Secure Your Future
On the brink of retirement? Things to do and decisions to make
Mar 15, 2007 2:34 PM
July is the month when UFT members most commonly retire. The second-most-common retirement period is after the completion of summer-session programs. If you plan to retire during July or August, now is the time to make an appointment for a final pension consultation. Call the UFT at 1-212-598-6866 to set up this once-in-a-career meeting. An early call for the next available appointment will ensure an appointment at the UFT office of your choice.
We suggest that for this life-changing event you bring your spouse or trusted friend to the consultation. The information that you receive will help you make the most appropriate decisions on retirement matters.
The final consultation will include:
- an estimate of your retirement allowance;
- a discussion of lump-sum distributions you may take (excess funds, loan);
- a discussion of your TDA account;
- an overview of retiree health insurance including SHIP and Welfare Fund benefits;
- guidance on filling out required forms;
- an explanation of taxation of your retirement allowance;
- a description of UFT services for retirees; and
- answers to any last-minute questions you may have.
Termination Leave and Termination Pay
Before your retirement date, you must decide whether to take either Terminal Leave or Termination Pay. A Terminal Leave is an extension of service equal to one day for every two days in the Cumulative Absence Reserve (CAR). It is available for people who are eligible to retire or will be eligible by the end of the leave.
Why do some people take Terminal Leave?
- to reach age 55 if they are under age 55 when the leave begins;
- to reach a service goal such as 20, 25 or 30 years;
- to try to see if the lifestyle of a retiree agrees with you — a member may return to service instead of retiring except in January or June and can resume service by filing an application;
- to gain more service credit (minimizing any actuarial reductions for early retirement by getting closer to age 62, if you have fewer than 30 years of service);
- to maintain in-service health insurance and Welfare Fund programs longer; or
- to earn increased pro-rata summer pay.
You cannot participate in per-session activities while you are on Terminal Leave.
Termination Pay, on the other hand, provides a member with a lump-sum cash payment of 1/200th of a year’s pay times half the number of days remaining in the CAR at retirement. Payment is made in three annual lump-sum payments after retirement.
By taking Termination Pay, you collect your pension and an additional sum.
You should discuss your individual situation with a pension consultant. In order to take a Terminal Leave, you must apply one calendar month before the leave begins. For a leave to begin on the first school day of the year, you must apply by June 1. To collect Termination Pay, you should file an application at your payroll school when you retire.
9/11 legislation
Tier III/IV members who worked in the World Trade Center rescue, recovery or cleanup operations between Sept. 11, 2001, and Sept. 12, 2002, may file a “Notice of Participation” (code D140) with the Teachers’ Retirement System. The “Notice of Participation” serves to inform the TRS that, due to your participation in those operations, you believe that you have developed or may develop a disabling health condition. The TRS must receive the “Notice of Participation” by June 14. Access the TRS Web site at www.trs.nyc.ny.us to obtain both an information sheet and a “Notice of Participation” form. Legislation for Tier I/II members will be introduced in the current Legislative session.
Important TRS reminders
It’s March 15, do you know who your TRS beneficiary is? Thousands of members still have not filed beneficiary forms. You must file a form to protect the interest of your beneficiaries.
The Pension Protection Act of 2006 is being carefully studied at the TRS. This act permits non-spouse beneficiaries to transfer Qualified Pension Plan or tax-deferred annuity death benefits to an inherited IRA account. The TRS is working on putting this new provision into effect. We will update you when more is known. TDA Beneficiary accounts will be covered by this new law.
You should have received your 4th Quarter 2006 Quarterly Account Statement. If you did not receive it, check with the TRS because it may not have your current address.
“Secure your future” is compiled and written by Mel Aaronson, Sandra March and Mona Romain, teacher-members of the NYC Teachers’ Retirement Board. For further information on items discussed, call your UFT borough office or the TRS. BRONX: 1-718-379-6200; BROOKLYN: 1-718-852-4900; MANHATTAN: 1-212-598-6800; QUEENS: 1-718-275-4400; STATEN ISLAND: 1-718-605-1400; Teachers’ Retirement System: 1-888-8NYC-TRS (692-877), www.trs.nyc.ny.us.
