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Plan Description
Alternate Retirement
System Plan
Plan Information Sheet: Certificated and Classified
for Part-Time, Seasonal, and Temporary Employees
Introduction
A federal
law, the Omnibus Budget Reconciliation Act of 1990 (OBRA
90), requires that governmental employees who are not
members of their employer’s existing retirement system be
covered by Social Security or an alternate plan.
You are
enrolled in an alternate plan called the Public Agency
Retirement Services Alternate Retirement System Plan (PARS
ARS). PARS ARS satisfies federal requirements and provides
cost savings to you and your employer when compared to
Social Security. The PARS ARS plan only requires a minimum
contribution of 7.5% to your retirement account.
This
information is a general description of what you can expect
as a participant in PARS ARS. The Plan Document provides a
detailed description and contains all of the specific legal
requirements of the plan. A copy of the plan document is
available for review with your employer.
Enrollment in
the PARS ARS Plan is automatic for eligible employees.
Effective
January 1, 1992 and thereafter:
1. Each
pay period, 3.75% of your wages will be deducted
from your pay and deposited into your PARS ARS account.
Your contributions are made on an after-tax basis.
2. Each
pay period, your employer will also contribute the
equivalent of 3.75% of your wages to your PARS ARS
account. Employer contributions are also made on a
pre-tax basis.
3.
Investment activity will be credited to your PARS ARS
account based on your monthly account activity and will
accumulate tax-free until your termination from
the plan and the distribution of your account balance.
Designating a
Beneficiary
1) In the
event that you pass away while contributing to the PARS
ARS Plan, your account balance will be distributed to
your beneficiary.
2) If you
are married at the time of your death, your
spouse/registered domestic partner is automatically your
beneficiary. If you wish to designate someone other than
your spouse/registered domestic partner, you may do so
by submitting a Designation of Beneficiary Form.
3) If you
are unmarried at the time of your death, your account
balance will be paid to your estate unless you have
designated another beneficiary.
4) You
may obtain a Designation of Beneficiary Form from your
employer or from PARS.
Becoming Eligible for a Benefit
You (or
your beneficiary in the event of your death) will be
eligible to receive your PARS ARS account balance when
one of the following events occurs:
a. Termination of
Employment
b. Retirement
c. Permanent and Total
Disability
d. Death
e. Changed employment
status to a position covered by another retirement
system*
*If there
have been no contributions into your PARS ARS account for
two (2) years, you may be eligible for a distribution of
your account.
Receiving
Your Account Balance
1) When
your employer notifies PARS that you are eligible for a
distribution of your account, appropriate forms will be
sent to you by mail. Within 90 days of PARS’ receipt of
all correctly completed forms, the account will be
distributed.
2) Your
distribution options are:
a.
You may elect to receive a one-time lump-sum cash
payment. If your account balance is greater than
$200, your distribution may be subject to federal
and/or state income tax withholding. If you are
under age 59½, your distribution may also be subject
to an excise tax withholding.
b. If
your account balance is greater than $200, you can
defer tax withholding from your distribution by
electing a direct rollover to a traditional IRA or
to an eligible employer plan that accepts rollovers
(e.g. 403(b), 457(b), 401(k), etc.).
For further
information or for questions about your account, please
contact PARS.
(800)
540-6369
Monday – Friday
9:00AM – 5:00PM Pacific Time
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