It’s a good time to review your pension
The start of a new school year is a good opportunity to review the basics of membership in the Teachers’ Retirement System (TRS) or the Board of Education Retirement System (BERS).
Through your membership in the UFT, you are lucky to count yourself among the minority of Americans who still have a traditional pension. This defined-benefit pension is a hallmark of union benefits that helps to provide a secure retirement after years of work. It is an asset the UFT fiercely defends.
Department of Education-employed UFT members receive a retirement allowance provided through the Qualified Pension Plan. Once you meet certain age and service requirements, you are eligible for a defined-benefit pension that provides a steady lifetime income unaffected by the ups and downs of the financial markets.
The Teachers’ Retirement System celebrated its anniversary on Aug. 1, marking 106 years of serving New York City’s education professionals. Over the years, TRS has grown into one of the largest pension systems in the nation, serving more than 220,000 in-service members, retirees and beneficiaries.
TRS membership is automatic for all regularly appointed teachers, school secretaries, school counselors, other pedagogues and paraprofessionals who are appointed. Other DOE employees represented by the UFT — including physical therapists and occupational therapists, school nurses, per-diem teachers and long-term substitute teachers and substitute paraprofessionals — are eligible to join BERS.
New hires will receive a welcome letter this fall with instructions on how to fill out the enrollment application and the designation-of-beneficiary form and how to send their proof of date of birth to the pension system.
UFT members contribute to their defined-benefit pension plan through automatic paycheck deductions. Contribution rates are determined by your pension tier, which reflects when you joined the pension system.
Hand in hand with the pension plan is the optional Tax-Deferred Annuity (TDA) program that the two pension systems have. With the TDA program, members can build additional retirement income during their working years.
As its name implies, the TDA program enables participants to save money while deferring the payment of federal and local income taxes. Contributions to the TDA program are subtracted from your pay before taxes, which means a lower tax bill today. Those same contributions have years (maybe decades) to grow before you retire, so you’ll be building wealth for your retirement years.
To enroll in the TDA program, you must file a separate enrollment application and a separate designation-of-beneficiary form.
TRS and BERS also offer loans from both the Qualified Pension Plan and the TDA.
Disability retirement benefits are available to in-service members who meet certain requirements, and all members are covered by a death benefit for survivors if the member dies.
This column is compiled by Tom Brown, David Kazansky and Victoria Lee, teacher-members of the NYC Teachers’ Retirement Board.