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By now you have heard about the mayor’s suggested new pension plan that would:
- Raise employee contributions to 5 percent of salary for every year of service
- Make regular service retirement payable at age 65 at the rate of 1.67 percent times years of service times final average salary
- Call for early reduced retirement at age 55 with 10 years of service (the reduction is 5 percent reduction for each year younger than age 65)
- Take away the cost-of-living adjustment after retirement
- Change the interest rate on the Tax-Deferred Annuity fixed account from the current 7 percent to 0 percent (that’s right) going forward.
Yes, we have our work cut out for us, but with your support, we will prevent these draconian changes.
When you are making your arguments on why we should preserve our pension plan, you should make sure that you stress that pensions are not paid out of general operating revenues of the city, but out of a trust fund that both employees and the employer contribute to and which is invested for growth. The investment growth pays for most of the pension.
As we said last time, recent investment gains are starting to pay off the losses suffered from November 2007 to March 2009 by the stock-market crash that was caused by manipulation of the investment markets by Wall Street.
Pension plan provides death benefit
In the Jan. 20 issue, we wrote of the advantage of a defined benefit plan that provides income protection if a member becomes disabled and unable to work until retirement age.
Our pension plan also provides protection in case a member passes away while in-service. The pension fund provides a benefit for beneficiaries.
We will describe the benefit payable to beneficiaries that covers most of our members. The actual benefit that you are entitled to is listed in your Annual Benefit Statement. The beneficiaries that you have named to receive your death benefit are listed in both your Annual Benefit Statement and each Quarterly Account Statement you receive.
If you don’t have beneficiaries listed, any benefits due will be paid under the provision of the New York State estate laws. This will cause long delays and legal problems for your loved ones at a time of great loss. You must check to see whom you have listed as your beneficiaries. If the person listed is no longer appropriate, it is quite easy to request a change of beneficiary form from the Teachers’ Retirement System or the UFT and make the change.
If you are like most people, you probably do not want a large sum of money to be paid to your former spouse if you die in service. This is what would happen if you do not officially change your beneficiary at the Teachers’ Retirement System. If you are one of the thousands of members who have no beneficiaries on file, you can also request the required form from the Teachers’ Retirement System or the UFT.
You must have two separate forms on file: one for the qualified pension plan and one for the Tax-Deferred Annuity. As of Feb. 8, more than 30,800 members have no designation of beneficiary for their qualified pension plan and more than 8,800 have none for the Tax-Deferred Annuity.
Death benefit for in-service members
The Teachers’ Retirement System Death Benefit is equal to:
- one year’s salary upon the completion of one year’s credited service;
- two years’ salary upon the completion of two years of credited service; and
- three years’ salary upon the completion of three or more years of credited service,
For members on maximum salary, this could be more than $300,000.
When an in-service member reaches age 61, the benefit is reduced by 5 percent per year until retirement. This design is very protective providing more coverage for younger members who have not had the chance to build up their Tax-Deferred Annuity accounts and less coverage for those members who have had the opportunity to build up their Tax-Deferred Annuity accounts and other assets. About 125 in-service members unfortunately pass away each year. More than 25 percent of them had no designation of beneficiary on file.
This benefit continues in effect even after retirement with a residual benefit beginning with the third year of retirement and thereafter with 10 percent of any benefit payable at age 60 or 10 percent of the benefit payable at the time of retirement if the member retires before age 60.
Accidental death benefit
If a member dies in service before the effective date of retirement as the natural and proximate result of an accident in the line of duty that was not caused by the member’s willful negligence, the beneficiary will receive an accidental death benefit in the form of a pension equal to 50 percent of the regular compensation earned during the final year of actual service.
An application must be filed within 60 days of the death.
Beneficiaries for accidental death benefits are prescribed by law in the following order:
- A surviving spouse who has not renounced survivorship rights in a separation agreement and has not remarried.
- Surviving children until age 25.
- Dependent parents under regulations determined by the Teachers’ Retirement System.
- Any other person who qualified as a dependent on the member’s posthumous federal income tax return or the return filed in the year immediately preceding death until such person reaches age 21.
There are different types of insurance protection for retirees. In a future column we will describe them.
Social Security privatization
As if we didn’t have enough to do to protect our pensions, the Republicans in Congress are again bringing up Social Security changes like privatizing it, raising the retirement age and cutting the benefits. Good thing UFT retiree and former middle schools vice president Richie Miller, the current vice president of the Nevada branch of the Alliance for Retired Americans, worked tirelessly to re-elect Senate Majority Leader Harry Reid.
Sen. Reid told the Republicans that cuts to Social Security are “off the table.” By the way, Rich is leading the Nevada Alliance for Retired Americans in efforts to block a large tax increase being pushed by Nevada Gov. Brian Sandoval on real estate owned by seniors.
Latest statistics available show that more than 300 Teachers’ Retirement System retirees live in Nevada.
Newly appointed members
The Teachers’ Retirement System Welcome Kit (plan description, enrollment beneficiary forms) has been distributed to 2,981 of the system’s new members. For uninterrupted and complete coverage of the many benefits of our pension plan, file the enrollment form and beneficiary forms recently sent to you. Your reward will be protection of your in-service benefits during your career and a secure retirement in the future.
Quarterly Account Statements
Statements began to be mailed in early February to about 109,000 Teachers’ Retirement System members. If you haven’t received yours yet, contact the Teachers’ Retirement System.
“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.
What is your favorite movie about a teacher?
Dead Poets Society
Stand and Deliver
Mr. Holland's Opus
Total votes: 658