As a member of the UFT, you are entitled to a benefit that is becoming as rare as it is important: a traditional pension.
Only 20% of U.S. workers participate in a defined-benefit pension plan, according to the U.S. Bureau of Labor Statistics. Because of your union, you are among the 85% of public sector employees still covered by a defined-benefit pension plan, one of many valuable UFT benefits.
You are fortunate to be in the minority of Americans who still have access to a defined-benefit pension, the gold standard of retirement plans. This pension guarantees a lifetime annuity of regular payments based on a formula that takes into account your years of service, your salary and your age.
With a defined-benefit pension, the vagaries of the stock market don’t mean a thing. You don’t have to worry. The amount of your pension benefit stays the same each month throughout your retirement.
Even if you are a long way from retirement, understanding your pension benefits will provide some insight into how your union fights for you and why the UFT will always stand strong against those who would like to diminish or eliminate the defined-benefit plan and the retirement security it affords members. This hallmark of union benefits is something the union defends fiercely in its daily work.
Department of Education-employed UFT members who are eligible for the defined-benefit plan enroll in either the Teachers’ Retirement System (TRS) or the Board of Education Retirement System (BERS), depending on their job title. Decades of UFT advocacy bore fruit for the union’s paraprofessionals in the fall of 2021 as a newly enacted state law guaranteed all UFT-represented full-time paraprofessionals will automatically become members of TRS.
The Qualified Pension Plan (QPP) is where your pension contributions go and where employer contributions are invested, whether you are a member of TRS or BERS. These well-established systems handle the management of your funds and have an enviable track record of investment. Contributions to your pension plan are based on your date of membership in TRS or BERS.
The QPP is known as a defined-benefit plan because the benefit is determined by a pre-defined formula and not by the performance of investments.
The UFT ensures that a dignified level of retirement security is available to all UFT members who are career employees of the city Department of Education. Our four pillars of retirement security are:
- A defined-benefit traditional pension, under which the retirement benefit is equal to a fixed percentage of a member’s final average salary.
- Social Security.
- A Tax-Deferred Annuity (TDA), which is a voluntary retirement savings program with tax advantages.
- Health insurance and UFT Welfare Fund benefits.
The defined-benefit pension, the TDA, city-provided health insurance for most retirees and the UFT Welfare Fund supplemental health benefits are designed to work with Social Security to provide financial security for UFT members after a long career of educating and supporting New York City’s children.
For more information about TRS, call 888-869-2877 or visit the TRS website.
For more information about BERS, call 929-305-3800 or visit the BERS website.
The UFT Pension Department is another source of information. Call 212-331-6311 and ask to speak to a UFT pension consultant. Also, consider attending some of the department’s pension clinics on many different subjects throughout the year. Find upcoming clinics.
New law affects vesting
All TRS/BERS members are now considered vested after they have attained five years of service credit.
Previously, the requirement was 10 years for all Tier 6 members as well as some Tier 4 members.
This column is compiled by Tom Brown, David Kazansky and Debra Penny, teacher-members of the NYC Teachers’ Retirement Board.
