TRS retirement report: a bi-annual newsletter for active members [Dec. 2009]

www.TRSGA.com
C KuCd st r Congratulations to the members of the TRS Call Center for being featured on the Georgia Customer Service website.
The Governor's Office of Customer Service has a new initiative called the "employee eCampaign" that features tips and stories from employees throughout the State. Our Call Center was asked to submit a tip about accessible services.
Each Customer Service Representative submitted a tip and the top three tips, submitted by Shakeya Roberson, Thomasina Richards, and Eileen Kouyate, were combined into one:
"Give every caller your undivided attention and a wonderful personal experience by arriving at work a few minutes early to allow time to clear your mind of issues that may have occurred at home or on your way to work. Being fully accessible means being mentally prepared and ready to serve."
And the proof is in the pudding. In FY09, TRS Customer Service Reps answered 97.4% of all calls coming in to the Call Center within 30 seconds
of receipt.

TRS RETIREMENT REPORT

A BI-ANNUAL NEWSLETTER FOR ACTIVE MEMBERS December 2009

VOLUME 1 / JULY 2008

TRS Economic Update
by
J ffr L. Ez , Ex v D re r

Fiscal year 2009 was one of the most tumultuous economic years since the Great Depression. The impact has been global and has left no one untouched, including TRS. We have suffered in this significant downturn as have all investors. During this turbulent period, the TRS Board of Trustees and investment staff have taken great care in managing our funds, allowing us to weather the storm better than most investors. While most public retirement systems around the country suffered negative investment returns between 15% and 24%, our return was a negative 13% for the year.
Over the past several months, economic indicators have shown improvement and economists feel that the recession is over. It appears as though we have entered the early stages of recovery. As a result, our first quarter return for fiscal year 2010 was a positive 10.9%, reflecting a significant improvement. Full recovery is expected to be slow as the economy continues to fight a lack of job growth and the resulting rise in the unemployment rate. History has shown that job growth can lag the end of a recession by several years. Without job growth and a return to normal unemployment rates, we will not have achieved a true economic recovery. Yes, we can see the light at the end of the tunnel. However, we are not sure how long the tunnel is or when we will reach the end.

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It is important to remember that approximately 65 percent of the funds necessary to pay for retirement benefits come from investment income. The remaining 35 percent comes from member and employer contributions. Negative investment returns such as those experienced in fiscal year 2009 have a direct impact on future contribution rates. As a result, the TRS Board of Trustees increased both the member and employer contribution rates for fiscal years 2010 and 2011. Rising contribution rates are not in response to TRS' inability to provide benefits. The increases are to ensure that future generations of teachers will inherit a system as strong and secure as the one we have today. The TRS Board of Trustees is committed to exercising caution and making sure that we have the financial resources available to meet all the System's obligations -- both today and in the future.
Let me close by saying that fiscal year 2009 was an extremely difficult year for the economy and TRS. However, the recent upward trend in the financial markets is impacting TRS in a positive manner. Our current 387,000 participants can rest assured that the diversification of our portfolio, combined with the strong leadership of the TRS Board of Trustees and our knowledgeable investment staff, will continue to keep TRS strong. Your retirement benefits remain safe and secure.
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INSIDE THIS ISSUE:

Online Retirement Process Furloughs & Earnable Comp

Summer Retirements

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Retirement
Legislation
During the 2009 Georgia General Assembly several fiscal bills affecting TRS and its members were introduced. A fiscal bill is defined as one which: 1) increases a retirement benefit; 2) increases the actuarial accrued liability of a retirement system; or 3) increases the normal cost of the retirement system. Due to current economic conditions, all fiscal bills died in committee and are no longer valid.
The 2010 legislative session will be the second year of the two-year biennial session. Therefore, only non-fiscal bills can be introduced in 2010. Legislation having a fiscal impact will have to wait until 2011 to be introduced.
There were four non-fiscal bills that passed both chambers, with one in particular that may be of interest to you.
Act #44 (HB 371) amends TRS' investment authority by allowing the system to increase its equity investments. This bill provides for incremental increases of up to 75% in the allowable percentange amounts.
This bill further amends the system's investment authority by removing the 15% restriction on investments in corporations in a country other than the United States or Canada.
We will keep you updated on all legislation affecting TRS once the 2010 session begins.

ORentliirneement Process

In an effort to make applying for retirement faster, friendlier, and easier, beginning in January, 2010 members will have the ability to apply for retirement online. Gone will be the days of manually completing a form.
The launch of the online retirement process will happen in three phases: 1) the Retirement Application, 2) the Employer Forms, and 3) the Disability Certification Forms.
In the first phase, which will be available in January, 2010, the sections of the Retirement Application to be completed by the retiring member will be automated. Online access will make it easier for each member to complete and submit the retirement application in a timely

manner, and, in turn, allow TRS to place future retirees on a retirement payroll faster. A member can log in to her account and simply click "Apply for Retirement." She will then be prompted to fill out information specific to her retirement. When the process is complete, a summary sheet is provided for her records. There will also be links to the most important forms as well as "Tips" to help make the process as easy and user-friendly as possible.
The second phase will enable employers to complete and submit the Sick Leave Certification and Retirement Certification forms online.
The third and final phase consists of automating the application process for disability retirement. Again, we want to make the process as fast and easy for all of our valued members.
We will continue to create an environment that is productive, easy, helpful and available to all members. Our members and employers will always come first at TRS.

Annual Membership Statement
Your TRS Membership Statement for FY 2009 is available online via your TRS account. We encourage you to review it and notify your employer if you notice any discrepancies in your personal information or service credit. You can make changes to your beneficiaries online via your account as well.

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TRS Welcomes New Board Chair

J. Alvin Wilbanks has been a member of the TRS Board of Trustees for over four years and was recently elected TRS Board Chair for fiscal year 2010. His vast experience in education and his many professional accomplishments bring a wealth of expertise to TRS and its members.
Mr. Wilbanks began his career as a teacher in the DeKalb County School System and worked his way up to assistant principal, principal and director of the Occupational Education Center. From DeKalb, he transferred to the Georgia Department of Education before landing in Gwinnett County. He opened Gwinnett Technical College as its president and served there for 12 years, during which he was also the assistant superintendent for occupational and continuing education for Gwinnett County Public Schools.
In 1996, Mr. Wilbanks was named the chief executive officer and superintendent of Gwinnett County Public Schools, where he has served in that capacity for the past 13 years. He was most notably named the "2005 Georgia Superintendent of the Year."

Mr. Wilbanks serves on many legislative committees and coalitions, and has won awards for his professional accomplishments and civic contributions, including being named the Gwinnett Chamber of Commerce's "2005 Citizen of the Year."
"TRS is recognized as one of the better managed and fiscally sound retirement systems in our country. That reputation didn't happen by accident."
He is excited about his new position and has very positive thoughts about TRS as a whole. He believes that TRS does an excellent job of making sure their work is making a difference in the lives of retirees. He says, "TRS is recognized as one of the better managed and fiscally sound retirement systems in our country. That reputation didn't happen by accident."
Mr. Wilbanks would like to continue TRS' legacy of being well managed and fiscally sound. He is working with the retirement system to make sure we "make a difference"

by implementing the changes that will be needed for not only today, but for the future of TRS.
Mr. Wilbanks was born in Nicholson, GA (Jackson County). He graduated from Commerce High School and went on to receive his bachelors from the University of Georgia, and his M.Ed. & Ed.S degrees from Georgia State University.
Outside of work, Mr. Wilbanks enjoys reading, deep-sea fishing with his grandchildren and woodworking. Mr. Wilbanks and his wife live in Lawrenceville and they have two daughters and five grandchildren.

FY 2011 Contribution Rate Increases
The TRS Board of Trustees adopted the following changes to the employer and employee contribution rates effective July 1, 2010:
Employer Rate...from 9.74% to 10.28%
Employee Rate...from 5.25% to 5.53% For more information, please read the news release in the News section of our website.

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Update
Georgia's unprecedented fiscal challenges require some benefit changes and premium increases in 2010. These changes are necessary due to the shortfalls in state revenue that are normally used to fund the benefits program and keep pace with health care growth.
Active members and retirees will see changes in 2010.
Medicare eligible retirees: Effective January 1, 2010 Medicare eligi-
ble retirees and their Medicare eligible spouses and dependents will be required to enroll in one of the SHBP Medicare Advantage Private Fee for Service with Prescription Drug Coverage (MAPD) or Private Fee For Service (PFFS) options in order to continue to receive the state subsidy for their health insurance premiums.
Active employees and pre-age 65 retirees and their non-Medicare eligible spouses and dependents:
As part of SHBP's commitment to keep our health insurance options affordable, SHBP will offer an Open Access Plan (OAP). The OAP offers a different network of providers with United Healthcare (UHC). The OAP network is similar to the one currently used by SHBP, although you may see some differences.
As you may know, the CIGNA option for SHBP members has been an OAP product since January 1, 2009.
The options referred to generically as the Preferred Provider Organization going forward will be referred to as an Open Access Plan or OAP.
continued pg. 6

Furloughs & Earnable Compensation
As you know, current economic conditions and reduced revenue collections have resulted in the difficult task of having to reduce budgets by several methods such as furloughs, salary reductions, and reductions of contracted work days. All of which will have an impact on the amount of earnable compensation to be reported to TRS. "Earnable compensation" means the full rate of regular compensation payable to a member for his full normal working time...[O.C.G.A 47-3-1(11)]. In accordance with Georgia law and advice from the Attorney General's Office, reporting of employer and employee contributions will be as follows:
1. Furloughs are considered a temporary adjustment in an employee's salary and not a permanent salary reduction. Since Georgia law states contributions are remitted based on the member's full rate of regular compensation for his full normal working time, contributions will continue to be reported based on the member's full regular salary prior to the implementation of the furlough.
2. Salary reductions and reductions in contracted days are permanent in nature and become the employee's full rate of regular compensation for his full normal working time. Therefore, employee and employer contributions should be remitted based on the employee's adjusted regular salary.
Reporting employers should report all employee salaries equally and not differentiate between newer employees and those employees who are nearing retirement. Should discrepancies occur, a TRS representative will contact your payroll/ benefits personnel for clarification.
For employees who are close to retirement, please remember that the retirement calculation is based, in part, on the member's two highest consecutive years of salary and not their final two years of salary.
So far, the majority of our employers are reporting contributions with little or no difficulty. If you or your staff have any questions or are experiencing any issues regarding the monthly reporting of contributions, please contact your TRS Representative in Employer Services. We are more than happy to help.

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TRS One-Day Pre- Retirement Seminars

The decision to retire is complicated and involves answering a number of challenging questions: "Will I be able to maintain my standard of living if I retire now, or should I wait?"..."When should I start collecting my Social Security benefits?"... "What kind of health insurance will I have in retirement?" and "What happens to my assets after I pass away?" In an effort to shed some light on the answers, TRS launched six one-day pre-retirement seminars throughout the State for our retiring members.
During the first quarter of 2009, we invited TRS members within five years of retirement to meetings in Albany, Kennesaw, Savannah, Macon, Gwinnett, and Augusta. Over 900 members and their guests attended one of our seminars.
The seminars were held on Saturdays (in an effort to avoid missing a workday and to allow spouses or friends to accompany our members) and included presentations from TRS, Social Security, the State Health Benefit Plan, the Board of Regents Health Plan, and the Cooperative Extension Service of the University System of Georgia. A special thanks goes to Dr. Joan Koonce, from the Cooperative Extension Service, for travel-

ing to all six locations to deliver her presentations on financial and estate planning. Also in attendance were representatives from your 403(b) vendors (AIG, ING, Fidelity, Valic, Lincoln Financial and TIAA-CREF) who were more than happy to provide investment information and answer questions.
We appreciate the support of all of our presenters and vendors in helping to make these seminars successful.
We would also like to thank the following employers for hosting our seminars: Darton College, Georgia Gwinnett College, Kennesaw State University, Effingham Board of Education, Middle Georgia College, and Augusta State University. Each host worked hard to ensure we had everything we needed and

gave up a Saturday to make sure the day ran smoothly.
Based on the feedback we received, it is clear that our first attempt at providing you with a one-stop pre-retirement seminar was a success. Over 400 surveys were collected and, on a 5-point scale with 5 being "excellent", the overall rating for all seminars was 4.6. We also appreciate the many suggestions we received and plan on using the feedback to enhance future seminars. We are planning more one-day seminars in 2010.
We would like to thank everyone for their support and encourage all of our retiring members to attend one of our seminars, workshops or counseling sessions prior to retirement.

For More Information
Look for Postcards In the Mail
Once we determine the locations and dates for our upcoming oneday seminars, we will notify members within five years of retirement via a postcard. Our goal is to identify locations that serve as many members as possible. If your system is interested in hosting one of these seminars or a workshop/counseling event, please contact Mike Zarem (mike.zarem@trsga.com) for more information. These events provide members with an opportunity to become informed and prepare for retirement.

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Update
When confirming a current provider or searching for a new provider you should use CIGNA's "Open Access Plus" and UHC's "Choice Plus" networks.
The OAP functions like the PPO plans that were offered in 2009 with benefits for in-network and out-of-network coverage. You can choose any network physician or other health care provider without a referral and you will continue to receive the highest level of benefit coverage when using in-network providers.
Both CIGNA and UHC OAPs include continued access to a comprehensive network of hospitals, other health care professionals and pharmacies here in Georgia and nationwide. Utilizing these networks allows for greater provider negotiated discounts for most services.
You will not see any significant differences in the covered services that were offered to you under the PPO options as a result of the options now being referred to as an OAP. However, there are plan design changes that are required in 2010 on all options such as deductibles, outof-pocket limits, co-pays and coinsurance as a result of the state's fiscal situation. Members should read their benefit materials carefully to under-
stand the changes in all options.

Financial Planning Basics
Six Sins of Estate Planning

If you already have a will, you are well ahead of many. "AARP reports that 40 percent of Americans age 50 and over have no last will and testament." However, just having a will is not enough. You owe it to yourself and your loved ones to have a full estate plan: "a set of documents that will guide your loved ones through your last days and beyond." Here are some tips on what to look out for when preparing your plan.
Do-it-yourself estate planning Using software to create wills, trusts,
etc. may sound like a good idea especially since no fees have to be paid to an attorney. However, it is best to get a legal professional to look over all of your documents and plans for any mistakes. Even the slightest mistakes such as not signing in a certain place, not having enough witnesses or not having something notarized could put your documents up for dispute.
Withholding information Even close spouses may not be up-
to-date on all of the financial information of the other. Make sure that you and your spouse get everything on paper regarding your personal assets whether its real estate, insurance policies, stocks, or various bank accounts. Also, make your attorney aware of any family matters that you wish to have addressed, such as providing for a disabled relative.
Taking into account only your assets Your estate plan should span beyond
simply dividing up your assets. You want to make sure your family knows your wishes regarding health care. How do you feel about life support? Who should be in charge of making health care and financial decisions should you be unable to do so? There are specific documents designed to provide your loved ones with answers to questions such as these. Georgia has a standard form that combines the health

care power-of-attorney, living will and guardianship.
Transferring everything to your spouse While everything you leave to your
spouse is exempt from estate tax, transferring everything to him/her might not be the best idea if you want to consider the next generation. The future generation might be subject to steep estate taxes when your surviving spouse is gone. You can make use of trusts to ensure that subsequent generations get as much of what is left to them as possible.
Appointing the wrong people You do not have to go with tradition
when it comes to choosing an executor or executrix in your will. The fact that your sister is your only sibling does not make her the most appropriate executrix. And just because you thought your brother and his wife would make the best guardians for your children in the past does not mean that circumstances have not changed. They might not be the best candidates for guardians now. Whoever you choose for whatever responsibility, make sure that each person is fully aware of your decisions and wishes.
Forgetting to update Updating your will and other docu-
ments is extremely important. It should not be put off. While it may sound silly, the truth is you do not know the future. If you forget and leave everything to an ex-wife, she will get everything. Also, there are certain situations, such as marriage and the birth and adoption of a child that will invalidate a will. Updating a will after any significant change in your life is very important. If you die without a valid will, then your assets will be distributed according to the intestacy laws of your state.
Source: Eight big estate planning blunders. (2008). Consumer Reports Money Adviser, 5, 6-7.

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Best Trails in Georgia

Get Out. Get Dirty. Get Fit.
Get off the Couch and Into
the Great Outdoors!
Georgians are fortunate to have such exceptional state parks and historic sites right in their backyard. Ranging from Amicalola Falls to Kolomoki Indian Mounds, the parks do much more than protect Georgia's environment and history; they encourage people to lead healthy, active lives. Adults who spend time in nature are more relaxed and energetic. Children who play outdoors are often more imaginative and physically fit. And visitors to historic sites go home with a greater understanding of yesteryear.
There is no end to what you can do at Georgia's state parks and historic sites. Below are just a few ways you can follow the park system's urging to "Get Out. Get Dirty. Get Fit." To learn more about Georgia's state parks and historic sites, visit www.GeorgiaStateParks. org.
Volunteer Your Expertise From a few hours to a few months, volunteers are
needed for dozens of projects across Georgia. The most popular program is for RV-loving Campground Hosts, but other volunteers help with golf courses, landscaping, special events, small construction projects and more. To learn how your skills can make a difference, call the State Parks Volunteer Coordinator at 404-656-6533.
Library Loan Program Save money by using your city or county library
card before you visit. Simply check out a ParkPass or Historic Site Pass and you won't pay for parking or admission fees at Georgia's state parks and historic sites.

#1. Appalachian Trail: Springer Mountain to Hightower Gap
#2. Appalachian Trail: Woody Gap to Neels Gap
#3. Appalachian Trail: Entire trail beginning at Springer Mtn...and ending 2,100 miles north at Mt. Katahdin in Maine
#4. Amicalola Falls State Park Trails
#5. Appalachian Trail: Neels Gap to Hogpen Gap
Join a Ranger-led Event Browse the calendar of events on www.Georgia-
StateParks.org and you will find concerts, guided hikes, re-enactments, blacksmithing, fishing tournaments, triathlons and more. Program fees are exceptionally low or sometimes free.
Give Back to the Parks & Historic Sites Join the non-profit Friends of Georgia State Parks &
Historic Sites organization, and you get a free Annual ParkPass, discounts and the satisfaction of helping protect Georgia's most beautiful and significant places.
Canyon Climbers Club Challenge yourself with the ultimate outdoor step
machine. The Canyon Climbers Club is reserved for those few who have scaled Amicalola Falls, explored Providence Canyon, braved Tallulah Gorge and conquered Cloudland Canyon. Members get a t-shirt, bragging rights and healthy heart.
Muddy Spokes Club Grab your bike, helmet and energy bars. The Muddy
Spokes Club includes 11 parks with trails that range from breath-taking singletrack to paved paths. Finish all 69 miles and get a fun "mud-splattered" t-shirt.
Get Outdoors Georgia Badge Want to spend more time with your grandchildren?
Children ages 7 to 14 can work toward earning a "Get Outdoors Georgia" badge that encourages them to get outside and enjoy nature. Free activity books are available at state parks, historic sites and www.GeorgiaStateParks. org/jrranger.

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Summer 2010 Retirement Applications
Due to the high volume of new retirements submitted during the spring, receiving applications early will help ensure new retirees receive their first benefit check in the month they retire. Please keep the following dates in mind as we advance towards summer:
June 1st retirees must complete and submit applications and paperwork to TRS by March 31, 2010 if they want a check in June.
July 1st retirees must complete and submit applications and paperwork to TRS by April 30, 2010 if they want a check in June.
Applications received after these dates will be processed on a first-come, first-served basis. We do our best to accommodate everyone, but applications/forms received in our office by the deadlines listed ensure a timely retirement benefit payment. The retirement application is not complete until all of the following forms have been received by TRS:
Application for Service Retirement
Identification for members and beneficiaries
State and Federal Tax Withholding Forms
Affidavit of Residency* (new form)
Retirement Certification Report (TRS-8) completed by you
If members have any service credit for which they are eligible to purchase, it must be purchased PRIOR TO RETIREMENT.
* Federal (8 U.S.C. 1621) and State (O.C.G.A. 50-36-1) statutes require verification of lawful presence in the United States when applying for public retirement benefits. Therefore, TRS is requiring that every member applying for either service or disability retirement complete an Affidavit of Residency form. The form is located in the Forms drop down menu and has been added to the online Service and Disability Retirement Packages. It has not yet been added to the Retirement Handbook, so please ensure your employees complete and include it with the other
required forms.

Saving For Retirement
at Any Age
To everything there is a season...a time to spend and a time to, ahem, save.
For retirement, that is.
"The second you earn income, you should put something aside for retirement," said Matthew Tuttle, president of Tuttle Retirement Solutions in Stamford, Conn. "You should start as early as possible. Make saving automatic. Instead of waiting until April 15 to contribute to your IRA, have a set amount deducted automatically from your paycheck each month."
The investment strategy varies with age. In general, the younger you are, the more aggressive your investments can be. As you age, move into more conservative investments such as bonds because you have less time to make up for market dips.
Those who don't save and invest for retirement will soon understand the wisdom of this Yankee insight: Anyone who digs a hole is bound to fall into it.
"We used to say that retirement was a three-legged stool--Social Security, employer pension plan and personal savings," said Tuttle. "But no more. What worked for our parents and grandparents won't work for us because we live in an entirely different world. Now I tell my clients that retirement is a unicycle and the wheel you're trying to balance on is your personal savings. If you're not saving--or not saving enough--you're not going to be able to do much in retirement."
Source: Scott Reeves, Forbes.com with excerpts from "Seven Tips to Retiring Securely"