On November 12, residents of Calvert County attended the third in a series of Financial Literacy Forums on retirement plans and distributions that was hosted by the Calvert County Commission for Women and the Calvert Public Library.
Guest speakers from local and federal government teamed up to discuss what the audience from Dunkirk, Huntingtown, Lusby, Prince Frederick and St. Leonard need to know about public and private-sector retirement plans. Speakers included Timothy Hayden, director of Finance and Budget for Calvert County and Mark Humphries, benefit advisor at the U.S. Department of Labor’s Employee Benefits Security Administration in Silver Spring, Maryland. In his current position, Hayden oversees the various retirement plans covering employees of Calvert County. Humphries helps employees, employers, and companies servicing corporate sponsored pension plans to understand and comply with federal laws.
Hayden opened his remarks with this caution, “Know who is giving you investment advice and how much of your money they are taking.” His presentation focused on helping individuals understand defined benefit plans that guarantee retirement income over a lifetime and the various defined contribution plans. Topics included:
Explanation of the difference between defined benefit and defined contribution plans, like 401(a) plans
Who is eligible to participate in retirement plans
How to sign up for Calvert retirement plan options
When employees can receive retirement payouts available under the county’s 13 options
What and when investment choices are available
Calculation of retirement income for defined benefit plans
Who can be a beneficiary
How working longer affects retirement income
Cost of living adjusts for retirement benefits
Humphries focused on the basic rules and role of the federal government in monitoring approximately 20 types of retirement plans set up by private sector companies for their employees. An important part of private sectors plans is becoming eligible to participate and vest in the contributions made by employers. The law covering private sector plans – the Employee Retirement Income Security Act – requires employees to work a minimum number of hours to become eligible to participate in the plan. He also discussed: vesting in terms of the number of years needed to become entitled to benefits, how distributions can occur before retirement and encouraged the audience to check their accounts to ensure all contributions get properly posted. In addition, he discussed the summary annual report that provides an annual update of assets in the employee’s account and how to get help from the Labor Department to correct problems involving retirement plans.
A snapshot of questions from the audience included:
Does the Calvert County plan require you to sign up or is participation by default?
Will you lose money on investments in bonds or do you get the face value?
Can you move 401(k) assets to an Individual Retirement Account?
How does the Teachers’ Retirement Account work?
If you take a lump sum distribution of pension assets, does it affects your participation in other benefits like retiree health coverage?
What is the Maryland Small Business Investment Trust?
Is the Internal Revenue Service limit on tax deductible contributions cumulative for contributions to multiple retirement plans?
What is the age limit for taking required mandatory distribution of retirement benefits?
Several handouts provided to the audience are available online:
What You Should Know About Your Retirement Plan: https://www.dol.gov/ebsa/publications/wyskapr.html?vm=r
Publications Listing: https://www.dol.gov/ebsa/pdf/ebsapublications.pdf
The survey of participants indicated all found the forum informative and indicated a desire to see future forums covering: Home ownership and repairs; budgeting and investing; trusts, annuities and other investments; and buying a first home.
Future Financial Literacy forums will discuss:
Maximizing Your Credit Score
Buying a First Home
Saving & Investing for Younger Generations
Submitted by Gloria Della
Commissioner, Calvert County Commission for Women