RETIREMENT

When Cops Retire.....

When a good man leaves the job and retires to a better life, many are jealous, some are pleased and yet others, who may have already retired, wonder. We wonder if he [she] knows what they are leaving behind, because we already know. We know for example that after a lifetime of camaraderie that few experience, it will remain as a longing for those past times.  We know in the law enforcement life there is a fellowship which lasts long after the uniforms are hung up in the back of the closet. We know even if he throws them away, they will be on him with every step and breathe that remains in his frame. We also know how the very bearing of the man speaks of what he was and in his heart still is.

These are the burdens of the job. You will still look at people suspiciously, still see what others do not see or choose to ignore and always will look at the rest of the law enforcement world with a respect for what they do; only grown in a lifetime of knowing. Never think for one moment you are escaping from the life. You are only escaping the job and we are merely allowing you to leave active duty.

So what I wish for you is that whenever you ease into retirement, in your heart you never forget for one moment that Blessed are the Peacemakers for they shall be called children of God, and you are still a member of the greatest fraternity the world has ever known.        Author Unknown

PLANNING FOR YOUR RETIREMENT: Retirement involves complex choices—DROP, health care, annuities. Please use this page to help plan for your retirement. OP&F encourages you to visit their offices for a one-on-one pre-retirement interview three to four months before your retirement date. During this interview, retirement counselors provide an overview of the retirement process, provide an estimate of your pension benefits, and explain the health care program currently available. You can also receive an estimate of your pension benefit that will be deposited in your DROP account should you elect to enroll in DROP in addition to providing you with an eight year projection of your DROP benefit.  This interview is rather enjoyable as the customer service representatives at OP&F go that extra mile to ensure that all your questions are answered and concerns addressed.  There is absolutely no obligation to make a decision at any time during or after your personal interview.  The pension system is there for you; use it to your advantage. They encourage you to bring along your spouse.  Make a day of it. After the interview, visit the police memorial adjacent to the OP&F building, and then have lunch in Germantown. Service Retirement and DROP interview appointments are available Monday through Friday at 9:00, 1:00 and 2:00. Disability appointments are available at 11:00 only. Parking is provided at no charge. You should plan to spend approximately two hours in the interview. To schedule an interview, call customer service at 1-888-864-8363. Ohio Police & Fire Pension Fund (OP&F) produces a series of guides to inform members about benefit options available as they approach retirement. Each guide provides a general overview of subjects ranging from public re-employment to OP&F-sponsored health care benefits. Each book is available to download from the OP&F web site. ARE YOU AWARE that the National Rifle Association (NRA) provides a $25,000 no strings attached death benefit to the survivor of an officer killed in the line of duty? They even offer a yearly discount rate of $20.00 (regularly $35.00) only to law enforcement officers.  Whether you believe in the philosophy of the organization or not, twenty bucks per year for $25,000 of life insurance money is a benefit worthy of your survivor to receive.  Check their website for details or contact me for an application. Although this column is entitled Retirement Tips and Talk, I will from time to time, incorporate information useful for both pre and post retirement members. It is essential that all active and retired members of the division be kept informed. REMEMBER: Those who fail to plan, plan to fail.

RETIREMENT TIPS AND TALK By Bob Stanek Benefits Officer      Retirement is not the end of our life, but a new beginning.  It’s the next chapter in our book of life that now we get to write. How creative we are can mean the difference between a best seller and a complete flop.    When planning your retirement, it is important to remember that money, more than any other factor, will dictate most of your retirement decisions. Your level of financial preparedness for your retirement years will determine when you retire, what type of lifestyle you and your family will enjoy during retirement, and what might be left as a legacy to your heirs.      There are many ways that proper planning can improve your current retirement outlook. The more time you have to prepare, the more change you can effect in your retirement income. A sound financial plan and ongoing professional advice can help you obtain your retirement objectives.      It has been said that no one plans to fail, they simply fail to plan. Nowhere is this idea more applicable than when it comes to meeting our retirement objectives. A sound financial plan can be the difference between meeting one's retirement objectives and facing the discouraging surprise of one caught unprepared and with too little time remaining to change their financial course.      At the very least, ongoing retirement planning will help you understand the financial demands of retirement, and make those decisions that are best suited to applying limited resources to potentially unlimited demands.      Retirement is a life altering decision, not one to be made lightly.  It is important to retire on your timetable, so that you can enjoy the fruits of your labor. Two key words in retirement consideration is PLAN and PREPARE.  Remember, THOSE WHO FAIL TO PLAN, PLAN TO FAIL.

RETIREMENT TIPS AND TALK By Bob Stanek Benefits Officer Pension Protection Act of 2006: Gross income exclusion up to $3,000 for health insurance premiums:      The federal Pension Protection Act of 2006 included a provision allowing retired public safety officers to take up to a maximum of $3,000 income exclusion from their taxes beginning with the 2007 tax year if they have health insurance premiums deducted directly from their regular pension benefits. OP&F members qualify as eligible public safety officers as defined by this act who have: Retired with a normal service retirement (i.e., age 48 with 25 years of service); Retired with an age commuted service retirement (i.e., age 62 with 15 years of service), or Retired as a disability benefit recipient.      The gross income exclusion will benefit these public safety officers who have qualified health insurance premiums deducted directly from their pension. This exclusion can include premiums paid on behalf of the member, spouses and dependents when the premiums are paid directly from the eligible public safety officer’s service or disability pension.      This gross income exclusion only applies to a distribution if the payment of premiums is made directly to the provider of the accident or health care plan or qualified long-term care insurance contract by deduction directly from a service or disability pension distribution from an eligible retirement plan. This would include the OP&F-sponsored health care plan. However, long-term health care is currently not deducted from OP&F health care coverage and therefore not eligible.      To take advantage of the gross income exclusion, those eligible will need to claim the associated tax benefits on their individual tax return IRS Form 1040 IRS outlines how to report the new $3,000 gross income exclusion for public safety officers:      The Internal Revenue Service (IRS) now has tax forms, publications and instructions on its Web site for the 2007 tax year. These up-to-date materials include a provision for the Public Safety Officer exclusion from gross income of up to $3,000 for qualified health insurance premiums. While the form has not been changed, Line 16b on Form 1040 is able to accommodate this exclusion. Retired public safety officers should report their total pension distributions on line 16a of Form 1040. If the individual qualifies for the insurance premium exclusion, it should be indicated on line 16b of Form 1040. To take this exclusion, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. Remember that the amount shown in box 2a of Form 1099-R does not reflect the health care premium exclusion. The amount of health care contributions for 2007 is listed on your OP&F monthly benefit statement for December.      When taking this exclusion the public safety officer should write “PSO” next to the adjusted taxable amount received on line 16b. Detailed information appears on page 22 of the 1040 Instructions for 2007. For those who do not use Form 1040, the exclusion can also be reported on Form 1040A (lines 12a and 12b) and on Form 1040NR (line 17a and 17b). If you have any questions on this exclusion, please consult a tax professional for advice.

RETIREMENT TIPS AND TALK By Bob Stanek Benefits Officer SEPARATING FROM THE DIVISION OF POLICE: Members are reminded to review General Police Order 1.1.33, Separating from the Cleveland Division of Police, prior to their separation to ensure timely and proper completion of their departure paperwork. Section 1. B. of GPO 1.1.33 states in pertinent part that members shall report to the personnel Unit to complete their separation forms. Section 1. C. of GPO 1.1.33 delineates the equipment (if applicable) that members shall return to the Division of Police at the Personnel Unit. Most significantly, failure to report to the Personnel unit to complete the separation forms may leads to gaps in insurance coverage or delays in disbursement of funds due. In other words, follow this procedure: 1) Call me on line x 5153 or stop in my office located in the Personnel Unit at least one week prior to your anticipated retirement date to set up an appointment.  At that time we will review the list of equipment that needs to be returned and discuss any other pertinent matters relating to your retirement, including service weapon purchase. PURCHASE OF SERVICE WEAPON:   (In part, relating to retirements)      Officers may purchase their Division issued handgun, prior to, or within one year of, retirement from the Cleveland Division of Police, by completing a Form-1 if the conditions below apply: I.    Division handguns may be purchased when one of the following apply:      A.    Officers with a minimum of 23 years of service who are 46 or more years of age may purchase their Glock 9mm at fair market value, determined by the Officer in Charge (OIC) of the Ordnance Unit. To purchase their 9mm Glock officers may use their clothing allowance. Certified check or money order is required to purchase service weapons other than the 9mm.      B.    Officers who leave the employment of the Division and are awarded a Police and Fire Disability Pension are eligible to purchase their Glock handgun regardless of years of service or age by certified check or money order. II.    Officers utilizing their clothing allowance to purchase their 9mm shall complete the top portion of the Firearms Purchase Form-1; make a copy to attach to the clothing allowance form, and hand carry the original through the chain of command. Make plans to purchase your service weapon prior to your retirement appointment date with me.  If retiring on a medical disability pension bring me a copy of your award and acceptance letter prior to your anticipated departure and I will give you a Form 1 authorizing the purchase. Unless extenuating circumstances exits, WALK-IN retirements are not in your best interest. Information and pre-planning before you retire leads to a stress free and enjoyable retirement.

RETIREMENT TIPS AND TALK By Bob Stanek Benefits Officer Commonly asked questions: Q:  What do I need to do when I want to retire? A:  You need to contact the Ohio Police & Fire Pension Fund in Columbus approximately 45 days before terminating employment with the city to request a service retirement application. This is required to be completed once YOU determine your separation date. In fact, make an appointment to go there and complete the application.  They will be able to review the annuity election you may elect to choose and provide you definitive numbers. The anticipated termination date that you enter on the service application is not set in stone, if you change your mind; you just have to call and advise them.  Remember, once filed, the service pension application is only valid for 6 months; then you will have to submit an updated one. Upon leaving DROP and retiring, you begin to receive your monthly pension benefit and are given the opportunity to enroll in health care benefits, managed by United Healthcare.  Once you retire and three full years have elapsed from your date of DROP entry, you can withdraw funds from the DROP accrual in a lump-sum payment or installments that may be subject to taxation. Remember you will automatically forfeit the benefit if you continue to work beyond eight years. Be aware of your DROP termination date. Q:  Why is it best to make an appointment with the Benefits Officer? Why can’t I just come in? A:  The appointment is for your convenience. You want to make sure I am available and in my office.  This is your day. You don’t want to feel stressed or rushed on your day and you understandably do not want to have to wait or maybe come back if I am unavailable. There are also other considerations that will be discussed that are pertinent to your retirement. Once in my office, the entire process takes approximately one and a half hours. There is a myriad of forms to complete during which time I thoroughly review all aspects pertaining to your retirement and address any questions you may have.  This is an important day and I want to ensure a smooth transition for you. Q:  When does my health care coverage with the city end? A:  Health care ends the last day in the month in which you retire.  For example, if you terminated employment on the 3rd of the month, you would be covered thru the last day of the month; Likewise, if you left on the 29th of the month.  Plan accordingly. Take advantage of the benefits.  Contact me first. Q:  Do I receive a retired police ID card? A:  Yes, upon completion of the retirement departure process in my office, I furnish you authorization to receive a retired identification card from the Photo Lab. Q:  I always hear plan, plan and plan for retirement.  It can’t be that complicated. A:  This begins a new chapter in your life.  How well you survive financially, what frame of mind you retire in and are you ready for retirement, are factual considerations.  You and you alone determine your retirement destiny. Retirement is the reward we all look forward to, as we near the end of our career. Consider that the job you walk away from today may be the one you need to survive tomorrow. REMEMBER: Those who fail to plan, plan to fail.

RETIREMENT TIPS AND TALK By Bob Stanek Benefits Officer 8 Ways to Prepare for Retirement Are you prepared? Retirement is different things to different people. For those in their 20s, it's a distant dream. For those in their 30s and 40s, it's a minor concern. For those 50 and beyond, it's a reality that must be dealt with. No matter what your age, you should start to prepare for your retirement and the sooner the better. Here are 10 ways you can start preparing right now. 1.   1.     Review your finances If you know where you are, you can prepare for where you are going. If you are deep in debt, chances are you are not prepared for your eventual retirement. If necessary, set up a budget and be sure to include something for your retirement. No matter what your age, you should be putting something back for your retirement. It’s estimated you will need between 70 percent and 90 percent of your current income to maintain the same standard of living after retirement. 2.   2.     Review your retirement needs or goals What is your idea of retirement? For some, it’s sitting on the porch and watching the grandkids play. For others it’s traveling. For still others, it’s somewhere in between. What are your retirement needs or goals? Knowing what you plan to do can give you some idea of what you will need in the way of money and health. 3.   3.     Develop a healthy lifestyle When you retire, you no doubt want to be healthy so you can enjoy every minute. Now might be the time to start an exercise program, or quit smoking. Frugal saving and living habits to prepare for retirement won’t mean a thing if you don’t feel like getting out of bed once you retire. 4.   4.     Talk to your spouse about his/her retirement plan If you are married, you should discuss your spouse’s retirement plan to find out what benefits you might be entitled to receive. You should thoroughly understand any consent forms or waivers that you might be asked to sign for your spouse’s retirement plan distributions. 5.   5.     Review your DROP statement  You should thoroughly review this statement and if there are areas that you don’t understand or disagree with, you should talk to an OP&F representative immediately. 6.   6.     Review your Social Security Statement Each year; you should receive a Social Security Statement about three months before your birthday. This is a record of your earnings that have had Social Security taxes paid. It also has an estimate of the benefits you or your family might receive from those earnings. If you find a mistake or disagree with this statement, you should contact the Social Security Administration immediately. 7.   7.     Discuss your retirement goals with your spouse and family This is especially important if you are near retirement age. Your spouse might have different retirement goals and you will need to come to some sort of compromise. Your family should be aware of long range plans that might affect them. 8.   8.     Think about how you will spend your time Nothing is more frustrating than to have time on your hands and nothing to do. Once you retire, you might want to take another job, volunteer, travel, enjoy a hobby, and so on. Take some time to think about what you might want to do before you wake up that first morning and don’t have to go to work. While these 10 suggestions on how to prepare for retirement won’t guarantee that you will be ready for the big “R”, they will give you some ideas on how you can prepare. By planning for your retirement, you could make this phase of your life one of the best.

RETIREMENT TIPS AND TALK By Bob Stanek Benefits Officer INTERIM AND FINAL PAYMENTS INTERIM AND FINAL PAYMENTS Once you are eligible for service retirement benefits and OP&F receives and processes your Service Retirement Application, an acknowledgment letter will be sent to you. OP-F will send a form to the city requesting verification of your termination date and information about your separation pay. Generally within 60 days from the date OP&F receives the form completed by the city, OP&F will calculate your benefit and begin paying you an estimated interim benefit. Your first payment will occur within 60 days of your retirement date and is based on your last posted 36 months of salary and in most cases, will most likely be an amount less than the ultimate pension entitlement. During this interim period, and provided you selected multiple beneficiaries on your Service Retirement Application, you will be permitted to change the amount of designation for beneficiaries you named on your application but will not be permitted to change the beneficiaries. Approximately eight to 10 months after OP&F’s receipt of the employer accounting of member compensation, you should expect to receive your exact pension plus any difference between the exact and estimated interim pensions. When the final pension has been calculated, it will be paid retroactively to the date of your retirement, less any interim benefit payments. In the event of an overpayment during receipt of your interim pay, OP&F will make arrangements for repayment of those funds according to its governing rules. Although you have the opportunity to change the payment plan selection while accepting interim payments, in most cases, the amount of the interim payment will remain the same and the changes in the payment plan will be recognized as part of the final calculation. The above, with the exception of the within 60 day first payment, does not apply to those members enrolled in the DROP program.  Your monthly pension benefit will be the pension benefit and cola calculated total in the first column of your final DROP statement. BE PREPARED, PLAN AHEAD.  This means you have to plan to have at least two months of savings available to meet your monthly expense obligations to carry you through until you receive your first pension check, approximately two months after retiring.  UPCOMING PRE- RETIREMENT SEMINAR OP&F invites you and your spouse to attend a free pre–retirement seminar that will take place throughout Ohio in October and November 2008. During the seminars, OP&F Member Education representatives will provide in–depth information about the Deferred Retirement Option Plan (DROP), the OP&F–sponsored health care program, annuity options, and survivor benefits. If you are nearing retirement, or want to learn about DROP, plan to attend a seminar, bring your spouse and ask questions. The closest seminars are: Cleveland, Monday, October 6, 2008 Holiday Inn Select 15471 Royalton Road  Strongsville OH 44136 Akron/Canton, Tuesday, October 07, 2008 Hilton-Fairlawn 3180 West Market Street Akron OH 44333 You can register online at www.op-f.org or you can also register by calling OP&F Customer Service at 888-864-8363, Monday through Friday, 8 a.m.-4:30 p.m. EST. OP-F BENEFIT CALCULATION EXCLUSION Members in the terminal benefits program that cash out their furlough, be advised that this vacation cash-out is NOT included when computing your three high years. If you have any questions contact the Ohio Police and Fire Pension Fund at 1-888-864-8363 or visit their web site at www.op–f.org.

RETIREMENT TIPS AND TALK By Bob Stanek Benefits Officer PENALTY FOR RETURNING TO PUBLIC EMPLOYMENT UNDER AN OHIO RETIREMENT SYSTEM Often referred to as the “revolving door penalty,” if you return to public employment covered under any of the Ohio retirement systems (ORS), including OP&F, within two months of your retirement date from the Division of Police, then up to two months of your pension payments and contributions for such period must be forfeited under law.  A limited exception can be applied to you if you had been continuously employed in the other ORS-covered position, except for an OP&F position, two months before retirement and you submit the appropriate documentation to OP&F. Contributions that fall under this penalty are excluded from the calculation of your benefit and are refunded.  While this penalty does not apply to OP&F-sponsored health care benefits for you and your dependents who are eligible for medical. prescription drug or supplemental dental and vision coverage offered through another ORS should refer to the Members Guide to Health Care Coverage from United Health Care for more detailed information. MEMBERS GUIDE TO DOMESTIC RELATIONS ISSUES This guidebook is intended to assist members of Ohio Police & Fire Pension Fund (“OP&F”) in addressing pension issues when there is a divorce, dissolution of marriage or legal separation. The information contained in this guidebook is for informational purposes only as part of OP&F’s administration of its retirement plans and is not intended to serve as legal advice. Members may wish to share this information with their personal legal counsel. This and many other booklets can be viewed and/or printed from the OP&F web site at www.op-f.org FREQUENTLY ASKED QUESTIONS Can I access my OP&F account online? Yes. Members can now access their account information online using the Member Self Serve Web link at www.op-f.org. Registration is required to view your specific account information. How long does it take for my DROP contributions to be posted online? It usually takes 2 months from the time the monthly payroll is due to OP&F until it is posted online. For example, the May 2007 monthly report was due to OP&F on June 30, 2007. It was reviewed and posted to your account at the end of July, if there were no delays in reporting. If there were errors in your employer’s reporting, they have 30 days from the initial notice to correct the reporting deficiency, then OP&F will process the corrections, approve the report, and update the payroll to the member ledgers, which could take up to five business days. When is interest posted to my DROP accrual? Interest is posted every month between the 5th and 10th for the previous month. If for some reason, a pension or contribution is posted late that does not affect your interest. The interest is calculated back to the due date.

RETIREMENT TIPS AND TALK By Bob Stanek Benefits Officer The state of the stock market What does it mean to OP&F and your pension? The OP&F Board of Trustees and management continue to monitor the news and daily events happening on Wall Street and in Washington concerning the U.S. financial markets. While the news of the unsettled investment markets can be understandably concerning, it is important for OP&F members to know that their retirement benefits are secure and the ability to pay benefits is not affected by the market turmoil. They are monitoring OP&F’s exposure to the financial sector in order to insulate the fund from any undue risks and to identify potential buying opportunities. Their diversified portfolio will help weather the storm as it did during past turbulent economic times. You can be confident that your pension fund is responding accordingly. Their goal is to keep you informed about what the current economic situation means as a member of a pension fund with significant holdings in the stock market. Some facts to consider: OP&F is a patient, long-term, well diversified institutional investor. This means that their goal isn’t just to provide pension benefits for next month, but to provide a secure retirement income source for all of their members – both retired and active – well into the future. When the stock market has a bad day, a bad month or even a bad year, it does not affect their ability to pay the benefits that are guaranteed to you. OP&F’s long-term investment plan realistically includes the probability of brief periods of market weakness and still allows them to achieve their target return over time. Their Investment Department staff is working closely with their financial consultants to monitor the situation. They will continue to make prudent decisions based on their many years of expertise. OP&F has regularly been one of the best performing retirement systems nationwide in terms of investment returns. They expect this to continue. Study of DROP shows that plan remains cost-neutral An actuarial analysis of OP&F’s Deferred Retirement Option Plan (DROP) shows that the program is operating as designed and that the benefit option for members neither costs OP&F money nor serves as a source of revenue for the retirement system. The actuarial study, completed by Buck Consultants, stated that “Our analysis shows that, to date, the DROP, as currently in effect has not had a negative financial impact on the Ohio Police & Fire Pension Fund.” Buck presented its findings at the April, 2008 Board of Trustees meeting. DROP is a voluntary benefit introduced in 2002 by Ohio House Bill 134 and was implemented on January 1, 2003. The Ohio Revised Code calls for OP&F to prepare an actuarial investigation DROP examining its financial impact on OP&F at least every five years. The analysis by Buck serves as the first of these required investigations. DROP allows members who have qualified for a normal service retirement to continue working while accumulating a lump-sum of money for retirement. The amount the member would normally receive as a monthly retirement benefit accrues, with interest, in an account while they participate in the program. To take full advantage of DROP, members must remain in the plan for at least three years and no longer than eight years. For details visit the DROP section on this site or contact OP&F Customer Service. Direct Deposit Another new change in effect beginning January 1, 2009, will require benefit recipients to enroll in electronic direct deposit. Currently, 91 percent of OP&F benefit recipients use the convenience of Direct Deposit. Direct Deposit remains the easiest, most reliable, timely and also the most secure method of receiving your benefit. Direct Deposit enrollment forms are available on the OP&F Web site and also by contacting OP&F Customer Service at 800-860-9599.   In June OP&F sent letters to all benefit recipients regarding these changes. In July those who still receive their monthly benefit check in the mail were recently sent a Direct Deposit application form. OP&F will continue to provide information concerning these initiatives throughout the year Additional Changes: Also in a continuing effort to reduce costs and increase efficiencies, OP&F will be changing how benefit recipients receive information about their monthly benefit. Effective January 1, 2009, benefit recipients will no longer automatically receive a statement every month that shows information regarding their benefit.   Rather than receive a statement each month, members will be able to review their monthly statements online by January. OP&F will be adding a secure section to its Web site allowing members to view and print monthly statements.   Information obtained from the Ohio Police & Fire website @OP&F.org

RETIREMENT TIPS AND TALK By Bob Stanek Benefits Officer Insurance Premiums for Retired Public Safety Officers If you are an eligible retired public safety officer you can elect to exclude from income distributions made from your eligible retirement plan that are used to pay the premiums for accident or health insurance or long-term care insurance. You can do this only if you retired because of disability or because you reached normal retirement age. The premiums can be for coverage for you, your spouse, or dependents. The distribution must be made directly from the plan to the insurance provider, which OP&F does.  You can exclude from income the smaller of the amount of the insurance premiums or $3,000.00. You can only make this election for amounts that would otherwise be included in your income. Refer to page 24 in the 2008 Internal Revenue Service instructional guide for preparation of form 1040 available at the Post Office or online at www.irs.gov. If you have any questions on this exclusion, please consult a tax professional for advice FREQUENTLY ASKED QUESTIONS Whom will this gross income exclusion benefit? The gross income exclusion will benefit eligible service or disability retired public safety officers who have qualified health insurance premiums deducted directly from their pension. This can include premiums paid on behalf of the member, spouses and dependents when the premiums are paid directly from the eligible public safety officer’s service or disability pension. Does this gross income exclusion apply to survivors? No. Once an eligible public safety officer is deceased this gross income exclusion stops Is the gross income exclusion amount for medical, prescription or both? Both. The exclusion covers all qualified health insurance premiums. Does this gross income exclusion include or exclude co-pays and deductibles? Co-pays and deductibles are excluded. The gross income exclusion only covers qualified health insurance premiums paid directly from a defined benefit pension plan on behalf of an eligible public safety officer. Are premiums for long-term health care insurance included within this exclusion? This gross income exclusion only applies to a distribution if the payment of premiums is made directly to the provider of the accident or health care plan or qualified long-term care insurance contract by deduction directly from a service or disability pension distribution from an eligible retirement plan. Long-term health care is currently not deducted from OP&F health care coverage. As a qualified public safety officer, am I eligible for additional $3,000 exclusions for my spouse and for my dependents? No. The gross income exclusion is limited to $3,000 per year, per eligible public safety officer only. Do I qualify for the gross income exclusion if I am on my spouses’ health care plan? The gross income exclusion is only available if the plan is deducting and then remitting premiums directly to the insurance provider directly from the eligible pubic safety officer’s pension. Information obtained from the Ohio Police & Fire website @OP&F.org OP&F provides this information to the membership as a service and does not intend to substitute any IRS interpretations, rules or eligibility requirements. Please contact the IRS or your tax preparer directly to verify your tax filing questions or with any questions or for additional information related to qualification of this gross income exclusion. PLANNING TO RETIRE THIS YEAR? What do I need to do when I want to retire?  You need to contact the Ohio Police & Fire Pension Fund in Columbus approximately 45 days before terminating employment with the city to request a service retirement application. This is required to be completed once you determine your separation date. In fact, make an appointment to go there and complete the application.  They will be able to review the annuity election you may elect to choose and provide you definitive numbers. The anticipated termination date that you enter on the service application is not set in stone, if you change your mind; you just have to call and advise them.  Remember, once filed, the service pension application is only valid for 6 months; then you will have to submit an updated one. Upon leaving DROP and retiring, you begin to receive your monthly pension benefit and are given the opportunity to enroll in health care benefits, managed by United Healthcare.  Once you retire and three full years have elapsed from your date of DROP entry, you can withdraw funds from the DROP accrual in a lump-sum payment or installments that may be subject to taxation. Remember you will automatically forfeit the benefit if you continue to work beyond eight years. DROP IN OR DROP OUT? To DROP in or DROP out is an important personal decision each of us needs to make. The Deferred Retirement Option Plan (DROP) is an optional benefit that allows eligible members to accumulate a large sum of money for retirement.  Enrolling in DROP is a voluntary decision that members should make after careful consideration of their own individual situation.  OP&F strongly encourages all members to seek financial, legal and tax advice from professional counselors before entering DROP.  If you enroll in DROP, you will continue to work and therefore will not be considered retired. Participation in DROP has no impact on your employment status.  OP&F does not intend to notify the division if or when you choose to enroll in DROP. Steps to enrollment Call OP&F at 800-860-9599 to request a written estimate of your pension benefit that will be credited to DROP. Use the DROP calculator to see how much you might accrue in DROP over the next eight years. Discuss DROP with a tax or financial planner to see if DROP is right for you. If you are already eligible for a normal service retirement and would like to enroll in DROP, return a completed and notarized Election to Enroll in DROP form to OP&F. You can request a form by calling Customer Service at 888-864-8363 or downloading one from their Web site. Submit your election form to OP&F through the mail or in person at 140 East Town Street, Columbus, OH 43215. OP&F will not accept forms that are incomplete, faxed or photocopied. Within 90 days of OP&F receiving your Election to Enroll in DROP form, you will receive information indicating your DROP effective date and the amount of the pension that will be credited to your DROP account each month. In most cases, your DROP participation will take effect on the first day of the first full employer-reporting period that immediately follows OP&F’s receipt of your completed Election to Enroll in DROP form. Pension payments will be applied to DROP based on your effective date and you are not permitted to specify an effective date on your election form. Contact me at the benefit office on line 5153 or E-mail at rstanek@city.cleveland.oh.us to set up a confidential appointment to discuss DROP enrollment or any questions you have about retirement.

RETIREMENT TIPS AND TALK By Bob Stanek Benefits Officer ARE YOU READY TO RETIRE? Before taking on this huge step, find out if you are ready to retire Emotional Readiness Retiring isn't as simple as quitting your job. There are financial concerns, indeed, but just as important, you have to be emotionally ready for your new life and it takes about two years to go from one place in human development to the next place. You should expect a transitional period, for example, as a new parent faces or as a couple faces marriage and it's normal to feel confused and overwhelmed. To help the transition, people have to develop goals for this period in life. Retirees go through phases before they get settled into their new daily patterns. In the beginning, you might sleep as long as you want in the morning and enjoy the lack of structure that you were tied down to when you were working. But that's only temporary. Eventually you'll want something to structure your time and part of that is because we're so used to having goals and moving towards them. So how do you set new goals? The same way you set the old ones, more or less. Write a list of things you'd like to do. Whether it’s spending more time with your grandkids, taking a computer class, visiting a library or finally creating that killer garden in your yard, you need to decide which goals you'd like to accomplish. As you think about the things you'd like to do, remember who you are, or who you were early in your working years and what things gave you pleasure back then. That means getting back to some of the things you've let fall by the wayside, perhaps a talent that's been on the back burner. The things you loved to do years ago can finally be restarted in retirement. Or, you can find new things that you've been eager to try, such as traveling, a new craft, a sport or another adventure. Many retirees are spending their days mentoring younger generations and sharing decades of knowledge. They say it's terribly rewarding to volunteer. They give help and they can pick and choose what they really want to do. Make a laundry list of all the possibilities and see how they may fit into your new schedule. See which friends will be around to share it with, or take this new start as a way to make some new friends. But of course, you have to have the means to pay for it all. Financial readiness is the next item to examine before you retire.  RETIREMENT READINESS TEST You’ll need a relative or friend who knows you well to help you grade your responses. There are no right or wrong answers so be as honest as possible with yourself to determine whether you’re really ready or how to better prepare yourself (give yourself 1 point for each question below) Why are you thinking about retirement now? Do you really want to retire? Have you attended a retirement preparation program or seminar on financial planning? Have you attended a retirement preparation program or seminar on social planning (community activities and interpersonal endeavors, for example)? How would your finances be if you retired now? (if Social Security, your  pension and savings will replace 75-85% of your final income) Have you developed any outside interests, hobbies, volunteer activities or any areas of new learning? Have you planned new activities in which you would regularly interact with others, offering opportunities for new friendships? What do your family and friends say about your retiring? Have you considered whether you want a complete or partial retirement? In other words, have you considered taking on part-time or temporary work, or even a less than full-time small-business venture? The emphasis here is on consideration. During retirement, will the process of making at least a modest contribution helping out in various volunteer or other activities be sufficient for you, or do you feel you need to make an immediate major difference in what you do? What is important and fulfilling for you? How do your retirement plans relate to your thinking here? What gives you a sense of meaning and purpose in life? How do your retirement plans relate to your thinking here? Scoring: (give yourself 1 point for each question above) 10-12 points: You’re likely to have a great or highly satisfying retirement.   8-9 points: Your retirement could have some problems, likely fixable.   6-7 points: You could be challenged by ambivalent feelings, requiring a solid effort to bring your situation up a notch.   3-5 points: You’re potentially in a trouble zone, with your retirement not working well, short of a major effort to get it on track.   0-2 points: You’re in jeopardy of having an unfulfilling retirement, requiring an all-out effort to work things out.

RETIREMENT TIPS AND TALK By Bob Stanek Benefits Officer RETIREMENT PREPAREDNESS Certainly one of the major concerns on everyone’s mind as we near retirement is the economy.  The Ohio Police & Fire Pension Fund is strong and stable. I am confident that as we retire, our monthly benefit will be there for us to collect, well into our golden years.  However, a bigger concern should be with the expected windfall from our Deferred Retirement Option Plan account. What financial plan do you have in place to protect this valuable asset? The fact is, as police officers, many of us are not good money managers.  Sure, we can handle the bi-weekly paycheck, but how well will we be prepared to make sound financial decisions regarding our DROP money.  When it’s gone, it’s gone. AND REMEMBER The Deferred Retirement Option Plan (DROP) is an optional benefit that allows eligible police officers and firefighters to accumulate a lump–sum of money for retirement. The Ohio Police & Fire Pension Fund (OP&F) is proud to offer this benefit to its membership, which has been the most requested addition to OP&F’s benefit offerings in many years. The popularity of DROP programs has grown across the country since public sector employers first introduced them in the 1980s. Based on tremendous member request, OP&F has put in place a beneficial program without additional cost to members, their employers or OP&F. Thanks to member persistence, the support of member unions and associations and the receptive Ohio Legislature, the Governor signed Senate Bill 134 into law in 2002, which enabled OP&F to begin offering DROP in 2003. The first wave of mandatory departures will take effect January, 2011. Don’t be caught unprepared and uninformed.  Remember those who fail to plan, plan to fail. JUST A REMINDER Enrolling in DROP is a voluntary decision that members should make after careful consideration of their own individual situation. OP&F strongly encourages all members to seek financial, legal and tax advice from professional counselors before entering DROP. Prior to enrolling in DROP, you are encouraged to contact OP&F to request a written estimate of your pension benefit that would be credited to DROP. OP&F typically generates these estimates within two to four weeks. You are not required to come to OP&F offices in Columbus to discuss your DROP benefits with an OP&F counselor; however, they welcome you to do so. STEPS TO ENROLLMENT Call OP&F at 800-860-9599 to request a written estimate of your pension benefit that will be credited to DROP. Use the DROP calculator to see how much you might accrue in DROP over the next eight years. Discuss DROP with a tax or financial planner to see if DROP is right for you. If you are already eligible for a normal service retirement and would like to enroll in DROP, return a completed and notarized Election to Enroll in DROP form to OP&F. You can request a form by calling Customer Service at 888-864-8363 or downloading one from their Web site. Submit your election form to OP&F through the mail or in person at 140 East Town Street, Columbus, OH 43215. OP&F will not accept forms that are incomplete, faxed or photocopied. Within 90 days of OP&F receiving your Election to Enroll in DROP form, you will receive information indicating your DROP effective date and the amount of the pension that will be credited to your DROP account each month. In most cases, your DROP participation will take effect on the first day of the first full employer-reporting period that immediately follows OP&F’s receipt of your completed Election to Enroll in DROP form. Pension payments will be applied to DROP based on your effective date and you are not permitted to specify an effective date on your election form. The next major concern is the availability and cost of health care benefits. The Ohio Police and Fire Pension Fund offers optional healthcare coverage through United Health care.  The monthly premiums are not cheap.  For example, the premium deducted from the monthly pension check for a pre-Medicare eligible husband and wife, is over $750.00 per month. It its imperative that you consider healthcare costs when planning for your retirement. Next months column will be devoted solely to health care issues.

RETIREMENT TIPS AND TALK By Bob Stanek Benefits Officer Health Care Coverage OP&F continues to partner with United Healthcare to deliver health care coverage to OP&F eligible benefit recipients and their dependents. The 2009 health care plan will offer one plan design through one carrier, United Healthcare, for all non-Medicare eligible benefit recipients and dependents, early Medicare recipients, Medicare A only recipients, Medicare B only recipients, or OP&F retirees residing outside of the U.S. United Healthcare is a national carrier with a strong national network across the country. This will allow one carrier to provide the administration for all benefits. OP&F benefit recipients and dependents age 65 and over that are Medicare eligible and enrolled in both Medicare Parts A & B will be eligible to enroll in an AARP Medicare Supplement Plan underwritten by United HealthCare Insurance Company. Medicare supplement plans help you control your out-of-pocket expenses, like deductibles and coinsurance, and offer flexibility by providing a wide variety of coverage options. In most states, up to 12 standardized Medicare supplement plans may be offered. These plans are guaranteed renewable as long as your premium is paid on-time, and do not require you to submit any claim forms. With standardized Medicare supplement plans, you have total freedom to choose any doctor, specialist, hospital or other provider that accepts Medicare-anywhere in the U.S. No referrals are required. The Ohio Police & Fire Pension Fund (OP&F) continues to sponsor a health care plan for eligible benefit recipients and their dependents according to the plan design and enrollment guidelines. Adoption of this plan came as a result of a vote by the Board of Trustees to reaffirm their commitment to provide current and future retirees with quality health care and to develop a plan that would ensure availability of some form of health care subsidy. This will allow one carrier to provide the administration for all OP&F sponsored health care coverage. This will include health care, prescription drug, voluntary dental and vision coverage options. Eligibility guidelines for the OP&F-sponsored health care coverage Retirees, qualified surviving spouses, surviving children who are receiving the statutory survivor benefit, and eligible dependents who are students between the ages of 18 and 23, may qualify to participate in the OP&F-sponsored health care coverage if determined eligible according to the terms of the health care plan. Benefit recipient eligibility guidelines Generally, a benefit recipient is defined as an OP&F member who is receiving a service retirement or disability benefit, or surviving spouse, a surviving child/orphan, or dependant parent who is receiving statutory survivor benefits from OP&F. Retiree An OP&F member who is receiving a service pension or disability benefit from OP&F is eligible to participate in health care and or prescription drug coverage on the effective date of their retirement or the first day of the month following their effective date of retirement. The required paperwork must be filed with United Healthcare within 60 days of receiving your first benefit check. Surviving spouse Upon the effective date of the statutory survivor benefits, a surviving spouse who receives a statutory survivor pension from OP&F is eligible to participate in the OP&F-sponsored health care plan as long as they are not participating or waived health care coverage through another Ohio retirement system or were legally separated from an OP&F member on or after January 1, 2004. Health care coverage for an eligible surviving spouse continues without interruption upon the member’s death for a limited period. In this event, a Survivor Health Care Eligibility and Enrollment Form must be filed with United Healthcare within 90 days. A surviving spouse who remarries may still participate in the OP&F-sponsored health care coverage as long as he or she is not participating or waived health care coverage provided through another Ohio retirement system. The new spouse and any child born to the surviving spouse after the OP&F member’s death are not eligible for coverage, unless the OP&F member is the child’s parent. Health care and prescription drug coverage You and your eligible dependents may participate in the OP&F-sponsored health care and prescription drug coverage under the following circumstances: • at the time of your OP&F retirement; • three years after your OP&F retirement or commencement of OP&F benefits; • with proof of change in family status (i.e. marriage, death, divorce); • with proof of loss of group coverage; or • at the time you become eligible for Medicare. You must notify United Healthcare in writing of these changes within 60 days of the qualifying event in order to be eligible for enrollment. If you or your spouse are employed and eligible for health care or prescription drug coverage through the employer, you can participate in the OP&F-sponsored health care coverage. However, OP&F will not subsidize your contributions. Also, if your spouse is eligible for health care or prescription drug coverage through his or her retirement system, as long as it is not another Ohio retirement system (ORS), he or she will be eligible for the OP&F-sponsored health care coverage but will be responsible for paying the full premium. Please see page 42 for the OP&F-sponsored health care full premiums, and pages 11 & 12 for information on benefits through an ORS eligibility. Voluntary dental and vision plans Voluntary dental and vision coverage are separate plans offered as a supplement to health care coverage. Enrollment in these plans is offered annually to all eligible benefit recipients during the Annual Change Period that occurs in the fall with coverage taking effect January 1 of the following year. Unless there is a valid change in family status (i.e. death, divorce, or other loss of eligible status), you and your enrolled dependents must remain in the voluntary dental and vision plans for 12 consecutive months in 2009. The appropriate contributions will be deducted from your benefit check for the entire period. In addition, if you enroll in these plans, you can only enroll additional dependents during the Annual Change Period, unless there is a valid change in your family status. Pre-existing conditions The OP&F-sponsored health care plan provides coverage for pre-existing conditions upon enrollment. United Healthcare will also be providing prescription drug benefits through United Healthcare Pharmacy for all OP&F retirees, both non-Medicare and Medicare, unless you enroll in Medicare Part D. To enroll in health care and/or prescription drug coverage as a new retiree, you must complete a Health Care Eligibility and Enrollment Form within 60 days of receiving your first benefit check. However, if you have not received your Health Care Eligibility and Enrollment Form, you must contact United Healthcare at 1-888-832-0964 and request an enrollment kit, which will be mailed directly to your home. You may also call United Healthcare to set up an appointment to review your health care coverage options. If you want to waive or change your coverage, you must do so within 60 days of receiving your first benefit check. Coverage for new benefit recipients and dependents will take effect at the effective date of retirement or the 1st day of the month following the effective date of retirement as designated on the benefit recipient’s Health Care Enrollment and Eligibility Form. The effective date of retirement is the default date. You may enroll in the OP&F-sponsored voluntary dental and vision plans only during the Annual Change Period. Even though you and your dependents are eligible for health care and prescription drug coverage on the effective date of your retirement or the 1st of the month following your effective date of retirement, until your first benefit check is mailed or direct deposited, you and your dependents are considered to be in the “window period.” During this period, you must pay for any health care or prescription drug services up front and submit claim forms for reimbursement. Claims for health care services or prescription drugs during the window period must be submitted to United Healthcare. You must follow the procedures in the members health acre guide to submit claims to United Healthcare for reimbursement without penalty of health care and prescription drug expenses that you received during the window period. Married couples both receiving OP&F retirement benefits Married couples that individually receive their own OP&F service pension or disability benefit may enroll in OP&F-sponsored health care or prescription drug coverage under one of the following methods: both individuals are enrolled as benefit recipient and dependent and health care contributions are being withheld from the benefit recipient’s pension benefit; or each individual is enrolled separately under his or her own plan, with health care contributions  being withheld from each benefit recipient’s pension benefit. Married couples individually receiving a service pension or disability benefits may not enroll in two OP&F-sponsored plans at the same time. In addition, only one parent can cover eligible children. Please contact United Healthcare Customer Service at 888-832-0964 for more information. Other Ohio retirement system benefits An individual who is eligible to receive health care coverage through another Ohio retirement system is not eligible to enroll in the OP&F-sponsored health care, prescription drug, dental or vision plans. Other Ohio systems include: Ohio Public Employees Retirement System, School Employees Retirement System, State Highway Patrol Retirement System, and State Teachers Retirement System. Voluntary dental coverage In 2009, OP&F will continue to sponsor voluntary dental coverage through United Healthcare as a separate plan, with a separate non-subsidized contribution amount since routine dental services are not covered under the OP&F sponsored health care coverage. You have the option of enrolling in the separate voluntary dental coverage every year as long as you or your eligible dependents are not covered under another Ohio retirement system. Voluntary vision coverage In 2009, OP&F will continue to offer voluntary vision coverage through United Healthcare Vision, underwritten by United Healthcare Ins. Co., as a separate plan, with a separate non-subsidized contribution amount since routine vision services are not covered under the OP&F-sponsored health care coverage. You have the option of enrolling in separate voluntary vision coverage every year as long as you or your eligible dependents are not covered under another Ohio retirement system. Monthly contributions Contributions for the health care, prescription drug, voluntary dental and voluntary vision coverages are deducted from your monthly pension benefit when you are enrolled. Paying full premiums if eligible through an employer or retirement system If you or your spouse is employed and eligible for health care or prescription drug coverage through the employer, you can participate in the OP&F-sponsored health care coverage. However, OP&F will not subsidize your health care contributions. Also, if your spouse is eligible for health care or prescription drug coverage through his or her retirement system, as long as it is not another Ohio Retirement System (ORS), he or she will be eligible for the OP&F-sponsored health care coverage but will be responsible for paying the full premium. Log online to the Ohio Police & Fire Pension Fund website to review and download the United Healthcare Member’s Guide to Health Care Coverage for 2009. Next months article will address the most important topic; WHAT'S IT GOING TO COST ME? Remember to attend the financial planning workshop being held at the FOP Lodge #8 hall on Tuesday, May 19, 2009 at 6:00 P.M. Spouses are welcome. Please RSVP to 1-866-892-6013. Remember: THOSE WHO FAIL TO PLAN, PLAN TO FAIL Source:  Ohio Police & Fire Pension Fund                 Members Guide to Health Care Coverage for 2009

RETIREMENT TIPS AND TALK  11/2009 By Bob Stanek Benefits Officer  PLANNING TO RETIRE SOON? What do I need to do when I want to retire? You need to contact the Ohio Police & Fire Pension Fund in Columbus approximately 45 days before terminating employment with the city to request a service retirement application. This is required to be completed once you determine your separation date. In fact, make an appointment to go there and complete the application.  They will be able to review the annuity election you may elect to choose and provide you definitive numbers. The anticipated termination date that you enter on the service retirement application is not set in stone, if you change your mind; you just have to call and advise them.  Remember, once filed, the service retirement application is only valid for 6 months; then you will have to submit an updated one. Upon leaving DROP and retiring, you begin to receive your monthly pension benefit and are given the opportunity to enroll in health care benefits, managed by United Healthcare.  Once you retire and three full years have elapsed from your date of DROP entry, you can withdraw funds from the DROP accrual in a lump-sum payment or installments that may be subject to taxation. Remember you will automatically forfeit the benefit if you continue to work beyond eight years.  Ohio Deferred Compensation - Deferral limits for 2010 The Internal Revenue Service recently announced that the annual deferral limits for 2010 will not change and will remain as follows: $16,500 - Regular deferral limit $22,000 - Age 50 plus deferral limit $33,000 - Catch-up deferral limit Paying too much in taxes? Ohio Deferred Compensation may be able to help. Please visit www.Ohio457.org or call 1-877-644-6457.  This is a question I posed to OP&F regarding proposed health care premiums for future retirees.  From: Stanek, Robert [mailto:rstanek@city.cleveland.oh.us] Sent: Friday, November 06, 2009 11:41 AM To: Questions Subject: Health care premiums  Question:  “For new retirees, the subsidy for the health care plan premiums will be tied to years of service” If this item is enacted, will a member’s entry into DROP, at 25 years, become their final years of service, as pertaining to this item?  Or would a member who entered DROP at 25 years and stayed the full 8 years be calculated at 33 years of service, for purposes of the proposed health care premium? Answer: Good afternoon. This is a good question, as we have asked it ourselves.  Unfortunately, we do not have an answer as to how the details would be if this part of the proposals ever does come to pass. If it does, the specifics would be designed at that time. We would advise to check our Web site regularly for any updates, as that will be the first place we will post any changes. And we apologize that we do not have a definitive answer for you at this time. If we can be of further assistance please let us know.  Sincerely, The Ohio Police and Fire Pension Fund 140 East Town Street Columbus, OH 43215  DROP Participation: If you are DROP eligible and not currently enrolled, it may be in your best interest to enroll now.  One of the recommendations being considered is to increase the minimum period for DROP participation to 5 years from the current 3 years, for all new participants.  Also, if you leave DROP before the 5 years have been completed, you forfeit the interest credited.   Miscellaneous Notes:  Just a reminder there is full service financial planning available to you through Blue Line Financial Services Inc. They are a wholly owned subsidiary of The Cleveland Police Credit Union and are located right inside the Credit Union office.  They offer a great resource to our members by providing sound financial advice on the unique features of the Ohio Police & Fire Pension Fund, DROP and Deferred Compensation. They also have a variety of investment and life insurance options available. If you are interested in developing a financial plan or just have questions, contact Sharon Mazur at: (216) 978-0606 or (216) 621-4440.  Is it a good time for you to refinance? Rates are still at historical lows. Call Coleen Kovacic-Nola, Mortgage Lending Consultant, at 216-325-1370, for a FREE analysis. Coleen is also conveniently located inside the Credit Union office. If you plan to stay right where you are, refinancing could save you thousands.  Take advantage of what our Cleveland Police Credit Union has to offer you, both as an active member and continuing after you retire. Reading of the Will: The relatives of the family's rich dowager gathered for the reading of her will after her long awaited death. “Being of sound mind,” read the lawyer, “I spent every last cent before I died.”

RETIREMENT TIPS AND TALK  12/2009 By Bob Stanek Benefits Officer DROP: The first wave of DROPouts will take place in January 2011.  It is vitally important to pay attention to your DROP termination date. Invariably someone will make a mistake and suffer the tragic consequence. For those leaving that January, you should have already spoken with a financial advisor. We all think, “This is my money, I’ll make the decisions”. Realistically, it doesn’t hurt to seek someone else’s opinion. By not consulting a professional, the only thing you set to lose is your financial stability, after retirement. Following is an answer to an E-mail question I posed to OP&F  regarding DROP departure: Q: If a member retires prior to or on their mandatory DROP departure date, what does the Pension Board require from the Cleveland Division of Police or the City to verify they are off the payroll, so as to not jeopardize the members’ DROP?  In what manner does the notification need to be made?  Could the initial notification be made by the member or must it be made by the employing entity?  What is the risk to the member who waits to retire on their mandatory DROP departure date, as it relates to timely notification? A: Good afternoon. The City must be the one to verify your termination date.  As long as the member terminates by a certain date, it doesn’t matter when OP&F receives the certification or when the member receives his final payout.  Example:  If a member terminates from the City on January 12, 2010 and we don’t receive certification until February 18th, that is ok and if the member doesn’t receive their termination pay until after January 12, 2010, that is ok too. We hope this response answers your question. If we can be of further assistance please let us know.  Sincerely, The Ohio Police and Fire Pension Fund 140 East Town Street Columbus, OH 43215 Active Members: 888-864-8363  742-4-13 Impact of Military Leave on DROP participants: (A) This rule shall apply to members who are DROP participants, called into active service, and who are granted service credit for the time period during which they were called into active service while a DROP participant, pursuant to section 742.521 of the Revised Code. (B) In the event the member is on active service at the time of his/her effective date into DROP, OP&F shall credit the member's contributions required under division (B)(1) of section 742.443 of the Revised Code, in accordance with the provisions of paragraph (D) of this rule and shall recalculate the service credit at the time of the DROP participant's effective date and corresponding DROP benefits if and when the service credit is granted in accordance with section 742.521 of the Revised Code. (C) In cases where the member is called into active service after his/her effective date into DROP, OP&F shall credit the member's contributions required under division (B)(1) of section 742.443 of the Revised Code, in accordance with the provisions of paragraph (D) of this rule. (D) In determining the member's contributions under paragraph (B) and (C) above, as the case may be, OP&F shall determine such contributions based on the contributions allocated for the member's benefit based on "salary" reported by the member's employer during that time period during which the DROP participant was in active service, which is based on the rate the employee would have received but for the period of service, including any pay raises. (E) All determinations of "salary" shall be consistent with the provisions of division (L) of section 742.01 of the Revised Code and rules 742-3-02 and 742-4-17 of the Administrative Code (“Calculation of DROP Benefits”). (F) The amount provided for in paragraph (D) above shall only be included for crediting the member's contributions according to division (B)(1) of section 742.443 of the Revised Code if the member pays to OP&F the difference between the member contributions paid by his/her employer and the actual member contributions due within three times the member's period of uniformed service, but no more than five years, which shall start on the date of the DROP participant's  reemployment. All amounts shall be paid at no interest to the member. (G) This rule shall be subject to the provisions of division (C) of section 742.444 and section 742.445 of the Revised Code. (H) Capitalized terms used in this rule shall have the meaning assigned to them in Administrative Rule 742-4-01 of the Administrative Code (“Definitions”). Last update: 9/25/2008  742-4-12 Impact of family medical leave on DROP participants: (A) “Family Medical Leave Act” shall mean the statutory provisions outlined in 29 U.S.C. 2601 et. seq. (B) For members who are DROP participants, but elect to exercise his/her rights under the Family Medical Leave Act (FMLA), an election to exercise his/her rights under FMLA shall not extend the time during which the DROP participant can participate in DROP. (C) If the DROP participant uses vacation or sick leave so that he/she can stay on his/her employer’s payroll, contributions shall be accrued for his/her benefit according to section 742.443 of the Revised Code and rule 742-4-06 of the Administrative Code. In cases where no “salary” is paid to the DROP Participant as a result of this election, no accrual of contributions shall be made for his/her benefit. (D) This rule shall be subject to the provisions of division (C) of section 742.444 and section 742.445 of the Revised Code. (E) Capitalized terms used in this rule shall have the meaning assigned to them in rule 742-4-01 of the Administrative Code (definitions). Source: Ohio Police and Fire Pension Fund FOR OUR RETIRED MEMBERS: IRS outlines how to report the new $3,000 gross income exclusion for public safety officers The Internal Revenue Service (IRS) now has tax forms, publications and instructions on its Web site for the 2009 tax year. These up-to-date materials include a provision for the Public Safety Officer exclusion from gross income of up to $3,000 for qualified health insurance premiums. While the form has not been changed, Line 16b on Form 1040 is able to accommodate this exclusion. Retired public safety officers should report their total pension distributions on line 16a of Form 1040. If the individual qualifies for the insurance premium exclusion, it should be indicated on line 16b of Form 1040. To take this exclusion, reduce the otherwise taxable amount of your pension or annuity by the amount excluded.  Remember that the amount shown in box 2a of Form 1099-R does not reflect the health care premium exclusion. The amount of health care contributions for 2009 is listed on your OP&F monthly benefit statement for December. When taking this exclusion the public safety officer should write “PSO” next to the adjusted taxable amount received on line 16b. Detailed information appears on page 22 of the 1040 Instructions for 2009. For those who do not use Form 1040, the exclusion can also be reported on Form 1040A (lines 12a and 12b) and on Form 1040NR (line 17a and 17b). If you have any questions on this exclusion, please consult a tax professional for advice. NOTE:  If you need to reference an article and do not have access to a FOP Communicator, you can find this same article, in its entirety, on the CPPA website. On the opening page, scroll down and look on the left side for the retirement section.  You do not have to be a member to do this and you can view all archived columns.  Thanks to Steve Loomis and the CPPA for allowing me to post this on their website. “Knowledge is Power”!  JOKE OF THE MONTH: A woman came home to find her retired husband waving a rolled up newspaper around his head. Wife: 'What are you doing dear?'  Husband: 'Swatting flies - I got 3 males and 2 females' Wife: 'How do you know which gender they were?' Husband: 'Easy - 3 were on the beer, and the other 2 were on the phone'

RETIREMENT TIPS AND TALK  1/2010 By Bob Stanek Benefits Officer Here is your get ready to retire checklist:  Better grab a pencil and pad. Here's exactly what you need to do at each stage from 5 years before. Winging it" might have worked OK while you were employed, but ignorance or mistakes in retirement can cost you dearly. Retiring too soon, choosing the wrong investments, withdrawing too much money or failing to plan for health care cost can all turn your golden years to brass.   Think about where you'll live. Demographic surveys show most retirees "age in place," meaning they continue to live in the same house, or at least the same community, as when they retired. But downsizing or moving to a cheaper community can help your retirement assets last longer. Since where you live has a strong impact on your expenses, you'll want to consider your options carefully. Imagine what you'll do. Some people don't think about how they'll spend their time in retirement until they wake up jobless. That's a bad idea psychologically as well as financially. Retirees who fare best are generally the ones who have absorbing interests to pursue.  Those who wait until retirement often find themselves casting about for something to do, and may discover that the hobby or pastime they thought they would love isn't quite so engaging when they can indulge it full-time. Boost your retirement contributions. If you're not already taking full advantage of your Deferred Compensation, IRA and other retirement options, now's the time to increase your contributions. Use MSN Money's Plan your Retirement section to see if you're on track, and try your calculations using different life expectancies. Your chances of making it to age 90 or beyond have never been better; many financial planners now use age 95 as their default life expectancy. Consider paying down your mortgage. If you still have some cash left over after paying off your other debt and maximizing your retirement contributions, think about getting that mortgage retired before you do. Having the house paid off helps many retirees sleep better at night. Not having a mortgage also means you may have to draw less from your retirement accounts, allowing them to grow tax-deferred longer and reducing your overall tax bill. Cut your risk. You'll still need to have your portfolio tilted toward stocks, but you may want to ratchet back your exposure. Now is also the time, if you haven't done so already, to lighten up on company stocks and stock options. Consult with a CPA or other tax professional before you sell so you understand the tax implications. Find out what income you can expect. Retirement income may come from multiple sources such as; Social Security payments, OP&F pension payments, DROP and your own savings:  Review your annual Social Security benefit statement or contact Social Security at 800-772-1213 for an estimate of your monthly check.  Remember you are penalized by Social Security if you also received a public pension.  The monthly benefit will be reduced. Contact current and former employers to see if you have any pensions accrued and, if so, how much you can expect to receive. Think about health-care and long-term care expenses. Medical costs are spiraling, and you may not have enough coverage: Medicare, the government program that covers most health-care costs for seniors, doesn't kick in until age 65. (Even then, some significant expenses aren't covered, so you'll want to investigate private Medi-Gap polices'. AARP is a good resource of information. Medicare doesn't cover most nursing-home expenses, which means you, may want to consider buying long-term care insurance. Create a tentative budget. Now that you have an idea of your expected lifestyle and income, you can start to put together a budget that reflects those elements. (You can use MSN Money's Retirement Expense Calculator to get started.) You may well discover you'll need to work longer than you expected, or you could get some happy news and decide you want to accelerate your retirement plans. Before you do either, though: Consider getting a second opinion. Should you apply for Social security benefits early or opt for bigger payments later? Will you take a lump-sum DROP or other disbursements? Will you need to tap your retirement funds when you quit work, and what's the best way to do so? You can, and should, educate yourself about these topics. But planning for retirement is so complex, and the consequences of making a mistake so potentially severe, that it can be worth hiring an objective financial planner or tax professional to review your plan. Refine your plan. You're close enough now that you can refine your budget, tweak your asset allocation and get a clearer idea of how much income you can expect. If your plan no longer works, consider other options: working longer, moving somewhere cheaper, living on less. Review your Social Security statements. Your Social Security check is based on your 35 highest-earning years, so you'll want to make sure your wages over the years have been reported properly. Take a vacation at your retirement destination. When people are contemplating moving after retirement, the standard advice is to take a few extended visits to the proposed destination in different seasons. The idea is to find out if you still like the place once you're more familiar with it. You might take the same advice even if you don't plan to move. You may find your town has more to offer workers and families than seniors with time on their hands. Put the finishing touches on your plan. Run it past a professional. Even if you've managed your own investments until now, you'll still want a second opinion from an objective, experienced financial adviser. You can get referrals from The National Association of Personal Financial Advisors, the American Institute of Certified Public Accountants' Personal Financial Specialist division and the Garrett Planning Network, among others If you're moving, start getting the house ready. If you've lived in your house awhile, you'll probably have some work to do before you can put it on the market. Pack up the clutter, perform any necessary repairs and consider cost-effective fixes to get the best price. Apply for Social Security three months before you want your first check. You won't be eligible until age 62 at the earliest, so if you're retiring before then, make sure to note this important date on your calendar. Sign up for Medicare three months before your 65th birthday. If you're already receiving Social Security checks, your enrollment will be automatic. Otherwise, you should enroll online or by phone with the Social Security Administration. If you follow even half of these suggestions you will be well on your way to financial security and an enjoyable retirement. Retire on your own terms. If a person stays around just to prove a point or make that last dollar, what good would it have been if they’re not around to spend it? Realistically, 5 years from now would it even had mattered? To view past retirement columns, Google CPPA.org and on the bottom left of the homepage, select retirement. Courtesy of the CPPA, all columns have been archived for your reading benefit. ON THE LIGHTER SIDE: Two old men in a retirement village were sitting in the reading room and one said to the other, ''How do you really feel? I mean, you're 75 years old, how do you honestly feel?'' ''Honestly, I feel like a new born baby. I've got no hair, no teeth, and I just peed myself.''

RETIREMENT TIPS AND TALK  3/2010 By Bob Stanek Benefits Officer Commonly asked questions: Q:  What do I need to do when I want to retire? A:  You need to contact the Ohio Police & Fire Pension Fund in Columbus approximately 45 days before terminating employment with the city to request a service retirement application. This is required to be completed once YOU determine your separation date. In fact, make an appointment to go there and complete the application.  They will be able to review the annuity election you may elect to choose and provide you definitive numbers. The anticipated termination date that you enter on the service application is not set in stone, if you change your mind; you just have to call and advise them.  Remember, once filed, the service pension application is only valid for 6 months; then you will have to submit an updated one. Upon leaving DROP and retiring, you begin to receive your monthly pension benefit and are given the opportunity to enroll in health care benefits, managed by United Healthcare.  Once you retire and three full years have elapsed from your date of DROP entry, you can withdraw funds from the DROP accrual in a lump-sum payment or installments that may be subject to taxation. Remember you will automatically forfeit the benefit if you continue to work beyond eight years. Be aware of your DROP termination date. Q:  Why is it best to make an appointment with the Benefits Officer? Why can’t I just come in? A:  The appointment is for your convenience. You want to make sure I am available and in my office.  This is your day. You don’t want to feel stressed or rushed on your day and you understandably do not want to have to wait or maybe come back if I am unavailable. There are also other considerations that will be discussed that are pertinent to your retirement. Once in my office, the entire process takes approximately one and a half hours. There is a myriad of forms to complete during which time I thoroughly review all aspects pertaining to your retirement and address any questions you may have.  This is an important day and I want to ensure a smooth transition for you. Call me on line x 5153 or stop in my office located in the Personnel Unit at least one week    prior to your anticipated retirement date to set up an appointment.  At that time we will review the list of equipment that needs to be returned and discuss any other pertinent matters relating to your retirement, including service weapon purchase. Q:  When does my health care coverage with the city end? A:  Health care ends the last day in the month in which you retire.  For example, if you terminated employment on the 3rd of the month, you would be covered thru the last day of the month; Likewise, if you left on the 29th of the month.  Plan accordingly. Take advantage of the benefits.  Contact me first. SEPARATING FROM THE DIVISION OF POLICE: Members are reminded to review General Police Order 1.1.33, Separating from the Cleveland Division of Police, prior to their separation to ensure timely and proper completion of their departure paperwork. Section 1. B. of GPO 1.1.33 states in pertinent part that members shall report to the personnel Unit to complete their separation forms. Section 1. C. of GPO 1.1.33 delineates the equipment (if applicable) that members shall return to the Division of Police at the Personnel Unit. Most significantly, failure to report to the Personnel unit to complete the separation forms may leads to gaps in insurance coverage or delays in disbursement of funds due  ON THE LIGHTER SIDE: YOU KNOW YOU'RE OVER THE HILL WHEN..... You and your teeth don't sleep together. Everything hurts, and what doesn't hurt -- doesn't work Getting "lucky" means you remember where you left your car in the parking lot.

RETIREMENT TIPS AND TALK  4/2010 By Bob Stanek Benefits Officer To DROP in or DROP out is an important personal decision each of us needs to make. The Deferred Retirement Option Plan (DROP) is an optional benefit that allows eligible members to accumulate a large sum of money for retirement.  Enrolling in DROP is a voluntary decision that members should make after careful consideration of their own individual situation.  OP&F strongly encourages all members to seek financial, legal and tax advice from professional counselors before entering DROP.  If you enroll in DROP, you will continue to work.  Participation in DROP has no impact on your employment status.  OP&F does not notify the municipality that a member is enrolled in DROP.  That being said, it is imperative to enter DROP as soon as you are eligible. The two primary reasons I have heard members justify their delayed entry into DROP is they do not understand the program or they are not sure they want to leave after the eight years maximum participation.  Payroll File Upload Employer Calendar Seminars Payroll Contributions Contribution Rates Employer Digest Newsletter Documents Forms ACH Information Employer Manual Prior to enrolling in DROP, you have the option of contacting OP&F to request a written estimate of your pension benefit that would be credited to DROP. OP&F typically generates these estimates within two to four weeks. You are not required to come to OP&F offices in Columbus to discuss your DROP benefits with an OP&F counselor; however, they welcome you to do so. Steps to enrollment Call OP&F at 800-860-9599 to request a written estimate of your pension benefit that will be credited to DROP. Use the DROP calculator to see how much you might accrue in DROP over the next eight years. Discuss DROP with a tax or financial planner to see if DROP is right for you. If you are already eligible for a normal service retirement and would like to enroll in DROP, return a completed and notarized Election to Enroll in DROP application form to OP&F. You can request a form by calling Customer Service at 888-864-8363 or downloading one from their web site at www.op-f.org  I would suggest you submit your completed application form to OP&F by Certified Return Receipt mail.  Sure this method costs a few bucks, but you will have proof that it was delivered and signed for. OP&F will not accept forms that are incomplete, faxed or photocopied. If you download off the Internet, return all four pages, even though there are some that won’t be applicable to you. Within 90 days of OP&F receiving your Election to Enroll in DROP form, you will receive information indicating your DROP effective date and the amount of the pension that will be credited to your DROP account each month. In most cases, your DROP participation will take effect on the first day of the first full employer-reporting period that immediately follows OP&F’s receipt of your completed Election to Enroll in DROP form. Pension payments will be applied to DROP based on your effective date and you are not permitted to specify an effective date on your election form. Contact me at 216-623 5153 or E-mail to rstanek@city.cleveland.oh.us to discuss DROP enrollment or any questions you have about retirement.  Don’t PROCRASTINATE; remember it’s your money! ON THE LIGHTER SIDE: YOU KNOW YOU'RE OVER THE HILL WHEN..... 1)  You try to straighten out the wrinkles in your socks and discover you aren't wearing any 2)  It takes two tries to get up from the couch. 3)  The twinkle in your eye is merely a reflection from the sun on your bifocals. 4)  You sink your teeth into a steak -- and they stay there 5)  Be nice to your kids. They'll choose your nursing home.

RETIREMENT TIPS AND TALK  5/2010 By Bob Stanek Benefits Officer SEPARATING FROM THE DIVISION OF POLICE: Members are reminded to review General Police Order 1.1.33, Separating from the Cleveland Division of Police, prior to their separation to ensure timely and proper completion of their departure paperwork. Section 1. B. of GPO 1.1.33 states in pertinent part that members shall report to the personnel Unit to complete their separation forms. Section 1. C. of GPO 1.1.33 delineates the equipment (if applicable) that members shall return to the Division of Police at the Personnel Unit. Most significantly, failure to report to the Personnel unit to complete the separation forms may leads to gaps in insurance coverage or delays in disbursement of funds due. FOLLOW THIS PROCEDURE: Call 623-5153 or stop at my office located in the Personnel Unit at least one week prior to your anticipated retirement date to set up an appointment.  At that time we will review the list of equipment that needs to be returned and discuss any other pertinent matters relating to your retirement, including service weapon purchase. Unless extenuating circumstances exits, WALK-IN retirements are not in your best interest. Information and pre-planning before you retire leads to a stress free and enjoyable retirement. PLAN FOR YOUR RETIREMENT: Retirement involves complex choices—DROP, health care, annuities. OP&F encourages you to visit their offices for a one-on-one pre-retirement interview three to four months before your retirement date. During this interview, retirement counselors provide an overview of the retirement process; provide an estimate of your pension benefits. Service Retirement and DROP interview appointments are available Monday through Friday at 9:00, 1:00 and 2:00. Disability appointments are available at 11:00 only. Parking is provided at no charge. You should plan to spend approximately two hours in the interview. To schedule an interview, call customer service at 1-888-864-8363. GAMES TO PLAY IN RETIREMENT: 1)  Sag, you’re It! 2) 20 Questions Shouted into your Good Ear! 3) Red Rover, Red Rover, the Nurse Says Bend Over! 4) Hide and Go Pee! 5) Musical Recliners!

RETIREMENT TIPS AND TALK  6/2010 By Bob Stanek Benefits Officer LIFE INSURANCE 101 All policies fall into one of two camps. 1.  There are term policies, or pure insurance coverage. And there are the many variants of whole life, which    combine an investment product with pure term insurance and build cash value. 2. Insurance is sold, not bought. 3.  Whole life is expensive. 4. Policies with an investment component cost many times more than term policies. As a result, many people who buy whole life often can't afford an adequate face value, leaving themselves underinsured. 5. Whole-life policies are built on assumptions. 6. Keep your investing and insurance strictly separate. There are better places to invest - and without the high commissions of whole-life policies. 7. Buy enough term coverage to fill your needs. Life insurance is no place to skimp. 8. Match the term of the policy to your needs. 9. Buy when you're healthy. Older people and those not in the best of health pay steeply higher rates for life insurance - so buy as early as you can. 10. Tell the truth. There's no sense in shading the facts on your application to get a lower rate. Be assured that if a large claim is made, the insurance company will investigate before paying Look to Blue Line Financial Services for your insurance needs. They are a wholly owned subsidiary of The Cleveland Police Credit Union and are located inside the Credit Union.  They are a great resource providing sound financial advice on the unique features of the Ohio Police & Fire Pension Fund, DROP, Deferred Compensation and Life Insurance. Contact Sharon Mazur at: (216) 978-0606 or (216) 621-4440. Is it a good time for you to refinance? Rates are still at historical lows. Call Coleen Kovacic-Nola, Mortgage Lending Consultant, at 216-325-1370, for a FREE analysis. Coleen is also conveniently located inside the Credit Union office. If you plan to stay right where you are, refinancing could save you thousands. Take advantage of what our Cleveland Police Credit Union has to offer you, as an active member and a retiree. ON THE LIGHTER SIDE: Can you speak up? On a rural road a state trooper pulled this farmer over and said: "Sir, do you realize your wife fell out of the car several miles back?" To which the farmer replied: "Thank God, I thought I had gone deaf!" Cop and Beer A cop pulls a guy over for weaving across two lanes of traffic. He walks up to the driver's window and asks, "You drinkin'?" The driver replied, "You buyin'?" Basic food groups for police 1. Glazed    2. Jelly    3.Powdered   4.Chocolate Frosted

RETIREMENT TIPS AND TALK  7/2010 By Bob Stanek Benefits Officer CAN YOU AFFORD RETIREMENT?  Let us view retirement as a very long journey during which you resolve to enjoy the highest standard of living possible. Start asking yourself questions like: Are you going to stay in a five-star hotel or a two-star one? What kind of foods would you like to devour? Would you like to eat everyday? How much would it cost to take tours whenever you like? And most importantly, what exactly are the children asking for? If you're on the doorstep of retirement, happily smiling while thinking you're done with tiresome budgeting and financial planning, I've got bad news for you: You're not! If you want to retire in style, there is absolutely no way you can stop budgeting in retirement. You have to know how much money you need on a daily basis and how much you require for all of your retirement goals. You will have to make a budget and most importantly: stick to it. A monthly budget is ideal given that expenses are variable and you don't want to lose your way along the journey. Any retirement budget, however, could do with the life expectancy factored in. Use a life expectancy calculator to get a fairly close prediction based on how you answer the questions. Knowing when you might pop off would make your budgeting task easier. You are also advised to look into the matters of how to handle your taxes and insurance in your Golden Years. In addition, your budgeting plan will have to allow for any and all unexpected events. What if your spouse is taken ill or passes away?  What if there is an accident in the family or a hurricane in the state or other unexpected expenses? An analysis of your cash requirements is imperative before you ultimately retire. This hypothetical cash flow estimate can make the difference between a cheerful existence and continual heartache in your Golden Years. The calculations are based on your gross income and everything depends on your lifestyle. An intelligent financial planner can tell you whether you have come up with a figure that is realistic. Still, your standard of living will be your doing and he can't tell how predictably or unpredictably you would act in later years. In the end you would either be leaving an inheritance or a bounced check. While you should not turn into a miser in your Golden Years, forethought is essential to a healthy and happy retirement lifestyle. Many retirees downsize their housing in retirement years in order to take advantage of high real estate values; others pack up for retirement homes. Retirees also like to move into small townhouses or to the suburbs - where they can live their lives away from the hustle and bustle they've constantly breathed in. Again, it is your life and up to you to decide how you will spend the remainder of it. You might just want to remain in your present neighborhood because of friends, family, or health facilities - or you may want to fly off to a Caribbean island for a much awaited change.  Ultimately it’s your decision.  Remember: Those who fail to plan, plan to fail. ON THE LIGHTER SIDE: The Pope was getting into his limo one night when he turned to the limo driver and said, “Before I die, I would love to drive this beautiful limo just once.” “Well, here,” the limo driver says, “Take the wheel, Your Holiness!” Further down the road, the limo is stopped by a policeman who looks in the window, goes back to his squad car, calls dispatch and says, “I just pulled over someone real important and I don’t know what to do.” “Well, who is it?” his dispatcher says, “The mayor? The governor? The president?” “I don’t know,” the officer responds, “but the Pope’s his chauffer