As you plan for your transition to leave City employment, the following information is available to assist you through the process. If you are retiring, or need help determining if your eligible to retire, San Diego City Employee's Retirement System (SDCERS) offers retirement planning tools and resources to help you with your benefit decisions.
Below is information on when your benefit coverage will end along with non-health benefit conversion options.
Health, Dental, and/or Vision Insurance
Coverage will continue through the end of the month in which your last day of active employment occurred. Please pay careful attention to your last day of active employment as this will impact your benefits coverage. See the three examples below:
|
Last Day of Active Employment |
Separation Date |
Benefits End Date |
|---|---|---|
|
October 30 |
October 31 |
October 31 |
|
October 31 |
November 1 |
October 31 |
|
November 1 |
November 2 |
November 30 |
The prepayment of health insurance premiums will be adjusted on your final paycheck.
For information on your rights to continue health coverage for you and your dependents, please refer to the City's COBRA webpage. Note, due to the timing of when your separation is entered in the City's payroll system and when information is sent to Health Equity/WageWorks, the City's COBRA administrator, it may take between three to four weeks for you to receive your COBRA election packet. You will have 60 days from the date the COBRA packet is mailed to enroll in COBRA coverage.
Life Insurance (Basic and Supplemental)
If you are enrolled in the City's Group Life insurance policies through The Hartford. The City's plans offer Conversion or Portability options for you and your dependents. Conversion and portability are not available for Accidental Death & Dismemberment (AD&D) coverage.
You will receive a Notice of Continuation of Coverage to complete and return directly to the life insurance carrier within 31 days from the date your coverage ends.
Flexible Spending Accounts (FSA) Reimbursements
Dependent/Child Care (DCC) - contributions accrue until you separate employment. You are eligible to receive up to the accrued amount by submitting claims to WageWorks, the City's FSA administrator. Claims may be submitted within 30 days of separation for services received and paid for prior to separation.
Dental/Medical/Vision (DMV) - the full annual allotment is available until separation. Healthcare expenses can be paid for through your last day of work with the WageWorks-issued debit card. Any claims may be submitted within 30 days of separation for services and/or supplies received prior to separation.
If you do not submit claims within the 30-day period, any funds remaining in your DCC or DMV accounts will be forfeited.
San Diego Employees' Retirement System (SDCERS)
If you are an SDCERS member and are planning on retiring, you should visit the SDCERS website at www.sdcers.org six months in advance, create a secure Member Portal account, and use the Benefits Calculator to review benefit estimates. Six months before you are eligible to retire, your Member Portal account will include Online Applications to start the retirement process. Once you submit your initial application online, you will be contacted to schedule your personal counseling appointment. During your appointment, the retirement counselor will answer your questions and provide you with a final summary of your selections. Your application is not complete until you sign and submit your final application provided by your counselor. Pre-retirement webinars are offered monthly and are open to all SDCERS members at any age. For questions, call 619-525-3600.
If you are an SDCERS member and terminate prior to being eligible for retirement, your options vary depending on whether you are vested and if you are a General Member, Safety Member or Elected Officer. You will be sent a Termination Packet with your options approximately four weeks after you leave employment. For information regarding the City's defined benefit (pension) plan, please visit www.sdcers.org.
Mandatory Defined Contribution Plans
Supplemental Pension Savings Plan (SPSP and SPSP-H)
Once you are no longer a City employee (retirees hired as provisional are considered termed employees for distribution purposes), you can have access to your SPSP or SPSP-H account. Note, however, that due to the timing of your separation and when electronic files are sent to Principal, it may take between two to four weeks for Principal to have your separation documented in their system.
As long as there is more than $5,000 in your SPSP account, you may leave your money in your account for as long as you want.
When you would like to take a distribution, funds may be distributed as partial, full lump sum or systematic (monthly/quarterly/semi-annual/annual) withdrawals until funds are depleted. Both employee and employer funds are distributed on a “pro-rata” basis, meaning they are taken proportionately from each type of contribution (employee post-tax, employee pre-tax, and employer pre-tax contributions).
Distributions from your SPSP account are subject to mandatory 20% Federal and appropriate State withholding taxes. Mandatory tax withholding applies to all taxable distributions you receive, with documentation sent annually for tax return preparation.
In addition, the Tax Reform Act of 1986 imposes a 10% penalty tax on early distribution of tax-deferred monies to terminating employees who have not reached the age of 59 1/2. You will be responsible for paying these penalty taxes when you file your income tax returns. However, the 10% tax will not apply if distributions before age 59 ½ are made to a participant after separation from service if the separation occurred during or after the calendar year in which the participant reached age 55 (if you are a public safety employee, separation must occur on or after the calendar year in which you reach age 50 to avoid the early withdrawal penalty).
It is recommended that you consult with a qualified tax advisor to determine whether a distribution of the City's contributions is subject to the early withdrawal penalty. Employee contributions prior to 1/1/2016 are not subject to early withdrawal penalties since they were made on an after-tax basis.
After separation from City service, only pre-tax assets (employee contributions after Jan. 1, 2016, employer contributions, and all earnings) in the plan may be rolled over to over to either another employer plan (if allowed by the new plan) or an Individual Retirement Account (IRA). In these instances, when received by the new plan, it assumes the new plan's rules (for example, early withdrawal penalties apply if funds are withdrawn from an IRA before age 59½). You also have the option to roll SPSP funds over into the CalPERS 457 Plan after separation; however, the SPSP plan rules would still apply to these funds (i.e. certain early withdrawal penalties). Pre-tax funds may be rolled over to the City of San Diego 401(k) Plan.
Pre-tax transfers from the SPSP plan are reportable to the IRS but not taxable in the year of transfer. Post-tax contributions (employee contributions made prior to Jan. 1, 2016) cannot be transferred. They will be returned to you and that amount is not subject to ordinary income taxes (since they were taxed before being contributed to SPSP).
No future contributions may be made after leaving City employment, with the exception of continuing loan payments. For the SPSP plan, new loans are not allowed once you have left City employment. You may continue to make payments directly to Wells Fargo on an existing loan. There is no required mandatory distribution necessary until age 70 ½ years of age (or actual retirement age if still actively employed by the City). The IRS mandates the beginning of the Required Minimum Distribution (RMD).
Please contact the Principal at 1-800-547-7754 to request a distribution, for a breakdown of pre-tax and post-tax balances, for more information regarding rollovers, or for any questions regarding your account.
Once you are no longer a City employee (retirees hired as provisional are considered termed employees for distribution purposes), you can have access to your 401(a) account. Note, however, that due to the timing of your separation and when electronic files are sent to Principal, it may take between two to four weeks for Principal to have your separation documented in their system.
As long as there is more than $5,000 in your 401(a) account, you may leave your money in your account for as long as you want.
When you would like to take a distribution, funds may be distributed as partial, full lump sum, or systematic (monthly/quarterly/semi-annual/annual) withdrawals until funds are depleted. All employee and employer funds are distributed on a “pro-rata” basis and all but voluntary employee contributions are taxed as ordinary income. A request can be made to have all pre-tax funds rolled over and the post-tax funds (employee voluntary contributions) paid to you.
Distributions from your 401(a) account are subject to mandatory 20% Federal and appropriate State withholding taxes. Mandatory tax withholding applies to all taxable distributions you receive, with documentation sent annually for tax return preparation.
In addition, the Tax Reform Act of 1986 imposes a 10% penalty tax on early distribution of tax-deferred monies to terminating employees who have not reached the age of 59 ½. You will be responsible for paying these penalty taxes when you file your income tax returns. However, the 10% tax will not apply if distributions before age 59 ½ are made to a participant after separation from service if the separation occurred during or after the calendar year in which the participant reached age 55 (if you are a public safety employee, separation must occur on or after the calendar year in which you reach age 50 to avoid the early withdrawal penalty).
It is recommended that you consult with a qualified tax advisor to determine whether a distribution of the City's contributions is subject to the early withdrawal penalty. Employee voluntary contributions are not subject to early withdrawal penalties since they were made on an after-tax basis.
After separation from City service, only pre-tax assets (employer contributions, mandatory employee contributions, and all earnings) in the plan may be rolled over to over to either another employer plan (if allowed by the new plan) or an Individual Retirement Account (IRA). In these instances, when received by the new plan, it assumes the new plan's rules (for example, early withdrawal penalties apply if funds are withdrawn from an IRA before age 59½). You also have the option to roll 401(a) funds over into the CalPERS 457 Plan after separation; however, the 401(a) plan rules would still apply to these funds (i.e. certain early withdrawal penalties). Pre-tax funds may also be rolled over to the City of San Diego 401(k) Plan.
Pre-tax transfers are reportable to the IRS but not taxable in the year of transfer. Post-tax (voluntary employee contributions) cannot be transferred. They will be returned to you and that amount is not subject to ordinary income taxes since they were taxed before being contributed to the 401(a).
No future contributions may be made after leaving City employment. There is no required mandatory distribution necessary until age 70½ years of age (or actual retirement age if still actively employed by the City). The IRS mandates the beginning of the Required Minimum Distribution (RMD).
Please contact the Principal at 1-800-547-7754 to request a distribution, for a breakdown of pre-tax and post-tax balances, for more information regarding rollovers, or for any questions regarding your account.
Voluntary Defined Contribution Plans
Once you are no longer a City employee (retirees hired as provisional are considered termed employees for distribution purposes), you can have access to your 401(k) account. Note, however, that due to the timing of your separation and when electronic files are sent to Principal, it may take between two to four weeks for Principal to have your separation documented in their system.
As long as there is more than $5,000 in your 401(k) account, you may leave your money in your account for as long as you want.
When you would like to take a distribution, funds may be distributed as a partial, full lump sum, a rollover, or systematic (monthly/quarterly/semi-annual/annual) withdrawals until funds are depleted.
Distributions from your 401(k) account are subject to mandatory 20% Federal and appropriate State withholding taxes. Mandatory tax withholding applies to all taxable distributions you receive, with documentation sent annually for tax return preparation.
In addition, the Tax Reform Act of 1986 imposes a 10% penalty tax on early distribution of tax-deferred monies to terminating employees who have not reached the age of 59 ½. You will be responsible for paying these penalty taxes when you file your income tax returns. However, the 10% tax will not apply if distributions before age 59 ½ are made to a participant after separation from service if the separation occurred during or after the calendar year in which the participant reached age 55 (if you are a public safety employee, separation must occur on or after the calendar year in which you reach age 50 to avoid the early withdrawal penalty).
It is recommended that you consult with a qualified tax advisor to determine whether a distribution of the City's contributions is subject to the early withdrawal penalty.
Assets in the plan may be rolled over to either another employer plan (if allowed by the new plan) or an Individual Retirement Account (IRA). In these instances, when received by the new plan, it assumes the new plan's rules (for example, early withdrawal penalties apply if funds are withdrawn from an IRA before age 59½). You also have the option to roll 401(k) funds over into the CalPERS 457 Plan after separation; however, the 401(k) plan rules would still apply to these funds (i.e. certain early withdrawal penalties). Transfers from the 401(k) plan are reportable to the IRS but not taxable in the year of transfer. Note, qualified pre-tax plans, such as DROP, pre-tax SPSP/SPSP-H, pre-tax 401(a), and 457(b), may be eligible for rollover into the 401(k) plan after separation.
No future contributions may be made after leaving City employment, with the exception of continuing loan payments. New loans are not allowed once you have left City employment. You may continue to make payments directly to Wells Fargo on an existing loan. There is no required mandatory distribution necessary until age 70 ½ years of age (or actual retirement age if still actively employed by the City). At this point, the IRS mandates the beginning of the Required Minimum Distribution (RMD).
Please contact the Principal at 1-800-547-7754 to request a distribution, for more information regarding rollovers or for any questions regarding your account.
Once you are no longer a City employee (retirees hired as provisional are considered termed employees for distribution purposes), you may begin distributions, at will, at any age without penalty. This is due to the fact that plan participants must only be “separated from service” (retired or terminated) to begin distributions of their account. In other words, 457 plan distributions are “service-based” and not subject to age restrictions. Note, however, that due to the timing of your separation and when electronic files are sent to CalPERS/Voya, it may take between two to four weeks for CalPERS/Voya to have your separation documented in their system.
You may leave your money in your CalPERS 457 Plan account for as long as you want, there is no minimum account balance. Distributions may be taken in any fashion a person chooses: full or partial lump sum, or systematic (monthly/quarterly/semi-annual/annual) withdrawals which may be changed, stopped and/or restarted until funds are depleted. Distributions from your CalPERS 457 Plan account are subject to mandatory 20% Federal and appropriate State withholding taxes, with documentation sent annually for tax return preparation. There is no early withdrawal penalty associated with the CalPERS 457 Plan, as long as you have separated from City service, you may withdraw funds at any age without an additional tax penalty.
Assets in the plan may be rolled over to either another employer plan (if allowed by the new plan) or an Individual Retirement Account (IRA) after separation. Pre-tax funds may be rolled over to the City of San Diego 401(k) Plan. When received by the new plan, the funds assume the new plan's rules (for example, early withdrawal penalties apply if funds are withdrawn from an IRA before age 59½). Transfers from the 457 plan are reportable to the IRS but not taxable in the year of transfer.
No future contributions may be made after leaving City employment. There is no Required Minimum Distribution (RMD) necessary until age 70½ years of age. The IRS mandates the beginning of the Required Minimum Distribution.
Please contact the CalPERS Information Line at 1-800-260-0659 (press 2 for a Participant Service Representative) to request a distribution, for more information regarding rollovers or for any questions regarding your account.
Options A and B are defined benefit-style retiree health plans for eligible employees hired prior to July 1, 2005. SDCERS manages the health reimbursements for eligible retirees. For more information, contact SDCERS at 619-525-3600 or toll-free at 1-800-774-4977 or visit the SDCERS website.
Eligible employees who were hired prior to July 1, 2005, and who elected Option C, will receive an allocation to their Option C account when they meet the applicable age and years of service requirements. You will get funded when you turn 55 if you have 20 years of service, or until 62 years of age if you have less than 20 years. For safety employees, you will get funded at 50 years with 20 years of service or 55 years with 10 years of service. You will receive an enrollment packet from your trust account administrator within 60 days of funding. Please contact the Risk Management Department Savings Section at 619-236-6600 if you have not received your packet within 60 days.
The Option C trust account administrators are as follows:
If you were contributing to a retiree medical trust, upon separation you are now eligible to submit claims for qualified health care expenses or monthly premiums. There is no minimum retirement age. Full distributions are not available.
The Retiree Medical Trust account is administered by Voya/TASC 1-866-678-8322. You may access your account at www.voya.com/hra.
After you become claim active, you will be able to file claims for reimbursement from your Health Retirement Accounts. Under the Claims Tool Kit, you have several options. You can click on Manage Claims to be redirected to your Claims Tool Kit, upload your receipts securely, view a comprehensive listing of eligible expenses, or search forms to download. Refer to the Online Claim Filing Instructions for details. For claims submission, please see the document entitled Step-By-Step Instructions for Online Claim Filing and Secure Receipt Upload. You can find this document in the Forms section of the Claims Tool Kit.
