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News

Department of Employee Trust Funds
January 14, 2015 (updated)

What is My Minimum Core Annuity Amount?

Retirees have been asking for clarification about the minimum amount to which their Core and Variable annuities can be decreased by negative adjustments. When you retired, the Notice of Final Retirement Annuity Calculation you received from the Department of Employee Trust Funds (ETF) indicated how much your annuity was at that time. It also listed the amount of your monthly payment in the Core Fund and Variable Fund (if applicable). These amounts can increase or decrease annually, depending on Core and Variable Trust Fund investment results.

Core and Variable Annuities

It is important to remember that, by law, your Core annuity can never be reduced below the finalized amount when it began. Only Core annuity dividends granted in previous years can be reduced.
However, if you participate in the Variable Fund, there is no limit to how much your Variable annuity can be reduced. A prolonged period of poor stock market performance could result in the Variable portion of your annuity being reduced below the original finalized amount.

I am retired and still participate in the Variable Fund. If I cancel participation in the Variable Fund and my Variable annuity is transferred to the Core Fund, do I receive a new minimum Core annuity amount?

Yes. The combined total of the finalized amount of your Core annuity when it began, plus the amount of your Variable annuity at the time it transfers to the Core Fund is your new minimum Core annuity amount.

Once your Variable cancellation becomes effective and your Variable annuity transfers to the Core Fund, the Core annuity adjustments are applied to your total annuity each year. If there are Core Fund annuity decreases, your total annuity can never go below your new minimum Core annuity amount.

Upon request the Department can provide the finalized amount of your Core annuity when it began. However, please be aware that if you decide to cancel Variable participation, your new total guaranteed minimum annuity amount cannot be determined until your last Variable annuity adjustment has been calculated.

 

RESOURCES

For more information about the Variable Fund, including how to cancel participation and the options available, consult these and other valuable ETF resources located in the Core/Variable Information menu on ETF’s Internet site. These include the following:

Note: If you are unsure about your finalized Core annuity amount, contact ETF.

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