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TRS Tax-Deferred Annuity Program

TDA Season Is Here

Fall has arrived and that means it’s enrollment season for the Tax-Deferred Annuity (TDA) Program once again. TDA is the supplementary investment program offered by the Teachers’ Retirement System (TRS) of the City of New York.

You can learn all the information you need about TDA by visiting the TRS web site at www.trs.nyc.ny.us. By using the site's “My TRS Account” section, you can also view your account information. If you sign up for Full Access to the “My Account Section” you will also be able to enroll in TDA, make changes in investment choices, change your contribution rate and even apply for TRS loans.

Of course, you still have the option of getting account information and ordering forms by phoning the TRS Service Line at 1-888- 8-NYC-TRS — that is, 1-888-869-2877.

What is a TDA?

The TDA Program enables you to save money for retirement on a tax-deferred basis. You make contributions to the program through payroll deductions that are taken before income taxes are deducted. This reduces your taxable income, thereby lowering your current tax expense.

Another tax advantage is that earnings on your TDA investments are not taxed until your TDA funds are actually distributed to you. And, you can use TDA funds to purchase credit for prior service.

Here's a summary of the key TDA rules:

  • TRS members can enroll in the TDA program at any time. To do so, you must file a TDA Enrollment Form (TD1) and a Designation of TDA Beneficiary Form (EN8). To open a TDA account online, click on TRS’ TDA Program on the TRS home page.
  • Newly appointed members will receive a TDA Enrollment Form along with a Welcome Kit from the TRS.
  • Under the TDA automatic re-enrollment feature, current TDA contributors do not have to file anything to continue contributing in 2008 under their current contribution rate elections (although the rate may be adjusted in some cases).
  • However, TDA participants may change their contribution rate by filing the TDA Contribution Rate Change Form (TD4) or by using the TDA Contribution Rate Change option in the “My TRS Account” section of the Web site. Changes received by Nov. 30 will be processed for January.
  • Participants can elect a “maximum” TDA contribution rate or elect to contribute a specific percentage of their salary. If they elect “maximum,” their TDA contribution rate will automatically be adjusted to their maximum contribution rate in future years.
  • Your maximum contribution rate for the next calendar year will be included in your Annual Benefits Statement (ABS), which is scheduled for release in October. The IRS has not established contribution limits for 2008, so the TRS has calculated maximum contribution rates based on the limits for 2007.
  • Based on the rules for 2007, members under age 50 may contribute up to $15,500 to their TDA in 2008. Members age 50 or older may contribute up to $5,000 a year in “catch-up” contributions over the maximum contribution amount in 2008. Members of any age who have at least 15 years of service and who have contributed an average of $5,000 or less to the TDA per year may contribute even more. They may add up to $3,000 a year in “catch-up” contributions, up to a total of $15,000 over one’s career. These maximum amounts are reflected in the percentage shown on your ABS.
  • To change the way their future contributions and/or past accumulations are invested, TDA participants may file the TDA Investment Election Change Form (TD45) or use the TDA Investment Election Change option in the My TRS Account section of TRS’ Web site. This change can be made quarterly by the first of the month preceding the quarter in question.Reminder: You must sign up for Full Access to “My TRS Account” for this option.
  • If you are eligible for automatic re-enrollment but do not wish to contribute in 2008, file a TDA Contribution Rate Change Form (TD4) or use the TDA Contribution Rate Change option in the “My TRS Account” section of TRS’ Web site. If you want your contributions to stop as of Dec. 31, 2007, TRS must receive your election by Nov. 30, or use the TDA Contribution Rate Change option in the “My TRS Account” section of the TRS Web site.
  • TDA participants who are not currently contributing to the TDA program must file a TDA Contribution Rate Change Form (TD4) to resume making TDA contributions in 2008 or use the TDA Contribution Rate Change option in the “My TRS Account” section of TRS’ Web site.
  • To get forms, call the TRS Service Line at 1-888-8-NYC-TRS, go to the TRS Web site or phone your UFT borough office.