OPERS answers members’ questions
Topics include updating bank information, investments, WEP
By Michael Pramik, Ohio Public Employees Retirement System
June 25, 2019 – We receive many questions through our social media sites, but we can’t always post responses to them.
So periodically we’ll use our PERSpective blog to answer some of those questions that we believe will have widespread interest.
Q: I’m a retiree, and I was planning to change banks. What’s the process for letting you know about that change so I can continue to receive my pension benefit without interruption?
A: You can use your OPERS Online Account to change your bank account information. Or, you can complete a “change request form” and mail it to us.
We recommend using the online account. First, it’s faster and easier. Second, you’ll receive a notice telling you when the change will be effective.
In either case, we advise that you leave your old account open until you receive your first pension deposit into your new account. Because benefits are paid once a month, it’s very possible that the change will not be effective the following month. However, you need to allow 30 days for the change to take effect.
Q: Can you explain the non-U.S. Equity sub-asset class?
A: Non-U.S. equities are simply publicly traded stocks of companies outside the United States. Sometimes called international equities, they represent more than half of global market capitalization according to Vanguard.
Our investment policy regarding this class has allocation targets to four market categories, including developed markets, developed markets small capitalization, emerging markets and emerging markets small capitalization. Exposure to those categories uses both externally managed portfolios and internally managed portfolios.
At the end of the first quarter of this year, OPERS had $15.2 billion invested in non-U.S. equities, or 17.7 percent of our Defined Benefit Fund. The Health Care Fund had $2.4 billion, or 19.6 percent of its portfolio, in this sector.
For more information, see the description of this sub-asset class on the OPERS website.
Q: My retirement will be affected by Social Security’s Windfall Elimination Provision. If I take a refund on my OPERS account and roll it into an IRA, will I avoid the WEP?
A: That’s a good question, one that many people ask. However, that action will not shield you from the WEP. Social Security will apply the provision to your Social Security benefit whether you refund your account or take your defined benefit pension. Here’s why:
Social Security applies the windfall provision to participants who also work in public-sector positions in which they do not pay into Social Security retirement. Each year an individual works in non-Social Security-covered employment appears as a zero in the Social Security benefit formula.
Adding zeroes to the formula’s average calculation tends to lower the average, making it seem like the individual had lower total earnings than he or she actually did, and creating a higher replacement rate than was warranted. Congress enacted WEP to address this perceived inequity.
So if just before you retire you refund your OPERS account, Social Security is still going to recognize the years you worked in the OPERS-covered position as “zeroes” on its benefit calculation.
Michael Pramik
Michael Pramik is communication strategist for the Ohio Public Employees Retirement System and editor of the PERSpective blog. As an experienced business journalist, he clarifies complex pension policies and helps members make smart choices to secure their retirement.
Ok, what if you end your public employment, go back to social security employment a few years, and then retire? Does it matter if you “retire” from social security first or is it(the calculation) all the same?
It doesn’t matter whether or when you retire from a public position. The key is the amount of time you have in a Social Security covered position. For more information, read the WEP fact sheet provided by Social Security, https://www.ssa.gov/pubs/EN-05-10045.pdf.
Julie, OPERS
I understand that working in a position covered by OPERS will reduce my social security benefit because 1. I am paying less Social Security taxes and therefore my average Social Security wages will be less and 2. The WEP reduces the 90% factor used to compute the Social Security benefit. I understand that opting for a refund will not change what I’ve paid or haven’t paid into the Social Security system but will it eliminate the WEP (since I have no pension)?
The Windfall provision is a federal law administered by the Social Security Administration. Your OPERS pension is not impacted, but your Social Security benefit will be impacted even if you refund your OPERS pension.
Any new information on the WEP pending legislation re: a monthly stipend for those affected?
The legislation you reference was not passed in the last Congress (which ended on Jan 3, 2019), and has not yet been reintroduced in the current Congress. We continue to advocate for GPO and WEP reform.
Julie, OPERS
That was a good clear response to the question: “My retirement will be affected by Social Security’s Windfall Elimination Provision. If I take a refund on my OPERS account and roll it into an IRA, will I avoid the WEP?”
There is another Federal Windfall Offset that prevents me, as a survivor, from receiving a social security monthly benefit based on my deceased spouse who qualified for social security benefits. I’m 67 years young. Is there any chance this will windfall penalty might change in my lifetime.
We continue to advocate for the reform of GPO and WEP in Congress.
I am retired via Social Security. After retiring, I have worked around 10 years in a part time capacity for organizations that the employer and I pay into the OPERS retirement system. When I stop working OPERS has indicated I will be eligible to receive about 125 dollars per month retirement from OPERS. If I decide to take the retirement benefit from OPERS will that affect my social security retirement income? If it does affect my Social Security income, are there other ways I could retrieve the money my employer and I paid into the OPERS retirement fund?
That’s an interesting question. You should contact your local Social Security office to learn the impact your OPERS pension may have on your Social Security benefits.
Julie, OPERS
Has the login for accounts recently changed. I cannot get into my account
Thanks
To access your online account, you will need your OPERS ID which is located on the top right corner of your Annual Statement. If you can’t locate your OPERS ID, please call us at 800-222-7377 and, after a few security questions, a member of our staff can provide it to you.
Julie, OPERS
Why is OPERS unwilling to comply with international banking regulations that would permit them to direct deposit pensions into accounts of those living outside of the United States.
For security reasons, an OPERS benefit recipient with a foreign address cannot have their monthly benefit payment direct deposited into a bank account either inside or outside of the U.S. You must accept a paper check.
We have more information on our website for those living or traveling outside the U.S. at https://www.opers.org/pubs-archive/members/living-or-traveling-outside-the-us.pdf.
Julie, OPERS
Can I use a cremation certificate instead of the death certificate to claim death benefit
Mr. Perkins,
When an OPERS benefit recipient passes away, OPERS needs a copy of the certified death certificate. For additional questions please contact us at 800-222-7377.
Julie, OPERS
Is a photocopy of the death certificate sufficient to apply for survivor’s benefits, or does one have to submit the actual death certificate? The cost is a concern at this time. Plus, my brother and I are beneficiaries , do both of us have to submit multiple photocopies of the death certificate individually with each beneficiary claim for deferred comp, death benefit ,etc?
We’re so sorry for your loss. A copy of the death certificate is acceptable. Deferred Compensation is a separate organization, and may have different requirements. For more information, call us at 1-800-222-7377 or go to the ‘Life Events’ page on the OPERS website and scroll to the bottom, https://www.opers.org/life-events/.
Julie, OPERS
i had 6 years in the army national guard am i able to buy back the time i was active roughly 24 weeks???
Please call us at 1-800-222-7377 and a member of our staff can help you.
I am currently paying into PERS, I have been in the PERS system for 37 years, I plan on retiring next spring. Once I’m 65, will I still be covered by medicare, I am currently 611/2 and will be 62 when I retire?
Congratulations on your upcoming retirement! Until you become eligible for Medicare, you can participate in the OPERS Retiree Health Plan. Once you become eligible for Medicare, then Medicare becomes the primary insurance and any supplemental plan selected through the Connector becomes secondary. You’ll receive an allowance from OPERS in a Health Reimbursement Arrangement (HRA) to purchase supplemental insurance or to pay for your Medicare premium.
We have more information about health care options for pre-Medicare and Medicare eligible retirees on the OPERS website at http://www.opers.org/healthcare/plan-options/index.shtml.
Julie, OPERS
Are you still reimbursing health care supplements for retirees?
If eligible, you can use your Health Reimbursement Arrangement (HRA) to be reimbursed for your Medicare supplement plan premiums. For more information, go to our health care page on the OPERS website at https://www.opers.org/healthcare/.
Julie, OPERS
I worked for a state university 1988-1991. Would I have any retirement monies earned at that time?
Please call us at 800-222-7377 and a member of our staff can help you.
Julie, OPERS
I retired with 23 years of credit in the system. What is the policy if I go back to work for a state agency?
You can find more information on going back to work for an OPERS employer after retirement, known as re-employment, on the OPERS website at https://www.opers.org/retirees/re-employment/index.shtml.
Julie, OPERS
Can I work for two separate employers that are opers retirement?
You cannot receive more than one year of service for any calendar year. For more information, please read our leaflet on service credit at https://www.opers.org/pubs-archive/leaflets/ISL-F.pdf. If you still have questions, please call us at 1-800-222-7377.
Julie, OPERS
I for one am grateful to have a good retirement system. I retired September 1996 with 28 years of service. When talking with others about their systems I realize how fortunate I am. The only thing I have an issue with is the COLA is based on your pension at time of retirement, not your current pension amount which is your COLA. Be glad you have a pretty secure pension in lieu of what happened with other private companies namely General Motors. Also a lot of people are paying $300.00 to $500.00 a month or more for health insurance plus major out-of-pocket expense and large amounts for prescriptions.
What is the effect, if any to funds given monthly to via for the connector ?
For Medicare retirees, the base allowance changes from $450 to $350 in 2022. To see how the change will affect you, go to https://www.opers.org/healthcare/health-care-2022/index.shtml.
Because of odot having Humana advantage , retirees have to pay a lifetime penalty monthly for Part A to medicare . Opers is currently reimburing retirees by adding to montly pension
Will this continue ?
Yes, the Board voted to continue the current Med A reimbursement program.
I had 5 years in OPERS and have terminated that position and now pay into a 403B with my new employment. I plan on rolling over my OPERS into the 403B and continue to work for 13 more year will rolling this over save me from the penalty on my social security benefits or will my social security still be penalized? My attorney says it won’t be penalized if I roll in over? However social security says it won’t save me from the penalty.
You can find more information at https://www.ssa.gov/planners/retire/wep.html which includes a link to their online calculator.