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Planning to retire in June?

Here are the steps you need to take
New York Teacher
Elderly man and woman sitting next to each other smiling while woman speaks on the phone

Many UFT members choose to retire when the school year ends. Whether you’ve already decided or are still on the fence, the virtual pension clinics sponsored by the UFT pension department — and presented by UFT special pension representatives Frank Panebianco, Victoria Lee and Christina McGrath — are a font of information. They couldn’t be more convenient, and we suggest you attend the clinic for your pension tier. 

In the meantime, here is some information to get you started if you are planning to retire in June:  

Credit for prior service

Purchasing additional credit for prior service may increase the amount of your service retirement allowance.  You can find out from your most recent Annual Benefits Statement (ABS) or a recent Total Service Letter from the Teachers’ Retirement System whether you have any service credit available to purchase. Contact the Board of Education Retirement System (BERS) for that information if you are a member of BERS.

Your TDA

If you have a TRS or BERS Tax-Deferred Annuity (TDA) program account, you can choose one of these three options

  1. annuitize your account and receive an additional monthly payment
  2. roll over (or withdraw) your TDA funds
  3. elect TDA deferral status and leave your account with TRS or BERS

If you choose the third option, you’ll have full access to the funds for loans and withdrawals and won’t be required to receive distributions from the account until you reach age 72. 

Pension loans

You may pay off any outstanding Qualified Pension Plan (QPP) loan balance you have before you retire.  You also have one last opportunity to take a new loan from your Qualified Pension Plan. However, any outstanding loan balance at retirement will reduce your monthly retirement allowance.

Your beneficiaries

The welfare of your loved ones is obviously a major concern. Your retirement payment option may provide for one or more beneficiaries in the event of your death, but you may also have other benefits that require designating beneficiaries.  For example, a post-retirement death benefit applies for most members, and there is a “fractional” benefit based on your retirement allowance payment for the month in which you die.

Direct deposit

If you already have your paycheck electronically deposited, you will receive your retirement allowance the same way and into the same account unless you inform TRS/BERS otherwise.  When you file your retirement papers, you can change accounts or sign up for Electronic Funds Transfer. 

Generally, QPP retirement allowance payments begin in three to five months after the retirement date. Your benefit will consider factors such as your pension tier, your total service credit, your age and your final average salary. You will receive advance payments until your pension is finalized by TRS.

Your QPP retirement allowance payments are exempt from New York City and New York State taxes, but local taxes may apply if you live outside New York State.  Federal taxes will be withheld from your first advance payment.  If you decide to defer your TDA account after retirement, taxes on your TDA funds and on any investment returns will be deferred until those funds are distributed to you.

Final consultation

TRS members may call 212-331-6311 to make an appointment for a final pension consultation with a UFT pension consultant. If you are a BERS member call 929-305-3800 to schedule an appointment for a final with BERS.

You must submit your retirement application to TRS/BERS at least one day, but not more than 90 days, before your effective retirement date.

Once you receive written confirmation of your retirement date from TRS/BERS, it’s important to file for health insurance with the Department of Education.

This column is compiled by Tom Brown, David Kazansky and Debra Penny, teacher-members of the NYC Teachers’ Retirement Board.

Related Topics: Pension