What to Expect after You Retire

While many of the decisions regarding your plan of payment, beneficiaries, and health care choices are made before you retire, you may be asking yourself, “What do I need to know during retirement?” After you retire, you still need to know about your taxes, as well as how to update your address and bank information. SERS staff is here to assist you with any questions.

ABOUT YOUR RETIREMENT ALLOWANCE PAYMENT


Direct deposit is required for all SERS retirees. Direct deposit of your funds is the only way to assure that your payment will be available on the first of every month.

You may be eligible to receive an estimated payment if SERS receives the following at least 30 days before your retirement effective date:

• Your fully completed retirement application, and
• Necessary birth certificates, marriage certificates, a completed Direct Deposit Form, and any other required documentation

Your estimated retirement allowance payment will be based on payroll and service credit information posted through your last completed fiscal year (July 1 – June 30). Once your employer reports all final pay figures, SERS will finalize your monthly retirement allowance and notify you of the final amount. If the final calculation of your retirement allowance is greater than the estimated amount, we will send you another payment that covers the difference.

If you select a PLOP, it will not be paid until SERS receives all required information from your employer. Please be patient, as there may be a delay of 60 to 90 days after your effective date of retirement.

After your initial payment, your payments will be available on the first of every month. The January payment will be in your account on the first business day following January 1. SERS sends a quarterly Focus publication, which will include a quarterly statement detailing your current gross monthly allowance and deductions, and these amounts for the year-to-date. You also will receive a statement if there are any changes to your monthly payment amount.

You also can view your monthly payment information using Account Login.  The Payments section of the secure site provides a breakdown of your payments and payment details for your next monthly payment. The Payments section also allows you change your tax withholding and direct deposit information.

When you write to SERS, please make sure to give your full name and the last four digits of your Social Security number.

Also, make sure you advise SERS of any change in address. Even if SERS deposits your check directly into your bank account, we still need your current home address. You can easily update your address using the My Profile section of Account Login.

You also must notify us when circumstances change, such as the death of a spouse if the spouse was covered by our health plan, or if you chose a Joint Life plan of payment.

Beginning April 1, 2018, new benefit recipients must wait until their fourth benefit anniversary for COLA eligibility. When COLA benefits resume, increases will be indexed to the Consumer Price Index (CPI-W) with a cap of 2.5% and a floor of 0%.

Power of Attorney and Guardianship

In some instances, such as a hospital or nursing home stay, a retiree may not be able to handle thier own financial matters. At times like these, many people find it helpful to have a trusted friend or relative act on their behalf and handle necessary financial matters. If you, as a retiree, want someone other than yourself to handle your SERS retirement, you must provide SERS with either a General or a Limited Power of Attorney form.

This is necessary because, in addition to the retiree, SERS’ pension payments may only be cashed by authorized individuals. In order for another person to have authority to take care of business related to a SERS pension, the retiree must grant Power of Attorney to someone, or a probate court must appoint a guardian for the retiree.

A Limited Power of Attorney form is available upon request from SERS. The filing of a Limited Power of Attorney form also will allow the designated person to change the address of the location where the payment is being sent.

A guardian might need to be appointed by a probate court when a retiree becomes unable to handle financial matters.

A copy of the appointment of the guardian must be filed with SERS. This information is necessary so we know how to prepare future payments and where to send them.

Taxes

A portion of your pension is subject to federal and state income taxes. When your pension is calculated, SERS determines the amount that is taxable and the amount that is nontaxable. SERS sends you this information when your first pension payment is processed.

SERS is required to withhold federal income tax from your monthly pension amount unless you elect in writing not to have any withholding.

You need to file an Internal Revenue Service (IRS) Form W-4P with SERS to instruct us on whether we should withhold income taxes. If you do not file this form, SERS withholds as if you had filed married with three exemptions. You can change your withholding amounts at any time by requesting a new form from SERS or downloading it from the SERS website.

 

Your SERS pension amount may be subject to state and/or local taxes. You should consult the appropriate tax department in the area in which you live to determine your obligations.

For Ohio residents, your SERS pension amount is subject to Ohio state income taxes. However, SERS is not required to withhold amounts for state tax unless you return a form indicating the specific amount you wish to have withheld. This amount can be changed at any time by requesting a new form from SERS or downloading it from the SERS website.

You should consult your own tax advisor, the IRS, or state or local tax departments for advice on your specific tax questions. SERS cannot provide individual tax advice.

Both your state and federal tax withholding can be updated anytime using Account Login.

By January 31 of each year, SERS will send you the IRS 1099-R Tax Form for the previous calendar year. This provides the pension amounts you received for the year, the amount of taxes withheld, and other tax information. You also will receive a SERS Income Tax Information handout that explains the form, and provides other detailed federal and state tax information.

Your 1099-R information will be available in your secure online account on our website the first week in January.