The Teachers’ Retirement System Passport Funds are diverse investment choices carefully designed to help TRS members who participate in the Tax-Deferred Annuity (TDA) Program save for retirement.
The TDA program, a voluntary and supplemental savings plan, dovetails with the guaranteed defined-benefit pension all TRS members will receive, thanks to the union, to create even better financial security.
About 77,000 TRS members, or approximately 75% of TRS’ in-service membership, are actively contributing to the TDA program. They invest in one or more of the Passport Funds.
The TRS Board, along with its investment advisers, reviews and evaluates TRS members’ investment options and occasionally discontinues one fund and begins a new one in response to a changing global economy. In 2020, one fund — the Inflation Protection Fund — is being discontinued and two new funds — the U.S. Equity Index Fund and the International Equity Index Fund — have been created.
Also in 2020, the IRS will increase its annual contributions allowed in the TDA program to up to $19,500 for members under age 50 and up to $26,000 for those who are 50 or older.
Here is an overview of the funds that will be available as of January 2020.
Fixed Return Fund
New York State currently guarantees the rate of return at 7% for members serving in titles, or resigned or retired from titles, represented by the UFT.
Diversified Equity Fund
This fund invests primarily in the stocks of U.S. companies with a portion of its assets in stocks of non-U.S. companies and other types of investments. Its objective is to achieve a rate of return comparable to that of the broad equity market.
This fund is a moderately conservative investment option that includes exposure to bonds and stocks. Its objective is current income and some capital appreciation. The fund began on Jan. 1, 2018, and was preceded by the Bond Fund and the Stable-Value Fund, which are no longer offered.
Inflation Protection Fund
No new investments will be accepted into the Inflation Protection Fund, which will be discontinued on April 1, 2020. This fund sought exposure to multiple asset classes and markets and to real estate debt and equity securities. Its objective was to provide, over a full market cycle, a real rate of return that exceeded inflation.
If you have investments in the Inflation Protection Fund, you may redirect those investments to other Passport Funds at any time. Any investments remaining in the Inflation Protection Fund as of March 31, 2020, will automatically transfer to the Balanced Fund.
International Equity Fund
This fund invests primarily in the stocks of non-U.S. companies in developed markets and is traded on a variety of stock exchanges and in a variety of currencies. The fund’s objectives are to provide long-term capital growth and to achieve a rate of return comparable to that of the non-U.S. equity markets over a full market cycle.
Sustainable Equity Fund
This fund invests primarily in stocks of large- and mid-capitalization U.S. companies that meet certain financial and social criteria, with a focus on sustainable business practices. Its objective is to achieve positive long-term capital appreciation over a full market cycle while focusing on sustainability characteristics, including environmental, social and governance factors.
Until September 2019, this fund was known as the Socially Responsive Equity Fund; the new name reflects a change in the underlying manager and strategy.
U.S. Equity Index Fund
This fund will begin on Jan. 1, 2020, and will invest in the more than 3,000 securities in the Dow Jones U.S. Total Stock Market Index. It will be fully invested in the broad U.S. stock market, with a small cash allocation for liquidity needs. Its objective will be to track the total return of the broad U.S. equity market, including large-, mid- and small-capitalization stocks.
International Equity Index Fund
This fund also will begin on Jan. 1, 2020, and will invest in the more than 6,000 securities in the MSCI World ex USA Investable Market Index. It will be fully invested in foreign stocks, with a small cash allocation for liquidity needs. Its objective is to track the total return of non-U.S. equity markets, including developed markets and emerging markets.
The Passport Funds are available to all participants in TRS’ Tax-Deferred Annuity Program and Tier I or II members for a portion of their Qualified Pension Plan accounts.
Board of Education Retirement System (BERS) members may choose between the Fixed Return Fund and the Diversified Equity Fund.
Read more about the TDA Program and the TRS Passport Funds, download the brochure on the TRS website.
|Diversified Equity||Balanced Fund||Int'l Equity||Inflation Protection||Socially Responsive|