Blog

Fund approves new member benefit calculations

  • By: admin
  • On: 02/23/2018 09:15:03
  • In: News
  • Comments: 0
The Amarillo Firemen's Relief and Retirement Fund is using a second-tier calculation for benefits earned by new firefighters.

Members of the fund authorized trustees to change the formula for the calculation of retirement, death, disability and employee termination benefits for future fund members. Approved by a ballot vote held in October, fund members also approved changing the definition of average salary. The changes began for members hired after the first of this year.


TEXPERS Staff Report

The membership voted on two ballot issues that amended the plan,” says Laura Storrs, the fund's administrator, in an email. “We also had the plan's attorney do a full review of the plan document, so we made some minor recommended changes that were basic cleanup to the document.”

Before the changes, a member's retirement benefit equaled 3.45 percent of highest three-year average salary multiplied by the member's service, according to a fund document outlining the ballot measures. The new formula calculates a new member's retirement benefit to equal the sum of 3.25 percent of highest five-year average salary multiplied by service up to 20 years plus 2.50 percent of highest five-year average salary multiplied by service in excess of 20 years.
 
The benefits, according to the fund, would be paid for the member's lifetime. If a member dies, two-thirds of the benefit would go to a surviving spouse for the remainder of that person's life.
 
The fund's death, disability and vested termination benefits are also based on the fund's new retirement benefit formula. According to the system, the new benefits formula does not change contributions for fund members. New members contribute at the same rate, 13 percent of pay.
 
Fund members also voted to change the definition of average salary for existing fund members. According to fund documents, a member's retirement, death, disability or vested termination benefit was calculated based on the member's highest consecutive three-year average salary. As of Jan. 1, a current member's benefit is calculated using a highest consecutive five-year average salary.
 
However, each member's highest consecutive three-year average salary, as of Jan. 1, 2018, would be preserved for purposes of calculating the member's benefit. Meaning, when a member retires, dies, becomes disabled, or is fully vested at termination, a current member's benefit is calculated using the greater of the member's current highest consecutive five-year average salary or the member's highest consecutive three-year average salary as existed as of the effective date of the plan change.
In other Texas pension news:

Public Safety Officers' deduction could reduce retiree incomes up to $3,000

Its tax filing time, and a good opportunity for public pension system administrators and trustees to remind their retired members of a deduction that could help reduce their gross incomes up to $3,000.

Called the Public Safety Officer's deduction, the IRS allows for the exclusion. Claiming it, retired firefighters, law enforcement officers, chaplains or members of a rescue squad or ambulance crew may reduce their incomes based on their medical, dental and vision insurance premiums, which are deducted directly from their retirement checks.
 
According to an Austin Firefighters Relief and Retirement Fund notice to its membership, IRS form 1099-R, used to report distributions from annuities and retirement plans, will not automatically reflect the exclusion. The instructions for taking the deduction is on Line 16b on Form 1040. To take the deduction, qualifying retirees simply reduce the otherwise taxable amount of their pension by the amount excluded.
The deadline to file 2017 taxes is April 17. Some Texas residents impacted by Hurricane Harvey may qualify for an extension. For more information, visit www.irs.gov or talk with a professional tax preparer.


Arick Wray elected to vacant spot on board of Amarillo firefighters' retirement fund

Members of the Amarillo Firemen's Relief and Retirement Fund elected Arick Wray to fill a vacant spot on the plan's board of directors.
Wray fills an expired term on the board and is a fire driver for the Amarillo Fire Department.

A total of 270 members were eligible to vote during the election but only 155 cast their votes between Dec. 12 and Dec. 20 to fill the board position. Wray received 80 votes beating out his opponent, Derek Johnston, by five votes.
 
Wray takes over the board position from Jerome Dreup, who served three years as a trustee.

Comments

There have been no comments made on this article. Why not be the first and add your own comment using the form below.

Leave a comment

Commenting is restricted to members only. Please login now to submit a comment.