1. Retirement Benefit Seminar
Indiana State Teachers’ Retirement Fund
Please silence your cell phone.

2. TRF Retirement Benefit Retirement Payment Options
Overview
TRF Retirement Benefit
Retirement Payment Options
TRF Resources: Web Site & Appointments

3. Pension Benefit Normal Retirement Eligibility
Age 65+ with 10+ years of service
Age 60+ with 15+ years of service
Ages 55 to 59 when age added to years of service totals at least 85 (Rule of 85)

4. Reduced Pension Benefit Early Retirement Eligibility
Age 50 to 59 with 15+ years of service
Age 50 – Early Retirement Factor = 44%
Member will receive 44% benefit for life
Age 59 – Early Retirement Factor = 89%
Member will receive 89% benefit for life

5. Pension Benefit Calculation: Years of Service
Fiscal Year: July 1 to June 30
120+ days = 1.0 year
60 to 119 days = 0.5 year
10 years of qualifying Indiana service = fully vested in pension

6. Pension Benefit Calculation: What counts as service?
Regular Indiana teaching service
Some substitute teaching situations in Indiana
School board approved leaves of absence from an Indiana school
Public Employees’ Retirement Fund (PERF) service
Military service credit
Private school service in Indiana (purchased)
Out-of-state service (sometimes purchased)
Additional years purchased

7. Your Teachers’ Retirement Fund (TRF) retirement benefit consists of two separate components: Monthly Pension Benefit + Annuity Savings Account Your TRF Retirement Benefit

8. TRF Retirement Benefit
Your TRF Retirement Benefit has two parts:
Monthly Pension Benefit
Annuity Savings Account (ASA)
Optional third part:
Rollover Savings Account (RSA)
Reminder: the IRS considers your total TRF retirement benefit as taxable income

9. Decisions to be Made When Applying for a Retirement Benefit
Choose one of six options for your Monthly Pension Benefit
Choose one of seven options for your Annuity Savings Account (ASA)
Choose one of five options for your Rollover Savings Account (RSA)

10. TRF Retirement Benefit
Part One: Monthly Pension Benefit

11. Monthly Pension Benefit Calculation Factors
Average Annual Compensation
Average of five highest years of salary earned for covered service
Benefit Multiplier: 1.1% (.011)
Years of Service
Service credit earned or purchased
Member’s Age at Retirement
Retirement Option Selection
The pension benefit is calculated using a number of factors.
the average of the five highest years of salary earned while working in a TRF covered position
That average, multiplied by our retirement factor of 1.1%
Total number of service years
Member age – Early retirement results in a reduction of the pension benefit
Retirement Option Selected – the various pension options available to you are also used in calculating your annual pension amount.

12. Monthly Pension Benefit
Benefit Formula:
Average salary x 1.1% x years of service (A-1 Option)
Example:
Age 55
30 years of service
Salary average (5 highest years): $60,000
Annual pension income based on formula:
$60,000 x 1.1% x 30 = $19,800 ($1,650/month)

13. Monthly Pension Benefit Overview Six Options
Three Limited Beneficiary Options
A-1
A-2
A-3
Three Survivor Options
B-1
B-2
B-3
Social Security Integration
In conjunction with options above if under age 62

14. Monthly Pension Benefit A-2: Straight Life
Highest paying monthly pension benefit for member
No pension benefit beyond member’s lifetime

15. Monthly Pension Benefit A-1 and A-3 Options: 5-Year Certain & Life
Both A-1 and A-3 offer:
Lifetime monthly pension benefit for member
5-year guarantee for beneficiaries of monthly pension benefit
Only A-3 offers:
Guaranteed balance recovery of ASA; available only with ASA 1 or ASA 7 election

16. Monthly Pension Benefit Survivor Options
B-1 100% Survivor Benefit
B /3% Survivor Benefit
B-3 50% Survivor Benefit
Upon death of member, appropriate percentage paid to named survivor

17. Monthly Pension Benefit Survivor Exceptions
Your choice of survivor and pension option cannot be changed unless the following circumstances exist:
Survivor pre-deceases member
Some divorce situations
Member marries after retirement
Member must notify TRF and complete appropriate paperwork. Change is effective when all required forms are completed.

18. TRF Retirement Benefit
Part Two: Annuity Savings Account

19. Annuity Savings Account What is it?
Individual investment savings account
Mandatory contributions
3% of Annual Salary
Voluntary contributions
Pre-tax or post-tax
Investment gains & losses
Immediately vested
Vested members, inactive for 90 days after June 30, 2009, can withdraw their ASA balance without forfeiting their pension

20. ASA: Pre-86 Contributions
All contributions into the ASA prior to December 31, 1986
Pre-86 dollars taxed prior to contribution
Pre-86 contributions accessible at retirement without further tax penalty

21. Annuity Savings Account
Monthly Options
ASA 1: Annuity converted to lifetime monthly payment
ASA 7: Pre-86 contributions distributed; remaining taxable portion paid as lifetime monthly benefit
Full Distribution
ASA 2: Full distribution (lump sum) with tax implications

22. Annuity Savings Account Rollover Options
ASA 3: Total Rollover
Pre-86 contributions distributed to member
Taxable portion paid as a rollover to IRA/qualified plan
ASA 4: Partial Rollover
Part of taxable portion paid as a rollover to IRA or qualified plan
Remainder of taxable portion paid as lump sum distribution

23. Annuity Savings Account Deferral Options
ASA 5: Deferred distribution of entire ASA
ASA 6: Pre-86 contributions distributed to member; taxable portion deferred

24. Rollover Savings Account (RSA)
Members may choose to create an additional savings account at TRF prior to retirement
Roll over tax-deferred funds from IRA or other qualified retirement plans
Control investment allocations
Elect a payment option at retirement

25. Rollover Savings Account Five Options
RSA 1: Monthly benefit
RSA 2: Full distribution
RSA 3: Rollover to an IRA or qualified plan
RSA 4: Partial rollover to IRA or qualified plan; remainder paid as distribution
RSA 5: Deferred distribution

26. Rollover Savings Account Research Different Options
As retirement approaches, compare outside retirement plan payment options with TRF’s payment options.
Account balance    TRF Company X         Company Y
     $60,000                  $432            $339                 $345
       ,000                   576               452                    463
     ,000                   720               565                    582
    ,000                   864               678                    701
(Information retrieved January, 2009)

27. Pension Benefit Social Security Integration
Available to members retiring prior to age 62
Utilizes SSA age 62 benefit information
Increases TRF benefit until member reaches age 62
Decreases monthly TRF benefit at age 62 and thereafter

28. Pension Benefit Social Security Integration
Take our earlier example: Member retires with a TRF benefit of $1,650/month
Monthly Social Security benefit at age 62 = $1,000
Monthly TRF benefit before age 62 = $2,188
Monthly TRF benefit at age 62 = $1,188
Combined Monthly TRF and Social Security benefits at age 62 : $1,188 + $1,000 = $2,188

29. Death Before Retirement
Pension Benefit Eligibility
Member has at least 15 years of service
If married at least 2 years, spouse receives a pension for life
If no qualifying spouse, dependent children receive a pension benefit until 18 years of age
Annuity Savings Account (ASA)

30. Retirement Planning Please remember, TRF employees are not financial planners.
Be aware of personal needs
Lifestyle change, health care costs, inflation, travel
Research options available to you
Consider all sources of retirement income
Social Security, TRF benefit, personal savings, spouse’s retirement

31. Ready to Retire?
Complete Application for Retirement Benefits, Part I and submit to TRF in a timely manner
Now available to submit online!
Submit Application for Retirement Benefits, Part II to your employer’s payroll office

32. Reemployment To reemploy in TRF- or PERF- covered positions:
30-day mandatory separation from retirement date to reemployment date
No additional service credit earned
No contributions to ASA
No earnings limitation
To reemploy in private sector:
Employable immediately
Subject to Social Security limitations

33. TRF Benefit Appointments
One-on-one appointment to discuss personal benefit and payment options
Schedule approximately two years prior to anticipated retirement date
Call TRF: (888) or (317)
Benefit appointment options
Indianapolis TRF office
Phone call
TRF comes to your school

34. TRF Web Site www.in.gov/trf

35. TRF Web Site
Register with your address as your username, and you will be ed a personal identification number (PIN) to log in
Can change PIN after online registration
Change contact information, investment allocations, & view quarterly statements
Use benefit estimate calculator
Change/update beneficiaries
Print Retirement Application – or submit it online

36. Teachers’ Retirement Fund
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