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Shift Change:Alternate Retirement Programby Corey Davis, Field Rep. West Sacramento Recently, CCPOA attended a retirement benefits meeting at CalPERS. We found out vital information that affects the pensions/retirement of our Parole Service Associates (PSAs). PSAs are Unit Six members represented by CCPOA. The vast majority of Unit Six members are considered Peace Officer/Firefighter Employees, but the state classifies PSAs as Miscellaneous Employees. The importance of this distinction is that PSAs hired on or after Aug. 11, 2004, are automatically enrolled in the Alternate Retirement Program (ARP). This is how ARP works. For the first two years, 5 percent is deducted from wages and placed in an ARP account. In the 25th month, the deduction stops going into the ARP and starts going to CalPERS. During months 47 through 49 of employment, the employee has to make a choice about what to do with the money in the ARP account. There are three options available: Option 1. Transferred over to CalPERS. Option 2. Taken as a direct payment or rolled into an IRA, etc. Option 3. Be transferred into a 401K. There is a fee is charged to the employee for choosing either Option 2 or 3. If there is no choice made by the employee, Option 3 is the default. In Option 3, there is also a monthly administrative fee charged against the funds. Here’s the real problem: if the employee takes Option 2 or 3, the first two years of service credits are lost. In order to keep the first two years of service credits, the employee must choose Option 1. There are no fees involved for taking this option, but the employee has to actively choose Option 1 during the 47th through the 49th month. The state begins mailing this important information to the affected employees in their 45th month, so PSAs need to be watching for these mailings. Also, anyone who was hired by the state as a "Miscellaneous Employee" (in any Bargaining Unit) on or after Aug. 11, 2004, and later becomes a Unit Six member, is also affected by the ARP for the time spent as a Miscellaneous Employee. For more ARP details and updated information, go to the Savings Plus Web site at www.sppforu.com (click on the Alternate Retirement Program Quick Link).  Print This PageBack to Volume 25, Issue 5 Back to PEACEKeeper Main Page |
