TRS facts 1994-1995: a member's guide to the Teachers Retirement System of Georgia

TRS FACTS
1994--1995
a member's guide
to the
TEACHERS RETIREMENT
SYSTEM
OF
GEORGIA

Teacher- .1:2etir-ement SYitem of Georgia

GERALD S. GILBERT
Executive Director

Dear Member:
The board of trustees and staff of the Teachers Retirement System are pleased to present this 1994-1995 edition of TRS Facts. It provides up-to-date general information about the system which should answer most of your questions. Please note that as a result of 1994 legislation the rate of member contributions has been reduced from 6% to 5% of "eamable compensation." For more specific information about Teachers Retirement System laws or about your individual account, please do not hesitate to contact our office.
I am pleased to report that the Teachers Retirement System continues in sound financial condition. The funding of the system is adequate to insure that current and future benefits will be available for the system's retirees and their beneficiaries.
Sincerely,
Gerald S. Gilbert Executive Director

TRS Facts 1994-95 1

BOARD OF TRUSTEES

Mr. Ernest L. Stroud, Jr. CHAIRMAN

Mr. Robert W. Batten

Ms. Linda T. Bohannon Mrs. Mildred R. Blackbum VICE CHAIRMAN

Dr. John A. Hulsey, Jr.

Mr. Paul E. Manners

Mr. Steven N. McCoy

Dr. Robert J. Puckett, Sr. Mr. Claude L. Vickers
2 TRS Facts 1994-95

Contents
Board of Trustees ................................................... 2 The Members ...................................................... 4 The Contributions .................................................. 4 Eligibility For Retirement Benefits ...................................... 4 The Retirement Benefit Formula ....................................... 5 Creditable Service .................................................. 6
Membership Service ............................................... 6 Out-of-State Service ............................................... 6 Military Service .................................................. 7 Maternity Leave Credit ............................................ 8 Study Leave Credit ................................................ 8 State of Georgia Employment ....................................... 8 Visiting Scholar Credit ............................................. 9 Repayment of Withdrawn Accounts .................................. 9 Membership Status .................................................. 9 Leaves of Absence ................................................. 10 Vesting .......................................................... 10 At 40 Years Of Service .............................................. 10 Survivor's Benefits ................................................. 11 The Beneficiary Forms ........................................... 11, 12 The Plans Of Retirement ...................................... 12, 13, 14 Estimate Your Maximum Benefit ...................................... 15 At Retirement .............................................. 16, 17, 18 At Termination - Withdrawing Your Funds ............................. 19 Your Annual Statement ............................................. 19 Administrative Staff ................................................ 20
TRS Facts 1994-95 3

The Members
All employees in covered positions of the state's public school systems, regional libraries, county libraries, and regional educational service agencies who are employed one-half time or more are required to be members of the Teachers Retirement System of Georgia (TRS) as a condition of employment. Likewise employees in covered positions of the University System of Georgia are required to be members of TRS unless eligible for participation in an optional retirement plan administered by the university system's board of regents. Covered positions include teachers, administrators, supervisors, clerks, teacher aides, secretaries, paraprofessionals, public school nurses and employees of the Agricultural Extension Service.
Other persons eligible for TRS membership include certain employees of the State Board of Education, State Department ofEducation and the Department of Technical and Adult Education. Public school lunchroom, maintenance, warehouse and transportation managers and supervisors are eligible for membership.
Certain teachers who are at least age 60 at the time they become employed in a covered position may decline TRS membership by notifying the system's board of trustees in writing within 90 days after becoming a teacher.
Public school personnel who are not eligible for membership in the system are maintenance and custodial employees, school bus drivers, and cafeteria workers. Temporary or emergency employees are also ineligible for membership. Substitute teachers are considered temporary employees and are not eligible for membership in the system.
4 TRS Facts 1994-95

The Contributions
All members ofthe Teachers Retirement System currently contribute the equivalent of5% ofearnable compensation to the system by payroll deduction. (The rate of member contribution was reduced from 6% effective July 1, 1994.) Effective with salaries paid to members for and after July 1987, contributions are made on a before-federal tax basis. Effective with salaries paid for and after January 1, 1990, contributions are also made on a before-State of Georgia income tax basis. In addition to your contributions, your employer contributes a percentage of your gross salary to the system. For fiscal year 1994-1995, the employer contribution rate is 11.81 % of gross salary.
Eligibility For Retirement Benefits
Service Retirement
You are eligible for monthly retirement benefits by one of the following: 1. Completion of 30 years of creditable service -
regardless of age. 2. Completion of at least 10 years of creditable
service AND attainment of age 60. (Effective July 1, 1992, the reduction for retirement under age 62 was eliminated.) 3. Completion of at least 25 years of creditable
service AND attainment of at least age 55. lf you
retire under this provision your benefit will be permanently reduced by the lesser of one-twelfth of 7% for each month you are below age 60, OR 7% for each year or fraction of a year by which you have less than 30 years of creditable service. 4. A member who would attain 30 years of creditable service by December 31 of the ensuing school year may retire effective September 1, at the beginning of the school year. The retiring member must apply to TRS for this early retirement, and notify his employer by no later than May 1 preceding the ensuing school year and must pay the full actuarial cost of the service and , the resulting early retirement.
Disability Retirement
You are eligible to apply for monthly benefits under the disability provisions of the law if you are an active member, have at least 9 1/2 years of creditable service and are permanently disabled.

The Retirement 'Benefit Formula
Service Retirement
Your benefits from the Teachers Retirement System are calculated by using the percentage of salary formula. Simply stated, two percent is multiplied by your years of creditable service established with the retirement system, including partial years (not to exceed 40 years). This product is then multiplied by your average monthly salary for your two highest consecutive years of service. Please note that any nine or more months of service within a fiscal year would constitute a full year of service credit. Also, salary earned for any nine or more months of service within a fiscal year would constitute a full year of salary for purposes of calculating retirement benefits. In the event you do not have credit for two years of service within the two-year salary period, additional salaried months are included to complete two years ofservice. The resulting product is your monthly retirement benefit under the maximum plan of retirement.
Disability Retirement
Disability retirement benefits are also calculated using the percentage of salary formula - two percent multiplied by the total years of creditable service times the average monthly salary for the two highest consecutive years of service. As with service retirements, salary earned for any nine or more months of service within a fiscal year constitutes a full year of salary. The resulting product is the monthly disability retirement benefit under the maximum plan. There is no age requirement for disability retirement.

The 1984 Average Salary Limitation
In 1984, the Georgia General Assembly passed Act No. 1276 which placed certain limitations on the amounts of salary increases the Teachers Retirement System can use to calculate retirement benefits. The specific limitation is determined each year by the General Assembly's appropriation for salary increases for the ensuing year.
The salary increases appropriated for the 19941995 year resulted in limitations on salary increases TRS can use to calculate a member's highest twoyear average salary as follows:
For Employees of the Board of Regents . 7.50% For All other TRS Members ......... 9.39% After determining a member's two consecutive years which produce the highest average salary, which also represents at least two years ofcreditable service, a base year is determined against which the first of the two highest years is compared. The resulting allowable salary for the first of the highest two years is then compared to the second of the highest two years. Note: The provisions of Act No. 1276 will only affect retiring members whose date of current TRS membership is on or after July 1, 1984.
Minimum Retirement Benefit
Retired members are guaranteed a mm1mum retirement benefit of $17 .00 per month for each year of creditable service, to a maximum of forty years, under the maximum plan of retirement.

TRS Facts 1994-95 5

Creditable Service
Since it is ultimately creditable service that you must establish in order to retire, you should be familiar with the following types of service that you can establish as creditable service.
Membership Service
Membership service is your normal active service for which you were employed and for which you have made and are making contributions to the retirement system. If you have at least nine months of service during a fiscal year you will receive credit for one year of service. Therefore, if you work from September through May, you will earn credit for one year of membership service. If you are employed on a 12 months-per-year basis, you will receive credit for a year of membership service upon completion of at least nine months of service during the fiscal year ending June 30. You may not receive credit for more than one year of service for any fiscal year.
To be eligible to establish any of the following types of service you must have an active TRS account and must have contributed to the system for at least one year in the last five years. Beneficiaries of deceased members cannot establish additional service credit. All service credit must be established prior to retirement.
6. TRS Facts 1994-95

Out-of-State Service
After completing six years as a contributing member ofthe Teachers Retirement System ofGeorgia, you may establish one year of credit for service rendered in a public educational institution of another state. With the completion of each additional year of Georgia service thereafter, you may establish an additional year of out-of-state service - to a maximum of ten years.
Out-of-State service may be established only if the out-of-state employment, had it been rendered in Georgia, would have made you eligible for membership in the Teachers Retirement System of Georgia. Types of employment which cannot be established are private school employment, less than half-time employment, temporary employment and student employment.
Ifyou were a member of the Teachers Retirement SystemofGeorgiapriortoApril 1, 1966, your cost for service rendered in a state that allows credit to be established for Georgia service is 8% of the annual salary you earned in the other state plus applicable accrued interest. If the date of your first membership in the Teachers Retirement System of Georgia is April 1, 1966, or after, your cost for out-of-state service is the total applicable member and employer contributions plus interest.
To establish out-of-state service you should first secure copies of form TRS-OS-4 (Certification of Out-of-State Service). These forms should be submitted to the school system(s) where the service was rendered so that the dates of employment, total service and annual salaries can be verified by a current official. Verification is also required from the respective teachers retirement system of the other state to the effect that you are not receiving, or eligible to receive, now or in the future, retirement benefits from that state based on the service you wish to establish with the Teachers Retirement System of Georgia.
Subject to the same eligibility requirements for out-of-state service, creditable service may also be established for teaching service in American dependents' schools, schools operated by the Bureau of Indian Affairs of the U.S. Department of the Interior and teaching service in the public schools of the' Virgin Islands, Puerto Rico, Guam and the District of Columbia. Your cost for such service is the total applicable member and employer contributions plus' interest. Such service must be included in the maximum of 10 years of service allowable under the outof-state provisions of TRS law.

Military Service
Teachers Retirement System law contains several amendments which provide for the establishment of up to five years of retirement credit for periods of active duty military service in the armed forces of the United States.
Credit for allowable military service rendered between December 7, 1941, and December 31, 1944, is granted at no cost.
Credit for service rendered after January 1, 1945, and during periods of national emergency (World War II, The Korean Conflict and the Vietnam Era), may be established by payment of the member contributions you would have paid to the retirement system had you been a member - based on the salary you first received as a teacher in the public schools of Georgia after leaving military service, plus accrued interest. If you went directly (within six months) from teaching service in Georgia into active duty military service, your cost will be based on your last annual salary prior to entering military service.
The official dates of these three periods of national emergency are as follows:
World War II ........... 12/7/41 - 12/31/46 Korean Conflict .......... 6/27/50 - 1/31/55 Vietnam Era ............... 8/5/64 - 5/7/75 If your date of current membership is prior to March 28, 1974, you may establish credit for active duty military service rendered outside the periods of national emergency under specific conditions by paying the appropriate employee contributions and interest.To qualify, your college training or teaching service must have been interrupted by military service and you must have become a public school teacher within five years of your release from active military service.

Active duty military service, other than as listed above, from which you have been honorably discharged and which was rendered during any period when a military draft was in effect, may be purchased by payment of appropriate employee and employer contributions plus interest, based on compensation you first received as a Georgia public school teacher after completion of the military service. The military draft has been in effect as follows:
September 16, 1940- March 31, 1947 June 24, 1948 - July 1, 1973 Members with at least twenty years of membership service as of July 1, 1978, who were on active duty military service between July 1, 1946, and December 31, 1948, may establish retirement credit for military service rendered during the period December 7, 1941, through December 31, 1948. Employee and employer contributions must be paid on all military service rendered during the period January 1, 1947-December 31, 1948. If your current date of membership is on or after March 28, 1974, no military service credit can be established if that service has been or will be used in the determination of your eligibility for retirement benefits or allowances from another state or federal retirement program, other than social security and the United States civil service. Any such member who has previously established military service credits prior to March 28, 1974, and who later withdraws from the system is not eligible to reestablish any military service credit, including free service, even though the member may subsequently repay the withdrawn account. Credit for "Ordered Military Duty" such as service in operation "Desert Storm" may be established with the Teachers Retirement System by payment of employee contributions by the member and payment of employer contributions by the employer. All ordered military duty service must be purchased within five years from termination of the ordered military duty. In order to apply for military service credit, you should submit a copy of your separation papers which show your dates of active duty military service. The maximum amount of military service credit allowable is five years.

TRS Facts 1994-95 7

Maternity Leave Credit
Members may purchase credit for periods of absence from employment prior to March 5, 1976, because of pregnancy. One and one-half months of credit may be awarded for each pregnancy with a maximum of six months allowable for all pregnancies. The cost is based on the full actuarial value of the additional service. If you wish to establish credit for periods of maternity leave, you should request an application form and should submit a birth certificate or other proof of the specific pregnancy.
Study Leave Credit
You may be eligible to establish retirement credit for periods of full-time graduate study. The requirements are: 1. You must have been a full-time teacher in the
public schools of the State of Georgia or in the University System under the Board of Regents immediately (not more than six months) prior to the period of full-time graduate study. 2. You must submit a transcript or similar document to the Teachers Retirement System as verification of the full-time graduate study period. 3. You must return to full-time employment as a teacher in the public schools ofGeorgia or in the University System for a minimum of five years following the period of graduate study. Your cost to purchase study leave credit is based on the annual salary you were receiving for full-time employment as a Georgia teacher immediately prior to the period of study leave. Study leave service may be purchased by payment of appropriate employee and, in some cases, employer contributions plus interest.

State of Georgia Employment
If you have been a member of the Employees' Retirement System ofGeorgia (ERS) and have withdrawn those contributions not more than three times, you may establish credit for that service with the Teachers Retirement System after three years of membership service with TRS by paying the amount ofcontributions you would have paid, plus applicable interest, to TRS had you been a member.
If you have not withdrawn your contributions from the Employees' Retirement System you may transfer your total credits immediately by paying the difference in the amount ofcontributions you paid as an ERS member and the amount ofcontributions you would have paid as a TRS member, plus applicable interest. Should you request a transfer of your ERS account to TRS but elect not to pay the difference at the time it is transferred, you will receive retirement credit with TRS for a pro-rata portion of the service. However, full credit for the service under ERS will not be granted until you have paid the difference.
If your State of Georgia service was rendered before the establishment of the Employees' Retirement System of Georgia (January 1, 1950), it may be established as creditable service with the Teachers Retirement System provided you have at least five years of current TRS service and provided you pay both applicable employee and employer contributions and interest on all such service rendered on and after January 1, 1945. Such State of Georgia service rendered prior to January 1, 1945, may be established at no cost provided all eligible service rendered between January 1, 1945, and January 1, 1950, is purchased. To initiate a transfer of ERS credits to TRS, you should notify the Teachers Retirement System office, in writing, of your election to transfer the credits.

8 TRS Facts 1994-95

Visiting Scholar Credit
A maximum of two years of service as a visiting scholar at a public college or university may be established as creditable service by members who , were granted a leave of absence from a unit of the University System of Georgia for such purpose. Such service must be included in the maximum of 10 years ofservice allowable under the out-of-state provisions of TRS law, and it cannot be established if you are eligible for benefits based on the service from another source, except social security. Your cost is based on your salary at the time of making application for the service and includes the appropriate employee and employer contributions, plus interest.
Repayment of Withdrawn Accounts
After returning to active TRS membership, you may, after completing the required years of membership service, repay all or part of your withdrawn accounts, plus interest, and recover the creditable service represented by the years for which your payment is received. Upon request, a cost calculation showing your cost for each year of withdrawn service will be sent to you.
If you have withdrawn your TRS contributions no more than three times subsequent to January 1, 1961, you may, after completing three years of membership service, repay for all or part ofyour withdrawn service. Ifyou have withdrawn your contributions no more than four times you may repay for your withdrawn service after completing five years of membership service. If you have withdrawn five or more times, you may repay for the withdrawn service after completing ten years of membership service. In calculating interest to be charged for repayment of more than three withdrawals, the regular rate for repay-
ment of all withdrawn service is increased by an
additional 2% for each withdrawal exceeding three.

Membership Status
Your account with the Teachers Retirement System remains active provided you are an active contributing member at least one year out of any five consecutive years. Therefore, you may have a break in your covered employment of up to four years and retain your active account. If your account becomes inactive, you will not be eligible to establish any additional service credit, you will not be eligible to repay previously withdrawn accounts, and your account will not be credited with additional interest. If you had ten or more years of service at the time your account becomes inactive, you will no longer have the right to apply for disability retirement nor will you have the right to leave a monthly benefit to a surviving beneficiary.
Ifyour account is in inactive status and you have not withdrawn your contributions, you may reinstate your account to active status in one of three ways: 1. After you have at least two years of membership
service in your current (active) account, the service credit in your inactive account will be credited to your current (active) account at no cost. 2. If you have less than two years of current membership service in your current (active) account and have a break in covered service of more than four years but not more than five years, you may reinstate your account by paying an amount equal to 12 1/2% of your salary for the last year of service prior to the break in service. 3. If you have less than two years of current membership service in your current (active) account and have a break in service of more than five years but not more than six years, you may reinstate your account by paying an amount equal to 25% of your salary for the last year of service prior to the break in service. If you are eligible to reinstate your inactive account by paying the appropriate amount listed in paragraph No. 2 or No. 3, above, no waiting period is required. The appropriate amount can be paid and the contributions, interest and service credit which were in the inactive account can be placed in your current account.

TRS Facts 1994-95 9

Leaves of Absence
The normal four-year period which you may be out of covered employment and still retain an active account may be extended by a leave of absence, approved by the system's board of trustees. To be eligible for a leave of absence, you must be an active contributing member whose contributions have not been withdrawn.You must return to covered employment by the end of the leave of absence in order to retain an active account.
Allowable leaves of absence, for the purpose of extending the duration of your active account beyond the four-year period include:
Maternity
A maternity leave of absence of one year may be granted upon receipt of your application and an application completed by your physician. For information about how retirement credit may be established for periods of pregnancy, see page 8.
Illness
A leave of absence may be granted because of illness which prevents you from rendering service upon which TRS membership is based.
Adoption
A leave of absence of an additional year may be granted for each child adopted.
Study
A leave of absence of up to two years may be granted for study purposes. The period of study must be continuous. For information about how retire-
ment credit may be established for periods of full-
time graduate study, see page 8.
Military
A leave of absence may be granted for periods of service in the armed forces. For information about how retirement credit may be established for periods of service in the armed forces, see page 7.

Vesting
One of the ways you may become eligible for service retirement benefits is to have at least 10 years of creditable service with attainment of age 60. Therefore, once you complete 10 years of creditable service, you have a vested right to a retirement benefit at age 60. Thus, a member with at least ten years of creditable service is said to be "vested."
A person with a vested right to a benefit at age 60 should apply for benefits during the six-month period prior to attaining age 60.
At 40 Years Of Service
If you have at least forty years of creditable service, you may elect to discontinue your contributions to the system. This election is irrevocable. Further, your employer is required to discontinue deducting retirement contributions from your salary after you have completed forty years of creditable service and attained age 65. You may, however, sign a waiver which will enable you to continue your contributions.
If you will be receiving salary increases, it may be to your advantage to continue contributions since by making contributions on the increased salaries, your average salary for your highest two consecutive years of salary, upon which retirement benefits are based, could be higher.

10 TRS Facts 1994-95

Survivor's Benefits
When a member dies before retirement with less than 10 years of service
Should your death occur before retirement, and at the time of your death you had less than ten years of creditable service, a lump sum refund of your contributions and interest will be paid to your primary beneficiary. If you have designated more than one primary beneficiary, the lump sum refund ofyour account will be divided equally among those named. If your primary beneficiary(ies) have predeceased you, the lump sum refund will be made to any surviving secondary beneficiary(ies). In the event that you have not designated a beneficiary, or if all of your primary and secondary beneficiaries have predeceased you, a refund of your accumulated contributions and interest will be made to your estate.
With 10 or more years of service
In the event of your death before retirement, and ifyou have at least ten years ofcreditable service, your beneficiary(ies) will be contacted and advised as to the available benefits. In this instance, either a monthly benefit for life or a lump sum refund of the member's contributions and interest constitute the two types of benefits available. The monthly benefit payable to the beneficiary of an active member who dies while in active service is the same benefit that would have been payable if the deceased member had retired and had selected Plan B, Option 2 (the 100% survivorship option).
If only one primary beneficiary is designated and still living at the time of the active member's death, that individual would receive the entire available benefit. If more than one primary beneficiary is still living, the monthly benefit for life would be divided between the beneficiaries, however, the combined total amount cannot exceed the actuarially reduced monthly benefit which would have been payable to the member under Plan B, Option 2. If there are no surviving primary beneficiaries, the secondary beneficiary(ies) would have the same option as to a monthly benefit for life as the primary beneficiary(ies).

The Beneficiary Forms
When you joined the Teachers Retirement System you completed an application for membership and designated a primary and, perhaps, a secondary beneficiary. This election was made on your membership application. Should your present personal situation call for a change of beneficiary(ies), you are urged to complete a change form, have it notarized, and submit it to the TRS office.
Effective October 1, 1992, TRS began using a single multi-purpose change form (TRS-2-B) for the following purposes: 1. Name Change Request 2. Benefit settlement election for beneficiary(ies).
In this section, you check one ofthree settlement plans to be used if your death occurs prior to your retirement. Your choices are as follows: D Upon my death, ifl have 10 or more years of service, I wish my beneficiary(ies) to receive a monthly survivor's benefit for life. D Upon my death, ifl have 10 or more years of service, I wish my beneficiary( ies) to have a choice of a lump sum settlement or a monthly survivor's benefit for life. D Upon my death, if I have more than 10 years of service, I wish my beneficiary( ies) to receive a lump sum settlement of my contributions and interest rather than a monthly survivor's benefit for life. If you have less than 10 years of creditable service, a lump sum settlement of your contributions and interest would be paid to your beneficiary( ies). 3. This section ofform TRS-2-B is used to designate your primary beneficiary( ies) and your secondary beneficiary( ies). 4. This section is used to name a "refund designee." At the death of the member prior to retirement and the subsequent death(s) of the member's beneficiary( ies), the refund designee would be paid any remaining amount of contributions and interest which had not been paid to the beneficiary( ies).

TRS Facts 1994-95 11

Beneficiary Forms TRS,2,C, TRS,2,D and TRS,2,E
The designations used on these beneficiary forms are valid until changed. (Any changes of beneficiary designation made after October 1, 1992, should be made by using form TRS-2-B).
NOTE: If your beneficiary(ies) is designated
on either form TRS-2-C, TRS-2-D or TRS-2-E,
your choice of form will determine if, at your death
prior to retirement, your surviving beneficiary(ies)
will receive a monthly benefit for life or a lump sum
settlement of your contributions and interest. Your estate may be named as beneficiary to receive a lump sum refund. Monthly benefits can be paid only to an individual.
Beneficiary Forms TRS,2,C (Blue) (Choice of Monthly Benefit or Refund)
Ifyou have atleast ten years ofcreditable service, completion of this form will provide your beneficiary a choice of either a refund of your contributions and interest or a monthly benefit for life. You may designate single or multiple primary and secondary beneficiaries. If you elect multiple beneficiaries, you may indicate the percentage of available benefits to be paid to each beneficiary. The total percentages paid to all beneficiaries must be 100% of the available benefits. If no percentages are designated, the benefits will be divided equally.

Beneficiary Form TRS,2,D (Yellow) (Refund Only)
Use of this form will provide only a lump sum refund of your contributions and interest to your beneficiary(ies) after your death. Single or multiple primary and secondary beneficiaries may be designated. When multiple beneficiaries are designated the percentage ofavailable benefits to be paid to each beneficiary should be indicated. The total percentage paid to all beneficiaries must be 100% of the contributions and interest in the account. If no percentages are designated, the contributions and interest will be divided equally.
Beneficiary Form TRS,2,E (Green) (Monthly Benefit Only)
By using this form, a member with at least 10 years of creditable service provides a monthly survivor's benefit to one or more beneficiaries. Single or multiple primary and secondary beneficiaries may be designated. When multiple beneficiaries are designated the percentage of available benefits to be paid to each beneficiary should be indicated. The total percentage paid to all beneficiaries must be 100% of available benefits. If no percentages are designated, the benefits will be divided equally.

The Plans Of Retirement

Which Plan ls Right?
When you apply for retirement benefits you must designate a plan of retirement on the application form. Your choice will determine if you receive the maximum benefit available to you or if monthly survivors benefits will be provided for someone after your death. Your decision is therefore very important. The chart below shows some of the advantages and disadvantages of each plan. A detailed description of each plan follows.

Plan of Retirement
A-Maximum B- Option 1 B- Option 2
B- Option3
B-Option4

Reduced Monthly Benefit
No Yes Yes
Yes
Yes

Monthly Benefit To Survivor
No No Yes, 100% of Retiree's Benefit Yes, 50% of Retiree's Benefit Yes, as Designated By Member

Pop-Up Option Available
No No Yes
Yes
No

Retiree May Change Beneficiaries
After Retirement
Yes
Yes No

Guaranteed Total of Member's Contributions
& Interest
Yes
Yes
Yes

No

Yes

No

Yes

12 TRS Facts 1994-95

The Plans Of Retirement
Plan A , The Maximum Plan
This plan produces the largest possible monthly ' benefit for you, the member, during your lifetime. At
your death, all monthly benefits stop. If your death occurs prior to your having been paid total monthly benefits equal to your accumulated contributions and interest in the system, the balance of your accumulated contributions and interest will be paid in a lump sum to the beneficiary(ies) designated on your application for retirement. In most cases, the total contributions and interest will be depleted within 18 months of retirement. If there are no surviving beneficiaries at the time of your death, any applicable refund would be paid to your estate. If you select the maximum plan of retirement, you may change your beneficiary designations after retirement.
Plan B , The Optional Plans
At retirement, you may select one of six optional plans.
Plan B , Option 1
In selecting Option 1, you accept a relatively small reduction from the maximum monthly benefit in order to guarantee to the estate or beneficiary( ies) named on the retirement application, a lump sum refund ofany remaining portion ofmember contributions and interest that are not used to pay the annuity portion of the monthly benefit during the member's lifetime. In most cases, the total contributions and interest will be depleted within 10 to 14 years after retirement. If you select Option 1, you may change your beneficiary designations after retirement.

The Survivorship Plans
If you want to provide a continuing monthly benefit, after your death to a survivor(s), you will want to select one of the survivorship options. If you select a survivorship option, the amount of your monthly benefit will be reduced actuarially to allow for the monthly payment for life, both to you, and then, after your death, to your designated beneficiary( ies).
If you select one of the survivorship plans of retirement you cannot change your designation of beneficiaries after retirement except as specifically provided by law (see "Changes... " on page 14).
Option 2
This option offers you a reduced monthly lifetime benefit based on your age and the age of your beneficiary. Option 2 guarantees that at your death, your named beneficiary, ifliving, will receive for life, the same monthly benefit you received at the date of retirement, plus any cost-of-living increases you received up to the time of death.
You may designate multiple beneficiaries to receive lifetime monthly benefits and specify the percentage of available benefits to be paid to each beneficiary. If you select two or more beneficiaries, and one beneficiary predeceases you, the percentage of available benefits you selected for the remaining beneficiary will not be adjusted. Should your beneficiary or beneficiaries predecease you, your monthly benefit will remain under Option 2 unless you elect to change your plan of retirement and/or beneficiary as provided by law. (see "Changes... " on page 14).
Option 2, Pop,Up
You may select a reduced retirement benefit to be
designated "Option 2 Pop-Up" which provides that if
the beneficiary dies prior to your death, your benefit will increase to an amount as though you had not selected a survivorship plan of retirement. Your cost for the Option 2 Pop-Up plan is an additional 3% reduction in the factor used to determine the cost of
Option 2. Under this option, you can designate only
one beneficiary.

TRS Facts 1994-95 13

Option 3
Option 3 offers you a reduced monthly benefit based on your age and the age ofyour beneficiary. The benefit is paid to you for life and guarantees that at your death, your named beneficiary, if living, will receive a lifetime benefit of one-half of the initial monthly benefit you received at the time of retirement, plus on:e-half of any cost-of-living increases you received up to the date of death.
You may also designate multiple beneficiaries under Option 3 and specify the percentage of available benefits to be paid to each beneficiary. If two or more beneficiaries are designated to receive monthly benefits, the total amount payable to all beneficiaries cannot exceed one-half of the initial monthly benefit you received at the time of retirement, plus onehalf ofany cost-of-living increases you received up to the time of death. Should your beneficiary( ies) predecease you, your monthly benefit will remain under Option 3 unless you elect to change your plan of retirement/or beneficiary as provided by law (see "Changes ..." on page 14).
Option 3 - Pop-Up
You may select a reduced retirement benefit to be designated "Option 3 Pop-Up" which provides that if the beneficiary dies prior to your death, your benefit will increase to an amount as though you had not selected a survivorship plan of retirement. Your cost for Option 3 Pop-Up plan is an additional 2% reduction in the factor used to determine the cost of Option 3. Under this option, you can designate only one beneficiary.
Option 4
This option allows you to specify a monthly amount - other than provided for in the other options - which will be paid to a beneficiary after your death.
You may also provide monthly benefits to multiple beneficiaries by designating a percentage of available survivors benefits to each beneficiary. The total percentages so specified cannot exceed 50% of your benefit calculated under the maximum plan. If multiple beneficiaries are designated and one or more beneficiaries predeceases you, the percentages are not adjusted. Beneficiaries also receive a pro-rata share of any cost-of-living increases the member received up to the date of death.
14 TRS Facts 1994-95

Changes in Plan of Retirement and Beneficiary Designation
If you select a survivorship option you cannot, after retirement, change your plan of retirement or your designation of beneficiaries except as specifically stated in TRS law. 1. If you have named your spouse to receive survi-
vors benefits after your death and your spouse predeceases you, you may change your plan of retirement and you may designate a different beneficiary. The resulting benefit would be of the same actuarial value as the benefit you were receiving prior to the change. 2. Ifyou have named your spouse to receive survivor's benefits after your death and you become divorced you may change your plan of retirement and you may designate a different beneficiary. The resulting benefit would be of the same actuarial value as the benefit you were receiving prior to the change. 3. If, after retirement, you terminate your retirement, become a member again and ultimately reretire you may select a different plan of retirement and designate different beneficiaries upon your re-retirement.

Estimate Your Maximum Benefit
By using this chart you can estimate your maximum monthly benefits if you can anticipate your allowable average monthly salary for your highest two consecutive years of service and your total number of years of creditable service. Notice that a change in TRS law in 1992 eliminated any reduction due to age for any member who had ' attained age 60 and who retired on or after July 1, 1992.

$1000
1200 1400 1600 1800 2000 2200 2400 2600 2800 3000 3200 3400 3600 3800 4000 4200 4400 4600 4800 5000

10 yrs service Age60
200 240 280 320 360 400 440 480 520 560 600 640 680
no
760 800 840 880 920 960 1000

20 yrs service Age 60
400 480 560 640
no
800 880 960 1040 1120 1200 1280 1360 1440 1520 1600 1680 1760 1840 1920 2000

25 yrs service Age 55
325 390 455 520 585 650 715 780 845 910 975 1040 1105 1170 1235 1300 1365 1430 1495 1560 1625

25 yrs service Age 60
500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200 2300 2400 2500

30 yrs service
600
no
840 960 1080 1200 1320 1440 1560 1680 1800 1920 2040 2160 2280 2400 2520 2640 2760 2880 3000

32 yrs service
640 768 896 1024 1152 1280 1408 1536 1664 1792 1920 2048 2176 2304 2432 2560 2688 2816 2944 3072 3200

All figures are rounded to the nearest dollar amount

35 yrs service
700 840 980 1120 1260 1400 1540' 1680 1820 1960 2100 2240 2380 2520 2660 2800 2940 3080 3220 3360 3500

40 yrs service
800 960 1120 1280 1440 1600 1760 1920 2080 2240 2400 2560 2720 2880 3040 3200 3360 3520 3680 3840 4000

TRS Facts 1994-95 15

At Retirement
This section briefly mentions several subjects you will need to inform yourself about as you prepare for your retirement. You are urged to contact the counseling division of the system for an estimate of your benefits and to discuss any questions you may have concerning the different plans of retirement.
How To Apply For Service Retirement
One of two specific application forms must be used depending upon the Plan of Retirement you select. Ifyou select either the Maximum Plan or Plan B, Option 1, you should complete form TRS-SRA-1. If you select either Plan B, Option 2, 3, or 4, you should complete form TRS-SRA-2. Your application for service retirement must be received in the system's office no later than the end of the month in which your retirement is to become effective and no earlier than 180 days in advance of the effective date of your retirement. The original ofthe two-part form must be sent to the office of the system and the yellow copy should be submitted to your last employer. The SRA1 and SRA-2 forms also contain information on the member's election to-withhold federal tax.
If you wish to designate more than one beneficiary, you should use form TRS-MB-1, Designation of Multiple Beneficiaries, along with the appropriate retirement application form. If used, it must accompany the application form, TRS-SRA-1 or TRSSRA-2. A Retirement Certification Report form TRS-8, must be completed by your last employer and submitted to the retirement system office. This report certifies to the retirement system that you have terminated your employment as of a specific date. It also serves as a verification of your last months of salary.

How To Apply For Disability Retirement
One of two specific application forms must be used depending upon the Plan of Retirement you select.
Ifyou select either the Maximum Plan or Plan B, Option 1, you should complete form TRS-DB-1. If you select either Plan B, Option 2, 3, or 4, you should complete form TRS-DB-2. Your application for disability retirement must be received in the system's office no later than the end of the month in which your retirement is to become effective and no earlier than 90 days in advance of the effective date of your retirement.
If you wish to designate more than one beneficiary, you should use form TRS-MB-1, Designation of Multiple Beneficiaries, along with the appropriate retirement application form. If used, it must accompany the application form for disability retirement, TRS-DB-1 or TRS-DB-2.
A "Statement of Family Physician" form, TRSDB-3, must be completed by your physician and submitted to the system's office. This form provides for detailed statements from your physician and must include information relative to your disability.
A Retirement Certification Report form TRS-8, must be completed by your last employer and submitted to the retirement system office. This report certifies to the retirement system that you have terminated your employment as of a specific date. It also serves as a verification of your last months of salary.
Upon receipt ofthe appropriate completed forms the Teachers Retirement System can process your application for disability retirement. In many instances, a second medical examination may be required. Ifsuch an examination is necessary, TRS will appoint a physician at its cost to perform the examination. Both medical reports are then submitted to the system's medical board which evaluates the reports and makes a recommendation to the Board of Trustees.

16 TRS Facts 1994-95

When Are Benefits Paid?
Your first retirement check will be processed on a "new retiree payroll" which is scheduled for the middle of each month. If your effective date of retirement is July 1, your first check will be scheduled 'for the end of July. If your properly completed application is received by TRS at least 30 days prior to your effective date of retirement and all your allowable service has been established, you should receive your first check during your first month of retirement. With the exception of your first check, TRS benefit checks are mailed the last business day of the month prior to the month for which payment is being made. For example, the February benefit checks will be mailed on the last working day of January.
You may have your benefit check mailed directly to your mailing address or to your financial institution for deposit to your account. You may also elect to have your benefits sent to your financial institution by electronic transfer.
The State Health Benefit Plan
If you are eligible and wish to participate in the State Health Benefit Plan after retirement, you should complete an enrollment and payroll authorization form prior to your retirement. The completed forms are to be submitted by your employer to the office of the State Health Benefit Plan, not to the TRS office.
The Teachers Retirement System will deduct the monthly premium from retirement checks for only those retirees whose enrollment forms have been approved by the State Health Benefit Plan. TRS does not determine eligibility for participation in the plan and does not provide information on the filing of claims. Specific questions should be addressed to: State Health Benefit Plan, Twin Towers West, Room 512, Atlanta, GA 30334.

Taxes
Federal Income Tax As a result of passage of the Tax Reform Act,
effective July 1, 1986, a major portion (usually 9598%) of your benefits received from the Teachers Retirement System are subject to federal income tax, beginning with the first check. The calculation of the exact taxable amount and the monthly exclusion is made during the regular processing of the retirement application. This calculation is based on IRS tables and regulations and your age. Once the total of monthly exclusions equals the total of taxed contributions made to TRS (contributions to TRS after 7/1/87 have not been taxed), the full monthly benefit is subject to federal tax.
Federal law also requires automatic withholding of income tax from the taxable retirement benefit unless you elect no withholding. The election of withholdings is made on the application for retirement or with an IRS form W-4P, obtainable from IRS or the TRS office. The Teachers Retirement System is required to remind you that if the election is made not to have tax withheld from the retirement benefit, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if withholdings and estimated tax payments are not sufficient.
Shortly after the first of each calendar year, you will be mailed a completed IRS form 1099R, showing the benefits paid, the taxable amount and any taxes withheld for the preceding calendar year. This 1099R, along with information sent with your first retirement check, is for your use in filing your annual federal income tax return.
State of Georgia Income Tax As a result of legislation passed in 1989, the
monthly benefits from Teachers Retirement System of Georgia are no longer exempt from Georgia income tax. The effective date of the taxation was January 1, 1989. The Teachers Retirement System will withhold Georgia income tax from your monthly benefits upon receipt of a properly completed form G-4, Employees Withholding Allowance Certificate. The form 1099R which is sent to you shortly after the first of each calendar year will also show the amount of any withholdings for State of Georgia income tax.

TRS Facts 1994-95 17

Cost Of Living Increases
Cost of living adjustments, based on increases or decreases in the Consumer Price Index, are granted to eligible retirees of the system. The increases can amount to as much as 1 1/2% each six months compounded. However, a 1 1/2% increase is not an automatic increase - it can be less. Cost of living adjustments are paid in January and July of each year. Beneficiaries of deceased retired members who receive a continuing benefit will continue to receive cost-of-living adjustments that the retired member had been receiving, and will receive additional adjustments in January and July of each year. If you retire under the provisions of Act 1313, Senate Bill 92 of 1992, you will become eligible for cost-of-living increases after reaching age 60 or after you would have obtained 30 years of creditable service whichever occurs earlier.
Social Security Offset
If you do not have your own Social Security coverage but will qualify for Social Security benefits as a result of your spouse's Social Security coverage, the Social Security Administration will reduce your Social Security benefits $2 for every $3 you are receiving from another governmental retirement system - such as the Teachers Retirement System of Georgia.
If any of your present or future Social Security benefits will be subject to this "offset" provision you may want to give additional consideration to a survivorship plan of retirement when you retire with the Teachers Retirement System of Georgia. While such a plan would reduce your own TRS monthly benefit, you would be providing a continuing benefit to a survivor and in some cases the reduction would be balanced in part by a smaller reduction in Social Security benefits. Ifyou have questions regarding this matter, you should contact your Social Security Office. The benefits you may receive under Social Security in no way affect your benefits from the Teachers Retirement System.

Work Restrictions
Teachers retired on service retirement may engage in substitute teaching in Georgia without suspension or reduction of the retirement benefit provided the compensation is as a substitute teacher. Private school teaching, out-of-state public school teaching, working in private industry, or employment by a Georgia state agency will not affect the retirement benefit of service retirees. A retiree who retired under service retirement may also elect to return to service as a classroom aide, provided the service is less than full-time. In such a case, the classroom aide will continue to receive retirement benefits and any post retirement benefit adjustments granted, if any, during such part-time work. However, the employment will not count as creditable service and the retiree will not be entitled to a recomputation of retirement benefits upon cessation of the part-time service.
Teachers retired on disability retirement may also engage in the same types of work as those on service retirement. There is a restriction on the amount ofmoney the disabled retiree may earn. Ifthe disabled retiree's salary in any new job is more than the difference between the benefits from TRS under disability retirement and the current rate ofcompensation for the position the retiree held at the time of retirement, it will affect the TRS benefits. Specifically, a disabled retiree's benefits from TRS may be reduced so that the retirement benefit plus the salary earned in the new job would not exceed the current rate ofcompensation for the position held at the time of the disability retirement.
In order to prevent any jeopardy to retirement benefits, the retiree has the responsibility ofnotifying TRS of his or her after-retirement employment. A disability retiree must report all employment and salary to TRS. A service retiree along with the employer must report any employment with a TRS reporting agency prior to such employment. A member who is retiring and plans to engage in some form of employment with a TRS reporting agency immediately after retirement must coordinate such activity with TRS and the employer in advance of the anticipated effective retirement date. Failure to comply with TRS law and policies may result in loss of' retirement benefits.

18 TRS Facts 1994-95

At Termination .,
'Withdrawing Your Funds
If your employment with your school system is
terminated, you may withdraw your accumulated contributions, including all interest credited to your account. Upon receipt of a completed application (form TRS-13) your refund will be processed after the effective date of your termination from employment. Partial refunds of contributions and interest are not permitted.
Refunds are subject to federal and Georgia income taxes. Refunds made to members under age 59 are also subject to Federal excise tax of 10% of the amount that is considered income.

Your Annual Statement
A comprehensive statement of your account is prepared for each fiscal year in which retirement contributions were reported for you by your employer. The statement shows the amount of interest, currently at the rate of 4 1/2 %, credited to your account on June 30, based on your account balance on the previous June 30. Your statement also shows contributions reported, a summary of membership service, purchases of service, total creditable service, and your beneficiary designations.
Your statement is distributed through your employer, usually in October of each year. You are urged to read your statement carefully each year, keep it in your financial records, and contact the TRS office in writing concerning any questions you have about your statement.

This booklet is presented with the compliments of the Teachers Retirement System ofGeorgia. Its purpose is to explain the benefits and requirements of the system in a simple and factual manner. Of necessity the subjects discussed cannot be complete in every detail and cannot, through any error or incompleteness of statement, restrict lawful powers of local boards of education or the Teachers Retirement System nor be in conflict with the Teachers Retirement System laws. Federal laws which affect organizations such as the Teachers Retirement System take precedence over state laws.
TRS Facts 1994-95 19

TRS ADMINISTRATIVE STAFF

Jeffrey L. Ezell Deputy Executive Director

Stephen J. Boyers Controller

Charles W. Cary, Jr. Director
Investment Services Division

Susan E. Garrett Manager
Refund & Service Division

Dianne J. Rogers Manager
Retirement Division

Phil Rogers Manager
Counseling & Information Division

20 TRS Facts 1994-95

TEACHERS RETIREMENT
SYSTEM OF GEORGIA

,.

SUITE 400, COUNSELING DIVISION , 5TH FLOOR

TWO NORTHSIDE 75

ATLANTA, GEORGIA 30381,7901

TELEPHONE 404-352-6500 GIST 271-6500 TOLL FREE (GA. ONLY) 1-800-352-0650
FAX 404-352-4885

I

X Two Northside 75 Exit 104, I-75 Free Parking