TRS 2011 Comprehensive Annual Financial Report

TEACHER RETIREMENT SYSTEM OF TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT 2011
Summary of Benefits
when the member is within five years of being eligible to
retire when leaving employment:
1. A lump sum payment equal to twice the member’s
annual compensation or $80,000, whichever is less.
2. Sixty monthly payments equal to the member’s standard
annuity without reduction for early age, provided
the member had at least five years of service credit at
the time of death.
3. For a sole beneficiary, lifetime payments equal to
a 100 percent joint and survivor annuity, provided the
member had at least five years of service credit subject
to any reduction applicable for early age.
4. An amount equal to a return of the member’s contributions
with accumulated interest.
5. Survivor benefits of $2,500 lump sum payment
plus a monthly benefit. For example, $350 per month
to a beneficiary spouse with minor children, continuing
until the youngest child reaches age 18. At age 65, the
spouse would begin receiving $250 per month for life.
In addition to these five options, a lump sum death benefit
of $160,000 is available if the active member is employed in
a TRS-covered position and dies as the result of a physical
assault during the performance of the employee’s regular
job duties.
Also, the DROP beneficiary of a DROP participant will receive
the accumulated DROP account balance, payable as a lump
sum or in periodic installments.
Retirees - In addition to any joint and survivor or guaranteed
period annuity that may be payable under an optional form
of payment a retiree elected, the beneficiary of a service or
disability retiree is entitled to a $10,000 lump sum payment.
In certain circumstances, eligible survivors may select alternate
payment options in lieu of the lump sum benefit. The
alternate payment options include a lump sum payment of
$2,500 and an applicable monthly survivor benefit payment.
If total payments made before death to a retiree and, when
applicable, to a beneficiary for an optional service retirement
annuity are less than accumulated contributions at retirement,
an amount equal to the remainder is paid to the beneficiary
or as otherwise provided by law. Should a retiree die prior to
receiving all PLSO payments that are due, TRS will pay any
remaining PLSO payments in a single lump sum payment to
the beneficiary. If the retiree participated in DROP and died
before receiving all DROP distributions, any unpaid DROP payments
are paid to the beneficiary designated by the retiree.
GRANDFATHER PROVISIONS
A person who, as a member, met any one of the following
criteria on or before August 31, 2005, is grandfathered under
plan provisions repealed with respect to non-grandfathered
members:
• the member was at least 50 years old, or
• the member’s age and years of service credit equaled
at least 70 (“Rule of 70”), or
• the member had at least 25 years of service credit
Members who are grandfathered will have their benefits
determined in the following manner:
• Final Average Salary at retirement will be determined
by the highest three years (instead of five
years) of salary.
• Preservation of certain retirement reduction
factors means that members age 55 or older with 20
to 24 years of credited service who take early retirement
will receive a lesser reduction to their annuities than
those members who are not grandfathered.
• Partial Lump Sum Option eligibility will require
either age 65 with at least five years of service credit,
or a combined age plus years of credited service that
equals at least 80 (“Rule of 80”) instead of 90.
H E A L T H B E N E F I TS
The major health benefits and long-term care provisions are:
HEALTH BENEFITS FOR ACTIVE PUBLIC
SCHOOL EMPLOYEES
TRS-ActiveCare, the statewide health benefits program
for employees of school districts, open enrollment charter
schools, regional education service centers, and other
educational districts whose employees are members of
TRS, went into effect on September 1, 2002. The program
initially addressed the most critical areas of the state with
regard to availability and affordability of health benefits
for public school employees and therefore focused on
smaller districts. The program has now been expanded to
include larger school districts and more than 1,118 entities
participated in the program in fiscal year 2011. Employees
of participating entities can choose from four preferred
provider organization plans, and employees of certain areas
also have the option of choosing coverage under a health
maintenance organization.
BENEFITS SECTION
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