To help make the Teacher Retirement System (TRS) actuarially sound, the retirement requirements will be adjusted. Although the “Rule of 80” will be maintained, retirees must be at least 62 years old to receive the full annuity. Employees choosing to retire prior to age 62 will have 5 percent per year annuity reduction. The law does include grandfathering provisions for those employees with five years of eligible service credit as of August 31, 2014.
The employee retirement contribution rate will remain at 6.4% for Fiscal Year (FY) 2014 and will increase to 6.7% in FY 2015, 7.2% in FY 2016 and 7.7% in 2017.
Another law was passed to allow certain retirees to change their annuity selection post-retirement.
Retiree Insurance Eligibility
A tiered insurance contribution for retirees based on years of service is being implemented. Retirees with 20 years of eligible service credit will receive the full state contribution, retirees with 15-19 years of eligible service credit will receive 75% of the full state contribution and retirees with a minimum of 10 years of eligible service credit would receive 50% of the full state contribution. A grandfathering provision is included for those employees with five years of eligible service credit as of August 31, 2014.
Retirement plan eligible employees are employees working in positions that are at least 50% FTE (half-time) and expected to last 4.5 months or longer. All employees who fall in this category are required to participate the Teacher Retirement System (TRS), unless an exception to TRS membership applies, for exceptions refer to the TRS Handbook. TWU employees participate in both Social Security and TRS. For information on whether or not your TRS pension will effect your Social Security benefit please log on to the social security site for Government Pension Offset and Windfall Elimination.
An Optional Retirement Program (ORP) is available for full-time faculty and certain administrative employees in lieu of the Teacher Retirement System (TRS). Eligible employees have 90 days from the date of employment to make a one-time choice to relinquish membership in TRS become a participant in the ORP. The decision to participate in TRS or ORP is extremely important because this is a one time irrevocable election. The ORP is a personal retirement plan purchased by the member to which the State makes contributions. Benefits are based on the accumulated contributions and interest in the member's account. Vesting occurs after one year and one day of participation. You can choose from any authorized provider for TWU 403(b).
TAX DEFERRED 403(b), 457 DEFERRED COMPENSATION AND ROTH 403(b) ACCOUNTS
Whether you participate in retirement or not, you are eligible to contribute pre-tax contributions into a Tax Deferred Account (TDA), a Roth 403(b) and/or a Deferred Compensation Program (457). Each of these types of plans are supplemental retirement savings plans that you can contribute to in order to supplement your regular retirement through TRS/ORP. Neither plan receives a state contribution. The benefit of the TDA and 457 plan is the tax sheltering of your contributions until retirement age (or withdrawal of your account after termination of employment, if prior to retirement). Roth accounts are after tax contributions with the benefit of deferring taxes on earnings and tax-free withdrawals during retirement. You must choose an authorized provider to participate in the 403b plan. For enrollment in the 457 program, contact Great West to review their investment options and other important information. For more information concerning the 457 Program, call Great West at 800-634-5091 or visit Texasaver.
Universal Eligibility Notification -- Voluntary 403b Savings Plans
All employees are eligible to contribute to a 403b.
2014 Contribution Limits
Minimum contributuion $20/month
2012 403(b) and 457(b) annual maximum contributions are as follows:
General Limit: $17,500
Age 50 Catch-up $5,500 (for those 50 or older)
Aggregate cap $52,000 (maximum for all combinations of 403(b), including Roth, ORP, and voluntary TSA)
Compensation Maximum $260,000.
TWU Retiree –To be considered a TWU Retiree and be honored at TWU’s Service Awards and Retirement Recognition Program, employees must have a minimum of 10 years of unwithdrawn State or Texas ISD service and be at least 65 years of age, OR have a minimum of 10 years of unwithdrawn State or Texas ISD service and meet Rule of 80 (age + years of service). Please note, employees may be eligible to retire without meeting these conditions but will not be considered a TWU Retiree. Retirees are honored only once. Each retiree is honored at time of retirement regardless of any future return to work agreements. Faculty members who choose to participate in the Retired Teaching Option (RTO) will be honored as a retiree BEFORE beginning RTO employment.
More about “Retirement Manager”...
page last updated 4/7/2014 1:57 PM