LAGERS retirees are an inquisitive and engaged group. They ask wonderful questions to better understand their LAGERS benefits. I have compiled a short list here of some of the most frequent questions we get from our retired crowd. Let me know if we need to add some more to this list!
Can I retire and then come back to work for another employer?
Absolutely! I once talked to a member who said his dream was to retire and then become a greeter at Wal-Mart because he assumed that was truly a job with zero stress. While I’m not qualified to speak about the stress levels of Wally World employees, I can tell you that this would be allowed under LAGERS’ rules. A person who retires from a LAGERS employer can go back to work either part-time or full-time for any employer that is not in LAGERS and the monthly benefit will not be affected. A LAGERS retiree can also go back to work part-time for a LAGERS employer, even one from which she is receiving a benefit, and the amount of the benefit will not be affected. Be careful here, however, as LAGERS defines part-time differently than a simple 40-hour work week. If you plan to re-employ after you retire with another LAGERS employer, check with our office first about how many hours you are allowed to work how this may impact your monthly retirement income.
What about working full time for a different LAGERS employer than one you retired from? This is allowed too, but you must have at least one-month break between your last day of work or your retirement effective date (whichever is later) and your re-employment date. If you don’t have that one month break, we would have to suspend the monthly benefit you are currently receiving. So, take a month off, you deserve it! If you do this, you would again be covered under LAGERS at your new employer and eligible for a second benefit after 12 months of employment; all the while, receiving your full, uninterrupted benefit from your first employer.
All of this can get a bit tricky, so if you are planning to go back to work for a LAGERS participating employer, either part-time or full-time, please contact us so we can walk you through it!
Who guarantees that my LAGERS benefit is secure?
People want certainty these days and a constant question we get from active members and retirees alike is, “how do I know my benefit will continue being paid, in full, for my lifetime?” The good news is that receiving a retirement benefit from LAGERS is about as certain as one can get. One reason for this is because your monthly payment is not affected by benefit changes your employer may make after you retire, nor is it affected by the economy or market swings. Another reason is because your retirement benefit is pre-paid. This means that at the time you retire, LAGERS sets aside, in a separate fund designated only for retirees, enough money to pay you for the rest of your life. This protected trust is solely for the benefit of LAGERS retirees and beneficiaries. And, that fund, as of June 30, 2015 is slightly above 100% funded, meaning we have all the money we need on hand today to pay the protected lifetime benefits for our 18,000+ current retirees.
When will I receive my tax forms from LAGERS?
LAGERS mails the 1099-R form (which is basically a W-2 for retired people) annually to each of our retirees. The IRS requires the 1099-Rs be mailed no later than January 31st each year so retirees can expect this form in their mailbox in early February. You may be able to get a copy about one week sooner by logging onto the myLAGERS web portal and printing it from there.
Can I waive the 20% tax withholding on the Partial Lump Sum?
If a retiree chooses the Partial Lump Sum (PLUS) and decides not to directly roll it into another retirement account, LAGERS withholds 20% of the PLUS and forwards it onto the IRS. LAGERS is required to withhold this amount, in all circumstances, even if the retiree is disabled. However, if your tax liability ends up being less than what was withheld, you can apply for a refund at the end of the year.
I need a pension award (income verification) letter, how do I get that?
A pension award letter is basically proof that you are receiving monthly income from a retirement plan. This may also be called an income verification letter which may be needed if you are applying for a loan or some other type of credit. There are a couple ways you can get this letter. One is online through the myLAGERS web portal. After logging into your account, click on the “Income Verification” link on the menu and then select “Download Income Verification.” Another way is to simply call our office. We will need to verify your identity over the phone, and then we will send the letter to you in the mail.
This has been a small sample of the questions we frequently receive from retirees. Please comment on this blog if you believe we have missed some. We always love to write about the topics you care about most!