TRF Member Handbook: Monthly Pension Benefit
Eligibility
Benefits Overview
Members with at least 10 years of service in a TRF- or PERF-covered position are considered vested in their monthly pension benefit.
A member’s retirement benefit consists of a monthly pension benefit and an Annuity Savings Account (ASA).
- The member’s monthly pension benefit is paid as a lifetime monthly benefit and is funded by the State or the member’s employer. To become eligible for a benefit, the member must be vested with 10 years of creditable service in a covered position. A member receives a statement each quarter which provides an estimate of the member’s monthly pension benefit, based on average salary, years of service, etc. For members with less than five years of service credit, no estimate is provided. Refer to the Monthly Pension Benefit section of this handbook for additional information.
- The member’s Annuity Savings Account (ASA) contains the mandatory three percent of annual compensation contribution, which is made by the member or the member’s employer, as well as any voluntary contributions made by the member and any investment interest or earnings. A member is immediately vested in the ASA and receives a detailed statement of account activity and balance information each quarter. Refer to the Annuity Savings Account section of this handbook for additional information.
- A member may also create a Rollover Savings Account (RSA) for which the member receives a detailed statement of account activity and balance information each quarter. Non-retired members may create a RSA by transferring funds from an IRA or other qualified retirement plan into TRF. TRF will only accept transfers of taxable funds. These rolled over funds, along with investment gains and losses, comprise the RSA. Refer to the Rollover Savings Account section of this handbook for additional information.
Vesting
A member must be vested (has earned 10 years of service credit in a covered position) to become eligible for a monthly pension benefit. Once vested, the member may receive a monthly pension benefit once he or she meets certain age and service requirements.
Regular Retirement
To apply for a regular (unreduced) retirement benefit, a member must meet one of the following criteria:
- Age 65 or older with at least 10 years of service credit;
- Between ages 60 and 64 with at least 15 years of service credit; or
- Between ages 55 and 59, if age and service credit total at least 85 (known as the Rule of 85)
If the member meets the age and service requirements above and chooses the A-1 payment option, the normal annual pension benefit is calculated by the following formula:
Average of Highest 5 Years of Annual Compensation x Total Years of Service x 1.1% (0.011)
Early Retirement
Early retirement is available to members who are between ages 50 to 59 with 15 or more years of service credit. A member retiring early receives a percentage of the normal annual pension benefit, according to Table 2 (below). The percentage of the pension benefit you receive at retirement remains the same for your lifetime.
Table 2 – Early Retirement Percentage of Normal Annual Pension Benefit
| Age | Percentage of Benefit |
|---|---|
| 59 | 89% |
| 58 | 84% |
| 57 | 79% |
| 56 | 74% |
| 55 | 69% |
| 54 | 64% |
| 53 | 59% |
| 52 | 54% |
| 51 | 49% |
| 50 | 44% |
Age 70 Benefits
A member who continues to teach in a TRF-covered position after age 70 and has 20 or more years of service is eligible to begin receiving retirement benefits without a separation from service. During the time a monthly pension benefit is received and the member is still employed in a TRF-covered position, no additional service credit or salary credit are earned and thus the retirement benefit remains at the same level as when it began. Should you choose this option, all of the normal alternatives for distribution of both your monthly pension benefit and your Annuity Savings Account are available to you.
Your Benefit
Factors
The amount of a member’s monthly pension benefit is based on the following factors:
- Benefit multiplier: 1.1 percent (.011)
- Average annual compensation: The average of the five highest years of annual compensation earned for service in a covered position
- Years of service: Service credit earned or purchased by a member
- Member’s age at retirement: Early retirement results in a reduction in the monthly pension benefit
- Retirement option selected
Benefits Calculator
There are three ways a member may calculate an estimated monthly pension benefit. The following are the three methods.
Method 1
Log in to the TRF Interactive Web site at https://www.benefitsweb.com/trf.html to generate an estimate based on the information we have to date which includes projected final average salary and service information, as well as the latest information reported from the employer. Estimates of all payout options are provided.
Method 2
From the benefit calculator available here, calculate an estimate by entering the projected retirement date, final average salary, and years of service.
| Example | You | |
|---|---|---|
| Final average salary | $50,000.00 | $ |
| Benefit multiplier | x .011 | x .011 |
| Pension base amount | $ 550.00 | $ |
| Years of service | x 30 | x |
| Annual retirement benefit | $16,500.00 | |
| Monthly benefit | / 12 | / 12 |
| Calculated as an A-1 option | $ 1,375.00 | $ |
Method 3
From the benefit calculator available here or the TRF Interactive Web site, calculate an estimate by using information from the member’s latest Social Security Statement. To be eligible for this payment option, the member must be less than 62 years of age at retirement and must enter the estimated Social Security income.
Payment Options
At retirement, a member must select one of the six options included in this section for distribution of the member’s monthly pension benefit. Additionally, a member may choose the Social Security Integration option in conjunction with any of the six available options if the member is under the age of 62 at the time of retirement. Each option provides a lifetime monthly benefit paid to the member. Upon the death of the member, some options provide lump sum benefits to the beneficiary or estate. Others continue to receive a monthly survivor benefit payment. The amount of the monthly pension benefit received depends upon the member’s selected option.
A-1 (5-Year Certain & Life)
This pension option provides a lifetime benefit to the member. In the event the member dies before receiving five years of payments, the beneficiary(ies) receives the remainder of the five years of guaranteed pension payments in a lump sum.
A-2 (Straight Life)
This pension option provides a lifetime pension benefit to the member. Should you choose either the ASA 1 or ASA 7 option (see ASA section of this handbook), the A-2 comes with a minimum amount provision that ensures the member or beneficiary(ies) will receive a benefit at least equal to the ASA balance at the time of retirement. For details about the minimum amount provision, see the Minimum Amount Provision paragraph at the end of this section.
A-3 (Modified Cash Refund Plus 5-year Certain & Life)
This pension option provides a lifetime benefit to the member. In the event the member dies before receiving five years of payments, the beneficiary(ies) will receive the remainder of the five years of guaranteed pension payments. The Annuity Savings Account (ASA) is reduced with each monthly benefit paid; if the member dies before reducing this balance to $0.00, the beneficiary will receive a single payment of the amount remaining. This pension option is only available with the ASA 1 or ASA 7 and RSA 1 (see Rollover Savings Account section of this handbook), if applicable. This option also includes a monthly annuitization of the member’s ASA. See the ASA section of this handbook for details.
B-1 (100% Survivor Benefit)
This pension option provides a lifetime benefit to the member. This option guarantees that, upon the death of the member, the qualified survivor will receive 100 percent of the member’s monthly benefit for the remainder of the survivor’s life.
B-2 (66 2/3% Survivor Benefit)
This pension option provides a lifetime benefit to the member. This option guarantees that, upon the death of the member, the designated survivor receives 66 2/3 percent of the member’s monthly benefit for the remainder of the survivor’s life.
B-3 (50% Survivor Benefit)
This pension option provides a lifetime benefit to the member. This option guarantees that, upon the death of the member, the designated survivor receives 50 percent of the member’s monthly benefit for the remainder of the survivor’s life.
Because survivor options(B-1, B-2, B-3) provide for a survivor benefit, the monthly pension benefit to the member is decreased.
Social Security Integration
A member who retires between ages 50 and 62 may integrate the TRF monthly pension benefit with the member’s estimated Social Security benefits. This does not affect the amount of the benefit received from the Social Security Administration.
Before age 62, the member’s benefit will equal the sum of the member’s Social Security estimate, multiplied by actuarial factors, and the member’s early retirement benefit. This will result in the member receiving a larger monthly benefit payment before age 62. After age 62, the member’s benefit will equal the difference between the member’s Social Security estimate, multiplied by actuarial factors, and the member’s pre-62 monthly pension benefit. Depending upon the member’s estimated Social Security disbursement, benefit payments may be greatly reduced or terminated at age 62.
Minimum Amount Provision
The minimum amount provision is relevant to certain options for distribution of the monthly pension benefit. The minimum amount provision is in place to guarantee that a member or that member’s beneficiary will receive benefit payments that total at least the balance of the member’s Annuity Savings Account (ASA) at the time retirement. If a member does not receive this minimum amount in combined annuity and pension payments during his or her lifetime, the member’s beneficiary can claim the remaining amount due. For example, if a member has $100,000 in her ASA at the time of retirement, this member’s total benefits received (combined annuity and pension payments) must equal $100,000 or the member’s beneficiary(ies) may claim the difference.
