Frequently Asked Questions About Pension
Sep 28, 2005 10:25 AM
Frequently Asked Questions About Pension
1. What is a TDA? The Tax Deferred Annuity (TDA) Program is authorized under Section 403(b) of the Internal Revenue Code and is available to members of BERS in education service. Under this program, members can save money to supplement both their Social Security and Qualified Pension Plan (QPP) benefits on a tax-deferred basis.
2. What is the fixed rate on TDA? How low can it go? The Fixed Program offers you a guaranteed annual rate of return on your investment set by New York State legislature. Currently the annual rate is 8.25%. The New York State Constitution states that the fixed rate cannot be lower than 7%.
3. Explain the 2 types of disability?
Ordinary Disability Retirement Eligibility:
- You are eligible to receive Disability Retirement Benefits at any age, provided that the following apply to you.
- You notify BERS in writing that you request disability retirement; and
- after a medical examination, the Medical Board finds that you are physically or mentally incapacitated for the performance of gainful employment, and, if you were so incapacitated when you ceased performance of your duties; and
- you have 10 or more years of credited service unless your disability is a result of a job-related accident.
Accidental Disability Retirement Eligibility:
- You can retire with less than the 10 years of credited service normally required only if the Medical Board determines that your disability is indeed the result of an accident you suffered while performing your job, and that said accident is not a result of your own willful negligence. Also, the accident would have to have occurred while you were a member of BERS. An Accident Disability is not subject to any taxation.
4. What are the rules to be vested in pension and in health benefits? You need 5 years of credited service to vest your pension. Vesting means you have acquired the right to receive the benefits specified by a retirement system’s particular retirement program. In order to receive Health Benefits you need ten years of credited service if you started your employment after December 27, 2001. If you were an employee of the City prior to December 27, 2001, you must have at least 5 years of credited service.
5. What are the benefits of joining the retirement system? In addition to collecting a retirement allowance and having a health plan (see above), as a member of a retirement system your family may be eligible to collect a death benefit should you die in service. You are also eligible to borrow against your pension. Also, if you become disabled you may be eligible for a disability retirement. If you did not join a retirement system, there would be no health plan when you separated from service.
6. How do you contact BERS? BERS can be reached by telephone at (718) 935-5400. They are located at 65 Court Street, Brooklyn, New York 11201.
7. What is a membership service deficit? Membership Service is the service rendered (that is, work performed) after you joined BERS; and it includes all service while you were on the payroll in a position that either required you to join BERS or allowed you to join BERS). If you were a member of BERS and money was not deducted, you must make up the deficit that accrued with interest.
8. What is buying back time? You may buy back service prior to your membership in BERS, once you have 2 years of membership in BERS. If you want to receive credit for previous service – whether full-time or part-time – you must submit a completed Prior Service Application form to BERS and, you must pay for such credit. The cost to purchase credit for previous service is equal to 3% of the wages you earned during the period(s) of prior service that you are claiming, plus 5% annual compound interest.
9. How do you compute part-time service for pension credit? For occupational and physical therapist, 1470 hours equate to a year of service.
10. Are there differences between TERS and BERS regarding maintenance of medical benefits when you retire? NO.
