An Annuity Savings Fund (ASF) is a voluntary, individual account pension program. With this particular program contribution of 0 percent, 5 percent, or 7 percent of gross pay, post-tax can be contributed. After 25 years of service, active employees may elect to withdraw from their ASF account, and upon retirement, withdraws can be made in a lump sum or annuitized.
Historically, the GRS Board has credited ASF accounts with the actuarially assumed rate of investment return – regardless of Plan performance.
In 2011, City Council adopted an Ordinance limited ASF interest credits to the Plan’s net investment return, with a cap of 7.9 percent and a floor of 0 percent.
Those Who Are Subject to ASF Recoupment
The Plan of Adjustment’s (POA) calculation of “excess interest” applies the interest formula in the 2011 Ordinance to the July 1, 2003 – June 30, 2013 Recoupment Period with a 20 percent Cap on the highest balance in this given period. The recoupment amount is also capped at 15.5 percent of your monthly pension check.
ASF Recoupment will be applied through a reduction in your monthly pension, or in some cases there is the option of paying the recoupment amount in a single lump sum (“Cash Option”).
ASF Recoupment Payment Options
1. Active or Terminated Employees with an ASF account:
1.1 Subject to the 20 percent cap, deductions will be made from your ASF Account and credited to the GRS Pension Plan.
2. Retirees, Active Employees or Vested Retirees who previously received an ASF Distribution (and DO NOT have an ASF Account or their ASF Account does not contain sufficient assets to satisfy the ASF Recoupment amount):
2.1 “ The Excess Interest” is converted to a monthly annuity amount based upon your life expectancy, interest at the actuarially assumed rate (6.75 percent) and the type of benefit selected at the time of retirement.
2.2 The monthly annuity amount will be deducted from your monthly pension until such time as the ASF Recoupment amount (at 6.75% interest) is paid in full.
2.3 The total combined reduction in your monthly pension benefit will not exceed 20 percent (e.g. 4.5 + 15.5 percent maximum reduction).
2.4 The ASF Recoupment Cash Option. (The cash option applies ONLY to Retirees, Active Employees or Vested Retirees who previously received an ASF distribution).
Each ASF Recoupment Recipient subject to a monthly benefit reduction will receive an ASF Election Notice and ASF Election Form via first-class mail to no later than seven days following the Effective Date of the POA. This is a one-time, irrevocable lump sum cash option. The ASF Election Form will explain the amount of the ASF Recoupment Cash Payment. It should be equal to the total amount of the ASF Recoupment shown on the ASF Distribution Recipients Ballot. In the event the aggregate amount of ASF Recoupment for all ASF Distribution Recipients selecting the ASF Recoupment Cash Option exceeds $30,000,000: (A) the ASF Recoupment Cash Payment will be the ASF Distribution Recipient’s Pro Rata portion of $30 million; and, (B) the remaining portion of the ASF Distribution Recipient’s ASF Recoupment will be annuitized and deducted from the ASF Distribution Recipient’s monthly pension check.
2.5 You DO NOT have to elect the cash option.