Transcription
teachers’ RETIREMENT SYSTEMMember HandbookTIER 1 A member before January 1, 2013
teachers’ RETIREMENTSYSTEM OF ALABAMAPhone877.517.0020 or 334.517.7000Fax877.517.0021 or 334.517.7001Emailtrsinfo@rsa-al.govBecause email submissions are unsecured, do not include confidential informationlike your Social Security number. Please include your full name, employer, homemailing address, and daytime phone number.MailWebsiteThe Teachers’ Retirement System of AlabamaP.O. Box 302150Montgomery, AL 36130-2150www.rsa-al.govMember Online Services (MOS LOGIN)Change your address and view your account statement onlinehttps://mso.rsa-al.govBuilding Location201 South Union StreetMontgomery, AlabamaBusiness Hours8:00 a.m.-5:00 p.m.Monday-FridayPlease provide your full name and Social Security number on all faxes and letters.
TRS Tier 1 Member Handbook(Member before January 1, 2013)IntroductionThe Retirement Systems of Alabama (RSA) is pleased to provide you withthe Teachers’ Retirement System (TRS) Tier 1 Member Handbook. Thishandbook is an important part of our commitment to provide members withvaluable information about their benefits and retirement. Please read this handbookthoroughly and keep it with your other benefit materials. Your member handbook isa very useful tool when you have questions about your TRS benefits and retirement.If you need further information, please visit the RSA website at www.rsa-al.gov orcontact the TRS with any questions you may have about your retirement benefit.The information in this handbook is based on the Code of Alabama 1975, Title 16, Chapter 25 for TRS and Chapter 25A for Public Education Employees’ Health Insurance Plan(PEEHIP). This handbook is not intended as a substitute for the laws of Alabama governing the TRS nor will its interpretation prevail should a conflict arise between its contents and Chapters 25 and 25A. Furthermore, the laws summarized here are subject tochange by the Alabama Legislature. Do not rely solely upon the information provided inthis handbook to make any decision regarding your retirement, but contact the TRS withany questions you may have about your benefits and retirement.www.rsa-al.gov1
Contents - Tier 1ContentsAbout TRS.4Our Mission.4TRS Board of Control.4Visit the RSA Website (www.rsa-al.gov).4Map and Directions.4Membership.6Defined Benefit Program.6Mandatory Participation.6Tier 1 and Tier 2.6Contributions.6Member Online Services (https://mso.rsa-al.gov).6Annual Statement of Account.6Designation of Beneficiary.7Change of Address.7Types of Creditable Service.8Vesting.8Termination of Service.9Ineligible for Retirement.9Refund of Contributions.9Table of Refunds .9Purchasing Additional Service Credit.10Military Service in the U.S. Armed Forces.10Noble Eagle Service (Act 02-430).10Restoration of WithdrawnService Credit from the RSA .11Maternity Leave Without Pay .11Out-of-State Public Service .11TRS Support Personnel, Teacher Aide, Job Corps, and Teacher Corps .11Department of Defense Dependent School Service .11Sources of Funds .12Death of a Member Prior to Retirement.12Preretirement Death Benefit.12Term Life Insurance Benefits.13Change of Beneficiary .13Reporting the Death of a Member .13Retirement Benefits.14Service Retirement.14Disability Retirement .14Three Easy Steps to Retirement .15Sick Leave Conversion.17Computing Your Retirement Benefit.18Retirement Formula for Maximum Monthly Benefit.18Maximum or Optional Monthly Benefit.19Maximum Monthly Benefit.19Optional Monthly Benefit.19Replacement Beneficiary.19Table of Maximum Monthly Retirement Benefit.202877.517.0020
Postretirement Employment.24Employment Restrictions.24Contract Employment.24Private Employment.24Disability Retiree.24Employment with the ERS.24Elected Officials.25Full-Time Employment with the TRS.25Retiree Information.26Cost-of-Living Adjustments (COLAs).26Direct Deposit.26Tax Information.26Deductions from Your Retirement Benefit Check.26RSA-1 Deferred Compensation Plan.27Employee Eligibility.27Employee Enrollment.27Easy to Make Deferrals.27Rollovers.27Tax Savings.28Retirement Savings.28Contact RSA-1.28Public Education Employees’ Health Insurance Plan (PEEHIP).29PEEHIP Information.29RSA Publications and Notifications.30www.rsa-al.gov3Contents - Tier 1Deferred Retirement Option Plan (DROP).22Continued Service after the DROP Participation Period.22Distribution of DROP Account.22Re-employment with the RSA after Withdrawal from Service.23
About TRS - Tier 1About TRSOur MissionThe mission of the Retirement Systems ofAlabama is to serve the interests of our membersby preserving the excellent benefits andsoundness of the Systems at the least expense tothe state of Alabama and all Alabama taxpayers.TRS Board of ControlResponsibility for the management andadministration of the TRS is vested in a15-member Board of Control. The board consistsof the following members: State Superintendent of Education, ExOfficio State Treasurer, Ex Officio Director of Finance, Ex Officio Twelve members of the TRS, all elected bythe TRS membership Two retired members One city or county superintendent One principal One from postsecondary education Three active teachers in grades K-12 Two education support personnel Two higher education membersThe Board of Control has full power to investand reinvest the retirement funds throughthe Secretary-Treasurer. The Board elects theSecretary-Treasurer, who serves as the ChiefExecutive Officer of the RSA and is responsiblefor the day-to-day management of the RSA.Visit the RSA Website(www.rsa-al.gov)The TRS strongly encourages its members andmember agencies to browse this user-friendlysite because of the tremendous amount of usefulinformation and interactive tools available.What you can find: Retirement Benefit CalculatorTRS retirement videosThe best ways of contacting the RSAView account statement onlineRates of Return for RSA-1Investment performancePublications and formsChange address onlineLegislation affecting the RSAPEEHIP informationAgency informationRetirement planning informationRetiree informationMap and DirectionsFrom the WestFollow Highway 80 to I-65. Follow I-65 North toMontgomery. Approaching Montgomery, stay inthe right-hand lane and exit onto I-85 North toAtlanta. Continue in the right-hand lane; thentake the first exit, which is Court Street. Stay on theservice road until you reach Union Street. Turnleft on Union Street. Continue on Union Streetthrough two traffic lights. The RSA Headquartersis on the right before Adams Avenue. Membersmay park for free in the Member Services parkinglot in front of the parking deck.From the EastFollow I-85 South to downtown Montgomeryand take the Union Street exit on the right. Takethe first right on the service road onto UnionStreet. Continue on Union Street through onetraffic light. The RSA Headquarters is on the rightbefore Adams Avenue. Members may park forfree in the Member Services parking lot in frontof the parking deck.4877.517.0020
About TRS - Tier 1From the SouthFollow I-65 North to Montgomery. ApproachingMontgomery, stay in the right-hand lane andexit onto I-85 North to Atlanta. Continue in theright-hand lane; then take the first exit, which isCourt Street. Stay on the service road until youreach Union Street. Turn left on Union Street.Continue on Union Street through two trafficlights. The RSA Headquarters is on the rightbefore Adams Avenue. Members may park forfree in the Member Services parking lot in frontof the parking deck.From the NorthFollow I-65 South into Montgomery. Take theI-85 North exit to the right to Atlanta. Stay in theright-hand lane and take the first exit on I-85,which is the Court Street exit. Stay on the serviceroad until you reach Union Street. Turn left onUnion Street. Continue on Union Street throughtwo traffic lights. The RSA Headquarters is on theright before Adams Avenue. Members may parkfor free in the Member Services parking lot infront of the parking deck.www.rsa-al.gov5
Membership - Tier 1MembershipDefined Benefit ProgramThe TRS is a defined benefit plan qualified underSection 401(a) of the Internal Revenue Code.Since its inception in 1941, the plan has provideddisability and service retirement benefits tomembers and survivor benefits to qualifiedbeneficiaries.A defined benefit plan provides the employeewith a specific benefit at retirement bycalculating the retirement benefit based on aformula. Benefits are payable monthly for thelifetime of the member, possibly continuing forthe lifetime of his or her beneficiary. The Code ofAlabama 1975, Section 16-25 contains the actuallanguage governing the plan.Mandatory ParticipationParticipation in the TRS is mandatory if a personis employed in a position eligible for coverage ina non-temporary capacity on at least a onehalf time basis earning at least the federalminimum wage. Once enrolled, the membermust continue participation until employmentis terminated. Active members of the Employees’Retirement System (ERS) and student employeesare not eligible for TRS participation.Temporary employees with a specific terminationdate not exceeding one year are ineligible.However, temporary employees employed longerthan one year must begin participation in theTRS at the beginning of the second consecutiveyear of employment. The member will be giventhe opportunity to purchase the first year oftemporary employment.Tier 1 and Tier 2Tier 1 plan member: Any member of theRetirement Systems who had service for whichhe or she received credit in the Employees’Retirement System or in the Teachers’Retirement System prior to January 1, 2013.Tier 2 plan member: Any member of theRetirement System who first began eligible6877.517.0020employment with an Employees’ RetirementSystem or a Teachers’ Retirement Systemparticipating employer on or after January 1,2013, and who had no eligible service in theEmployees’ Retirement System or the Teachers’Retirement System prior to January 1, 2013.ContributionsMember ContributionsMember contributions are based on percentagesof earnable compensation, but earnablecompensation cannot exceed 120% of base pay.Member compensation rates are determined bystatute and subject to change by the AlabamaLegislature.Regular EmployeesFull-time, Certified StateFirefightersCorrectional OfficersLaw Enforcement Officers7.5%8.5%Employer ContributionsThe employer’s contribution rate is establishedafter each annual actuarial valuation ofparticipating agencies.Member Online Services(https://mso.rsa-al.gov)The RSA Member Online Services websiteoffers members a quick way to view their TRSstatement, RSA-1 statement, and change theiraddress online. PEEHIP members can viewcurrent coverages, update contact information,and enroll, change, or cancel coverage duringOpen Enrollment. New members can enroll inPEEHIP within the first 30 days of employment.You will need to register by creating a User ID andPassword.Annual Statement of AccountYour personal Annual Statement of Account ismailed to your home address each August withthe exception of UAB employees who receivestatements in January. You may view your
A retired member who is receiving a benefit underthe provisions of Option 2, 3, or 4 retirementallowance may designate a replacementbeneficiary for a monthly survivor benefit if thedesignated beneficiary predeceases the retiredmember or if the member and the designatedbeneficiary become divorced. See ReplacementBeneficiary on page 19.The statement includes a Personal section whereyour beneficiary is indicated. Please check tomake sure that this information is current. If not,contact the TRS and supply us with the updatedinformation. The next section is MemberContributions. This section lists your previouslytaxed contributions, non-taxed membercontributions, total interest, and the balance as ofthe end of the fiscal year, which is June 30.Change of AddressThe Creditable Service by Category sectionbreaks down the member’s service credit bymembership, prior, purchased, and transferservice. This section also indicates if the memberis vested in the system or not. The Ten YearService History section shows your calculatedearnings based on actual contributions receivedfor the period beginning July 1 and ending June30 and will not necessarily agree with yourcontract salary or the salary reported on your W-2form. Your contributions and service credit arealso shown and are provided by your employer.All statement information is subject to lateraudit and correction.Having your current home mailing address on filewith the TRS is very important. Many importantdocuments are mailed to each member such asyour Advisor, TRS Board of Control Electionballots, Annual Statement of Account, and RSA-1statement.You may change your address through MemberOnline Services on our website. You will need toset up a User ID and Password to log in.You can also change your address in writing, withsignature, either by letter or Address ChangeNotification form. The change of address formcan be obtained from our website or requestedfrom Member Services. Address changes cannotbe made through email or over the phone.Designation of BeneficiaryIt is very important for members to keep theirbeneficiary designations current. Failure to doso can result in possible loss of valuable benefitsto your survivors. If you wish to change yourbeneficiary or in the event of marriage, divorce,or the beneficiary’s death, file a new beneficiarydesignation with the TRS.The RSA 100-C Change of Beneficiary - Priorto Retirement form is available on our websiteor you may contact the TRS. You may name morethan one beneficiary and designate them ascontingent or co-beneficiaries. If at the member’sdeath, there is no beneficiary; the member’sestate will be paid the appropriate death benefit.www.rsa-al.gov7Membership - Tier 1account statement online at our website. Thepurpose of the annual statement is to provide youwith information pertaining to your beneficiary,member contributions, accumulated interest,creditable service, and earnings. This alsoprovides you with the opportunity to verify yourrecords and use the information for retirementplanning.
Types of Creditable Service / Vesting - Tier 1Types of Creditable ServiceCreditable service is the total service credit accrued to your account and is one part of the formula used tocalculate your retirement benefit. It includes membership service, prior service, purchased service, andtransferred service. Periods of part-time or less than full-time service should be prorated based on thepercentage of time worked in relation to full time. For university faculty, a sabbatical at part salary resultsin a similar proration of service credit.Membership ServiceMembership service is service credit earned as an employee while a member of the TRS and makingcontributions to the TRS. Members can only earn a year’s worth of service credit in a year’s time. Servicecredit is calculated by your employer and reported to the TRS. Service credit is subject to review, audit,and correction by the TRS.Prior ServiceService credit earned prior to your agency’s participation date in the TRS.Purchased ServiceAlabama state law allows active members to purchase service credit for certain types of past employment.Purchasing service credit may increase the amount of your retirement income or allow you to retiresooner. See Purchasing Additional Service Credit on page 10.Transferred ServiceIf a member previously worked for an agency covered under the ERS, the member must authorize atransfer of service credit to the TRS.Leave of AbsenceA member of the TRS who is on leave of absence without pay is not entitled to any service credit while onsuch leave. A member receiving workmen’s compensation pay is also not entitled to any service credit forsuch pay.VestingVesting means the member has earned enough service credit to be eligible for a lifetime retirement benefitother than a refund of contributions. Members have a vested status in the TRS after accumulating 10 yearsof creditable service. Members cannot convert unused sick leave to retirement credit in order to meet theminimum 10 years of service required for vesting.8877.517.0020
Ineligible for RetirementOnce a member terminates employment prior toretirement eligibility, he or she has three options:1. If the member is vested (has at least 10years of service), retirement contributionsmay be left in the system until age 60. Themember may apply for service retirement tobe effective the first of the month followingattainment of age 60.2. With less than 10 years of service, themember may leave contributions in thesystem for up to five years. If the memberhas not returned to employment as aparticipating member, the account willbe terminated and contributions plus anyrefundable accrued interest will be payableto the member.3. The member may withdraw all retirementcontributions and refundable interest.Member contributions are only refundedat the request of the member upontermination of employment and applicationfor refund.Note: An approved leave of absence does notconstitute termination of employment.To request a refund, contact the TRS and requesta Form 7, Notice of Final Deposit andRequest for Refund and the Special TaxNotice Regarding Your Rollover Optionsor download them from our website. Instructionsfor completing the form are located on thereverse side of the form.Please read the Special Tax Notice for itsvaluable tax information. The taxable portionof the refund is subject to federal income taxwithholding at the rate of 20 percent unlessthe taxable amount of the refund is transferreddirectly (rolled-over) from the RSA to the trusteeof an Individual Retirement Account, Annuity, orQualified Retirement Plan.If the member elects to receive the refunddirectly, he or she will be refunded 80 percentof the taxable amount of the retirementcontributions and refundable interest, if any. Thetaxable portion of the refund may also be subjectto a 10 percent additional tax if the member is lessthan 59 ½ years old. No portion of the refund issubject to state of Alabama income tax.In January following the calendar year in which ataxable refund is made, a 1099-R will be issued tothe member who has directly received the refund,regardless of whether the individual rolled-overthe refund to a qualified plan within 60 days ofthe date of withdrawal.Refund of ContributionsA member’s contributions are only refundable atthe request of the member upon termination ofemployment and application for refund (Form7). There are no partial refunds; all contributionsare refunded in full.Interest on the account is only refunded if themember has at least three years of membershipservice. The employee is not entitled to the totalinterest credited to the account.Upon withdrawal, all service credit establishedwith the TRS is canceled. For vested members,the right to lifetime monthly retirement benefitsat age 60 is forfeited.Table of RefundsAmt ofInterestRefundedContributionsRefundedLess than 3 yrsNoneAll3 yrs, but less than 16 yrs50%All16 yrs, but less than 21 yrs60%All21 yrs, but less than 26 yrs70%All26 yrs or more80%AllYears ofMembership ServiceBy law, interest is credited on the previous year’saverage balance at the rate of four percent perannum. Refunds may be subject to a federal taxpenalty.9www.rsa-al.govTermination of Service - Tier 1Termination of Service
Purchasing Additional Service Credit - Tier 1Purchasing Additional Service CreditAlabama state law allows active members topurchase service credit for certain types of pastemployment. Purchasing service credit mayincrease the amount of your retirement incomeor allow you to retire sooner.To purchase service credit, the member mustensure proper certification of the service. Requestthe appropriate certification form by contactingthe TRS or download the form from our website.Have the form completed by an official recordkeeper where the service was performed. Thenreturn the completed certification form to theTRS.Military Service in the U.S. Armed Forces During an active member’s first yearof participation in the TRS, he or shemay purchase up to four years of eligiblemilitary service provided the member hashad no previous period of eligibility.Eligible service includes honorable servicein the U
teachers' RETIREMENT SYSTEM Member Handbook TIER 1 A member before January 1, 2013. Phone or877.517.0020 334.517.7000 Fax 877.517.0021 or 334.517.7001 . the exception of UAB employees who receive statements in January. You may view your Regular Employees 7.5% Full-time, Certified State Firefighters
