Current Pension Topics: Erroneous Deductions, Employer Contributions

Current Pension Topics
Erroneous Deductions, Employer Contributions


The following information comes from: http://www.trs.nyc.ny.us/htm/set-qpp.htm; the official Web site of the Teachers' Retirement System of the City of New York.

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 should I do if I believe there is an error in the amount of pension deductions taken from my paycheck?

If you believe an incorrect amount was deducted for your pension contributions, please notify TRS's In-Service Payroll Division in writing and attach a photocopy of the pay stubs in question.

Will I be refunded for an erroneous contribution?

Yes. To apply for a refund, you must complete an "Erroneous Contribution Refund Application" (code IP12). You may order this form through the "Publications/Forms" section on our Web site or by calling TRS at 1 (888) 8-NYC-TRS and selecting Option 3 on the TRS Service Line's main menu.

Does my employer contribute toward my retirement allowance?

If you are an in-service Tier I or II member who is not on a leave of absence, your employer makes contributions equaling 2.50 percent of your salary to your Increased-Take-Home Pay (or ITHP) account. If you retire, you would receive this amount as part of your retirement allowance. In addition, certain Department of Education employees in all tiers receive a supplemental contribution when they reach the maximum of their salary schedule. This amount is $550 per year for supervisors, and $400 per year for other members; if you are a Tier III or IV member, this amount is known as your Annuity Savings Accumulation Fund (or ASAF).

What do the payroll deduction codes on my pay stub represent?

The code "TRS 414H STD" represents pre-tax QPP deductions. The code "TR PN LNS" represents QPP loan payments.

The code "TRS TDA" represents TDA contributions (including goal amount and any applicable "catch-up" contributions).

The code "TRS TDA LOAN" represents TDA loan payments. The code "TRS BUYBACK" represents prior service purchase.

The code "TR PN ARR AT" represents mandatory purchase of membership service that was rendered by Tier III/IV members before July 1989; these funds are not federally taxable upon distribution.

The code "TRS 414H ARR" represents mandatory purchase of membership service that was rendered by Tier III/IV members after July 1989; these funds are federally taxable upon distribution.

What is the difference between FICA Classes "A," "C," and "E"?

* Under FICA Class "A," your Social Security tax and your pension contributions are both deducted from your gross salary.

* Under FICA Class "C," your pension contributions are reduced by the amount of your Social Security tax.

* Under FICA Class "E," only your pension contributions are deducted; no Social Security tax is withheld.

Tiers I/II members have the option of electing Class "A" or Class "C"; Tiers III/IV members are automatically assigned to Class "A." (Please note that Class "E" is no longer offered.)

When can I file for a FICA-C offset or an ITHP waiver?

Tier I and II members can apply at any time by filing a "QPP Contributions Change Application" (code IP1). You may order this form through the "Publications/Forms" section on our Web site or by calling TRS at 1 (888) 8-NYC-TRS and selecting Option 3 on the TRS Service Line's main menu.