www.trsga.com
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Welcome to the first edition of the TRS Retirement Report, designed to inform you about TRS and the retirement industry. We always appreciate the chance to communicate with you and encourage you to let us know the areas which we can improve, and those in which we are doing well so we can continue to provide you with services of value in a timely, accurate, and friendly manner.
I would also like you to know that everyone at TRS is a member of a hard-working team who is dedicated to meeting your needs in every way possible, using the best practices and best technology available. In fact, customer service is the main focus at TRS. We strive to be "Faster, Friendlier, and Easier" than ever before.
I, along with my staff, am truly fortunate to have the opportunity to serve you and bring you the services you need to be successful. You are the reason we exist at TRS. Thank you for your dedication to teaching our children and serving this great state of ours. z
TRS retirement report
A bi-annual Newsletter for Active members
Volume 1 / July 2008
Your Pension is Safe with TRS
by
Jeffrey L. Ezell, Executive Director
No matter what you have heard or read in the news lately about the financial markets, you can be assured that your TRS pension is safe and sound. The bottom line--your benefits are available when you need them!
The market turbulence over the past year has been troubling. Like all investors, private and institutional, we have been affected by the significant downturn in the markets; however, we have survived other downturns in our history. Black Monday in 1987, the bursting of the technology stock bubble in the late 1990's, the Enron and WorldCom fiascoes, and 9/11...TRS will weather this storm as well.
It is important to recognize and remember that the time horizon of the TRS investment portfolio is measured in decades, not days, weeks, or months. Much attention is paid to what is happening now, but the goal is to use periods of market fear and exuberance to TRS' long-term advantage. Unlike a retirement savings program, such as a 457 or 401(k) plan, your TRS account does not lose value when stock prices go down. We are a long-term investor, and short-term downturns in the market are anticipated in our investment strategy.
The funds used to pay retirement benefits are derived from employer contributions, member contributions, and investment income. These funds are invested in a mix of high quality bonds and stocks. Because TRS invests in a well-diversified portfolio, when
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one company or asset class under performs, the stability of the other asset classes offsets that negative performance. Simply stated, the companies making headlines today are just a small fraction of our overall portfolio.
The TRS Board of Trustees and our investment staff continually monitor our asset allocations and make adjustments as necessary. As in previous years, conservation of capital and conservatism continue to be the principles that guide our investment decisions. TRS has the liquidity needed to pay promised benefits today and the accumulated assets and funding mechanisms to pay them in the long-term as well.
TRS, as a large institutional investor, has access to investments that most individual investors do not have, and we use our professional investment expertise to make investments on behalf of our membership at a low cost. We know that the markets go up and down and that at times we'll have losses, but those losses will be offset by gains over the long run in TRS' diversified investment portfolio.
Because we know that the market can be volatile, we have taken a number of risk mitigation steps throughout the years and will continue to monitor all of our investments and manage our system in the context of our longterm investment horizon. You can be confident that the professionals at TRS are doing everything possible to protect and grow the funds available to pay for the retirements of current and future retirees. z
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INSIDE THIS ISSUE: PURCHASING SERVICE CREDIT
2009 LEGISLATION
WORKING IN RETIREMENT
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did you know?
Reaching Out
Educating Members
Throughout the State
When it comes to planning for your future, retirement should be high on your list of priorities. Have you thought about the lifestyle you want to maintain or the various transitions retirement can bring? How can you prepare for your future so you can enjoy your golden years?
The Customer Excellence Program was created to help you map out your future, no matter where you are in your career, and the earlier you get started, the better off you will be.
We offer new hire workshops for those members who are just getting started and interested in planning for their future. Our midcareer workshops benefit those members midway through their careers who are interested in staying abreast of new information and legislation that may affect their future. And we offer pre-retirement workshops and individual counseling for those members within 5 years of retirement who need a detailed look at the TRS benefit so they are equipped to make the choice that is right for them. We also offer 1-day seminars complete with presentations from TRS, the State health plans, the Social Security Administration, and a financial and estate planning expert.
To find events in your area, go to www.TRSGA.com and click on the Workshops and Counseling link. z
Purchasing Service Credit--To Buy or Not to Buy?
As an active member of TRS, you may be eligible to purchase certain types of service
credit. Purchasing service credit allows active TRS members to increase the number
of service years credited to their pension.
The most obvious reason to purchase service credit is to increase your retirement benefit. You can also use the years that you purchase to become vested or to reach normal service retirement. And you can use the service you purchase as protection for your beneficiaries in the unfortunate event you pass away during active service.
All members with an active TRS account (you must have contributed to TRS for at least one year in the last five years) are eligible to purchase service credit provided they meet the specific criteria for each type of service. All service must be established and paid for prior to retirement. Beneficiaries of deceased members cannot establish additional service credit. Also, if you are receiving a retirement benefit from a teaching position in another state, you cannot establish those years of credit under TRS.
VESTING. A member with at least 10 years of creditable service has a vested right to receive a benefit at age 60. However, if you leave a TRS covered position before reaching 10 years and withdraw your funds, you are not eligible for a benefit. If you decide to return to teaching and wish to gain those years back in an effort to vest, you may purchase your withdrawn service, or other eligible service, to reach vesting status. This may enable you to retire at an earlier age. Reaching vested status also entitles your beneficiaries to a monthly benefit in the event you pass away during active service.
REACHING NORMAL SERVICE RETIREMENT. Members are eligible for monthly retirement benefits if they complete 30 years of creditable service, regardless of age, or if they complete at least 10 years of creditable service and are 60 years of age. You can also retire under our early retirement provision with 25 years of creditable service, but you will
be subject to a penalty if you are under age 60. By purchasing service, you can become eligible for normal retirement at an earlier date or reduce the amount of the penalty received for early retirement.
INCREASING YOUR BENEFIT. When determining your retirement benefit, via a formula established by Georgia law, TRS takes into account your final average salary and your total number of years of creditable service. To determine the percentage of your final average monthly salary you will receive each month during retirement, TRS multiplies your years of service by 2%. For example, a member with 32 years of service will receive 64% (32 x 2% = 64%) of his or her final average salary. Each year of service purchased adds another year to your total number of years of creditable service. Therefore, for each year of service you purchase you will receive an increase of 2% of your final average salary during retirement.
TO BUY OR NOT TO BUY. Whether or not to buy service credit is a very important decision that you must make during your career. There are many advantages to purchasing service credit--retiring early, becoming vested, and increasing your benefit. It is also important to remember that your beneficiaries will not be able to purchase any service after you have passed away. When considering the cost of the service, remember the cost only increases with time and it may be helpful to view the purchase as an investment decision.
There are 12 different types of service credit that you may purchase provided you meet the criteria listed with each type of service. The cost of each service varies depending on years of creditable service and certain caveats distinct to each option. Please visit our website or call our office for more details on the services available for purchase. z
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in the news
Annual Membership Statement
Hopefully you have noticed our efforts in the past few years to make life faster, friendlier, and easier for you. One of those many efforts included faster and easier access to your Annual Membership Statement by making it only available online.
One of the biggest issues we have heard from you is the amount of time it takes to receive your statements. We decided to improve the delivery time by allowing you to access your statement via our website as soon as it was ready--no delays--and we were able to cut costs too!
This year we decided to forego the time-consuming and expensive process of printing and distributing the statements via your employer. Printing, collating, and mailing over 220,000 statements to over 385 employers, who in turn have to deliver them to their various schools and departments, can take some time. Plus, many of you change jobs over the summer and statements are shipped to old employers. Our goal is to allow everyone to have access to his/her statement and to obtain it without the wait.
If you have not taken a look at your Annual Membership Statement yet, we encourage you to do so. Although your account information is available online, it is an opportunity for you to learn about TRS, take a look at some of the projected estimates we have forecasted for you, and a review your account. We ask that you contact us if you notice a discrepancy in your account--sooner, rather than later (at retirement) .
To view and/or download a copy of your statement, simply log in to your online TRS account and view and/or print it at your convenience. z
! REMINDER ! FY 2010 Contribution Rate Increases
The TRS Board of Trustees adopted the following changes to the employer and employee contribution rates effective July 1, 2009:
Employer Rate...from 9.28% to 9.74%
Employee Rate...from 5.00% to 5.25%
For more information, please read the news release in the News section of our website. z
the LEGISLATIVE FRONT Three bills that may be of interest to you.
HB 165
This bill would amend the provisions for the establishment of private school service to include private school service rendered in another state. Currently, only eligible private school service rendered in Georgia is allowable. This bill does not change the full actuarial cost or any other aspect of current law regarding the establishment of private school service. This is a fiscal bill.
HB 345
This bill would expand a member's eligibility for retirement to include any member who has attained the age of 60 and has at least 5 years of membership service. Under current law, members may retire upon attainment of age 60 and 10 years of creditable service; or, 30 years of service at any age. This is a fiscal bill.
NOTE: Georgia law currently defines membership service and creditable service as follows: Membership Service--Service as a teacher while a member of the retirement system; and Creditable Service--Membership service plus any established/purchased service.
HB 371
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This bill will amend the retirement system's investment authority by allowing the system to increase equity investments. Under current law, the system may not invest more than 60% of assets in equities. This bill would provide for incremental increases in the allowable percentage amounts to 65% effective July 1, 2009; 70% effective July 1, 2010; and 75% effective July 1, 2011. This bill further amends the system's investment authority by removing the 15% restriction on investments in corporations or in obligations of corporations in a country other than the United States of America. This is a non-fiscal bill.
For a complete review of legislation that has been introduced and affects the Teachers Retirement System, please visit www.TRSGA.com and click on the Legislation link at the top of the homepage. z
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for your info
New Face of TRSGA.com
If you have not visited our website in a while, we encourage you to check it out. If you have, then welcome to our friendlier and easier portal to all that is TRS.
We have been listening to your suggestions and implemented some enhancements that should improve navigation and information presentation.
Accessing your account has never been easier and finding the information you need to be successful never faster. We hope you enjoy the site and encourage you to let us know what you think and how we can continue to improve the services we provide! z
Keeping Your Info Updated
As you know, your account is settled according to the information we have on file at TRS. That is why it is so important for you to keep us updated of any changes that should occur during your membership with TRS.
Address changes should be given directly to your employer. This information is provided to us monthly via employer contribution reports and overrides any addresses currently in our database.
Beneficiary changes should be made online via your TRS account as soon as possible. Should you pass away in active member status, your account will be settled according to whom your beneficiary is on file with TRS. This supersedes any other outside beneficiary designations.
Name changes, birth date and social security number discrepancies must be proven via certain identification and in writing. Also, if you have any questions regarding your account information (ie. incorrect service credit or contributions), please call our office to speak with one of our Customer Service Representatives. z
Working in Retirement
During the 2008 session, the Georgia General Assembly passed legislation that helps address the need for qualified educational professionals in Georgia's public schools. This new law will allow certain retired educators to start a new chapter in their lives by returning to the workforce and continuing to receive the retirement benefits they worked so hard to attain.
Effective July 1, 2008, TRS retirees who retired under a normal service retirement may return to work and continue receiving full retirement benefits provided that they have been retired for a minimum of 12 months. Normal service retirement is defined as having at least 30 years of service credit or being age 60 with at least 10 years of service credit. All previous return to work provisions regarding full-time teaching in a TRS covered position in retirement have been superseded.
Local school systems may employ a retiree as a full-time classroom teacher, principal, superintendent, media specialist or counselor (assistant principals and assistant superintendents are not eligible). The new legislation is very specific in defining a classroom teacher as a certified teacher (pre-K thru grade 12) employed by the public school system with the sole responsibility of academic instruction in a classroom. A principal cannot return to work as a principal in the same school from which he/she retired and a superintendent cannot return to work as a superintendent in the same school system from which he/she retired. Under the provisions of this legislation, extracurricular employment in addition to classroom teaching (i.e. coaching, athletic director, band director) is not eligible. Regional educational service agencies may still employ a retired teacher as an improvement specialist.
A school system employing a retiree must pay all employee and employer contributions to TRS as if the retiree was an active member of TRS. The retiree will not be eligible to accrue any additional employment benefits or receive any further creditable service as a result of reemployment.
TRS retirees may still return to work in less than halftime (49% or less) positions since these positions are not eligible for TRS membership.
For more information, please visit our website or call our office to speak with one of our Customer Service Representatives. z