Pension/Health – Milwaukee Retired Police Association

A Bill that would end the Windfall Elimination Provision for public pension recipients in the Social Security Program

April 15, 2022

Dear Wray,

Thank you for contacting me to share your thoughts on Social Security benefits. I appreciate you taking the time to let me know your views on this important issue.

Social Security represents a promise that the federal government has made to seniors and those who are approaching retirement age. Individuals and families have paid into this program, and they lived their lives depending on this promise. It is a promise we must keep. As Congress works to preserve this program for future generations, my top priority will be to protect those in retirement and individuals approaching retirement age.

As you know, Representative Kevin Brady (TX-8) introduced H.R. 5834 on November 3, 2021. This bill eliminates the Windfall Elimination Provision (WEP), a title of the Social Security Act that can reduce or eliminate Social Security benefits for an individual who also receives a public pension from a job not covered by Social Security. This bill would repeal the WEP and replace it with an updated benefits calculation formula, allowing for individuals who receive public pensions to also be eligible for benefits under the Social Security Act. For existing retirees, Social Security will provide a restoration of benefits payment to cover benefit loses under the WEP. I cosponsored this legislation because I believe it appropriately addresses a shortfall of our social security system.

Thank you again for contacting me on this important issue. I appreciate that you took the time to make me aware of your views. Please stay in touch as we continue to move Wisconsin and our nation forward. You can reach my office at 202-225-3031 or by visiting my website at Steil.house.gov.

On Wisconsin,

Bryan Steil
Representing Wisconsin’s 1st District

2022 Aetna Group Medicare Premium (ESA-PPO)

Milwaukee Retired Police Association

To All MRPA Aetna Group Medicare Plan Member(s):

It has come to our attention that an incorrect premium amount was loaded into the Aetna billing system for 2022. Aetna is working to correct the problem.

We want to reassure you that the correct monthly premium for your group plan is $13 per member per month.

There was a software error that indicated the premium was $74.28. This is not correct. Please disregard this amount and remit only the $13.00 premium amount with your bill.

If you wish to send in the full annual premium amount, the annual premium is $156.00.

For plan members with electronic transfer of funds (ETF) established, we have requested that Aetna ensures that the accurate premium amount be drafted in January.

Aetna Member Services is now aware of the billing discrepancy and will collect “the correct amount” from members wishing to pay by phone.

We apologize for the concern this discrepancy may have caused to our members, and thank the members who brought this to our attention.

We would like to take this opportunity to wish you and your loved ones a joyous holiday season & Happy New Year!

All the Best,

Kerry Leist & NBCI Associates

National Benefit Consultants, Inc Phone #262.201.4370

Pension Fund Update (March 2022)

The following is a Pension Fund update from Tom Klusman retiree Pension Board representative. It will inform you of everything you need to know about the status of our Pension Fund- the “lifeblood” of our retirement!

Pension Fund Update

by Tom Klusman, Retiree-elected Board Trustee

Hello and Happy Springtime MRPA friends. Here is the latest on what has recently gone on with our pension fund, where we are currently, and what is upcoming and significant.

CURRENT STATUS

As of the end of January 2022, our fund’s total value stands at $6.12 Billion. As I am sure you can figure, this is very good news. You may recall last Spring’s Newsletter when I reported our fund’s total value stood at $5.7 Billion. Also, our most recent Actuarial Valuation pegged our liability at $6.7 Billion. So, we have moved substantially closer to that fully-funded number this past year. There is much more to report on 2021 below.

Otherwise, 2022 is starting out a bit slow. This is understandable with all the global strife. We are about -2% down so far this year. Albeit, that is from the very high peak we started this year on.

Outgoing monies YTD are at $39 million, with $36 million of that being the one (January) so-far monthly retiree payroll. The rest is the costs to run the fund and GPS payments.

On the incoming / contributions side, we have received $73.4 million YTD in employee & employer contributions. The largest employer portion: the City, pre-paid their contribution for the year and received a 7.5% discount for it. Active employees will continue to contribute each pay period, so this number will increase throughout the year.

2021 YEAR-END REPORT

2021 was a very good year for our fund. As I mentioned earlier, we started 2021 with $5.7 Billion. We ended the year at just over $6.2 Billion. This improvement was very much attributable to excellent returns on our investment portfolio. For 2021 we achieved a 18.9% return. That number equates to $1.03 Billion in added value.

Also, during 2021, our fund paid out $461 million. Of that, $431.6 million went to us, the retirees, in the 12 monthly payrolls. The rest went out to new retirees’ GPS payments ($16 million) and fund expenses ($13 million to Staff, auditors, office space, etc.) which as you know the fund picked up the liability for from the City with the Global Pension Settlement.

Some other significant notes which our Chief Investment Officer recently highlighted to us regarding 2021 include:

The fund’s 18.9% return, which is net of fees (after investment managers get paid) is our highest calendar year return since 2013. It is also our fund’s 5^th highest return in the past 25 years.
The $6.2 Billion Total Fund Value as of the end of 2021 is the highest market value our fund has ever reported.
Our Fund’s investment portfolio outperformed its benchmarks by 6.1%. This is the largest outperformance our Fund has ever generated based on available records, which go back to 1996.
The $1.03 Billion investment gain achieved by our fund in 2021, (again, net of fees) is the highest investment gain our fund has ever reported.

And lastly, since I mentioned our friends in Madison at the WRS last year and how they beat us on investment returns in 2020, its only fair I do the same this year. Well, they achieved a 16.89% return on their portfolio in 2021. As stated above, our fund did 18.9%. Last year I pointed out that they invest in the same world we do and since they did better, we needed to do better. Well, we did.

OTHER SIGNIFICANT THINGS

I think you all know that every year we conduct an Actuarial Evaluation of our Fund. The actuary calculates (using some mathematical statistics and probabilities) what our liability is and compares that to our assets. That differential then tells us how well funded we are for what we will need to meet our responsibilities to current and future retirees, and also tells us how much the employers need to contribute for what they are receiving /received from their employees; past & present. The actuary is working on that analysis and report now and it will be presented in June to the Board. I will share its results with you in Fall.

In addition to the above annual task, this year (2022) two additional significant things will be occurring. Each 5 years we conduct an “Experience Study” and also the Actuary determines the next 5 years’ employer required contributions under the ERS’ “Stable Contribution Policy”. On the first point, later this year our actuary will present to the Board the statistical ‘experience’ of our fund; i.e. mortality rates, retirement rates, salary, CPI, stats and investment return projections to name a few. From that, the Board will vote on and approve “assumptions” to be applied to valuations, in order to project our future liabilities vs assets. Also, from this data, the amounts for employer contributions will be derived and set for the next (2023-2027) 5-year period. So, as you can see, there is a lot of important work coming.

Lastly, please enjoy the beautiful Spring weather, say goodbye to that nasty winter, and Thank you for your support.

Sincerely,

-Tom Klusman

IRS warns some retirees at risk of tax penalty: What to know

Brittany De Lea Published September 13, 2018

The IRS has a new warning for retirees, and while it’s not about a scam it could end up costing older taxpayers more money than they expect to pay.

The agency issued a statement urging Americans to check the amount being withheld from retirement accounts and monthly pension or annuity checks, as soon as possible, in order to avoid a penalty next year.

Since the year is almost over, the IRS said those who discover they have been paying too little, might need to make a quarterly estimated or additional tax payment directly to the agency.

The Tax Cuts and Jobs Act, which enacted a slew of changes to the U.S. tax code, altered the way dues are calculated by the IRS. As such, some retirees are at risk of having too little withheld from regular payments.

Overall, more taxpayers than normal are at risk of having to pay the agency next April.

According to a simulation conducted by the Government Accountability Office (GAO) in August, which reviewed the revised federal tax withholding tables for 2018 implemented by the IRS and the Treasury Department, 21 percent of workers are at risk of having their taxes underwithheld – 3 million more than projections based on the old tax code.

Only 6 percent of taxpayers are expected to have wages accurately withheld, while 73 percent are likely to have their taxes overwithheld. The former is three percentage points less than a simulation conducted using the same withholding structure and the old tax code. Accurate withholding was assumed to be within $100 of what is truly owed.

This year, employers are using W-4 forms already on file to calculate withholding amounts, which has posed problems for taxpayers because the sweeping tax reform changes address everything from personal exemptions to the standard deduction. The Tax Cuts and Jobs Act gave the Treasury Department authority to determine the withholding allowance structure because the old method was no longer suitable, and there was not enough time to issue a new W-4.

When asked in February about how many errors the Treasury has seen so far this year, Treasury Secretary Steven Mnuchin declined to comment directly, instead urging taxpayers to use the IRS withholding calculator.

Employees can update their withholding amounts and the administration has encouraged them to use the tax calculator, available on the IRS website. Retirees can also use the tool, entering their pension like income from a job. They can also consult a financial adviser.

For Social Security tax payments, the IRS says individuals can ask the Social Security Administration to withhold taxes at specified rates ranging from 7 percent to 22 percent. Changes can be made online.

Changes to IRA withholding amounts can also typically be made online.

The Trump administration released a proposal for the new 1040 tax document, or the U.S. individual income tax return, in June. It is expected to release a new W-4 form later this year.

MEDICARE ENTITLEMENT AND ELIGIBILITY

(Click on the following link) Medicare entitlement and elig – 2021

HOW TO EARN SOCIAL SECURITY CREDITS

(Click on the following link) How You Earn Credits 2020 467510 Rev 1.2020

TAX DEDUCTION FOR RETIRED PUBLIC SAFETY OFFICERS

By President Wray Young

The Pension Protection Act, which was signed into law in August of 2006, allows retired public safety officers to exclude from income distributions made from their eligible retirement plan that are used to pay the premiums for health insurance. This also includes the MetLife Dental & Vision plans negotiated for Milwaukee retiree firefighters and police. The distribution must be made directly from the pension plan to the insurance provider. You can exclude from income the smaller of the amount of the insurance premiums up to a maximum of $3,000 but the amount excluded cannot be used to claim a medical expense deduction. The MRPA is not qualified to give you tax advice so please direct any questions you might have regarding this benefit to your tax preparer or the IRS which, in turn, might refer you to IRS Publication 575.

Government Pension Offset & Windfall Elimination Provisions Will Reduce your Social Security Benefits – Wray Young

Kerry Leist, VP/Operations for NATIONAL BENEFIT CONSULTANTS, INC. passes along the following: There is important information regarding the Government Pension Offset & Windfall Elimination Provisions that will reduce your social security benefits and those of your surviving spouse if you should die before her/him.

Click to view:

Medicare Info

Kerry Leist, VP/Operations for NATIONAL BENEFIT CONSULTANTS, INC. passes along the following important information regarding Medicare eligibility. There are populations of protective services and a few others that lack 40 quarters. Some of those think they do not ‘qualify ‘ for Medicare. If entitlement is not at 40 credits it will costs those folks more for Medicare unless they qualify on a spouse’s record. Credits can be obtained through qualified employment or on a self-employment basis. Click on the following link to see more information on Medicare costs and benefits

If you have any questions concerning the attached Medicare information, please contact Kerry Leist at 262-327-4370

Police Relief Association (PRA) – By: Shannon M. Seymer-Tabaska

The Police Relief Association is a non-profit organization (501c3) whose PRA Board is elected by the membership, to include the Milwaukee Police Department Retirees Association (MPRA), the Milwaukee Police Association (MPA), and the Milwaukee Police Supervisor’s Organization (MPSO). The current PRA Board members include: President: Branko Stojsavljevic, Vice President: Vacant, Treasurer: Shannon M. Seymer-Tabaska, Secretary: Dena Klemstein, Directors: Patrick Doyle (retired member), David Feldmeier, and Eric Pfeiffer. In addition, the PRA Board has City Attorney Office representation under City Attorney Patrick McClain.

To be an active member of the PRA, one must be a sworn active law enforcement officer and/or a retiree who pays monthly dues of $2.08 into the PRA fund, which includes those members approved for a duty and/or ordinary disability. If a MPD member did not leave in good standing (i.e. termination and/or resigned) his/her PRA benefit ceases.

At retirement, active law enforcement members have the option to “opt out” of the PRA, but the PRA Board discourages this option as the majority of members lose a $9000.00 benefit that their beneficiary is entitled to at time of death. Once the latter “opt out” election is made, a member can’t re-enroll in the PRA. In addition, in 1998, there was a member election regarding the $9000.00 benefit amount wherein members elected to increase their dues to receive the $9000.00 benefit, but if a member did not make the election, their entitlement is $8000.00. There are also a few older retirees who only pay $1.25 per month into the PRA fund, so their benefit is reduced as well.

As an active member of the PRA, it is pertinent that any life change (i.e. marriage, birth/death, re-location, etc…) that result in beneficiary, address and/or phone changes, the PRA is provided the updated information. Updated information can be provided on a beneficiary form that can be found on the PRA website: http://www.pra-milwaukee.com/

and/or the member can contact us at (414) 649-8373 to request a form be emailed and/or mailed.

To claim a death benefit for a PRA member, the designee at death (i.e. spouse, surviving children) must contact the PRA at phone number (414)649-8373 to verify the member was active and in good standing and must provide a death certificate for the decedent. Members should be aware that the PRA Board members time is voluntary, thus, we do not have a full-time staffed office and will make a good faith effort to respond as soon as possible.

Currently, the PRA Fund is at 8.5 million dollars and it is the PRA Board’s fiduciary responsibility to ensure money collected from members and through donations (i.e. Combined Giving and/or private donors) is invested for fund growth and we all thank you for allowing us to serve the membership as your PRA Board.

Branko, Shannon, Dena, Pat, David, and Eric

From Greg Thiele

As many of you know, I have had hearing aids for about 15 years. I had to pay out of pocket each time I needed new ones. Today I was at the Avada office in Wisconsin Rapids for my annual test, which is always free. While talking to my audiologist was I was informed that United Health Insurance is now covering portions of hearing aids. He thought that Humana also might be covering some of the cost. While at the office his receptionist contacted United Health and Avada’s corporate offices. I need new hearing aids. The cost is around $5000. United Health informed the receptionist that my out of pocket cost is around $800. They pay the rest. The portion they cover also has to do with how much is left on your deductible. I for one never knew that United Health was covering any of this. From what they told me, United Health will cover up to around $5000. I was also informed that Avada was bought out by a large company that now owns almost 95% of all hearing aid companies in the world. This company put pressure on many of the insurance companies to start to cover the cost. This company also lowered the cost of hearing aids to make them more affordable. The hearing aids that I am getting for $5000 were almost $9000 last year. I hope this information helps some of you in the future. Greg