Planning Ahead for Retirement

Presented by:

Donna AdamickSandy Jimenez

Today’s Agenda

• How will retirement impact my Social Security?

• What else can I do to save for retirement?

• When can I retire under ORP?

• How do I retire with insurance benefits?

• How does Medicare come in to play?

• When can I retire under TRS?

Disclaimer: LSC staff do not represent the retirement plans and health care systems. The participant is responsible for researching and speaking directly with the entity for information as related to the participant’s concerns.

Social Security, Savings Plans, and ORP

Social Security• Social Security programs that may affect you:

• Government Pension Offset (GPO)• Windfall Elimination Provision (WEP)

• TRS benefits are not affected by benefits a member may receive from Social Security.

• However, in some instances Social Security benefits may be affected by government pensions such as TRS.

Savings Plans403(b) LSC TDA

457(b) LSC 457(b) Texa$aver

Eligibility All part-time and full-time

All part-time and full-time

All part-time and full-time

Loans

Withdrawals Not available

Tax Penalties 10% earlywithdrawal penalty prior to age 59 ½

10% early withdrawalonly on funds transferred from a 403(b)

10% early withdrawalonly on funds transferred from a 403(b)

Vendor(s)

Key Difference Easier fundaccess while employed

No 10% early withdrawal penalty upon separation

No 10% early withdrawal penalty upon separation

Optional Retirement Program (ORP)

• What is ORP?

• Contributions

• ORP Companies and Accounts

• Retirement Eligibility and Benefits

• Vesting

• Retirement Funds

• Coverage in the ERS Group Insurance Program

Employees Retirement System (ERS)

Employees Retirement System (ERS)

• Eligibility for ERS Insurance at Retirement• Retiree Coverage Options• Health Insurance Options• Prescription Drug Coverage• Retirement Insurance Premiums• Medicare and Your State Health Insurance• Dental Insurance• Vision Coverage• Life Benefits• TexFlex• Sample Premiums• Discount Purchase Program• Survivor Benefits

Employees Retirement System (ERS)Eligibility for ERS Insurance at Retirement. All of the following requirements must be met:

1. Service Credit – General Requirement2. Service Credit – GBP Participation Requirement3. Age or Rule of 80 Requirement4. Employment Status I5. Employment Status II

Retiree Coverage Options

• Health + Basic Life + prescription coverage

• Dental

• Vision

• Optional Term Life – Elections 1 and 2

• $10,000 Fixed Optional Life

• Dependent Term Life - $2,500

• TexFlex - COBRA

You have 30 days to make changes on your

Retiree Insurance Enrollment Statement.

Retirement Insurance Premium

The state pays 100% of your health insurance premium if you had at least five years of service with an agency that participates with the GBP on or before September 1, 2014.

If not, the state contribution is based on your years of service with an agency that participates in the GBP:

100%with 20 or

more years

75%with 15 up to 20 years

50%with 10 up to 15 years

Discount Purchase ProgramTreat Yourself to Cool Deals

• Shop online for discounted prices

• No membership fee

• Just shop and save

• www.DiscountProgramERS.com

ERS Survivor BenefitsAs a retiree, your spouse or eligible dependents may be entitled to certain benefits upon your death. These benefits may include:

• Health and dental coverage,

• Life insurance benefits, and

• Texa$aver 457 accounts.

ERSVisit www.ers.texas.gov to access:

• Your account

• Events calendar

• Plan information

• ERS publication

• Subscribe to updates

• Update your address

Call (877) 275-4377Monday – Friday7:30 a.m. – 5:30 p.m. CT

http://www.ers.texas.gov/

Teacher Retirement System (TRS)

Teacher Retirement System (TRS)• TRS Plan Design

• Earning Service Credit

• Grandfathered vs. Non-Grandfathered

• Retirement Eligibility

• What is My Tier?

• Retirement Eligibility by Tier

• Steps for Retirement

• Disability Retirement

• Keep TRS Informed

• TRS Informational Resources

TRS Plan DesignTRS is a 401(a) defined benefit plan.

Retirement Formula

Earning Service Credit

Grandfathered vs. Non-Grandfathered

Individuals who were members and met one of the following conditions by August 31, 2005 are considered to be Grandfathered:

• At least age 50;• At least 25 years of service; or• Met the Rule of 70.

Grandfathered Non-Grandfathered

Average Salary 3 year average 5 year average

Early Age Retirement reduction

• With more than 20 years• With less than 20 years

• As great as 10%• As great as 53%

• As great as 53%• As great as 53%

Retirement Eligibility• Retirement eligibility has changed over the years.

• These changes have resulted in six tiers of membership.

• Your membership tier is determined by:• The date you entered your current TRS

membership;• Your “grandfathered’ status; and• The amount of service credit you had on

August 31, 2014.

What is My TRS Tier?

What is My Tier?

• current membership began prior to Sept. 1, 2007; and• had at least five years of service on Aug. 31, 2014• Tier 1 if Grandfathered • Tier 2 if non-grandfathered

Tier 1 and 2

• current membership began between Sept. 1, 2007 and Aug. 31, 2014; and

• had at least five years of service on Aug. 31, 2014• Tier 3 if non-grandfathered• Tier 4 if grandfathered

Tier 3 and 4

• current membership began on or after Sept. 1, 2014; or • did not have at least five years of service on Aug. 31,

2014• Tier 5 if non-grandfathered• Tier 6 if grandfathered

Tier 5 and 6

Tier 1 & 2 Retirement Eligibility

Normal Age Retirement

• 65 with at least five years of service; or

• Meet the rule of 80 with at least 5 years of service.

Early Age Retirement

• At least 55 with five or more years of service but do not meet the Rule of 80; or

• 30 or more years of service credit, but do not meet the Rule of 80.

Tier 3 & 4 Retirement Eligibility

Normal Age Retirement

• 65 with at least five years of service; or

• Meet the rule of 80 with at least 5 years of service.

Early Age Retirement

• At least 55 with five or more years of service but do not meet the Rule of 80; or

• 30 or more years of service credit, but do not meet the Rule of 80.

Tier 5 & 6 Retirement Eligibility

Normal Age Retirement

• 65 with at least five years of service; or

• Meet the rule of 80 with at least 5 years of service.

Early Age Retirement

• At least 55 with five or more years of service but do not meet the Rule of 80; or

• 30 or more years of service credit, but do not meet the Rule of 80.

Steps for RetirementChoose a retirement

date

Request a retirement

packet

Complete and return retirement

forms

Terminate employment

Disability Retirement

• Regardless of age and years of service, members may apply for disability retirement if:

• Mentally or physically disabled from further performance of duties;

And

• the disability is probably permanent.

Helpful Information

Keep TRS InformedTRS provides valuable benefits to members, retirees, and beneficiaries. So it is important to:• Notify TRS of name changes;

• Keep your address current; and

• Keep your beneficiary designation current

Active member death benefits• Your coverage became effective on your first day

of TRS-covered employment.

• Beneficiaries may be eligible to select from five different payment plans.

TRS Informational ResourcesTRS Website www.trs.texas.gov• Download forms or brochures• Obtain general information• Registered MyTRS users may view personal account

info, modify contact info, and estimate retirement

Automated Phone System 800-223-8778• Request forms, brochures, account info with PID• Active members may check account balance

Benefit Counselors 800-223-8778• Available Monday-Friday 7 am-6pm• Office visits must be prescheduled• Remote counseling session must be prescheduled

http://www.trs.texas.gov/

Are You Ready to Retire?

1. Call your Financial Advisor

2. Attend Preparing for Retirement Workshop

3. Call TRS 1-800-223-8778, if applicable

4. Call your local HR or LSC Benefits Department

5. Call Social Security Administration

Questions

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