State Plan Reports

State plan participants often receive annual statements from the plan that provide an Account Withdrawal Value. This value typically represents the employee’s contributions plus interest and sometimes an employer match and interest. Using this value as the present value can be dangerous. In order to receive this lump sum value they must terminate their employment under the state plan and choose to withdraw their contributions. If the employee intends to continue working and receive a monthly pension upon attaining retirement age this value will, in most cases, drastically understate the value of the pension. This withdrawal also forfeits the right to future health care coverage.

Our detailed understanding of state pension plans allows us to accurately determine accrued benefits and calculate present values of those benefits to be received in the future. This often includes an analysis multiple benefit formulas, early retirement subsidies, and COLA entitlements. Our default position is to value the highest and best option available to the participant.

In situations where an individual is a member of more than one state plan we combine service and contributions between the two plans, preparing one report for the plan in which the member has more service. This requires a careful analysis of when the service was accrued since in most cases overlapping service does not count towards the pension benefit.