CITY OF NORFOLK

Every regular full-time employee or permanent part-time officer or employee must become a member of the Employees' Retirement System of the City of Norfolk. Constitutional Officers and their employees elected or employed on or after July 31, 1980 become members of the Virginia Retirement System.

This handbook briefly explains to the members the various types of benefits they may be entitled to as defined in Chapter 37 of the Norfolk City Code. It is intended to be used as a quick reference in answering basic retirement questions. Retirement benefits are established by the Norfolk City Council and in all instances, the actual situation is controlled by the ordinance establishing the Retirement System. Each member has a very personal stake in the Retirement System. Therefore, benefits are based on a member’s particular situation. Most benefit situations can be accurately estimated by the member. Generally, the member will know their highest three years of salary and also their years of service. These two factors are the major variables. There will be instances in which the member will need accurate information regarding their benefits. Should you have specific questions, the Retirement Office is here to assist you. In benefit areas other than the area of normal service retirement, the member would be well advised to request help from the Retirement Office. The Office is located on the 3^rd floor of the City Hall Building, room 309. Our telephone number is (757)664-4738. Calling for an appointment prior to visiting the office will allow us to retrieve your records and offer more efficient service.

"Creditable Service" for purposes of the System, consists of membership service and previous service. Each member shall receive membership service credit for all service rendered while a member of the system since becoming a member, or since last becoming a member in the event of a break in membership. In addition, an employee will receive 100% of accumulated sick leave at retirement on a working day basis as defined in the enabling ordinance.

"Average Final Compensation" denotes the average annual earnable compensation of a member for the three years of creditable service during which earnable compensation is highest, or, if you have less than three years of creditable service, the average annual earnable compensation during your years of creditable service. Overtime pay is excluded from the computation of average final compensation.

An "employee" is a regular full-time or permanent part-time officer or employee in a City of Norfolk budgeted job position. Upon entering the Retirement System, an employee is classified either as a "general employee" or as a "police officer, firefighter or paramedic employee".

A general employee who became a member prior to July 1, 1980, and who meets the eligibility requirement for normal service retirement for this group may, upon their own application, retire. The eligibility requirement for normal service retirement of members hired prior to July 1, 1980 is either age 60 or attainment of 30 years of creditable service. The normal service retirement allowance per annum is equal to 1/50 of average final compensation multiplied by the number of years of creditable service, up to the 35 years service cap. All general employee benefit allowances are limited to thirty-five (35) years of creditable service regardless of hire date. Example for employee who became a member prior to July 1, 1980, retiring on normal service retirement with 25 years of creditable service:

Average Final Compensation:

Highest earnings year $ 25,836.00

Next highest earnings year $ 25,020.00

Third highest earnings year $ 24,264.00

Total $ 75,120.00

Divide $75,120 by 3 $ 25,040.00

Divide $25,040 by 50 $ 500.80

Multiply $500.80 by 25 $ 12,520.00

Effective January 1, 1997, those general employees who became members of the System on or after July 1, 1980, the eligibility requirement for normal service retirement is age 60. The normal service retirement allowance per annum for this general employee is equal to 1/60 of average final compensation multiplied by their creditable service time prior to January 1, 1997 plus 1.75% per annum for each subsequent year, up to the maximum thirty-five (35) years creditable service allowance. Example for a general employee, age 62, who became a member on or after July 1, 1980, retiring on normal service retirement with 25 years of creditable service:

Average Final Compensation:

Highest earnings year $ 25,836.00

Next highest earnings year $ 25,020.00

Third highest earnings year $ 24,264.00

Total $ 75,120.00

Divide $75,120 by 3 $ 25,040.00

Divide $25,040 by 60 $ 417.33

Multiply $438.20 by 10 $ 4,382.00

The normal service retirement allowance of a general employee who became a member of the System on or after January 1, 1997, shall consist of a pension equal to 1.75% of average final compensation multiplied by the number of creditable service years up to a maximum of thirty-five (35) years creditable service. The eligibility requirement for normal service retirement of this group of general employees is also age 60.

Retirement is compulsory for police officers, firefighters, and paramedic employees at age 62. However, police officers, firefighters, or paramedic employees who meet the eligibility requirement for normal service retirement for their group may, upon their own application, retire. The eligibility requirement for normal service retirement of police officers, firefighters, or paramedic employees hired prior to July 1, 1980 is either age 55 or attainment of 25 years of creditable service. The normal service retirement allowance per annum is equal to 1/50 of average final compensation multiplied by creditable service time prior to January 1, 1997, plus 2.2% per annum for each subsequent year not to exceed a combined percentage sum of sixty-five percent (65%) of average final compensation. The sixty-five (65) percent allowance is a cap and applies to all police officers, firefighters, or paramedic employees regardless of hire date.

Example for a police officer, firefighter, or paramedic employee who became a member prior to July 1, 1980, retiring on normal service retirement with 25 years of creditable service:

Average Final Compensation:

Highest earnings year $ 25,836.00

Next highest earnings year $ 25,020.00

Third highest earnings year $ 24,264.00

Total $ 75,120.00

Divide $75,120 by 3 $ 25,040.00

Divide $25,040 by 50 $ 550.88

Multiply $550.88 by 3 $ 1,652.64

Service Retirement Allowance $12,670.24

Average Final Compensation:

Highest earnings year $ 25,836.00

Next highest earnings year $ 25,020.00

Third highest earnings year $ 24,264.00

Total $ 75,120.00

Divide $75,120 by 3 $ 25,040.00

Divide $25,040 by 60 $ 417.33

Multiply $550.88 by 10 $ 5,508.80

Service Retirement Allowance $11,768.75

The normal service retirement allowance of a police officer, firefighter, or paramedic employee hired on or after January 1, 1997, shall consist of a pension equal to 2.2% of average final compensation multiplied by the first 25 years creditable service then 2% for the next five (5) years creditable service totaling the sixty-five (65) percent average final compensation benefit allowance.

In any of the above examples, should the member have more than 25 years creditable service, the resulting benefit would be higher, however, limited to 35 years creditable service for general employees and sixty-five (65) percent of average final compensation for police officers, firefighters, or paramedic employees. In all instances, the member would have to use their own salary and the lesser of their creditable service time or creditable service time allowance or percentage.

An employee who became a member prior to July 1, 1980 and who is not eligible for normal service retirement, may elect to retire on an early service retirement allowance. A general employee must complete 25 years of creditable service or be 55 years of age, whichever occurs first. A police officer, firefighter, or paramedic employee must complete 20 years of creditable service or be 50 years of age. For those employees who became members of the System on or after July 1, 1980, a general employee must be 55 years of age and a police officer, firefighter, or paramedic employee must complete 20 years of creditable service or be 50 years of age. The early service retirement allowance is to consist of a deferred pension commencing at the age you

would have become eligible for normal service retirement if you had continued in service, equal to the amount computed as a normal service retirement allowance on the basis of your average final compensation and creditable service at the time of retirement. In lieu thereof, the member may elect at the time of your retirement, to start immediate receipt of a reduced pension, which is equal to the deferred pension, reduced by 1/2 of 1% of itself for each month that the date of commencement of payments precedes the date a police officer, firefighter, or paramedic employee would have become eligible for normal service retirement and 1/4 of 1% of itself for each month for general employees.

Upon the occurrence of total and permanent disability due to causes not the result of an accident in the performance of duty, a member who has completed 5 years of creditable service may be granted a retirement allowance. This allowance is equal to the normal service retirement if the member has met the eligibility requirement for normal service retirement. Otherwise, the ordinary disability retirement allowance is equal to the amount computed as a normal service retirement allowance on the basis of your retirement, but not less than 25% of the member's average final compensation, except that no minimum allowance is to exceed the allowance based on the member's average final compensation and the number of years of creditable service you would have if you had continued in active service until the age you would first have become eligible for normal service retirement. Computation of this benefit will be provided by the Retirement Office upon application.

Accidental Disability Retirement Allowance

Upon the occurrence of total and permanent disability due to causes resulting from an accident in the actual performance of duty, which is compensable under the Virginia Workers' Compensation Act, regardless of the length of service, a member may be granted a retirement allowance; provided that application for such allowance must be filed within 6 years from the time of the accident. The disability of a firefighter caused on or after July 1, 1972 by respiratory disease, hypertension or heart disease, or of a police officer caused on or after July 1, 1974 by hypertension or heart disease, or of a sheriff or deputy sheriff caused on or after July 1, 1976 by hypertension or heart disease, is presumed to have been suffered in the line of duty unless the contrary is shown by medical evidence. The accidental disability retirement allowance is equal to 66 2/3% of the member's average final compensation.

continued. Also, the member may request a reexamination for the same purpose. Failure to submit to an examination may cause discontinuance of retirement benefits.

Should the Board of Trustees determine that a disability beneficiary, who has not attained normal service retirement age, is engaged in gainful employment, or should the Medical Board certify to the Board of Trustees that a disability beneficiary is able to engage in gainful employment, paying more than the difference between the retirement allowance including any supplements, and the highest rate in the pay range effective January 1 of the current year for the position occupied at retirement, the Board may reduce the retirement allowance, including any supplements, to an amount which together with the amount earnable shall equal the amount established on January 1 of the year being considered. The reduction will be made in the year following the year in which the earning excess occurs. Should the retiree's earning capacity later change, the amount of the benefit may be increased or decreased in accordance with the provisions of City Code Chapter 37.

Upon separation from service prior to retirement, a member with at least 5 years of creditable service on or after January 1, 1997 may elect, if they are not eligible for retirement under any other provision of the Retirement System, to leave with the expectation of receiving a future benefit allowance payable when they reach normal service retirement age, provided contributions made prior to July 1, 1972 with interest, if any, remain in the System until the date they would have reached the normal service retirement age if they had continued in service. This benefit is determined like a normal service retirement allowance on the basis of your creditable service and average final compensation.

Upon the death of a member due to causes not the result of an accident in the actual performance of duty, a benefit may be paid to such person as you have designated or to your estate. All contributions, if any, made by the member, with not less than one-half of the interest credited thereon, are paid to your designated recipient or to your estate. If the member had one or more years of creditable service, or five or more years of creditable service if becoming a member after July 1, 1979, an additional lump sum benefit equal to 50% of your earnable compensation during the year immediately preceding your death is payable. After July 1, 1974, however, if the member's death occurs after attaining normal retirement eligibility and if the person designated for the lump sum death benefit is your spouse, the spouse may elect to receive, in lieu of the lump sum death benefit, a monthly pension for life, or until remarried, equal to one-half

of the normal service retirement allowance which would have been payable to the member if they had retired on the date of their death.

Upon the death of a member resulting from an accident in the actual performance of duty, where such death occurred within 6 years from the time of such accident, a monthly benefit is payable to the legal beneficiary regardless of the member's age or length of service. The death of a firefighter on or after July 1, 1972 caused by respiratory disease, hypertension or heart disease or of a police officer on or after July 1, 1974 caused by hypertension or heart disease, or of a sheriff or deputy sheriff on or after July 1, 1976 caused by hypertension or heart disease, is presumed to have been suffered in the line of duty, unless the contrary is shown by medical evidence. The beneficiary is the deceased member's spouse or, if there is no spouse or if the spouse dies or remarries, the children under 18 years of age; or, if there is no spouse or children under 18 years, the dependent parents. The accidental death benefit consists of a pension of one-half of the average final compensation of the member payable to their beneficiary as described above. In addition, all contributions, if any, made by the member with not less than one-half of the interest credited thereon are paid to their designated recipient or estate. If no spouse, child under 18, or dependent parent survives the member, their death is treated as a death due to ordinary causes.

Upon the death of a retired member receiving a retirement allowance payment, a lump sum death benefit is payable to the surviving spouse; or if there is no surviving spouse, to unmarried children under age 18, or unmarried children over 18 who are physically or mentally unable to make a living. The benefit is a lump sum amount equal to one-half of the average final compensation on which the retirement allowance of the deceased retired member was based, and one-half of specified permanent supplements which the deceased retired member was eligible to receive during the year of his death. However, the lump sum death benefit provided for in this paragraph shall not be applicable to any employee who becomes a member of the system on or after July 1, 1979, unless such person has attained five or more years of creditable service in such system. In case of a retired member who dies on or after July 1, 1974 and leaves a surviving spouse, the spouse may elect to receive in lieu of the lump sum death benefit, a monthly benefit payable for life, or until remarried, which is equal to one-half of the monthly retirement allowance, plus any cost-of-living allowance, which the deceased member was receiving at the time of his death, provided in the case of a member who retired on or after July 1, 1974, the member had not made an optional election.

Upon the termination of membership prior to death or becoming eligible for a retirement allowance, a member receives, upon application, all of his contributions, if any, with not less than one-half of the interest credited thereon. A member who retires on a normal or early service, ordinary disability, accidental disability or vested retirement allowance, shall be paid his contributions, if any, with not less than one-half of the interest credited thereon. Currently, a member receives all interest credited to their account when they retire.

Any amounts which may be paid or payable under the provisions of any workers' compensation or similar law to any member or beneficiary, or to the dependents of any member or beneficiary, on account of any disability or death arising out of and in the course of employment with the City shall be offset against, and payable in lieu of, any benefits payable out of funds provided by the City under the provisions of Chapter 37 of the City Code; provided, however, that no such offset shall be made against the normal service or early service retirement allowance of a member whose workers' compensation or similar benefit is not paid to such member because of a voluntary relinquishment, suspension or other termination thereof due to the member's failure, refusal or desire not to accept vocational rehabilitation or selective employment.

Prior to receiving consideration by the Retirement System for disabilities encountered as a result of a job-related accident, eligible personnel shall first be fully evaluated for benefit eligibility under the Virginia Workers' Compensation Act. This evaluation shall include necessary diagnostic studies which will be interpreted by duly recognized specialists selected by the City. The expense of such an evaluation shall be borne exclusively by the City, but will be made available to the employee's physician upon request. Upon certification that incapacity for duty was the proximate result of an accident, the cause of which is compensable under the Virginia Workers' Compensation Act, the employee will be referred to the Retirement System to be considered for retirement benefits.

Health care coverage is offered to retirees who have been employed by the City for at least fifteen (15) continuous years or who were retired due to a line-of-duty (accidental) disability. New retirees who are eligible and desire health care coverage must enroll within thirty days of retirement. Questions pertaining to Health Insurance are handled by the Human Resources Benefits Group. The main telephone number is 664-4486. Please contact them for additional information.

Active and retired employees of the City of Norfolk who have attained age 65 or are approaching that age, should register without delay for MEDICARE at the Social Security Office in their city.

Members should consider a valuable service offered to all retirees. This service is automatic direct deposit of your monthly retirement check. Direct deposit eliminates the possibility of delay or loss of checks in the mail, or loss by the recipient. It also eliminates the need to make a monthly trip to the bank. A number of retirees have elected to use this method to receive their monthly pension payments. Please contact the Retirement Office for the necessary forms if you are interested in this service.

Retirement checks are mailed out the last working day of the month. If you do not receive your check after 10 working days (2 weeks) and the check has not been cashed, a duplicate check can be issued to you within 5 working days of the date you reported the check not received. This means you many have to wait up to 15 working days or 3 weeks to receive a replacement check. Therefore, we encourage you to take advantage of direct deposit. With automatic direct deposit, your retirement benefit is in your checking or savings account when your financial institution opens for business on the date of the payment.

The pension allowance you receive from the City of Norfolk is fully taxable by federal and state governments unless you retired on accidental disability. You may elect to have federal and state taxes withheld from your pension benefit by completing Federal W-4P and State VA-4P forms. You may also elect to change the withholding amount at any time or as advised by your tax accountant by completing new forms.

The following personal changes should be reported to the Retirement System promptly.

• Change of address and telephone number

• If you marry, divorce, or remarry

• Legal Name Changes

• Death of a beneficiary

• If you or the courts appoint a power of attorney

The Retired Employee Association meets monthly. If you are interested in becoming a member or need more information about the association the mailing address is:

Retired Employees Association of Norfolk

Post Office Box 12901

Norfolk, VA 23511-0901

The entire cost of the Retirement System is paid by the City of Norfolk. Each year the City contributes to the System an amount which has been certified by the actuary as the amount needed on an annual basis to provide the retirement benefits which have been earned by the members. These funds are paid to the Retirement System Trust Fund and are maintained apart and separate from any other City Funds. The Trust Fund is administered by a Board of Trustees that is totally responsible for the Fund. Each member can be assured that his future benefits are provided every safeguard possible.

The Employees’ Retirement System was initially designed to be used as a supplemental system. We encourage you to contact Employee Benefits to learn about the 457 deferred compensation plan. As a final note, please take time to verify any unconfirmed reports regarding retirement issues.