Current Pension Topics: The Letters of the Law For TRS Members

Current Pension Topics
The Letters of the Law For TRS Members


An acronym consists of the first (or first few) letters of several words, like RADAR, from radio detecting and ranging. Following are acronyms used by the Teachers Retirement System of the City of New York (TRS). You should become familiar with these short-cut versions in important documents and statements issued to you as a member of the TRS. Your thorough understanding of TRS benefits is based, in part, on knowing what these acronyms mean.

Mr. Frank is a fee-only Retirement Financial Planner and a retired city high school Teacher of Accounting. He can be reached by telephone at (732) 536-9472, or via e-mail at rollover@optonline.net.

What is the ABS?

A-B-S stands for the Annual Benefits Statement. TRS issues this individualized report each fall to in-service members and members on a leave of absence for up to seven school years. The statement summarizes the members' Total Service Credit and lists their designated beneficiaries. Benefit estimates and benefit projections are also provided to certain retirement-eligible members. This information is reported as of the previous June 30.

What is my ASAF?

A-S-A-F stands for your Annuity Savings Accumulation Fund. This account contains the monthly supplemental contribution the Department of Education provides to certain Tiers III/IV members who reach the maximum of their salary schedule. This amount is $550 per year for supervisors and administrators, and $400 per year for other eligible members. This contribution is not provided to adjuncts, college employees, Charter School employees, or paraprofessionals.

What is my ASF?

A-S-F stands for your Annuity Savings Fund. This account contains a Tier I or II member's Qualified Pension Plan (QPP) contributions, and reflects investment results and/or interest and any withdrawals.

What is EAR?

E-A-R stands for Earnings After Retirement. This is a general term for the rules governing the amount that certain TRS service retirees are permitted to earn while they are also receiving retirement allowances. These earnings restrictions affect individuals under the age of 65 who work in public employment in New York State or any of its political subdivisions, such as New York City.

What is EFT?

E-F-T stands for Electronic Fund Transfer. This service enables TRS retirees to have their monthly retirement allowance and/or annuity payments electronically forwarded directly to their checking or savings account. EFT is also available for the payment of loans to members who receive their paychecks through direct deposit or their monthly retirement allowance payments electronically. EFT ensures that their account is credited on the payment date and safeguards against delayed, lost, or stolen checks.

What is my FAS?

F-A-S stands for Final Average Salary. This calculation is used to compute the retirement allowances of TRS members. For Tier I members, the FAS is generally the annual salary earnable during the last year of the most recent position they held for at least three years. For Tier II, III, or IV members, the FAS is generally the average of their highest-earned three consecutive annual salaries during their periods of total credited service. For all tiers, certain restrictions affect the calculation of the FAS.

What is ITHP?

I-T-H-P stands for Increased-Take-Home Pay. The City of New York contributes 2.5 percent of Tiers I/II members' gross salary toward their retirement allowance. This reduces the contributions that the members would have to make to the QPP and thereby increases their take-home pay. Members have the choice of waiving their ITHP, which would reduce their take-home pay, but provide them with a higher annuity benefit upon retirement. In any case, the city will make the same contribution to their ITHP account.

What is my MCAF?

M-C-A-F stands for your Member Contributions Accumulation Fund. This account contains a Tier III or IV member's Qualified Pension Plan (QPP) contributions with interest, and includes any contributions that the member paid to purchase optional service credit.

What is the QAS?

Q-A-S stands for the Quarterly Account Statement. TRS issues this report approximately two months after the end of each quarter of the calendar year to in-service members and retirees with TDA Deferral status. The statement summarizes a member's account balances, contributions, investment elections, loan status, and account activity for the reporting period. Members with Qualified Pension Plan (QPP) and Tax-Deferred Annuity (TDA) Program accounts receive one statement that includes information about both accounts.

What is the QPP?

Q-P-P stands for the Qualified Pension Plan. This defined-benefit plan, administered under Section 401(a) of the Internal Revenue Code, enables TRS members to receive a monthly retirement allowance upon meeting certain eligibility requirements.

What is an RMD?

R-M-D stands for a Required Minimum Distribution. This is the amount that certain participants in TRS' TDA Program must receive from their TDA funds in a given year to meet the distribution regulations of the Internal Revenue Service. RMDs apply only to TDA participants who have separated from service, are at least age 70-1/2, and have TDA Deferral status. It is important to note that the IRS imposes a 50 percent excise tax on any amounts that are required to be distributed for a given year, but are not.