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Retirement Benefit Seminar. Indiana State Teachers’ Retirement Fund Please silence your cell phone. Overview . TRF Retirement Benefit Retirement Payment Options TRF Resources: Web Site & Appointments. Pension Benefit Normal Retirement Eligibility. Age 65+ with 10+ years of service

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retirement benefit seminar

Retirement Benefit Seminar

Indiana State Teachers’ Retirement Fund

Please silence your cell phone.

overview
Overview
  • TRF Retirement Benefit
  • Retirement Payment Options
  • TRF Resources: Web Site & Appointments
pension benefit normal retirement eligibility
Pension Benefit Normal Retirement Eligibility
  • Age 65+ with 10+ years of service
  • Age 60+ with 15+ years of service
  • Ages 55 to 59 when age added to years of service totals at least 85 (Rule of 85)
reduced pension benefit early retirement eligibility
Reduced Pension BenefitEarly Retirement Eligibility
  • Age 50 to 59 with 15+ years of service
  • Age 50 – Early Retirement Factor = 44%
        • Member will receive 44% benefit for life
  • Age 59 – Early Retirement Factor = 89%
        • Member will receive 89% benefit for life
pension benefit calculation years of service
Pension Benefit Calculation: Years of Service
  • Fiscal Year: July 1 to June 30
  • 120+ days = 1.0 year
  • 60 to 119 days = 0.5 year
  • 10 years of qualifying Indiana service = fully vested in pension
pension benefit calculation what counts as service
Pension Benefit Calculation: What counts as service?
  • Regular Indiana teaching service
  • Some substitute teaching situations in Indiana
  • School board approved leaves of absence from an Indiana school
  • Public Employees’ Retirement Fund (PERF) service
  • Military service credit
  • Private school service in Indiana (purchased)
  • Out-of-state service (sometimes purchased)
  • Additional years purchased
slide7

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

Your TRF Retirement Benefit has two parts:

  • Monthly Pension Benefit
  • Annuity Savings Account (ASA)

Optional third part:

  • Rollover Savings Account (RSA)

Reminder: the IRS considers your total TRF retirement benefit as taxable income

decisions to be made when applying for a retirement benefit
Decisions to be Made When Applying for a Retirement Benefit
  • Choose one of six options for your Monthly Pension Benefit
  • Choose one of seven options for your Annuity Savings Account (ASA)
  • Choose one of five options for your Rollover Savings Account (RSA)
trf retirement benefit10
TRF Retirement Benefit

Part One: Monthly Pension Benefit

monthly pension benefit calculation factors
Monthly Pension BenefitCalculation Factors
  • Average Annual Compensation
      • Average of five highest years of salary earned for covered service
  • Benefit Multiplier: 1.1% (.011)
  • Years of Service
      • Service credit earned or purchased
  • Member’s Age at Retirement
  • Retirement Option Selection
monthly pension benefit
Monthly Pension Benefit
  • 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)

monthly pension benefit overview six options
Monthly Pension Benefit Overview Six Options
  • Three Limited Beneficiary Options
      • A-1
      • A-2
      • A-3
  • Three Survivor Options
      • B-1
      • B-2
      • B-3
  • Social Security Integration
    • In conjunction with options above if under age 62
monthly pension benefit a 2 straight life
Monthly Pension BenefitA-2: Straight Life
  • Highest paying monthly pension benefit for member
  • No pension benefit beyond member’s lifetime
monthly pension benefit a 1 and a 3 options 5 year certain life
Monthly Pension BenefitA-1 and A-3 Options: 5-Year Certain & Life
  • Both A-1 and A-3 offer:
      • Lifetime monthly pension benefit for member
      • 5-year guarantee for beneficiaries of monthly pension benefit
  • Only A-3 offers:
      • Guaranteed balance recovery of ASA; available only with ASA 1 or ASA 7 election
monthly pension benefit survivor options
Monthly Pension BenefitSurvivor Options
  • B-1 100% Survivor Benefit
  • B-2 66-2/3% Survivor Benefit
  • B-3 50% Survivor Benefit
  • Upon death of member, appropriate percentage paid to named survivor
monthly pension benefit survivor exceptions
Monthly Pension BenefitSurvivor Exceptions

Your choice of survivor and pension option cannot be changed unless the following circumstances exist:

  • Survivor pre-deceases member
  • Some divorce situations
  • Member marries after retirement
  • Member must notify TRF and complete appropriate paperwork. Change is effective when all required forms are completed.
trf retirement benefit18
TRF Retirement Benefit

Part Two: Annuity Savings Account

annuity savings account what is it
Annuity Savings AccountWhat is it?
  • Individual investment savings account
  • Mandatory contributions
      • 3% of Annual Salary
  • Voluntary contributions
      • Pre-tax or post-tax
  • Investment gains & losses
  • Immediately vested
  • Vested members, inactive for 90 days after June 30, 2009, can withdraw their ASA balance without forfeiting their pension
asa pre 86 contributions
ASA: Pre-86 Contributions
  • All contributions into the ASA prior to December 31, 1986
  • Pre-86 dollars taxed prior to contribution
  • Pre-86 contributions accessible at retirement without further tax penalty
annuity savings account
Annuity Savings Account
  • Monthly Options
      • ASA 1: Annuity converted to lifetime monthly payment
      • ASA 7: Pre-86 contributions distributed; remaining taxable portion paid as lifetime monthly benefit
  • Full Distribution
      • ASA 2: Full distribution (lump sum) with tax implications
annuity savings account rollover options
Annuity Savings AccountRollover Options
  • ASA 3: Total Rollover
      • Pre-86 contributions distributed to member
      • Taxable portion paid as a rollover to IRA/qualified plan
  • ASA 4: Partial Rollover
      • Pre-86 contributions distributed to member
      • Part of taxable portion paid as a rollover to IRA or qualified plan
      • Remainder of taxable portion paid as lump sum distribution
annuity savings account deferral options
Annuity Savings AccountDeferral Options
  • ASA 5: Deferred distribution of entire ASA
  • ASA 6: Pre-86 contributions distributed to member; taxable portion deferred
rollover savings account rsa
Rollover Savings Account (RSA)
  • Members may choose to create an additional savings account at TRF prior to retirement
  • Roll over tax-deferred funds from IRA or other qualified retirement plans
  • Control investment allocations
  • Elect a payment option at retirement
rollover savings account five options
Rollover Savings AccountFive Options
  • RSA 1: Monthly benefit
  • RSA 2: Full distribution
  • RSA 3: Rollover to an IRA or qualified plan
  • RSA 4: Partial rollover to IRA or qualified plan; remainder paid as distribution
  • RSA 5: Deferred distribution
rollover savings account research different options
Rollover Savings AccountResearch Different Options

As retirement approaches, compare outside retirement plan payment options with TRF’s payment options.

Account balanceTRFCompany XCompany Y

     $60,000                  $432            $339                 $345

       80,000                   576               452                    463

     100,000                   720               565                    582

    120,000                   864               678                    701

(Information retrieved January, 2009)

pension benefit social security integration
Pension BenefitSocial Security Integration
  • Available to members retiring prior to age 62
  • Utilizes SSA age 62 benefit information
  • Increases TRF benefit until member reaches age 62
  • Decreases monthly TRF benefit at age 62 and thereafter
pension benefit social security integration28
Pension BenefitSocial Security Integration
  • Take our earlier example: Member retires with a TRF benefit of $1,650/month
  • Monthly Social Security benefit at age 62 = $1,000
  • Monthly TRF benefit before age 62 = $2,188
  • Monthly TRF benefit at age 62 = $1,188
  • Combined Monthly TRF and Social Security benefits at age 62 : $1,188 + $1,000 = $2,188
death before retirement
Death Before Retirement
  • Pension Benefit Eligibility
        • Member has at least 15 years of service
        • If married at least 2 years, spouse receives a pension for life
        • If no qualifying spouse, dependent children receive a pension benefit until 18 years of age
  • Annuity Savings Account (ASA)
retirement planning please remember trf employees are not financial planners
Retirement PlanningPlease 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
ready to retire
Ready to Retire?
  • Complete Application for Retirement Benefits, Part I and submit to TRF in a timely manner
    • Now available to submit online!
  • Submit Application for Retirement Benefits, Part II to your employer’s payroll office
reemployment
Reemployment
  • To reemploy in TRF- or PERF- covered positions:
      • 30-day mandatory separation from retirement date to reemployment date
      • No additional service credit earned
      • No contributions to ASA
      • No earnings limitation
  • To reemploy in private sector:
      • Employable immediately
      • No earnings limitation
  • Subject to Social Security limitations
trf benefit appointments
TRF Benefit Appointments
  • One-on-one appointment to discuss personal benefit and payment options
  • Schedule approximately two years prior to anticipated retirement date
      • Call TRF: (888) 286-3544 or (317) 232-3860
  • Benefit appointment options
      • Indianapolis TRF office
      • Phone call
      • TRF comes to your school
trf web site
TRF Web Site
  • Register with your e-mail address as your username, and you will be emailed a personal identification number (PIN) to log in
  • Can change PIN after online registration
  • Change contact information, investment allocations, & view quarterly statements
  • Use benefit estimate calculator
  • Change/update beneficiaries
  • Print Retirement Application – or submit it online
teachers retirement fund
Teachers’ Retirement Fund

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