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Department of Employee Trust Funds
October 19, 2010 (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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