YOUR BENEFITS
Teacher Retirement System The Teacher Retirement System of Texas manages pension funds for Texas public education and some higher education employees, and it oversees the health insurance programs for active members (TRS-ActiveCare) and retirees (TRS-Care). TRS is governed by a nine-member board of trustees, appointed by the governor and confirmed by the Texas Senate. Many changes to TRS and its benefit structure have occurred in recent legislative sessions. These changes have made determining an individual employee’s retirement eligibility and benefits very complicated. We encourage TCTA members to call or email TCTA with general questions, or contact TRS directly for information about a specific situation. Per 2019 legislation, contribution rates to the TRS pension fund will increase over the coming years.
PENSION FUND CONTRIBUTIONS (a percentage of salary/payroll)
State Active members School districts*
2020 2021 2022 2023 2024 7.5% 7.75% 8.0% 8.25% 8.25% 7.7% 8.0% 8.0% 8.25% 8.5% 1.6% 1.7% 1.8% 1.9% 2.0%
*Districts also contribute at the state rate on salary paid above the state required minimum salary. Employees contribute 0.65% of salary to the TRS-Care fund (retiree health insurance). The state contributes 1.25% of payroll, and school districts contribute 0.75%.
Standard retirement
Generally, a TRS member may retire with the standard benefit at: 1. age 65 with five or more years of service credit; or 2. with at least five years of service, any combination of age and years of service credit totaling at least 80 (the “Rule of 80”). Exceptions: • A member who enters TRS membership after Aug. 31, 2007, and who had at least five years of service credit as of Aug. 31, 2014, must also meet a minimum age of 60 for full retirement benefits. • A member who did not have at least five years of service credit as of Aug. 31, 2014, must meet a minimum age of 62 for full retirement benefits. Members described by these provisions can still retire upon meeting the Rule of 80, but will have benefits reduced by 5% for each year under age 60 or 62, as appropriate. A TRS member who entered the system prior to Aug. 31, 2007, and had at least five years of service credit as of Aug. 31, 2014, does not have to meet a minimum age requirement to retire with full benefits. Provisions regarding “entering the system” consider a person
who withdrew TRS funds, then subsequently returned to school employment, to have entered on the date of re-entry rather than the original date of membership. The TRS Benefits Handbook, available at trs.texas.gov, has full details on retirement eligibility.
Early retirement
An employee can opt for early retirement if he/she has at least 30 years of service credit but does not meet the Rule of 80, or is at least age 55 with five or more years of service. Penalties for early retirement can be quite severe, but depend on the employee’s age, years of service credit, and whether they meet certain “grandfather” provisions established in 2005 when the penalties for early retirement were increased. Employees considering early retirement can consult with a TRS benefits counselor or use the retirement calculators on the TRS website. If a member leaves TRS-covered employment before meeting the criteria for retirement with either full or reduced benefits, the member may withdraw the money contributed to date, plus interest earned, but will not receive an annuity. The interest earned on contributions was lowered from 5% to 2%; the lower rate applies to contributions made after Sept. 1, 2014. Note: Any employee retiring after Aug. 31, 2005, who does not meet the Rule of 80 or have at least 30 years of service credit will not be eligible for TRS-Care, the retiree health insurance.
Disability retirement
An employee with a mental or physical disability that is likely permanent and that prohibits further performance of his/her duty may be eligible for disability retirement. An individual who qualifies for disability retirement and who has at least 10 years of service credit may opt for a disability retirement and receive an unreduced monthly annuity (calculated using the standard retirement formula), with a minimum annuity of $150. An employee who qualifies for disability retirement but has fewer than 10 years of service credit will receive a monthly benefit of $150 paid for the number of months that the employee worked in a TRS-covered position prior to retirement, the duration of the disability, or the duration of the employee’s life, whichever is least. Other key provisions affect how disability retirement works and whether it is the best option for an employee with a disability; members should review the TRS Benefits Handbook (at trs. texas.gov) or speak to a TRS benefits counselor for more details.
Partial lump-sum option
Retirees can select a partial lump-sum distribution of cash in exchange for a lower future monthly retirement benefit. This program is available only to members who are eligible for unreduced retirement benefits. The member must meet a Rule of 90 upon retirement to be eligible for the PLSO.* The maximum lump sum that may be taken is an amount equal to Continued 2020-21 TCTA Survival Guide
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