Current Pension Topics: How to Get Ready For A Smooth Retirement
By JOEL FRANK
Here is some more useful information taken from the 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.

How do I prepare for the retirement process?

If you are contemplating retiring soon, you may be wondering how to begin. It's important to begin preparing for the application process well in advance of your intended retirement date.

The following checklist should help you prepare for the retirement process.

- Review your service credit as soon as possible, to ensure you are eligible to retire;

- Consider taking a loan or, if applicable, an excess withdrawal; - Choose a method of distribution for your TDA funds;

- Elect a payment option and designate your beneficiaries, if applicable;

- Tiers I/II members should make a QPP investment election at retirement;

- File the "Service Retirement Application" for your tier; - Read any of the applicable TRS Retirement Series brochures; and

- Check for the forms you may need to file with your retirement application.

If I am a Tier I member, how would my Final Average Salary (FAS) be calculated?

If you have served at least three years in the position from which you are retiring, your FAS generally would be the actual gross salary earnable during the 12 months prior to your retirement. If you have served less than three years in the position from which you are retiring, your FAS generally would be your annual earnable salary during the last year of the most recent position you held for at least three years. You may instead elect to have your FAS be your average annual salary earnable during any five consecutive years.

If I am a Tier II member, how would my Final Average Salary (FAS) be calculated?

Your FAS generally would be the average of your highest three consecutive annual salaries. However, if the salary you earned during any year included in the three-year period exceeds the average of the previous two years by more than 20%, the amount in excess of 20% would be excluded from the calculation.

If I am a Tier III or IV member, how would my Final Average Salary (FAS) be calculated?

Your FAS generally would be the average of your highest three consecutive annual salaries. However, if the salary you earned during any year included in the three-year period exceeds the average of the previous two years by more than 10%, the amount in excess of 10% would be excluded from the calculation.

What payment options may I elect for my retirement allowance?

You may elect to receive the maximum retirement allowance for which you are eligible. However, if you elect to provide for a beneficiary after you die, your retirement allowance would be reduced. The following choices are available regarding your beneficiary: options that provide lifetime benefits to your beneficiary after your death; options that enable your retirement allowance to "pop up" to the maximum if your beneficiary predeceases you; and options that guarantee that a certain number of retirement allowance payments will be made to you (or to your beneficiary, if you should die before the designated number of payments have been made). Tier I and II members also have the option of leaving a lump-sum amount to a beneficiary. In all cases, you would receive your retirement allowance for as long as you live. Please see the FAQs under the Beneficiaries section for more information.

If I choose to receive the Maximum Payment Option, what would happen to my retirement allowance when I die?

All retirement allowance payments would cease upon your death. However, any amount due for the month in which you die would be payable to your fractional beneficiary.

In addition, for Tiers II/III/IV retirees who are covered under Death Benefit #2, their Death Benefit #2 beneficiary may be eligible to receive a lump-sum post-retirement death benefit. See the FAQs about Death Benefits for more information.

Can I receive my retirement allowance in a lump sum?

In general, lump-sum payments of your retirement allowance are only permitted for terminally ill members (please see TRS' "Lump-Sum Disability Benefit" brochure); however, all eligible members may apply for a loan from their funds in conjunction with retirement. If you are a Tiers I/II member, you may also withdraw in a lump sum any amount in your Annuity Savings Fund (ASF) that is in excess of your minimum accumulation. (Please note that an outstanding loan or an excess withdrawal at retirement may result in a reduction of your retirement allowance payments.)

May I change the elections I make on my retirement application?

Yes. However, in general, TRS must receive any changes no later than one day before the effective payability date of your retirement allowance. If you filed a disability retirement application, TRS must generally receive any changes within 30 days after the date on which the Medical Board recommends your disability retirement. However, the Applicant's Personal Report and the Report of Applicant's Physician may not be amended after they are filed.

In addition, members who filed for retirement after October 31, 2003 or left service under a disability retirement after October 31, 2003 may change their retirement allowance payment options up to 30 calendar days after their payability date. Disability retirees of all tiers may now change their retirement payment options up to 30 days after their disability application is approved or 30 days from the date they retired as a result of the disability, whichever is later. Please note that for all eligible members, the 30-day allowance includes weekends.