Retirement Services Frequently Asked Questions
After I retire, can I change the payment option I selected when I retired? No, you cannot change your option; this is an irrevocable decision that you make upon retirement.
Can I change my beneficiary form for my pension after retirement? No, you cannot change your beneficiary under any circumstances if you choose a joint and contingent option. If you choose a life only or one of the period certain options, you can change your beneficiary at any time. Please keep in mind that if you choose life only, your beneficiary will only receive the balance of what you paid into the pension plan plus interest less any benefits that have been paid to you.
What happens if I leave my pension after I quit my job but do not retire? If your employment with the City ends before you are eligible for normal or early retirement benefits and you have participated in the Pension Plan for at least five years, you have earned a non-forfeitable right to receive benefits at a future date when you reach retirement age. This is known as being "vested" in your benefit.
What happens if my spouse is my beneficiary and I get divorced? If you choose a joint and contingent option, upon your death, payment would be made to your spouse named at the time of your retirement. If you choose a life only or one of the period certain options, you may change your beneficiary.
What happens when both my beneficiary and I die? If you choose a joint and contingent option and both of you die, the balance between the contributions you paid plus interest and the total amount of benefits you have received will be paid to the estate of the last to die. If you choose the life only option, the balance between the contributions you paid plus interest and the total amount of benefits you have received will be paid to your estate. If you choose a period certain option and both of you die prior to the end of the period certain, payments will continue to the estate of your beneficiary until the end of the period certain option you chose.
Will my Social Security benefit be reduced because I have a City pension? Your earnings from this job are not covered under Social Security. When you retire, or if you become disabled, you may receive a pension based on earnings from this job. If you do, and you are also entitled to a benefit from Social Security based on either your own work or the work of your husband or wife, or former husband or wife, your pension may affect the amount of the Social Security benefit you receive. Your Medicare benefits, however, will not be affected. Under the Social Security law, there are two ways your Social Security benefit amount may be affected. For details concerning this topic please see Facts about Social Security and Your Pension (For more detailed information, download SS Notice Form SSA-1945, PDF).
How many years to vest in the Pension System? Five years.
What is retirement eligibility? Eligibility is different for General Employees and Police/Fire, as follows:
Normal Retirement: 30 years of service regardless of age or age 62 with at least five years of pension service (age 60 if you were hired prior to 1987 and fall under the provisions of Plan B (Pension Plan Code of 09).
Early Retirement: 25 years of service regardless of age or age 55 with at least five years of pension service.
Normal Retirement: 25 years of service regardless of age or age 55 with at least five years of pension service.
Early Retirement: 20 years of service regardless of age or age 50 with at least five years of pension service.
Is there a penalty for early retirement? If so, what is the penalty?
Yes, and is different for General Employees and Police/Fire, as follows:
Based on years of service: 5% penalty for each year under 30 years (25 years would be a 25% penalty)
Based on age: 4.8% penalty for each year under age 62
(if you were hired prior to 1987 and fall under the provisions of Plan B, beginning at age 57, the penalty changes to 2.4% for each year under age 60).
Based on years of service: 7.2% penalty for each year under 25 years.
Based on age: 3.0% penalty for each year under age 55.
Based on years of service: 6.8% penalty for each year under 25 years.
Based on age: 3.0% penalty for each year under age 55.
What is pension accrual? The percentage of your average monthly compensation you receive for every year of service. The total pension accrual is the total percentage of accrual you have earned over your career. For instance, for General Employees, you receive 2.25% accrual for every year of service. For 30 years of City Pension service, your total accrual is 67.5%.
What is the difference between the City's Pension, the MAP 401(k) and RSVP 457 plans?
This question requires a three-part answer:
1. The City's Pension Plan is a Defined Benefit Plan where retirement eligibility and a formula determines the amount of your retirement benefit. The formula is the average of your highest three years of salary times your total pension accrual.
2. The MAP 401(k) is a Defined Contribution Plan where your benefit is determined by the balance in your account at the time you start receiving benefits and an IRS factor for lifetime monthly benefit payments. If you are under the early retirement age without exception under the IRS guidelines, you may be subject to a penalty if you make any partial withdrawals or withdraw all of your funds.
3. The RSVP 457 is a Deferred Compensation Plan where you choose what benefit amount you want to receive until balance of account is paid out. You can also get partial withdrawals and full payout without any IRS penalties.
How many years to qualify for the 50% matching provision under the MAP 401(k) plan? This provision is for General Employees only and you must have seven years of service to qualify.
What if I terminate employment, but leave my money in the MAP plan, will I still be eligible for the 50% match if I had seven years of service? Yes, however payments cannot start prior to age 55.
Do I have to draw my 401(k) when I retire? Upon termination of employment, you can defer making a decision until a later date, but at Age 70 1/2 you must begin a Minimum Required Distribution (MRD) required by the IRS.
What are the DROP begin and end dates? (for benefit coordinators, etc.) DROP enrollment dates are based on the beginning of the first pay period of each month. These enrollment dates are mandated due to the City's PeopleSoft payroll system limitations that will not allow active employees to have a change in status within a pay period. Please download DROP Begin and End Dates (PDF).
What does DROP stand for? DROP stands for Deferred Retirement Option Plan, see plan guides for details of the program.
Is the City of Tallahassee pension plan mandatory? Yes you are required to become a member of the City of Tallahassee Pension Plan on your first day of employment as an elected official, or as a full-time or part-time employee in an approved, budgeted position.
Do I have access to my retirement accounts while I'm still actively employed? The only access to funds as an active employee is through the loan provision under the MAP 401(k) and RSVP 457 plans.
Why does the City of Tallahassee take out 20% for federal taxes on refunds of my retirement accounts? Under current law, if you choose to receive a refund, the City is required to withhold 20% of the payment and send it to the IRS as income tax withholding to be credited against your taxes. The amount of tax that is due depends on several factors; including the type of distribution you receive, your age at termination, and your tax bracket. Detailed information, about the tax treatment applicable to your refund, will be provided to you at the time you terminate your employment. You should consult with your personal tax advisor for more information concerning your personal situation.
Is there any way to avoid the 10% penalty, when taking a withdrawal from your retirement accounts after retirement? You would need to discuss the particulars with a tax professional, however, under IRS guidelines, if you take a withdrawal from a qualified plan before you reach normal retirement age, which is 59 1/2, or retire under disability, you will be subject to the penalty. There is a provision referred to as early retirement with exception where you will not be subject to the 10% penalty if you terminate/retire during the year you reach age 55.
How much will my monthly benefit be when I retire from the City of Tallahassee? The amount of your benefit is based on your years of pension participation, your age at retirement and your average monthly base salary. The formula for calculating your benefit is total accrual percentage times average base salary. Refer to the plan guide on this web for your particular plan details.
Will I still have a death benefit coverage when I retire? When you retire you choose a payment option which has a death benefit coverage for your spouse or beneficiary. If you choose a life only or one of the period certain options, you can change your beneficiary at any time. Please keep in mind that if you choose life only, your beneficiary will only receive the balance of what you paid into the pension plan plus interest less any benefits that have been paid to you.
After retirement can I return to work? If you are retired and receiving benefit payments and return to work with the City in a permanent, budgeted position the payments will cease. You may accrue additional benefits during your period of re-employment, depending on your length of service. In any event, when you again terminate, your previous benefits will resume. If you return to work in a temporary position your benefit payments will cease if you work more than 2,080 hours in any fiscal year. You should contact the Retirement Office upon your re-employment for more information about these rules.