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Member Education Seminar. Indiana State Teachers’ Retirement Fund Please silence your cell phones. Overview. Membership & Service Credit Retirement Overview Investments TRF Web Site. Membership Eligibility. Licensed Teachers & Administrators

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Member education seminar

Member Education Seminar

Indiana State Teachers’ Retirement Fund

Please silence your cell phones.


Overview
Overview

  • Membership & Service Credit

  • Retirement Overview

  • Investments

  • TRF Web Site


Membership eligibility
MembershipEligibility

  • Licensed Teachers & Administrators

    • Regular employment in Indiana public school system

  • Licensed Substitute Teachers

    • Requires minimum Associate’s degree

    • Requires completion of 1 year of service


What counts as service
What Counts as Service?

  • 120 or more days = 1.0 year

  • 60 to 119 days = 0.5 year

  • 10 years of qualified service = vested (eligible to receive pension benefit)


What counts as service1
What Counts as Service?

  • Regular Indiana teaching service

  • Substitute teaching in Indiana

  • Public Employees’ Retirement Fund (PERF) service

  • School board approved leaves of absence from an Indiana school


Board approved leaves of absence
Board Approved Leaves of Absence

  • These may include:

    • Advanced Study

    • Work Experience

    • Teacher Exchange

    • Pregnancy/Adoption

    • Sickness or Classroom Disability


What counts as service2
What Counts as Service?

  • Private school service in Indiana

  • Out-of-state service credit

  • Military service credit

  • Additional purchased years of service credit


Purchase of additional years of service credit
Purchase of Additional Years of Service Credit

Example of cost to purchase one additional year of service credit

AgeAnnual SalaryYrs ServiceEstimated Cost

35 $ 40,000 10 $ 526

40 45,000 15 1,394

45 50,000 20 2,234

50 55,000 25 12,646

If service credit is purchased and never used, the member is refunded the purchase amount plus interest.


How do i qualify for retirement service eligibility
How Do I Qualify for Retirement: Service Eligibility

  • Two Requirements: Service Eligible and Age Eligible

  • Service Eligible: Vesting

    • TRF members with 10 years of qualifying service


How do i qualify for retirement age eligibility
How Do I Qualify for Retirement: Age Eligibility

  • Age 65 with at least 10 years of service

  • Age 60 with at least 15 years of service

  • Ages 55-59: age and service years total at least 85 (Rule of 85)


Can i retire any earlier
Can I Retire Any Earlier?

  • Early (reduced) retirement available between ages 50 to 59

  • Must have at least 15 years of service

  • Pension percentage based on age

  • Member receives reduced pension benefit for life


Classroom disability benefit
Classroom Disability Benefit

  • Eligibility

    • At least five years of service

    • Active employment in a TRF-covered position

  • Conditions

    • Medically confirmed

    • Six-month continual absence from classroom

    • No teaching service earned

    • Reviewed annually

  • Benefit

    • $125/month + $5 for every year of service over five years


Death before retirement
Death Before Retirement

  • Survivor Pension Benefit Eligibility

    • At least 15 years of service in a covered position

    • Marital status

    • Dependent children

  • Annuity Savings Account (ASA)

    • Keep designated beneficiaries current


  • Your Teachers’ Retirement Fund (TRF) retirement benefit consists of two separate components:Monthly Pension Benefit+ Annuity Savings Account Your TRF Retirement Benefit


    Trf retirement benefit
    TRF Retirement Benefit consists of two separate components:

    • Pension Benefit

      • Administered by State of Indiana through Teachers’ Retirement Fund

      • Lifetime monthly benefit

  • Annuity Savings Account (ASA)

    • Composed of mandatory & voluntary contributions + investment gains/losses

    • Can be lifetime monthly benefit


  • Trf retirement benefit1
    TRF Retirement Benefit consists of two separate components:

    Part One: Monthly Pension Benefit


    Monthly pension benefit
    Monthly Pension Benefit consists of two separate components:

    • Benefit Formula:

      • Average salary x 1.1% x years of service (A-1 Option)

  • Example:

    • Age 55

    • 30 years of service

    • Salary average (5 highest years): $60,000

    • Annual pension income based on formula:

      $60,000 x 1.1% x 30 = $19,800 ($1,650/month)


  • Trf retirement benefit2
    TRF Retirement Benefit consists of two separate components:

    Part Two: Annuity Savings Account


    Annuity savings account what is it
    Annuity Savings Account consists of two separate components:What is it?

    • Individual investment savings account

    • Mandatory contributions

      • 3% of Annual Salary

  • Voluntary contributions

    • Pre-tax or post-tax

    • 1% increments

    • Up to additional 10% of salary

  • Investment gains & losses


  • Annuity savings account vesting withdrawal
    Annuity Savings Account consists of two separate components:Vesting & Withdrawal

    • Immediately vested

    • Consequences of withdrawal

      • Pension forfeiture

      • Penalties

      • Vested Members, inactive for 90 days after June 30, 2009, can withdraw their ASA balance without forfeiting their pension

  • Rollover protection


  • Annuity savings account voluntary pre tax contributions
    Annuity Savings Account consists of two separate components:Voluntary Pre-Tax Contributions

    • Contributions

      • Reduce taxable income

      • Taxed at distribution

  • Election window

    • Two-year time frame between fifth and seventh years

  • Irrevocable decision

    • Remains in effect for length of employment


  • Annuity savings account voluntary post tax contributions
    Annuity Savings Account consists of two separate components:Voluntary Post-Tax Contributions

    • Contributions

      • All taxes paid prior to contributions

  • Revocable decisions

    • Participation

    • Contribution percentages

    • Employer approval


  • Annuity savings account investment allocations
    Annuity Savings Account consists of two separate components:Investment Allocations

    • Allocation changes

      • Made quarterly

      • Made in 10% increments to total 100%

      • Defaults to Guaranteed Fund

  • Beneficiary designation

    • Beneficiaries should be named and kept current

    • Divorce/Marriage


  • Annuity savings account asa allocation
    Annuity Savings Account consists of two separate components: ASA Allocation

    • Risk tolerance

      • Comfort level with ASA value fluctuations

  • Age

    • Younger members may take on more market risk since losses can be made up over time

  • Portfolio diversification

    • Contributions allocated among different types of investments may reduce overall risk


  • Annuity savings account investor profiles
    Annuity Savings Account consists of two separate components:Investor Profiles

    Conservative

    • Prefer the slow and steady pace of stable investment options and are not comfortable at all with risk

    • Are within a few years of retirement or already retired


    Annuity savings account investor profiles1
    Annuity Savings Account consists of two separate components:Investor Profiles

    Moderate

    • Willing to accept some risk for potentially greater returns, but are uncomfortable with large ups and downs in the short-term

    • Comfortable with risk but have less than 10 years until retirement


    Annuity savings account investor profiles2
    Annuity Savings Account consists of two separate components:Investor Profiles

    Aggressive

    • Willing to take a higher level of risk for greater growth potential

    • Have more than 10 years until retirement

    • Not tempted to change allocations when experiencing a drop of 10% or more


    Annuity savings account investment election options
    Annuity Savings Account consists of two separate components:Investment Election Options

    • Guaranteed Fund

      • Investment Risk Profile: STABLE

  • Bond Fund

    • Investment Risk Profile: CONSERVATIVE

  • Standard & Poor (S&P) 500 Index Fund

    • Investment Risk Profile: MODERATE

  • International Fund

    • Investment Risk Profile: AGGRESSIVE

  • Small Cap Equity Fund

    • Investment Risk Profile: AGGRESSIVE


  • Retirement planning please remember trf employees are not financial planners
    Retirement Planning consists of two separate components:Please remember, TRF employees are not financial planners.

    • Be aware of personal needs

      • Lifestyle change, health care costs, inflation, travel

  • Research options available to you

  • Consider all sources of retirement income

    • Social Security, TRF benefit, personal savings, spouse’s retirement


  • Retirement planning why worry about it now
    Retirement Planning: consists of two separate components:Why Worry About It Now?

    The power of compound interest

    • Age 22 $50/month 10 years at age 60… $86,000

    • Age 32 $50/month 28 years until age 60… $63,000

    • Age 42 $50/month 18 years until age 60… $24,000

      But what if…

    • Age 22 $100/month 10 years at age 60… $255,000

    • Age 32 $100/month 28 years until age 60… $194,000

    • Age 42 $100/month 18 years until age 60… $79,000

      Please note: estimates based on numbers as of January, 2009


    Retirement planning what should i do now
    Retirement Planning: consists of two separate components:What Should I Do Now?

    • Set realistic goals

    • Develop a budget and stick to it

    • Save early and often

      • The power of compound interest

  • Determine best investment strategy

    • Which investor profile suits you?


  • Retirement planning what should i do now1
    Retirement Planning: consists of two separate components:What Should I Do Now?

    • Check investments periodically

      • TRF Interactive

      • Quarterly statements

      • Outside investments

  • Maintain good records

    • Keep all financial documents and brochures


  • Rollover savings account rsa
    Rollover Savings Account (RSA) consists of two separate components:

    • What is it?

      • May create a separate account before retirement

      • Rollover tax-deferred funds from IRA or other qualified retirement plans

  • Why set it up? And when?

    • TRF could offer a higher rate of return and/or better payment options than your current qualified retirement plan


  • Trf web site www in gov trf
    TRF Web Site consists of two separate components:www.in.gov/trf


    Trf web site trf interactive
    TRF Web Site consists of two separate components:TRF Interactive

    • Update contact information

    • Manage ASA investment allocations

    • Calculate potential retirement benefit

    • Change beneficiaries

    • View quarterly statements


    Teachers retirement fund
    Teachers’ Retirement Fund consists of two separate components:

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