Pension Office News | May 2017
PENSION OFFICE NEWS
No progress to report regarding the SPOG and SPMA contract negotiations.
DUAL ENTITLED – LEOFF 1 RETIREES
There has been a lot of confusion this year with our LEOFF 1 Dually Entitled Members about the State DRS COLA and your “city check.”
In April of each year the State of Washington Department of Retirement Systems (DRS) initiates a Cost of Living (COLA) for LEOFF 1 members who are dually entitled. Please know this does not always mean that you will receive a “raise.”
Our LEOFF 1, dually entitled members (Escalators/LEOFF) members may receive two checks, one from the State and one from the City to make up the difference in the Pension payment you are entitled to receive versus what you receive from DRS.
Example: Joe Smith, who is dually entitled, is entitled to $4000.00 per month due to his time on the department and rank. Joe’s check from DRS each month is $3200.00 gross per month. The Pension office then makes up the $800 difference between the entitled amount and the gross received amount – Joe receives a city check for $800, bringing him up to the $4000.00 gross total of his entitled pension.
SPMA and SPOG are not currently with a contract, so your pension entitlement totals have not changed; however, who is paying you how much has changed with the April COLA from DRS. The DRS COLA increased your pay by 2.28% from the State in April 2017, so the city check decreases. Please note the Pension Office calculation is from your Gross pay, not Net pay.
Other considerations – If you are paying for a “Flex Survivorship”- a spouse who you married after retirement. That “reduced” amount is determined by DRS and an actuarial reduction is taken directly from your Pension – Please note DRS calls this a “Reduction” in your pension – they do not call it a “deduction” as you would see for such items as “taxes”. The “Reduction” comes directly off your gross pay. I have been informed that DRS calls this a “Reduction” because if your flex survivor passes away prior to you, the “reduction” can be “lifted” and you will then return to your full gross pay. This “Reduction” does NOT show up on your pay stub. It comes off the top of your DRS Pension.
The flex survivorship comes with an annual cost of living increase. DRS does not send written notification to you about the increase. The Police Pension Office is not notified who has a flex survivorship and who does not. At the end of March of each year we are sent information on our dually entitled members with Gross pay and reduced Net pay. We in PPN do not know if there is a reduced amount due to flex survivorship, tax liens, previous spousal awards, etc.
Also, please understand that a DRS COLA may place you into another tax bracket thus changing your tax deduction. The Pension Office cannot change how much you are receiving from the DRS and make adjustment on the City check to keep you in a lower tax bracket.
If you have further questions, contact Stephanie Coleman at firstname.lastname@example.org or 206-386-1286 Press Option 3 at phone tree.