Secure Your Future

Take care of yourself — it’s earlier than you think

Mar 1, 2007 2:57 PM

You have probably heard the old saying, “If I knew I was going to live this long, I would have taken better care of myself.” Maybe more of us should take it to heart. We are living longer, fortunately, but that also means planning for a longer retirement.

Annually, we give you a report on the longevity statistics of our retirees — what you have to look forward to. On Dec. 30, there were 69,192 retirees collecting a traditional Qualified Pension Plan retirement check. There were 4,267 members collecting a tax-deferred annuity second check. Both the QPP and the TDA checks are paid for the life of the retiree and can never run out as long as the retiree is alive. By the way, the total dollars paid out in QPP and TDA checks for the month of December was almost a quarter of a billion dollars.

Economic security and good health are a great combination. So let’s look at the longevity of our retirees:

• Octogenarians — 10,086, or 14.6 percent of retirees, are 80 or over — that’s one out of seven;
• Nonagenarians — 2,584, or 3.7 percent of retirees, are 90 or over — one out of 23; and — drum roll:
• Centenarians — 86, or .12 percent, are 100 or over — one out of 805 (the oldest are two retirees age 107!).

If this doesn’t show the immense value of a defined benefit (DB) pension plan that guarantees an income for life, what does? Add to this an excellent health insurance plan and the current Social Security system (a form of DB plan) and you have the finest retirement financial security available.

TDA

You know how we feel about the TDA as an excellent supplement to the QPP. It’s the best invention since the wheel. It gives you an opportunity to save on current taxes, which is like an interest-free loan by the government so that you can invest more funds to add to your retirement security. It allows the investment you make to grow, while deferring current taxes on your investment gain, so that you can build up a large lump sum of money to use as you wish in retirement.

This program made available through the political strength of the UFT is almost unique in the country. It is one of about six TDA programs actually sponsored and run by a retirement system. The Teachers’ Retirement System, with a lot of UFT input, has produced a program so appealing that the rate of participation by TRS members is twice that of the typical TDA plan available to teachers in thousands of school districts in America.

The program is popular with young members age 24 or under, 23.9 percent of whom contribute, as well as those eligible to retire age 55 or older, 76.7 percent of whom contribute. More than 90 percent of those retiring have such confidence in the program that, despite the barrage of vendors trying to talk them into removing their funds, they leave the TDA with the TRS for continued investment.

As of Dec. 31, the value of the TDA accounts invested by TRS was more than $14.5 billion. If you are not participating, you should strongly consider doing so.

Several years ago, the UFT had legislation enacted which eliminated the 3 percent QPP deduction after the completion of 10 years of membership or credited service. Many members, who had not contributed to the TDA before, began to contribute when their required contributions stopped. If you are in this category, you can — with no pain — become a TDA contributor and build a more financially secure future.

Beneficiary /proof of date of birth

TRS statistics still show very high numbers of members who have not returned Designation of Beneficiary forms, nor have they filed date-of-birth documentation.

Members’ beneficiaries are put in jeopardy if a member dies and no designation of beneficiary is on file. Two designation forms are needed — one for the QPP and a second for the TDA. In a future issue we will again describe this valuable protection.

Pension benefits depend greatly on the age of the retiree and frequently on the age of a beneficiary as well. The TRS must have proof of your date of birth in order to provide you with accurate, prompt service when you collect a TRS benefit. It cannot do this unless you file date-of-birth documentation. Acceptable documentation includes:

• birth certificate
• passport; or
• naturalization document.

A photocopy is acceptable.

If none of the above is available, then two of the following items are required (photocopies are acceptable):

• affidavit of older relative
• baptismal certificate
• certificate of military record
• driver’s license
• government-issued identification; or
• life insurance policy.

 

“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.