TRS retirement report: a bi-annual newsletter for retired members [Dec. 2010]

www.TRSGA.com

TRS RETIREMENT REPORT
A BI-ANNUAL NEWSLETTER FOR RETIRED MEMBERS VOLUME 1 / JULY 2008 December 2010

TRS Statistics
Economy Improving
As of November 30, 2010, the System's assets were $50.3 billion (was $46.0 billion on June 30, 2010).
System's assets have increased by 9.4% since June 30, 2010.
System's assets have increased by 17.3% since June 30, 2009.
Investment returns for FY2010 were 11.1%.
Benefits Paid
Benefits paid during FY10 $2.8 billion.
Average Benefit as of July 1, 2010:
$2,967 per month. $35,604 per year.
Average Benefit for New Service Retirees as of July, 2010 (w/25 + years of service):
$3,495 per month. $44,172 per year.a

The Year in Review & Holiday Wishes
from
Jeffrey L. Ezell, Executive Director

,GRQWNQRZDERXW\RXEXW,QGLWKDUGWR believe another year has gone by. As promised, we continued to focus our efforts on providing excellent customer service throughout TRS by making the services we provide faster, friendlier, and easier.
In January, we implemented the online UHWLUHPHQW DSSOLFDWLRQ 7KLV HIFLHQW DQG user-friendly automated process immediately detects errors and decreases processing time by as much as 50%. To date, more than 1,600 online applications have been submitted. I expect these numbers to continue to increase as more of our members take advantage of the online process.
Our Customer Excellence Program continues to grow in its success throughout the State. We added two retirement planners to the team in an effort to meet the growing demand for TRS-related education and counseling events. The additional staff allowed us to individually counsel over 2,700 retiring members (a 9% increase), in addition to the over 2,500 members counVHOHGLQWKH756RIFHDVZHOODVSUHVHQW to/meet with over 18,000 members at 262 events throughout Georgia. We continue to enjoy participating in the GREA chapter meetings, as well as the Annual Conference, and look forward to meeting with our retirees.

In addition to the outreach efforts, we introduced pre-retirement workshops here at WKH$WODQWD RIFH :LWK WKH DGGLWLRQ RI DQ in-house team, we are able to better service our metro-Atlanta members with our convenient mid-town location and by holding the workshops during school breaks and teacher workdays.
TRS also continues to refresh and enhance the technology infrastructure supporting its line-of-business information systems. Doing so facilitated 99% uptime availability for these information systems, permitted our staff to quickly respond to our members' needs, and provided 24-hour availability to our members via the internet through the System's customer web portal. Over 148,000 members have registered for access to their accounts and during FY 2010 our members have completed over 117,000 service requests using the portal.
Other enhancements made to the web include: a "pop-up" customer satisfaction survey; an RSS feed section; the installation of remote deposit scanners that allow member deposits to be made onsite, resulting in faster processing of creditable service purchases and a cost savings attributed to the closing of our lockbox account DWWKHEDQNDQGQDOO\DQHZ2YHU3D\ment Recovery" section within the Retire-

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INSIDE THIS ISSUE:

TRS ATTENDS RETIREE CONFERENCE

PROTECT YOUR MONEY FROM SCAM ARTISTS

2011 COST-OF-LIVINGADJUSTMENT

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Outreach & Retirees
Our outreach staff is happy to meet with any group of TRS retirees to answer questions related to TRS.
We can discuss: cost-of-living adjustments; beneficiary issues; circumstances allowing you to change your plan option in retirement; effects of divorce and your benefit; how a survivor's benefit is calculated; the financial status of TRS; and/or a general TRS update. We can also walk you through all the wonderful information available to retirees on the TRS website.
The discussion can be tailored to meet your group's needs (no matter the number) and could run anywhere from 15 to 45 minutes based on your agenda.
We have come to a number of unit meetings already for various groups of retired teachers, including, for example, the Georgia Retired Educators Association (GREA), the Georgia Association of Educators (GAE)Retired, and the Professional Association of Georgia Educators (PAGE).
We will travel to the location of your meeting and there is no cost to your group. This is a free service offered to all TRS members, whether you are an active or retired teacher
If your group would like to make arrangements for a TRS speaker, contact Michael Zarem, Communications
Manager, at 404-425-6616. a

TRS Attends Retiree Conference

plans, and about the financial health of TRS.

From May 3rd through May 6th of 2010, TRS was in attendance at the 52nd annual convention of the Georgia Retired Educators Association (GREA). This year the convention was held at the Marriott City Center Hotel and Suites in downtown Macon. About 700 retired teachers from every corner of the state attended the convention.
Throughout the duration of the convention, TRS outreach staff worked at a booth in the exhibit area, located next to the main auditorium. Many attendees stopped by the TRS booth to talk about the "good old days" and about the condition of our economy and to ask questions about COLAs, recently published news related to pension

On May 4th, Jeffrey L. Ezell, TRS Executive Director, was a featured speaker for two breakout sessions at the convention. Topics of his presentation included statistics on the improving economy, membership, benefits paid out to retirees, and our funding status based on our liabilities and assets. Mr. Ezell also touched on the sources of funding and how much each source has contributed over the last 30 years. A discussion also ensued on all the services and information available to retirees on the TRS website. Towards the end of the sessions, Mr. Ezell touched on recent legislation that impacted TRS business. Well over 150 retirees attended the sessions.
As always, TRS appreciates the opportunity to speak and meet with our members. We look forward to next year's conference and hope to see many of our members there. a

NEW Survey Tool
We love to hear your feedback.
756 LV QHYHU VDWLVHG ZLWK WKH VWDWXV quo. We are constantly trying to improve E\SXWWLQJ\RXUQHHGVUVW6RLI\RXKDYH visited our website lately, or you plan on visiting the site soon, you will notice that we have added a new pop-up survey. This new feature is meant to be customer service friendly, as well as useful. It will allow us to take the pulse of all of our members so that we might better serve you in the future. a

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The Year in Review & Holiday Wishes continued

ment Services division that helps eliminate redundancies and minimizes the amount of overpayments being created. TRS is making a prodigious effort to keep up with developing technologies and provide the best that these new technologies have to offer. We will continue to grow our applications and programs and tailor them to the needs of our members.

I can't thank you enough for your continued partnership. 3URYLGLQJ RXU PHPEHUV ZLWK D EHQHW VR ULFKO\ GHVHUYHG for educating Georgia's youth is a pleasure and we strive to continue to provide you with the best customer service available. On behalf of myself and my entire staff, I would like to wish you and your family a very Happy Holiday and a healthy and Happy New Year. a

Protect Your Money From Scam Artists Family and friends can take steps to shield loved ones

The numbers are shocking. As many as one in five older Americans have been taken advantage of financially, according to an elder investor fraud survey. In reality, that figure may be low, because many older people who've been swindled are too embarrassed to admit it. While unscrupulous individuals are happy to fleece anyone of any age, seniors are all too often the targets of scam artists.
Swindlers typically try to appeal to one of two emotions: fear or greed. Fear may entail the specter of some purported calamity requiring a costly car or home repair, or claims that credit or tax problems could ruin your future. The appeal to greed often involves an investment that pays unusually high interest or that promises substantial profits in a short time frame.
Taking advantage of people isn't solely the purview of shady characters and telephone boiler rooms. Even people who work for seemingly reputable companies may try to push inappropriate investments or impose exceptionally high fees. Here are some of the most common ways that scammers target unsuspecting seniors, as well as tips on avoiding these ruses:
Telemarketers In most cases, it's best simply to hang up on telemarketers after asking to be removed from their call lists. Enroll in the National Do Not Call Registry to prevent many of these calls. At a minimum, request that information be mailed to you before you make any decisions.

If a telemarketer claims to be calling from a business you know, such as your bank, ask for a call-back phone number. Then check to see if the number matches the one on your statement or credit card.
Advertisements Just because a company advertises on radio or television or in the newspaper doesn't necessarily mean that it's legitimate. These media outlets are under no obligation to investigate an advertiser. The majority of ads for tax relief, credit counseling, gold coins and buying real estate on the cheap, just to name a few, aren't going to help your bottom line.
E-mails Computers make it much easier for swindlers to separate victims from their money. Don't believe anything you read in an unsolicited e-mail, and never respond to requests for personal information such as account numbers, social security numbers or your date of birth. Legitimate companies don't ask for this type of information by e-mail.
Mail solicitations Don't let a slick presentation woo you into doing something you'll regret. If you don't recognize the company, don't bite. Even if you do, proceed with caution. Read the fine print, and if you don't understand it all, ask a trusted family member or adviser to help. a
by: Jonathan Pond | from: AARP | June 24, 2010

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RSSFeeds
At TRS, we understand the growing need for access to important information via the web, and the ability to connect quickly to that information. In an effort to meet our member's growing needs, TRS has added RSS feeds to our website.

What Difference Does a Pension Make?

People with pensions are less like-
ly to be at risk in retirement.

cial resources that will be available to households when they retire.

What is an RSS feed, you ask? RSS is an acronym for "Really Simple Syndication," which means it is a family of web feed formats used to publish frequently updated works. Or more simply put, it's the newest way of getting fresh content from different web sources/sites.
TRS has created three different RSS feeds for our members:1) Active Members; 2) Retirees; and, 3)Employers. The three different feeds will provide up-to-date information about TRS such as, breaking news, press releases, changes in policy, and legislative updates.
To access the RSS feeds you simply go to www.trsga.com, click on the link at the bottom of the page, or click on the orange RSS logo in the Recent News box. Once you have arULYHG DW WKH 566 SDJH QG WKH IHHG category that most applies to you and subscribe. TRS will now automatically update you when anything is posted, added, or changed. If you do not wish to receive automatic updates do not click on the subscribe link. You can always just read the article summaries under the different feed categories, without having to sign-up or subscribe to the feed itself.
Please enjoy this new service and we look forward to any comments and suggestions you may have. a

The desire to remain independent in old age is virtually universal.
The notion that retirees should have WKHPHDQVWREHVHOIVXIFLHQWLQUHWLUHment was a bedrock value on which our nation's decades long commitment to Social Security was built.
While it is well-recognized that Social Security is highly effective at lifting retirees and their families out of poverty, it is also true that this safety net was not designed to enable retirees to maintain their pre-retirement living standards on its own.
Employment-based retirement plans are the key way that middle class workers remain part of the middle class after they stop working. Indeed for retirees with incomes between $16,000 and $44,000 per year, income from employment-based retirement plans represents the most significant source of income, after Social Security. The Social Security statistics do not distinguish between income provided by D GHQHG EHQHW '% SHQVLRQ DQG WKDW GHULYLQJIURPGHQHGFRQWULEXWLRQ'& retirement savings plans,such as 401(k) s and IRAs. But there is reason to believe that DB pensions, distinct from DC plans, play an especially important role in supporting retirement income adequacy.
Studies of retirement preparedness W\SLFDOO\EHJLQE\H[DPLQLQJWKHQDQ-

Such resources may include DB penVLRQ EHQHWV 6RFLDO 6HFXULW\ EHQHWV and savings accumulated in DC plans and elsewhere. Some studies take an even broader measure, including earnings from work by "retired" individuDOV WKH YDOXH RI ZHOIDUH EHQHWV DQG the value of home equity, as assets that can be tapped to generate income in retirement.
To gauge retirement readiness, researchers compare the aggregate level of such resources for individual households to some standard. Some researchers rely on a relative standard, like the proportion of preretirement income that can be replaced in retirement (replacement rates). An "adequate" replacePHQW UDWH LV W\SLFDOO\ GHQHG DV RQH that allows a retired household to enjoy roughly the same standard of living as it did before retirement. This standard of adequacy might be deemed to fall anywhere from 65% to 85% of preretirement income.1 Other researchers have used an absolute standard, like the poverty threshold. Obviously, this DSSURDFKHQFRPSDVVHVDQDUURZHUGHnition of "needs" in retirement. Using either standard, DB pensions appear to play a special role in ensuring retirement preparedness.
5HVHDUFKHUV DW %RVWRQ &ROOHJH QG that those with DB pensions are much

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Percent of Households "At Risk" at Age 65 by Birthdate and Retirement Plan Coverage

Retirement Plan Coverage

Early Boomers
Born 1946-1954

Late Boomers
Born 1955-1964

Generation X'ers Born
1965-1972

All households

35%

44%

49%

Households with both DB pension & DC Plan

12%

Households with a DB pension Plan

15%

Households with a DC plan

49%

Households with no retirement plan

50%

21%

25%

20%

30%

52%

48%

60%

65%

more likely to maintain their pre-retirement living standard and thus are less likely to be at risk of inadequate retirement income than those who rely on DC plans or who have no retirement plan to rely on. Predictably, those with both a DB pension and a supplemental DC plan are the least likely to be at risk of having income that falls short. The study labels "at risk" households that are projected to fall more than 10% short of achieving a target replacement rate designed to maintain pre-retirement living standards.
For households approaching retirement today, about one in three are at risk of falling short. But among those with a DB pension plan, just 15% are "at risk" and just 12% of those that can count on both a DB pension and a supplemental DC plan are "at risk." Half of households approaching retirement that do not have any type of retirement plan are deemed "at risk." The risk-reducing effects of DB pension plans are consistent across age groups from the Early Baby Boomers through Generation X.
/LNHZLVH D )HGHUDO 5HVHUYH VWXG\ QGV WKDW '% SHQsion plans are highly effective at ensuring that retirees have VXIFLHQW UHVRXUFHV WR VXSSRUW WKHPVHOYHV 7KLV VWXG\ XVHV an absolute standard of retirement income adequacy (i.e. the SRYHUW\OLQHRUQHDUSRYHUW\GHQHGDVWLPHVWKHSRYHUW\OLQH ,WQGVWKDWRIKRXVHKROGVWKDWFDQFRXQWRQ UHFHLYLQJ'%SHQVLRQEHQHWVZLOOKDYHVXIFLHQWLQFRPHWR exceed the poverty line.2 Eighty-three percent of DB pension recipients will have income in excess of 1.5 times the poverty

line. Households that rely on DC plans face higher risks of hardship than those with DB pensions. Ten percent of DC plan households will have income below the poverty line and 26% will be either poor or near-poor, with income below 1.5 times the poverty line.
Considering that only four in ten households in the Federal Reserve study have DB pensions, whereas about half have DC plans, the stronger poverty-reducing impact of DB pension plans may be surprising. However, it is less surprising when one takes into account the fact that the median wealth held in a DB pension plan is about two times larger than the median holdings in DC plans and IRAs. This indicates that DB pension plans tend to be better at ensuring employees are able to accumulate adequate resources for retirement. a
1 A replacement rate less than 100% may adequately allow a household to maintain its pre-retirement standard of living, because some expenses decline in retirement (e.g. payroll taxes, commuting costs and other job related expenses, and the cost of saving for retirement).
2 ,W LV ZHOO UHFRJQL]HG WKDW WKH RIFLDO SRYHUW\ OLQH LV D SUREOHPDWLF DQG somewhat arbitrary standard. The "poverty line" is based on a measurement developed in 1964 that fails to accurately account for dramatic changes since that time in the costs of health care, housing, and other items. For this reason, researchers will often use a threshold of 1.5 times the poverty line as a betWHUPHDVXUHRILQFRPHDGHTXDF\7KLVLVVXSSRUWHGE\UHVHDUFKLQWKHHOGRI gerontology which indicates that elder households may need income of 1.5 to 3.0 times the poverty line in order to meet even the most basic needs. (Russell Bruce and Conahan 2006).
Excerpts from Issue Brief, May 2008; Retirement Readiness, What Difference Does a Pension Make? by Beth Almeida, National Institute on Retirement Security, .

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TRSCOLA
TRS Board policy 513-5-1-.16 governs the provisions for granting a cost-of-living adjustment (COLA) to eligible retirees. A COLA is granted when the current index is equal to or greater than a retiree's base index as computed at the time of his/her retirement. The indexes are computed based on the average Consumer Price Index (CPI). The current index is 218.269 and was computed as follows:
May 2010.................... 218.178 June 2010................... 217.965 July 2010.................... 218.011 August 2010............... 218.312 September 2010......... 218.439 October 2010.............. 218.711 Total: 1,309.616 6 = 218.269
The base index for retirees who retired between July 1, 2008 and December 1, 2008 was 218.309 and was computed as follows:
May 2008..................... 216.632 June 2008.................... 218.815 July 2008..................... 219.964 August 2008................ 219.086 September 2008.......... 218.783 October 2008............... 216.573 Total: 1,309.853 6 = 218.309
The current index remains below the base index for retirees who retired between July, 1 2008 and December 1, 2008. Therefore, in accordance with Board policy, these retirees are not eligible for a COLA effective January 1, 2011. Due to a spike in the CPI during 2008, these retirees have not been eligible for a COLA since their retirement. The current index must be equal to or greater than 218.309 in order to grant these retirees a 1.5% COLA.
If you require additional information, please contact one of our Call Center Representatives at (404) 352-6500 or (800) 352-0650. a

News &
Legislation
TRS has created a new look and feel for our News and Legislative sections on our website. We created sections that are more visual, and more tactile. We re-organized the information to make navigation easier and faster.
(DFKVHFWLRQQRZFRQWDLQVDODQGLQJSDJH7KLVUVWSDJH LVZKHUH\RXZLOOQGDQLQGLYLGXDOV\QRSVLVIRUHDFKQHZV or legislative update, as well as a link to the full page/article. The user may also click on the pictures to take them to the full story/update.
At the bottom of the News section there will be a link to RXU$UFKLYHV ZKHUH \RX ZLOO QG RXU ROGHU DUWLFOHV DQG publications.
As we begin to update other sections of our site, we look forward to your comments and suggestions and to serving your best interests. a
CoSmoionng! LiTveR-CShat
In an effort to expand our customer service and answer your questions faster and more HIFLHQWO\ ZH DUH DGGLQJ D /LYH &KDW IHDture to our website. You will be able to click the Live Chat link and immediately be connected to one our customer service representatives. A "chat" window will open and you will be able to ask questions or voice concerns in real time without ever having to pick up the phone. a