TRS 2011 Comprehensive Annual Financial Report

TEACHER RETIREMENT SYSTEM OF TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT 2011
Summary of Benefits
The Teacher Retirement System of Texas (TRS) administers
a defined benefit retirement plan that is a qualified pension
trust under Section 401(a) of the Internal Revenue Code.
The pension trust fund provides service and disability
retirement, as well as death and survivor benefits, to eligible
employees of public and higher education in Texas and their
beneficiaries. A general information booklet, TRS Benefits
Handbook, is provided to each TRS member and annuitant.
Retirement benefits are financed by member, state, and
employer contributions, and through investment earnings of
the pension trust fund.
TRS administers TRS-ActiveCare, the statewide health
benefits program for eligible public education employees
of participating entities. The program is financed by plan
participant premium payments and investment income
from the assets of the trust. In addition to TRS-ActiveCare,
the system administers a separate trust that provides
comprehensive health benefits coverage for retired
members through TRS-Care. This program is financed by
contributions from the state, active public school employees,
reporting entities (employers), premium payments from plan
participants, and investment income from the assets of the
trust.
TRS also administers an optional long-term care insurance
program for eligible retirees and public school employees.
Certain family members are also eligible. The plan is available
on an enrollee-pay-all basis.
R E T I R E M E N T P L A N
B E N E F I T S
This summary of benefits is based on statutory provisions of
the plan effective for FY 2011.
The major retirement plan benefits are:
SERVICE RETIREMENT
Normal Retirement Eligibility - Age 65 with at least five
years of credited service, or when the sum of member’s age
and years of credited service (five years minimum) equals
or exceeds 80 for members who established membership
before September 1, 2007 and maintained membership until
retirement.
Age 65 with five years of credited service, or age 60 and
the sum of member’s age and years of credited service (five
years minimum) equals or exceeds 80 for members who
established TRS membership on or after September 1, 2007.
For grandfathered members who re-enter TRS on or after
September 1, 2007, age 55 with at least 20 years of service
credit and the sum of member’s age and years of credited
service equals or exceeds 80.
Standard Annuity - A monthly benefit payable at retirement
throughout the retiree’s lifetime and calculated according to
the statutory benefit formula.
Benefit Formula - 2.3 percent times the average of the five
highest annual creditable salaries times years of credited
service equals an annual standard annuity. For members who
are grandfathered, the three highest annual salaries are used.
Minimum Benefit - $150 per month less any reduction for
early age or optional annuity selection.
Early Retirement Eligibility - Age 55 with at least five years of
credited service, or any age below 50 with 30 or more years
of credited service, provided the sum of the member’s age
and years of credited service is less than 80 for members
who established membership before September 1, 2007 and
maintained membership until retirement.
Age 55 with at least five years of credited service, age and
credited service total 80 but less than age 60, or 30 years
of credited service but less than age 60 for members who
established TRS membership on or after September 1, 2007.
Early Retirement Benefit - The standard annuity calculated
under the benefit formula (or the minimum benefit, if
applicable) reduced for early retirement. The amount of
the reduction varies depending on age, years of service
credit, and whether a member is grandfathered. The date
a member joined TRS (before September 1, 2007, or on or
after September 1, 2007), also can determine whether the
standard annuity will be reduced.
DISABILITY RETIREMENT
Eligibility - Physical or mental disability precludes the member’s
continued performance of current duties and the disability is
probably permanent, as certified by the TRS Medical Board.
Benefit - For disabled members with at least 10 years of
credited service, the greater of the standard annuity unreduced
for early age or $150 per month minimum benefit,
less any reduction for the selection of an optional annuity.
For disabled members with fewer than 10 years of credited
service, $150 per month.
Duration - For retirees with 10 or more years of credited
service, payments continue for as long as the disability continues.
For those with fewer than 10 years of credited service,
payments continue for the life of the retiree, the duration of
the disability, or the number of months of credited service,
whichever is shorter.
BENEFITS SECTION
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