Secure Your Future

Social Security makes the news again

Jun 4, 2009 4:11 PM

VARIABLE ANNUITY
The unit value is computed during the latter part of each month. Recent values are:
	VARIABLE A	VARIABLE B
March	35,364	19,483
April	37,951	19,477
May	41,505	19,466

The economic downturn has led to a worsening of the long-range Social Security financing outlook. The Social Security trustees report that the Social Security Trust Fund that pays for old age, survivors and disability insurance will be exhausted in 2037. This is four years sooner than was expected in 2008, before the economic downturn.

The trust fund in 2008 grew by $180 billion to a total of $2.4 trillion. Income to the Trust Fund came from contributions from about 162 million working people, interest on the Trust Fund investments and taxation of benefits received by the highest-earning recipients.

Expenditures from the trust funds amounted to $625 billion in 2008.

Experts tell us that even though Social Security took in fewer contributions due to the recession, Social Security still has enough money to pay full benefits without any changes until at least 2037. After that date with no changes, the system will be able to meet about 75 percent of its obligations.

Moving out of the recession and to a more normal economy will add funds and many experts believe that alone will be sufficient to meet all future obligations.

Discussions are ongoing as to whether anything has to be done to ensure the long-term solvency of the system. One thing you do not hear about now is a call for Social Security privatization. Can you imagine what would have happened to individual private Social Security accounts if the Bushites had won the debate? By the way, the Social Security system’s investment in special issue Treasury Bonds earned 5.1 percent in 2008 compared to the tremendous decline of most account balances in privately invested retirement accounts.

A great huzzah should be paid to the system. While paying out $625 billion and taking in $805 billion dollars, it only cost .9 percent of total expenditures to administer the system. Do not let anyone tell you that private, profit-motivated industry is more efficient than government in providing services. The average cost of running a privately run insurance company is in the double digits.

Social Security has some good news and some bad news for recipients in 2010. The good news is that because of lower prices especially in energy there was low to no inflation in the period measured for the COLA for 2010. The bad news is that for the first time in over 30 years a COLA based on the CPI will not be given.

If any changes have to be made to ensure the long-term solvency of the Social Security system, these changes would only be minor. Tweaking the system to make up either in savings or in additional contributions — 1 percent in the employer share and 1 percent in the employee share — is all that is needed.

The Medicare Trust Fund Part A that is set aside to pay for hospital-related expenses is in worse financial condition than is the Social Security Trust Fund. Experts say this problem will not be resolved until health care costs are brought under control.

The Obama administration has made the control of health costs one of its primary goals.

TRS account information online

In early June, the Teachers’ Retirement System will make obtaining secure access to the MY TRS Account section of its Web site easier.

The My TRS Account site provides a safe and secure online environment for viewing your account information and, depending on your tier and membership status, it can be a resource for:

• enrolling in the tax-deferred annuity;
• changing your TDA rate or investment elections;
• applying for a loan;
• viewing or calculating estimated retirement allowance benefits;
• calculating service purchase amounts;
• calculating tax withholding amounts; and
• registering for TRS’ educational programs.

Planning to retiree in the next year or two?

You worked hard this year and some of you are thinking of retiring in a year or two. The UFT’s Pension Clinic is designed for you. [See lower left for dates and times.] Though clinics are scheduled throughout the year many people find the best time to participate is in the summer. Check for the dates on this page, and plan your summer around the clinics.

The clinic is designed for the members who are two or three years from retirement. It is a mini-course on your retirement plan. You can use part of the summer to think further about securing your future.

Topics covered include:

• how to calculate an estimate of your Qualified Pension Plan retirement allowance;
• the TRS’ investment program;
• the TDA program;
• optional forms of retirement allow­ance;
• lump-sum withdrawals;
• terminal leave and termination pay; and
• retiree health insurance and Welfare Fund benefits.

No one should retire without participating in at least one series of Pension Clinics. Many members attend more than once. No registration is required. Do yourself a huge favor and take some time to prepare for a financially secure retirement.

Late-breaking news for retiring members

We were again able to arrange for the Department of Education Health Insurance Unit to set up temporary headquarters at the TRS office at 55 Water St., Manhattan. The unit will be at TRS between June 4 and June 26 from 9 a.m. to 4:30 p.m. to accept the retiree health insurance form (ERB). This will save members a trip to 65 Court St. in Brooklyn to hand in their ERB.

To make this process as stress-free as possible, members must:

• have a completed ERB form with them;
• have a receipt that they handed in their retirement application;
• retirees 65 or older should have applied at Social Security for Medicare Part A and B and submit the awards letter if they have not yet received the Medicare card.
• If adding a spouse, domestic partner or dependent, you must have a marriage certificate, domestic partner registration or birth certificate for children.

Members who plan to hand in their retirement application on other days, or who cannot complete the filing of the ERB at TRS must bring their ERB form and other necessary documents to the Health Insurance Unit offices at 65 Court St.

“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.