 30th
Your
Social Security
Statement
Can Help You Save
– By Linda Zamfino, Social Security Public Affairs Specialist in Oakland, CA.
June 1, 2010
County Government Center Board Chambers
(10:30 a.m. & 1:00 p.m.)
June 3, 2010 Ontario TAD
Dorothy Rowe Conference Room
(9:30 a.m. & 11:00 a.m.)
June 9, 2010 Hall of Records
4th Floor Conf. Rooms A & B
(9:30 a.m. & 11:00 a.m.)
June 15, 2010 Victorville CFS Conference Room 1
(10:30 a.m. & 1:00 p.m.) News and updates for SBCERA retirees and beneficiaries
•
Arrowhead Credit Union
•
California State Levy
•
Children’s Fund of SB County
•
County COBRA Premiums
•
County Dental Insurance
•
County Health Insurance
•
Federal IRS Levy
•
Fiscal Federal Credit Union
•
MDAQMD Retiree Medical
•
PERS Long Term Care Insurance
•
Retiree Association (RESBC) Dues
•
SBPEA/DEBA Dental
•
SBPEA/SEBA Dues
•
SBPEA/SEBA Vision
•
SEBA – Safety Life Insurance
Service credit is one of the primary factors used to determine your monthly life-time retirement benefit. As your years of service credit increase, your retirement benefit typically goes up.
You can increase your years of service credit in two ways. You can work longer, earn-ing more service credit, or you may be eligible to purchase additional service credit. SBCERA offers several types of service credit purchases for active and
SBCERA member contribution rates will change be-ginning June 19, 2010. SBCERA contribution rates are approved annually by the Board of Supervisors and are based on studies conducted by independent actuaries.
Contributions to the retirement fund are made by our members and their employers. These funds are held in a separate trust fund and are invested for the long-term.
SBCERA and its Board Members would like to wel-come Larry Walker, San Bernardino County Auditor-Controller/Recorder/Treasurer/Tax Collector, as its new Ex-officio Member. Mr. Walker was appointed Treasurer-Tax Collector when the San Bernardino County Board of Supervisors voted earlier this year to merge the offices of the Auditor-Controller/Re-corder and the Treasurer-Tax Collector. Prior to his appointment, Assistant Treasurer-Tax Collector An-nette Kerber was filling the Ex-officio seat vacated by Dick Larsen who retired in July. Mr. Walker was selected to serve on the Board of Retirement’s
Help SBCERA save on printing and mailing costs. Sign up at www.SBCERA.org to receive all future Quarterly Review newsletters via email.
Service credit PurchaSe Brochure Now availaBle
coNtriButioN rateS are chaNgiNg
Board of retiremeNt uPdate
NEWS FLASH
In the one year period ending February 28, 2009, theS&P 500 declined by a devastating 43.32%. The MSCI All Cap World Index of equities declined by 47.87% for the same period and high yield bonds as represented by the Merrill Lynch High Yield Master II Index fell by 23.23%. Almost all assets with the exception of govern-ment bonds, which benefited from a flight to quality, declined in value significantly during the year prior to February 28, 2009.
Stock markets around the world then began a dramatic reversal and recovery from the abyss in March of 2009 with the S&P 500 now showing a gain of
53.62% for the one year period ending February 28, 2010. The MSCI All Cap World Index of equities also gained 58.96% for the same period. High yield bonds as represented by the Merrill Lynch High Yield Master II Index showed an even more impressive gain of 57.54% considering the more muted decline of the prior year.
After the largest selloff and rebound in the equity and credit markets since the Great Depression many investors are now asking themselves the question, “What now?” In answer, some market proponents are giving the “all clear” signal that the economy is in recovery mode and that the equity market is more fairly priced but still offers
Administration Committee and as Chairman of the Audit Committee.
In addition, two Board of Retirement seats will be up for election this November. All members of the Board serve three-year terms. The seats up for election are the Board’s General Member Repre-sentative and Retired Member RepreRepre-sentative. The seats are currently held by Dawn Stafford and Bob McDonald, respectively. Declarations of Candidacy and procedural information will be available from the Registrar of Voters in mid-August. More infor-mation regarding the election will be posted soon. deferred members. However, the advantages and limita-tions for each type of purchase vary.
View SBCERA’s new brochure, “Enhancing Your Retirement: Service Credit Purchases,” to find out the differences between each type of
pur-chase, what they can be used for, and what you may be eligible to purchase. The
bro-chure can be found on our Web site www.SBCERA.org. If you would like a brochure mailed to you, please email us at [email protected].
Currently, approximately 70 percent of SBCERA’s retire-ment benefit funding comes from investretire-ment earnings. The remaining 30 percent comes from employee and employer contributions.
Watch for the new contribution rates in future commu-nication materials or look for them online in the coming months.
good upside. Many other investors focused on the still fragile credit markets and job environment remain nervous about the future, and economists are still largely divided regarding the issue of inflation or deflation.
To many long-term investors, this uncertain outlook and the extraordinary gains of the last year suggest caution and a return to fundamentals. Last year the markets ral-lied as a whole, and the key factor in obtaining large returns was the amount of exposure an investor had to risky assets. Many investment professionals believe that most of the gain of the broad market is now behind us and that stock and bond selection will be more critical on a go forward basis. While last year passive exposure to the markets was of great benefit, this year active management may be of greater value.
Last year also saw lower quality stocks and bonds outperform higher quality issues in what is sometimes referred to as a junk rally. The premiums that investors
currently demand for investing in lower quality compa-nies over higher quality compacompa-nies is only modest, so on a risk adjusted basis, valuations now appear to favor higher quality issues over lower quality ones. If the mar-ket becomes more volatile over the next year these higher quality securities should also provide more stability in a portfolio than lower quality issues. The weak credit and lending environment also suggests a heightened risk of default for lower quality, highly leveraged companies.
As always, a well diversified portfolio that includes appropriate allocations to stocks, bonds and other diver-sifying assets is critical in managing overall investment risk. However, in the current investment environment good manager selection and a focus on quality assets will likely provide additional benefits to investors and hopefully make the question of “What now?” a little less ominous.
Retirement 101:
Death Benefits
for Active,
Vested Members
The last few years have been tough on everyone. While the signs of economic crisis began in late 2008, it wasn’t until early 2009 that we all watched as the economy seemingly collapsed and the financial markets crumbled.
As a result, public pension plans including SBCERA suffered drastic, unforeseen losses. However, we are beginning to see the signs of prosperity and growth on the horizon. And we believe SBCERA is well-positioned for the impending recovery. While we have already shown some recovery, we still have quite a recovery ahead of us. As of December 31, 2009, our fund was up 8.8% for the first half of the fiscal year to nearly $5.1 billion.
Defined benefit plans, such as SBCERA, guarantee members a lifetime retirement benefit. These benefits are funded with employee contributions, employer contributions and investment earnings. At SBCERA, nearly 70 percent of our benefit payments are funded with our investment earnings. These funds are held in trust and invested separately from any general fund. They are managed and invested for the long-term by SBCERA’s nine-member Board of Retirement.
In the midst of this economic uncertainty, there has been increased criticism about defined benefit plans, especially public pension plans, and their viability in
today’s economic condition. The economy is cyclical and markets can be extremely volatile as we have all witnessed. Therefore, it is difficult for us to predict how we will perform in the future. I can, however, ensure our members that our fund remains highly diversified and the Board is committed to ensuring its security.
While various initiatives for pension reform have been discussed in the media and by elected officials, it is important to remember that defined benefit plans are a promise. They are a vested right that is consid-ered a binding commitment by law. Historically, no one has been able to forego this commitment. As a mem-ber of SBCERA you are guaranteed this benefit, which sets the foundation for a secure retirement.
As our local leaders and elected officials work to-gether to determine how to ensure a stable and se-cure retirement for everyone, I assure you that your retirement benefits are safe and our pension promise remains solid and secure.
Timothy B. Barrett, CFA Executive Director/CIO
Defined Benefit Plans
Setting the Foundation for a Secure Retirement
What Now?
As a member of SBCERA, you are eligible for various death benefits. Multiple factors impact what type of benefits will be available for your beneficiaries upon your death. They include:
• Whether you are an active or retired member at the time of your death.
• Whether you are a vested or non-vested member. You become vested after you have earned at least five years of service credit. A year of service credit is equivalent to 2,087 hours worked.
• If your death was service-related or non service-related. In the last Quarterly Review, we covered the benefits available for Active, Non-Vested members. After earning five years of service credit and becoming vested, additional death allowances are available for your surviving spouse, domestic partner, or eligible children. However, any other designated beneficiary or beneficiaries such as a sibling or adult child will only be eligible for the lump-sum death benefit option described below.
In terms of identifying the death benefits available to your beneficiaries, it is important to define the following beneficiaries:
• Surviving Spouse: Someone you are married to prior to your death.
• Eligible Child: An unmarried, dependent child under age 18, or a full-time student, unmarried until age 22.
• Domestic Partner: A partner that you have been registered with in the State of California as of the date of your death.
If you die after you are vested, the following options will be available to your beneficiary or beneficiaries: • Optional Death Allowance: A monthly payment
equal to 60 percent of the amount you would have been awarded in a nonservice-connected disability retirement. This option is only available to a surviving spouse, eligible child or domestic partner.
• Modified Death Allowance: A lump-sum pay-ment of one month’s compensation for every full year of service credit, up to six months worth of compen-sation, plus a reduced monthly payment that will be based on the age of your beneficiary. This option is only available to a surviving spouse or domestic part-ner.
• Death Benefit: A lump-sum payment of one month’s compensation for every full year of service credit, up to six months worth of compensation, plus any refund-able contributions you may have, plus interest. Take a look at your annual member statement or sign up for Web Member Services at www.SBCERA.org
to check the balance of your refundable contributions. This option is available to any designated beneficiary. In addition, if you were a General member continuously for 18 months immediately prior to your death, your sur-viving spouse and/or dependent children will be eligible for Survivor Benefits. This includes a $255.00 Burial Allowance. The amounts can be found in the Survivor
Benefits Table in SBCERA’s summary plan description, “The Compass.”
If your death is the result of a service-connected in-jury or disease that arose from your employment, all of the options above will be available to your beneficia-ries. However, a surviving spouse, domestic partner or eligible children may qualify for a monthly survivorship equal to the amount that would have been awarded in a service-connected disability.
Please Note: As an active or deferred member, you may choose whoever you would like as your ben-eficiary; however, if you have a surviving spouse or minor children, they may have certain rights that super-sede the rights of your named beneficiary.
Service credit is one of the primary factors used to determine your monthly life-time retirement benefit. As your years of service credit increase, your retirement benefit typically goes up.
You can increase your years of service credit in two ways. You can work longer, earn-ing more service credit, or you may be eligible to purchase additional service credit. SBCERA offers several types of service credit purchases for active and
SBCERA member contribution rates will change be-ginning June 19, 2010. SBCERA contribution rates are approved annually by the Board of Supervisors and are based on studies conducted by independent actuaries.
Contributions to the retirement fund are made by our members and their employers. These funds are held in a separate trust fund and are invested for the long-term.
SBCERA and its Board Members would like to wel-come Larry Walker, San Bernardino County Auditor-Controller/Recorder/Treasurer/Tax Collector, as its new Ex-officio Member. Mr. Walker was appointed Treasurer-Tax Collector when the San Bernardino County Board of Supervisors voted earlier this year to merge the offices of the Auditor-Controller/Re-corder and the Treasurer-Tax Collector. Prior to his appointment, Assistant Treasurer-Tax Collector An-nette Kerber was filling the Ex-officio seat vacated by Dick Larsen who retired in July. Mr. Walker was selected to serve on the Board of Retirement’s
Help SBCERA save on printing and mailing costs. Sign up at www.SBCERA.org to receive all future Quarterly Review newsletters via email.
Service credit PurchaSe Brochure Now availaBle
coNtriButioN rateS are chaNgiNg
Board of retiremeNt uPdate
NEWS FLASH
2 3 4
In the one year period ending February 28, 2009, the S&P 500 declined by a devastating 43.32%. The MSCI All Cap World Index of equities declined by 47.87% for the same period and high yield bonds as represented by the Merrill Lynch High Yield Master II Index fell by 23.23%. Almost all assets with the exception of govern-ment bonds, which benefited from a flight to quality, declined in value significantly during the year prior to February 28, 2009.
Stock markets around the world then began a dramatic reversal and recovery from the abyss in March of 2009 with the S&P 500 now showing a gain of
53.62% for the one year period ending February 28, 2010. The MSCI All Cap World Index of equities also gained 58.96% for the same period. High yield bonds as represented by the Merrill Lynch High Yield Master II Index showed an even more impressive gain of 57.54% considering the more muted decline of the prior year.
After the largest selloff and rebound in the equity and credit markets since the Great Depression many investors are now asking themselves the question, “What now?” In answer, some market proponents are giving the “all clear” signal that the economy is in recovery mode and that the equity market is more fairly priced but still offers
Administration Committee and as Chairman of the Audit Committee.
In addition, two Board of Retirement seats will be up for election this November. All members of the Board serve three-year terms. The seats up for election are the Board’s General Member Repre-sentative and Retired Member RepreRepre-sentative. The seats are currently held by Dawn Stafford and Bob McDonald, respectively. Declarations of Candidacy and procedural information will be available from the Registrar of Voters in mid-August. More infor-mation regarding the election will be posted soon. deferred members. However, the advantages and limita-tions for each type of purchase vary.
View SBCERA’s new brochure, “Enhancing Your Retirement: Service Credit Purchases,” to find out the differences between each type of
pur-chase, what they can be used for, and what you may be eligible to purchase. The
bro-chure can be found on our Web site www.SBCERA.org. If you would like a brochure mailed to you, please email us at [email protected].
Currently, approximately 70 percent of SBCERA’s retire-ment benefit funding comes from investretire-ment earnings. The remaining 30 percent comes from employee and employer contributions.
Watch for the new contribution rates in future commu-nication materials or look for them online in the coming months.
good upside. Many other investors focused on the still fragile credit markets and job environment remain nervous about the future, and economists are still largely divided regarding the issue of inflation or deflation.
To many long-term investors, this uncertain outlook and the extraordinary gains of the last year suggest caution and a return to fundamentals. Last year the markets ral-lied as a whole, and the key factor in obtaining large returns was the amount of exposure an investor had to risky assets. Many investment professionals believe that most of the gain of the broad market is now behind us and that stock and bond selection will be more critical on a go forward basis. While last year passive exposure to the markets was of great benefit, this year active management may be of greater value.
Last year also saw lower quality stocks and bonds outperform higher quality issues in what is sometimes referred to as a junk rally. The premiums that investors
currently demand for investing in lower quality compa-nies over higher quality compacompa-nies is only modest, so on a risk adjusted basis, valuations now appear to favor higher quality issues over lower quality ones. If the mar-ket becomes more volatile over the next year these higher quality securities should also provide more stability in a portfolio than lower quality issues. The weak credit and lending environment also suggests a heightened risk of default for lower quality, highly leveraged companies.
As always, a well diversified portfolio that includes appropriate allocations to stocks, bonds and other diver-sifying assets is critical in managing overall investment risk. However, in the current investment environment good manager selection and a focus on quality assets will likely provide additional benefits to investors and hopefully make the question of “What now?” a little less ominous.
Retirement 101:
Death Benefits
for Active,
Vested Members
The last few years have been tough on everyone. While the signs of economic crisis began in late 2008, it wasn’t until early 2009 that we all watched as the economy seemingly collapsed and the financial markets crumbled.
As a result, public pension plans including SBCERA suffered drastic, unforeseen losses. However, we are beginning to see the signs of prosperity and growth on the horizon. And we believe SBCERA is well-positioned for the impending recovery. While we have already shown some recovery, we still have quite a recovery ahead of us. As of December 31, 2009, our fund was up 8.8% for the first half of the fiscal year to nearly $5.1 billion.
Defined benefit plans, such as SBCERA, guarantee members a lifetime retirement benefit. These benefits are funded with employee contributions, employer contributions and investment earnings. At SBCERA, nearly 70 percent of our benefit payments are funded with our investment earnings. These funds are held in trust and invested separately from any general fund. They are managed and invested for the long-term by SBCERA’s nine-member Board of Retirement.
In the midst of this economic uncertainty, there has been increased criticism about defined benefit plans, especially public pension plans, and their viability in
today’s economic condition. The economy is cyclical and markets can be extremely volatile as we have all witnessed. Therefore, it is difficult for us to predict how we will perform in the future. I can, however, ensure our members that our fund remains highly diversified and the Board is committed to ensuring its security.
While various initiatives for pension reform have been discussed in the media and by elected officials, it is important to remember that defined benefit plans are a promise. They are a vested right that is consid-ered a binding commitment by law. Historically, no one has been able to forego this commitment. As a mem-ber of SBCERA you are guaranteed this benefit, which sets the foundation for a secure retirement.
As our local leaders and elected officials work to-gether to determine how to ensure a stable and se-cure retirement for everyone, I assure you that your retirement benefits are safe and our pension promise remains solid and secure.
Timothy B. Barrett, CFA Executive Director/CIO
Defined Benefit Plans
Setting the Foundation for a Secure Retirement
What Now?
As a member of SBCERA, you are eligible for various death benefits. Multiple factors impact what type of benefits will be available for your beneficiaries upon your death. They include:
• Whether you are an active or retired member at the time of your death.
• Whether you are a vested or non-vested member. You become vested after you have earned at least five years of service credit. A year of service credit is equivalent to 2,087 hours worked.
• If your death was service-related or non service-related. In the last Quarterly Review, we covered the benefits available for Active, Non-Vested members. After earning five years of service credit and becoming vested, additional death allowances are available for your surviving spouse, domestic partner, or eligible children. However, any other designated beneficiary or beneficiaries such as a sibling or adult child will only be eligible for the lump-sum death benefit option described below.
In terms of identifying the death benefits available to your beneficiaries, it is important to define the following beneficiaries:
• Surviving Spouse: Someone you are married to prior to your death.
• Eligible Child: An unmarried, dependent child under age 18, or a full-time student, unmarried until age 22.
• Domestic Partner: A partner that you have been registered with in the State of California as of the date of your death.
If you die after you are vested, the following options will be available to your beneficiary or beneficiaries: • Optional Death Allowance: A monthly payment
equal to 60 percent of the amount you would have been awarded in a nonservice-connected disability retirement. This option is only available to a surviving spouse, eligible child or domestic partner.
• Modified Death Allowance: A lump-sum pay-ment of one month’s compensation for every full year of service credit, up to six months worth of compen-sation, plus a reduced monthly payment that will be based on the age of your beneficiary. This option is only available to a surviving spouse or domestic part-ner.
• Death Benefit: A lump-sum payment of one month’s compensation for every full year of service credit, up to six months worth of compensation, plus any refund-able contributions you may have, plus interest. Take a look at your annual member statement or sign up for Web Member Services at www.SBCERA.org
to check the balance of your refundable contributions. This option is available to any designated beneficiary. In addition, if you were a General member continuously for 18 months immediately prior to your death, your sur-viving spouse and/or dependent children will be eligible for Survivor Benefits. This includes a $255.00 Burial Allowance. The amounts can be found in the Survivor
Benefits Table in SBCERA’s summary plan description, “The Compass.”
If your death is the result of a service-connected in-jury or disease that arose from your employment, all of the options above will be available to your beneficia-ries. However, a surviving spouse, domestic partner or eligible children may qualify for a monthly survivorship equal to the amount that would have been awarded in a service-connected disability.
Please Note: As an active or deferred member, you may choose whoever you would like as your ben-eficiary; however, if you have a surviving spouse or minor children, they may have certain rights that super-sede the rights of your named beneficiary.
Service credit is one of the primary factors used to determine your monthly life-time retirement benefit. As your years of service credit increase, your retirement benefit typically goes up.
You can increase your years of service credit in two ways. You can work longer, earn-ing more service credit, or you may be eligible to purchase additional service credit. SBCERA offers several types of service credit purchases for active and
SBCERA member contribution rates will change be-ginning June 19, 2010. SBCERA contribution rates are approved annually by the Board of Supervisors and are based on studies conducted by independent actuaries.
Contributions to the retirement fund are made by our members and their employers. These funds are held in a separate trust fund and are invested for the long-term.
SBCERA and its Board Members would like to wel-come Larry Walker, San Bernardino County Auditor-Controller/Recorder/Treasurer/Tax Collector, as its new Ex-officio Member. Mr. Walker was appointed Treasurer-Tax Collector when the San Bernardino County Board of Supervisors voted earlier this year to merge the offices of the Auditor-Controller/Re-corder and the Treasurer-Tax Collector. Prior to his appointment, Assistant Treasurer-Tax Collector An-nette Kerber was filling the Ex-officio seat vacated by Dick Larsen who retired in July. Mr. Walker was selected to serve on the Board of Retirement’s
Help SBCERA save on printing and mailing costs. Sign up at www.SBCERA.org to receive all future Quarterly Review newsletters via email.
Service credit PurchaSe Brochure Now availaBle
coNtriButioN rateS are chaNgiNg
Board of retiremeNt uPdate
NEWS FLASH
In the one year period ending February 28, 2009, theS&P 500 declined by a devastating 43.32%. The MSCI All Cap World Index of equities declined by 47.87% for the same period and high yield bonds as represented by the Merrill Lynch High Yield Master II Index fell by 23.23%. Almost all assets with the exception of govern-ment bonds, which benefited from a flight to quality, declined in value significantly during the year prior to February 28, 2009.
Stock markets around the world then began a dramatic reversal and recovery from the abyss in March of 2009 with the S&P 500 now showing a gain of
53.62% for the one year period ending February 28, 2010. The MSCI All Cap World Index of equities also gained 58.96% for the same period. High yield bonds as represented by the Merrill Lynch High Yield Master II Index showed an even more impressive gain of 57.54% considering the more muted decline of the prior year.
After the largest selloff and rebound in the equity and credit markets since the Great Depression many investors are now asking themselves the question, “What now?” In answer, some market proponents are giving the “all clear” signal that the economy is in recovery mode and that the equity market is more fairly priced but still offers
Administration Committee and as Chairman of the Audit Committee.
In addition, two Board of Retirement seats will be up for election this November. All members of the Board serve three-year terms. The seats up for election are the Board’s General Member Repre-sentative and Retired Member RepreRepre-sentative. The seats are currently held by Dawn Stafford and Bob McDonald, respectively. Declarations of Candidacy and procedural information will be available from the Registrar of Voters in mid-August. More infor-mation regarding the election will be posted soon. deferred members. However, the advantages and limita-tions for each type of purchase vary.
View SBCERA’s new brochure, “Enhancing Your Retirement: Service Credit Purchases,” to find out the differences between each type of
pur-chase, what they can be used for, and what you may be eligible to purchase. The
bro-chure can be found on our Web site www.SBCERA.org. If you would like a brochure mailed to you, please email us at [email protected].
Currently, approximately 70 percent of SBCERA’s retire-ment benefit funding comes from investretire-ment earnings. The remaining 30 percent comes from employee and employer contributions.
Watch for the new contribution rates in future commu-nication materials or look for them online in the coming months.
good upside. Many other investors focused on the still fragile credit markets and job environment remain nervous about the future, and economists are still largely divided regarding the issue of inflation or deflation.
To many long-term investors, this uncertain outlook and the extraordinary gains of the last year suggest caution and a return to fundamentals. Last year the markets ral-lied as a whole, and the key factor in obtaining large returns was the amount of exposure an investor had to risky assets. Many investment professionals believe that most of the gain of the broad market is now behind us and that stock and bond selection will be more critical on a go forward basis. While last year passive exposure to the markets was of great benefit, this year active management may be of greater value.
Last year also saw lower quality stocks and bonds outperform higher quality issues in what is sometimes referred to as a junk rally. The premiums that investors
currently demand for investing in lower quality compa-nies over higher quality compacompa-nies is only modest, so on a risk adjusted basis, valuations now appear to favor higher quality issues over lower quality ones. If the mar-ket becomes more volatile over the next year these higher quality securities should also provide more stability in a portfolio than lower quality issues. The weak credit and lending environment also suggests a heightened risk of default for lower quality, highly leveraged companies.
As always, a well diversified portfolio that includes appropriate allocations to stocks, bonds and other diver-sifying assets is critical in managing overall investment risk. However, in the current investment environment good manager selection and a focus on quality assets will likely provide additional benefits to investors and hopefully make the question of “What now?” a little less ominous.
Retirement 101:
Death Benefits
for Active,
Vested Members
The last few years have been tough on everyone. While the signs of economic crisis began in late 2008, it wasn’t until early 2009 that we all watched as the economy seemingly collapsed and the financial markets crumbled.
As a result, public pension plans including SBCERA suffered drastic, unforeseen losses. However, we are beginning to see the signs of prosperity and growth on the horizon. And we believe SBCERA is well-positioned for the impending recovery. While we have already shown some recovery, we still have quite a recovery ahead of us. As of December 31, 2009, our fund was up 8.8% for the first half of the fiscal year to nearly $5.1 billion.
Defined benefit plans, such as SBCERA, guarantee members a lifetime retirement benefit. These benefits are funded with employee contributions, employer contributions and investment earnings. At SBCERA, nearly 70 percent of our benefit payments are funded with our investment earnings. These funds are held in trust and invested separately from any general fund. They are managed and invested for the long-term by SBCERA’s nine-member Board of Retirement.
In the midst of this economic uncertainty, there has been increased criticism about defined benefit plans, especially public pension plans, and their viability in
today’s economic condition. The economy is cyclical and markets can be extremely volatile as we have all witnessed. Therefore, it is difficult for us to predict how we will perform in the future. I can, however, ensure our members that our fund remains highly diversified and the Board is committed to ensuring its security.
While various initiatives for pension reform have been discussed in the media and by elected officials, it is important to remember that defined benefit plans are a promise. They are a vested right that is consid-ered a binding commitment by law. Historically, no one has been able to forego this commitment. As a mem-ber of SBCERA you are guaranteed this benefit, which sets the foundation for a secure retirement.
As our local leaders and elected officials work to-gether to determine how to ensure a stable and se-cure retirement for everyone, I assure you that your retirement benefits are safe and our pension promise remains solid and secure.
Timothy B. Barrett, CFA Executive Director/CIO
Defined Benefit Plans
Setting the Foundation for a Secure Retirement
What Now?
As a member of SBCERA, you are eligible for various death benefits. Multiple factors impact what type of benefits will be available for your beneficiaries upon your death. They include:
• Whether you are an active or retired member at the time of your death.
• Whether you are a vested or non-vested member. You become vested after you have earned at least five years of service credit. A year of service credit is equivalent to 2,087 hours worked.
• If your death was service-related or non service-related. In the last Quarterly Review, we covered the benefits available for Active, Non-Vested members. After earning five years of service credit and becoming vested, additional death allowances are available for your surviving spouse, domestic partner, or eligible children. However, any other designated beneficiary or beneficiaries such as a sibling or adult child will only be eligible for the lump-sum death benefit option described below.
In terms of identifying the death benefits available to your beneficiaries, it is important to define the following beneficiaries:
• Surviving Spouse: Someone you are married to prior to your death.
• Eligible Child: An unmarried, dependent child under age 18, or a full-time student, unmarried until age 22.
• Domestic Partner: A partner that you have been registered with in the State of California as of the date of your death.
If you die after you are vested, the following options will be available to your beneficiary or beneficiaries: • Optional Death Allowance: A monthly payment
equal to 60 percent of the amount you would have been awarded in a nonservice-connected disability retirement. This option is only available to a surviving spouse, eligible child or domestic partner.
• Modified Death Allowance: A lump-sum pay-ment of one month’s compensation for every full year of service credit, up to six months worth of compen-sation, plus a reduced monthly payment that will be based on the age of your beneficiary. This option is only available to a surviving spouse or domestic part-ner.
• Death Benefit: A lump-sum payment of one month’s compensation for every full year of service credit, up to six months worth of compensation, plus any refund-able contributions you may have, plus interest. Take a look at your annual member statement or sign up for Web Member Services at www.SBCERA.org
to check the balance of your refundable contributions. This option is available to any designated beneficiary. In addition, if you were a General member continuously for 18 months immediately prior to your death, your sur-viving spouse and/or dependent children will be eligible for Survivor Benefits. This includes a $255.00 Burial Allowance. The amounts can be found in the Survivor
Benefits Table in SBCERA’s summary plan description, “The Compass.”
If your death is the result of a service-connected in-jury or disease that arose from your employment, all of the options above will be available to your beneficia-ries. However, a surviving spouse, domestic partner or eligible children may qualify for a monthly survivorship equal to the amount that would have been awarded in a service-connected disability.
Please Note: As an active or deferred member, you may choose whoever you would like as your ben-eficiary; however, if you have a surviving spouse or minor children, they may have certain rights that super-sede the rights of your named beneficiary.
5
For years, Social Security has been encouraging Americans to plan and save for their retirement by utilizing their Social Security Statement. If you are age 25 or older and not yet receiving benefits based on your own earnings record, you should receive your Statement every year about two to three months before your birthday. But do you take the time to review it? You should. Here’s what it will give you:
• An estimate of the monthly retirement ben-efit you could receive at age 62, full retire-ment age and age 70;
• An estimate of the monthly benefit you could be entitled to if you become disabled;
• An estimate of the monthly benefit your family could receive if you die.
However, there is something government em-ployees should know. Some emem-ployees of feder-al, state and local government agencies may also be eligible for a pension based on earnings not covered by Social Security. In other words, earn-ings from government employment where Social Security taxes were not withheld. Because of a law known as the Windfall Elimination Provision (WEP), this can affect the amount of your Social
Security monthly benefits shown on your State-ment. Social Security does not
know whether you are eligible for such a pension not covered by Social Security, so we can-not automatically adjust the estimates on your Statement.
If you have had this kind of employment where your earn-ings were not subject to Social Security taxes, see our fact
sheet, Windfall Elimination Provision at: www. socialsecurity.gov/pubs/10045.html
to find out whether you might be affected. There is also a calculator available online at our website to calculate your estimate to include the Windfall Elimination Provision at: www. socialsecurity.gov/retire2/anyPi-aWepjs04.htm
The Statement provides valuable information for planning your financial future. The State-ment also gives you the opportunity to review your earnings to make sure they’ve been re-ported correctly to the IRS. To learn more about Your Social Security Statement, go to
www.socialsecurity.gov/mystatement.
Your Social Security Statement Can
Help You Save ... Cover
News Flash ... pg 2
Service Credit Purchase Brochure Now Available Contribution Rates Are Changing
Board of Retirement Update
What Now? ... pg 2
Retirement 101 ... pg 2
Death Benefits For Active, Vested Members
Executive Director’s Corner ... pg 4
Defined Benefit Plans: Setting the Foundation for a Secure Retirement
Payee Perspective ... pg 5
Identifying Your Payroll Deduction Options 2010 COLA Approved
Important Dates And Events... Back
Board of Retirement Meetings
SBCERA Board meetings are held in the Board Chambers on the first Thursday of every month at 9:00 a.m. All meetings are open to the public.
May 6, 2010 June 3, 2010 July 1, 2010
2010 San Bernardino County Open
Enrollment Meetings
Have retirement questions? SBCERA will be joining other San Bernardino County service providers at this year’s San Bernardino County Open Enrollment Meetings. Look for us on the following dates at these locations:
Holiday Schedule
SBCERA will be closed for the following holidays:
Memorial Day . . . .
May 31, 2010
Independence Day . . .
July 5, 2010
Regular office hours are Monday - Friday from8:00 a.m. to 5:00 p.m.
2010 Mid-Career Planning Seminars
SBCERA’s Mid-Career Retirement Seminars are well under-way. Don’t miss the following upcoming seminars: June 24, 2010 July 29, 2010 August 26, 2010 The Mid-Career Seminars are held on the last Thursday of each month from 5:15 to 7:00 p.m. in the SBCERA Board Chambers located on the 1st floor of 348 W. Hospitality Lane in San Bernardino. Seating is limited. To reserve a seat, call (909) 885-7980 or email us at [email protected]. PRSRT S TD U.S. POS T A GE
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Have any story ideas?
Email us at [email protected],
or call (909) 885-7980 ext. 329.
Identifying Your Payroll Deduction Options
In accordance with Government Code 31452 and Board of Retirement
Policy, retirees and beneficiaries can have various deductions taken
from their monthly SBCERA retirement benefit payment. They include:
All deductions require written authorization from members. This
can be done using an SBCERA Deduction Authorization Form or the
appropriate organization’s insurance or deduction authorization form.
For more information, go to the Post-Retirement section online at
www.SBCERA.org
or contact us at (909) 885-7980 or toll free at
(877) 722-3721.
The 2010 cost-of-living adjustment (COLA) for
SBCERA payees was approved at 2 percent by
the Board of Retirement on February 4, 2010.
The annual COLA is determined by comparing
the December consumer price index (CPI) in each
of the past two years for the Los
Angeles-River-side-Orange County area.
The local region change as of December 2009
was 1.83 percent – that is 2.0 percent when
rounded to the nearest half-percent in
accor-dance with the ’37 Act (§31870).
Therefore, current retirees and beneficiaries,
and any members who retired on or before April
1, 2010 will receive a 2% COLA this year.
For more information regarding how the
cost-of-living adjustments are
deter-mined, please refer to SBCERA’s COLA
Frequently Asked Questions (FAQs) online at
www.SBCERA.org
. If you would like the
FAQs mailed to you, call us at (909) 885-7980 or
(877) 722-3721 and we would be happy to mail
you a copy.
2010 COLA Approved:
To be reflected on April 30th payment
April 30th
May 28th
June 30th
Your
Social Security
Statement
Can Help You Save
– By Linda Zamfino, Social Security Public Affairs Specialist in Oakland, CA.
June 1, 2010
County Government Center Board Chambers
(10:30 a.m. & 1:00 p.m.)
June 3, 2010 Ontario TAD
Dorothy Rowe Conference Room
(9:30 a.m. & 11:00 a.m.)
June 9, 2010 Hall of Records
4th Floor Conf. Rooms A & B
(9:30 a.m. & 11:00 a.m.)
June 15, 2010 Victorville CFS Conference Room 1
(10:30 a.m. & 1:00 p.m.) News and updates for SBCERA retirees and beneficiaries
•
Arrowhead Credit Union
•
California State Levy
•
Children’s Fund of SB County
•
County COBRA Premiums
•
County Dental Insurance
•
County Health Insurance
•
Federal IRS Levy
•
Fiscal Federal Credit Union
•
MDAQMD Retiree Medical
•
PERS Long Term Care Insurance
•
Retiree Association (RESBC) Dues
•
SBPEA/DEBA Dental
•
SBPEA/SEBA Dues
•
SBPEA/SEBA Vision
•
SEBA – Safety Life Insurance
For years, Social Security has been encouraging Americans to plan and save for their retirement by utilizing their Social Security Statement. If you are age 25 or older and not yet receiving benefits based on your own earnings record, you should receive your Statement every year about two to three months before your birthday. But do you take the time to review it? You should. Here’s what it will give you:
• An estimate of the monthly retirement ben-efit you could receive at age 62, full retire-ment age and age 70;
• An estimate of the monthly benefit you could be entitled to if you become disabled;
• An estimate of the monthly benefit your family could receive if you die.
However, there is something government em-ployees should know. Some emem-ployees of feder-al, state and local government agencies may also be eligible for a pension based on earnings not covered by Social Security. In other words, earn-ings from government employment where Social Security taxes were not withheld. Because of a law known as the Windfall Elimination Provision (WEP), this can affect the amount of your Social
Security monthly benefits shown on your State-ment. Social Security does not
know whether you are eligible for such a pension not covered by Social Security, so we can-not automatically adjust the estimates on your Statement.
If you have had this kind of employment where your earn-ings were not subject to Social Security taxes, see our fact
sheet, Windfall Elimination Provision at: www. socialsecurity.gov/pubs/10045.html
to find out whether you might be affected. There is also a calculator available online at our website to calculate your estimate to include the Windfall Elimination Provision at: www. socialsecurity.gov/retire2/anyPi-aWepjs04.htm
The Statement provides valuable information for planning your financial future. The State-ment also gives you the opportunity to review your earnings to make sure they’ve been re-ported correctly to the IRS. To learn more about Your Social Security Statement, go to
www.socialsecurity.gov/mystatement.
Your Social Security Statement Can
Help You Save ... Cover
News Flash ... pg 2
Service Credit Purchase Brochure Now Available Contribution Rates Are Changing
Board of Retirement Update
What Now? ... pg 2
Retirement 101 ... pg 2
Death Benefits For Active, Vested Members
Executive Director’s Corner ... pg 4
Defined Benefit Plans: Setting the Foundation for a Secure Retirement
Payee Perspective ... pg 5
Identifying Your Payroll Deduction Options 2010 COLA Approved
Important Dates And Events... Back
Board of Retirement Meetings
SBCERA Board meetings are held in the Board Chambers on the first Thursday of every month at 9:00 a.m. All meetings are open to the public.
May 6, 2010 June 3, 2010 July 1, 2010
2010 San Bernardino County Open
Enrollment Meetings
Have retirement questions? SBCERA will be joining other San Bernardino County service providers at this year’s San Bernardino County Open Enrollment Meetings. Look for us on the following dates at these locations:
Holiday Schedule
SBCERA will be closed for the following holidays:
Memorial Day . . . .
May 31, 2010
Independence Day . . .
July 5, 2010
Regular office hours are Monday - Friday from8:00 a.m. to 5:00 p.m.
2010 Mid-Career Planning Seminars
SBCERA’s Mid-Career Retirement Seminars are well under-way. Don’t miss the following upcoming seminars: June 24, 2010 July 29, 2010 August 26, 2010 The Mid-Career Seminars are held on the last Thursday of each month from 5:15 to 7:00 p.m. in the SBCERA Board Chambers located on the 1st floor of 348 W. Hospitality Lane in San Bernardino. Seating is limited. To reserve a seat, call (909) 885-7980 or email us at [email protected]. PRSRT S TD U.S. POS T A GE
P AID
PRSC 9 1 786348 W . Hospitality Lane, Third Floor Sa n Be rn ar di no , CA 9 24 15 -0 01 4
Boa
rd
of R
etir
em
ent
ser Weis en Ell ir – ChaVice Ch air – D awn St affo
rd er L oph rist Ch nry, He Bret egg io, Rob ert McD ona
ld, illia W ave er, D Walk rry , La uss ul R Pa ely, Ne Don ms
Exe
cut
ive
Di
rec
tor
/CI
O
CFA tt, arre . B y B oth TimQua rter ly R evie w is pu blis hed fo r m emb ers of t he S an Ber nar dino Co unt y Em ploy ees
’ aile le D ico er N ffic ns O atio unic omm A C CER SB by ten writ is . It ion iat soc As ent rem Reti y . roup is G Lew cer pen y S ed b sign d de ) an wise her ot oted s n les (un Mem ber com men ts a nd s ugg esti ons sh ould be dir ecte d to SB CER
A’s er. ffic s O tion ica mun Com
Em ail: co mmu nica tion s@s bce ra.o
rg : (8 ree oll F / T 980 85-7 9) 8 (90 l: Cal 77) 722 -37 21 o r (8 77) SBC ERA
–1 g A.or CER .SB www it: Vis
Have any story ideas?
Email us at [email protected],
or call (909) 885-7980 ext. 329.
Identifying Your Payroll Deduction Options
In accordance with Government Code 31452 and Board of Retirement
Policy, retirees and beneficiaries can have various deductions taken
from their monthly SBCERA retirement benefit payment. They include:
All deductions require written authorization from members. This
can be done using an SBCERA Deduction Authorization Form or the
appropriate organization’s insurance or deduction authorization form.
For more information, go to the Post-Retirement section online at
www.SBCERA.org
or contact us at (909) 885-7980 or toll free at
(877) 722-3721.
The 2010 cost-of-living adjustment (COLA) for
SBCERA payees was approved at 2 percent by
the Board of Retirement on February 4, 2010.
The annual COLA is determined by comparing
the December consumer price index (CPI) in each
of the past two years for the Los
Angeles-River-side-Orange County area.
The local region change as of December 2009
was 1.83 percent – that is 2.0 percent when
rounded to the nearest half-percent in
accor-dance with the ’37 Act (§31870).
Therefore, current retirees and beneficiaries,
and any members who retired on or before April
1, 2010 will receive a 2% COLA this year.
For more information regarding how the
cost-of-living adjustments are
deter-mined, please refer to SBCERA’s COLA
Frequently Asked Questions (FAQs) online at
www.SBCERA.org
. If you would like the
FAQs mailed to you, call us at (909) 885-7980 or
(877) 722-3721 and we would be happy to mail
you a copy.
2010 COLA Approved:
To be reflected on April 30th payment
April 30th
May 28th
June 30th
Your
Social Security
Statement
Can Help You Save
– By Linda Zamfino, Social Security Public Affairs Specialist in Oakland, CA.
June 1, 2010
County Government Center Board Chambers
(10:30 a.m. & 1:00 p.m.)
June 3, 2010 Ontario TAD
Dorothy Rowe Conference Room
(9:30 a.m. & 11:00 a.m.)
June 9, 2010 Hall of Records
4th Floor Conf. Rooms A & B
(9:30 a.m. & 11:00 a.m.)
June 15, 2010 Victorville CFS Conference Room 1
(10:30 a.m. & 1:00 p.m.) News and updates for SBCERA retirees and beneficiaries
