What’s New for 2018 in Pension and Benefits?
New Prescription Manager: – OPTUMRx
Effective January 1, 2018, members (active and retired) whose prescription coverage is through the SEHBP will have a new Prescription Management Service – OPTUMRx replaced Express Scripts. Those impacted by the change should have received their new Rx cards. You can manage your prescriptions through the OPTUMRx web page or mobile app.
Online: optumrx.com App for your smartphone: OptumRx
- Active members in the SEHBP will see increased premiums of 13% effective January 1st.
- Retirees under the age of 65 (not on Medicare) and are cost sharing their health coverage will see a 15.9% increase in their medical deduction from their pension check.
- Medicare Retirees – The letter explaining how to apply for the ERMA amount you are paying for Medicare is mailed by the Division of Pensions in February.
The 2018 SS max amount is $128,700. If your income exceeds this amount, you will not be subject to the SS withholding tax once you earn more than $128,700. In addition, if you are a TPAF member whose start date in the pension system was after July 1, 2007 (Tiers 2-5), your pensionable income caps at $128,700 for the year.
Retirees collecting Social Security will see a 2% COLA increase effective January 1st. The income limit for those under their Full Retirement Age increased to $17,040/year or $1,420/month.
New Federal Tax Law:
Tax withholding tables have not been published by the IRS. The new law could impact how you will file your 2018 tax return in the Spring of 2019 since the standard deduction has been doubled and many ‘deductions’ have been limited or eliminated. You should consult with your tax preparer to see if you need to adjust your tax withholding for 2018.
Retirees who wish to adjust their tax withholding once the new tax tables have been established can make those changes online through their MBOS accounts.
Pension Loans (Active Members Only) – INTEREST RATE AND ADMINISTRATIVE FEE
Loan Applications Received During Calendar Year 2018
Interest is charged on a loan at a commercially reasonable rate set annually by the New Jersey State Treasurer.
- For eligible borrowers, the interest rate for loan applications received in 2018 is 7.00% per annum on the declining balance of the loan.
An administrative processing fee also applies to all pension loans.
- The administrative processing fee remains the same at $15.00 per loan.
The interest rate for 2018 is determined using the Prime Rate as of December 15, 2017 (4.50%) plus 2.5%. The administrative processing fee is set annually and is based on the actual costs associated with administering the pension loan program.
The loan interest rate is fixed annually, so if you borrow in 2018 you will have the same interest rate for the life of your loan unless you borrow again after the 2018 calendar year has ended. Every time a member borrows against their available loan balance, the entire outstanding balance is re-certified for the current year’s interest rate.