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

www.TRSGA.com

TRS RETIREMENT REPORT

A BI-ANNUAL NEWSLETTER FOR RETIRED MEMBERS December 2009

VOLUME 1 / JULY 2008

C KuCd st r
Congratulations to the members of the TRS Call Center for being featured on the Georgia Customer Service website.

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

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.

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:

SHBP UPDATE

BOOST YOUR RETIREMENT INCOME

TAX RECOVERY ADJUSTMENT

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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.


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
eligible 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.

Update
The options referred to generically as the Preferred Provider Organization going forward will be referred to as an Open Access Plan or OAP
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, out-ofpocket limits, co-pays and coinsurance as a result of the state's fiscal situation. Members should read their benefit materials carefully to understand the changes in all options.

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"My favorite things about Georgia are

the four seasons, the people, and

the beauty of the state's geography."

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.

Mr. J. Alvin Wilbanks TRS Board Chair

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."

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.

The H1N1 Flu: What you need to know.
The encouraging news about the H1N1 flu virus, unlike the seasonal flu virus, is that adults older than 64 years do not seem to be at an increased risk of H1N1 complications. However, the CDC encourages everyone to take the following precautions:
Get vaccinated--the H1N1 flu shot is now available. Call your doctor or local pharmacy. Cover your nose and mouth with a tissue when you sneeze and then throw the tissue in the
trash. Wash your hands often with soap and warm water for at least 20 seconds. Avoid touching your eyes, nose and mouth so you don't spread germs. If you have a fever, stay home for at least 24-hours after your fever is gone.

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Giving Back
Many retirees are taking the opportunity to volunteer in retirement. A 2007 study by the Urban Institute notes that 45 percent of retirees engage in formal volunteer activities, even though only 34 percent had volunteered when they were working.1
Some opportunities may provide a nominal paycheck, but most all certainly provide flexible schedules and the ability to help those in need.
There are many opportunities available throughout your community, including your church, community center, or town government.
As a retired educational professional, you might even consider volunteering at a school. With the current budget issues, schools are looking for volunteers to help out.
Some retirees are even going back to school. Many colleges and universities offer discounts to seniors, so it can be affordable even on a limited income.
So, if you miss the workforce but want less of the stress of a full- or part-time job, give some thought to becoming a volunteer.
1 Retiring? What's Next? Consumer Reports

Boost Your Retirement Income

Every year, retirees pass up a whopping $10.1 billion in Social Security benefits--spousal benefits that most people don't even know they're entitled to. These benefits can increase your income and solve the big riddle that confronts so many of us when we first think about Social Security: whether to get immediate monthly income at 62 or wait and get a bigger check--maybe a lot bigger. If you hold off until you're 66--which the government considers Full Retirement Age (FRA) for people born from 1943 through 1954-- the monthly benefit will be one-third larger than if you take it at 62. Wait until age 70 and the check will be 76 percent larger.
The longer you live, the more that will matter--and chances are, you'll live a long time. The average 65-year-old can expect roughly 20 more years of life. Among that same group, 41 percent of women and 28 percent of men will live to age 90--and half of those women will make it to 95, as well as one-third of the men.
$10.1 billion in benefits go unclaimed every year.
Fortunately, spousal benefits offer a way around the riddle. If you're married--or if you're divorced after ten years of marriage and haven't remarried--you can claim a benefit not only on your own work record

but also on your spouse's. No, you can't collect those benefits simultaneously. In some instances, however, you can get them consecutively: you can file first to get a spousal benefit, and then later to get your own benefit after it has grown as big as possible.
To see how spousal benefits work, consider these sample situations.
Two-Income Couples
The Scenario: Bob is 66; Kathy is 62. Based on their work records, each qualifies for a $2,000 monthly benefit at their FRA. Kathy plans to file now for her own benefit, so it'll be reduced to $1,500 (for details on how your age affects the size of the benefit you receive, go to www.ssa.gov/retirement/1943. html). Bob intends to wait until he's 70 so that his benefit will grow to $2,640.
The Better Way: Normally, when you apply for your own benefit, the Social Security Administration also looks at your spousal benefit and, if it's bigger, adds the difference. But when Kathy files for Social Security, Bob should apply only for a spousal benefit, something he can do because he has reached FRA. "He must make it clear on the form that he's restricting the application to the spousal benefit," says Social Security Administration spokesperson Mark Lassiter. "That keeps his own benefit growing 8 percent a year for four more years."
The Payoff: As a spouse, Bob gets 50 percent of the $2,000 Kathy would be entitled to at 66, an extra $1,000 a month for four years. At age 70 he can switch to his own $2,640 benefit. According to the Boston College Center for Retirement Research, in any given year about 700,000 couples stand to gain from using this approach.
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Boost Your Retirement Income cont.
One-Income Couples
The Scenario: Tom, 64, works full-time; Sandra, 60, is a homemaker. His Social Security benefit at 66 will be $2,000 a month. He'd like to wait until he's 68 to apply, which will bump the benefit to $2,320. But he's not sure he and Sandra can manage that long without it.
The Better Way: At 66, Tom should apply for his $2,000 monthly benefit, which allows Sandra to file for a spousal benefit. Tom can then--surprise--voluntarily suspend his benefit (at FRA, he has that option) so it will keep growing. Meantime, Sandra continues receiving her spousal benefit. (For details, go to www.ssa.gov/ retire2/yourspouse.htm.)
The Payoff: Sandra gets $650 a month. Why not $1,000--half of Tom's benefit? Because she's only 62. No matter whose earnings record it's based on, the amount you get depends on your age when you apply for it.
Divorced Singles
The Scenario: David and Susan, both 62, were divorced after 15 years of marriage. David always earned much more than Susan. He remarried; she didn't. Susan needs income now. She figures she's stuck with her reduced benefit.
The Better Way: Since their marriage lasted at least ten years and ended more than two years ago, and Susan hasn't remarried, she is eligible for benefits based on David's record. She can file for a spousal benefit even if he hasn't yet filed for benefits himself.
The Payoff: Susan will get whichever amount is larger: her spousal benefit or the benefit based on her own work record. If she was at FRA, she could do as Bob does in the first example, limiting her application to the spousal benefit to keep her own benefit growing.
The moneymaking lesson here is to fully explore your choices. Use Social Security's online calculator (at www.socialsecurity.gov/OACT/anypia/anypia.html) to play with different assumptions, or make an appointment to visit your local Social Security office. Don't hesitate to ask agency staff to check with supervisors if they're unfamiliar with these seldom-used strategies.
Source: Lynn Brenner, AARP Magazine

TRS Retirement Stats at a Glance
Fiscal Year to Date as of August 31, 2009

1,338

Number of Retirements

Average Years of

17.3

Service for Members

with 10-24 Years

62.4

Average Age at Retirement for

Members with 10-24

Years

$1,336

Average Monthly Benefit for Members with 10-24 Years

32.3

Average Year of Service for Members

with 25+ Years

Average Age at

58.7

Retirement for

Members with 25+

Years

$3,864

Average Monthly Benefit for Members with 25+ Years

83,271

Total TRS Retirees

$226,503,140

Gross Benefits Paid to TRS Retirees

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Financial Planning Basics
SIX SINS OF ESTATE PLANNING

Heart Healthy Foods
1. OATMEAL: full of omega-3 fatty acids, folate and potassium; lowers levels of LDL cholesterol and helps keep arteries clear.
2. SALMON: rich in omega3 fatty acids; reduces blood pressure and keeps clotting at bay. Two servings a day may reduce your risk of dying from a heart attack by up to one-third.
3. AVOCADO: lowers LDL cholesterol and raises the amount of HDL cholesterol in your body.
4. OLIVE OIL: lowers bad LDL cholesterol and reduces your risk of developing heart disease.
5. NUTS: a good source of healthy fat, fiber and omega-3 fatty acids.
6. BERRIES: full of antiinflammatories which reduce your risk of heart disease and cancer.
7. LEGUMES: full of fiber, omega-3 fatty acids and calcium; lentils, chickpeas and black and kidney beans.
8. SPINACH: full of fiber and potassium; eating 2.5 servings of veggies cuts risk of heart disease by 25%.
9. FLAXSEED: full of fiber, omega-3 and -6 fatty acids.
10. SOY: may lower cholesterol; edemame, tofu and soy
milk.

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 exwife, 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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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 Park Pass or Historic Site Pass and you won't pay for parking or admission fees at Georgia's state parks and historic sites.

Join a Ranger-led Event Browse the calendar of events
on www.GeorgiaStateParks.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 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 ulti-
mate 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 ener-
gy bars. The Muddy Spokes Club includes 11 parks with trails that range from breath-taking single track 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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Why worry about your pension check, when you can have it directly deposited into your bank account through the TRS Electronic Funds Transfer (EFT) Program? It's safe, fast, and hassle free!
Did you know that the chance of having a problem with a check is 20 times greater than with direct deposit?* Checks pass through more hands and can get lost in the mail, stolen and forged. With EFT, you can rest easy that your retirement benefit will be safely and confidentially deposited into your account.
Over 90% of our retired members use EFT. If your checks are not deposited via EFT, what are you waiting for?
The TRS EFT Program is...
FAST: Your check is available the 1st business day of the month and funds are immediately available for withdrawal.
WORRY FREE: Your money is deposited via a secure electronic transfer--no chance of it getting into the wrong hands.
FREE: There is absolutely no cost to you.
RELIABLE: Your money will get to the bank even when you can not.
A TIME SAVER: No waiting in line at the bank.
To sign up for, or make changes to EFT go to www.trsga. com, click on the gold Account Login button. Then: 1) sign up for a new account; or 2) sign in to your existing TRS account. Once you have signed in, click on the Maintain EFT Information link to sign up or make changes online. If you do not have access to a computer, you may call TRS at (404) 352-6500 or (800) 352-0650 to request an EFT form.
* Source: Direct Deposit and Direct Payment, www. directdeposit.org and www.directpayment.org.

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Keeping Your Info Updated
To ensure we have the correct information on file and that you receive necessary correspondence, we ask that you keep TRS informed of any status changes that may occur while in retirement. Many changes or updates can be done online via your TRS account, while others must be made in writing.
Address changes should be made online via your TRS account to ensure all correspondence from TRS, such as your 1099R, reaches you at the correct address.
If your bank account information changes, affecting the direct deposit of your monthly retirement check, you may update it online via your account. You may also update your Federal and/or State Tax Withholding information.
Name and beneficiary changes, birth date and social security number discrepancies must be proven via certain identification and in writing. Please contact one of our Customer Service Representatives for help. Also, if you have any questions regarding your account information, call our office to speak with one of our Customer Service Representatives.

GA Department of Revenue Tax Recovery Adjustment

Recently, an email containing misleading information about member contributions and possible tax credits has been circulating around the State.
Back in January of 1990, the Georgia Department of Revenue created a "tax recovery adjustment" for TRS member contributions made from July 1, 1987 through January 1, 1990. During that period, member contributions were sheltered from federal income tax, but not Georgia state income tax. Thus, a member's contributions and pension were taxed by the State of Georgia.
The Georgia Department of Revenue allowed TRS members, who contributed to TRS from July 1, 1987 through January 1, 1990, to "recover" the taxes paid on those contributions when they filed for their state taxes. At retirement all retirees receive this important information at the time they receive their first benefit check.
TRS members eligible for this recovery adjustment will receive, along with their first benefit check, a letter that provides the total dollar amount of TRS contributions made during this time frame so members can document the adjustment on their state tax returns. For example, a retiree who retired on July 1, 1998 received this important tax information with

his/her first retirement check. In early 1999, when the retiree filed his or her state taxes for 1998, the adjustment would have been included.
To be clear, the amount shown in the letter you received is not the amount you are owed by the Georgia Department of Revenue, but is the amount of money from which you can recover the taxes you paid on it. This money has nothing to do with incorrect contribution amounts. The contributions you made to TRS during this time were and are correct.
If you fall into this adjustment period and are unsure as to whether or not you filed for this adjustment, we recommend that you go back and check your tax returns for the applicable year to avoid claiming the recovery more than once. If you already received your adjustment, then you are all set. If you did not claim the adjustment, please contact the Georgia Department of Revenue directly at https://etax.dor.ga.gov/ or 404-417-4477 or 1-877-602-8477 (outside metro Atlanta) to find out if you are still eligible.