UFT Pension Options and Tax Deferred-Annuity (TDA) Workshop Minutes – 11/14/23

Unofficial Minutes – for official pension information, contact a pension rep (some contact info is included below)

UFT Pension Services

Look for articles in New York Teacher

Schedule a pension consultant phone: 212.331.6311

Attend pension/BERS workshops

Retiree Toolkit: Upcoming events 

Website: www.uft.org 

TRS Pension Services

Website – www.trsnyc.org – Sign up for a member account if you have not done so already.

• All forms and booklets
• Loan information center
• Account information
• Annual Benefits Statement (ABS)

Call Center: 888.869.2877

Schedule a 30 minute Zoom call

Email inquiries to [email protected] 

Education programs at TRS – Registration required

Pension and Beneficiary Choices

1. Maximum Pension – You get the most per month possible until you pass away, but when you die, your pension stops and does NOT go to your beneficiary. Other options lower your pension but still go to your beneficiary when you pass away. Cost for maximum pension: free.

2. Continuing Pension Options – By choosing one of these options, you agree to take a reduced pension in order to provide pension payments to a beneficiary/beneficiaries upon your death.

1. Option 1: Joint Survivor Option 100% – The beneficiary receives the same monthly payments you were receiving until your death. More money comes out of your monthly pension because your beneficiary receives the same monthly payments as you when you pass away. You can only choose one beneficiary for this option.
2. Option 2: Joint & Survivor Option 25%, 50%, or 75% (your choice) – Beneficiary receives percentage chosen by you (either 25, 50, or 75 percent). Cheaper than option 1 because your beneficiary receives a percentage (25, 50, or 75) of your monthly pension when you pass away. You can only choose one beneficiary for this option. If beneficiary predeceases you, you are STUCK at whatever your monthly pension salary is until you pass away. You also DO NOT have the option to replace your beneficiary.
3. Option 5-1 Pop-Up – If beneficiary predeceases you, your monthly pension pops back up to the maximum. This option costs the most because of its flexibility.
4. Option 5-2 Pop-Up – Only available if you select the 50% option for your beneficiary. This option is not available for the 25% and 75% options. If beneficiary predeceases you, your monthly pension pops back up to maximum.
5. Option 3: “Five-Year Certain” – You receive your monthly pension until you pass away. If you pass away before receiving 60 monthly payments (5 years), beneficiary/beneficiaries receive the balance of the remaining payments. Ex: You pass away 36 months (three years) after retirement. You beneficiary/beneficiaries would receive 24 months (two years) of your pension salary. After that, they receive nothing. Can have multiple beneficiaries for this option.
6. Option 4: “Ten-Year Certain” – You receive monthly pension until you pass away. If you pass away before receiving 120 monthly payments (10 years), beneficiary/beneficiaries receive the balance of the remaining payments. Ex: You pass away 36 months (three years) after retirement. Your beneficiary/beneficiaries would receive 84 months (seven years) of your pension salary. After that, they receive nothing. Can have multiple beneficiaries for this option.

Tax Deferred Annuity (TDA). 

1. Your Tax Deferred Annuity (TDA) is the money that you voluntarily take out of your check for your retirement. All money taken out is pre-tax. Helps reduce your current taxable income.

2. Not taxed until you withdraw money.

3. Whether working or retired, you can take out a loan at the current interest rate (7%).

4. Can change your contribution rate at any time. Takes between one and three billing cycles to go through. 

5. Minimum contribution is 1%. Maximum annual contribution (if under 50 yrs. old) is $23,000 for 2024. 

6. Maximum annual contribution (if over 50 yrs. old) is $23,500 for 2024. 

7. Start as soon as possible and only contribute what you can afford.

8. After 15 years of service, if you have made contributions of $5,000 or less, you may be eligible to make an additional “catch-up” contribution.

9. TDA amount taken from each check can be seen on the bottom right of your pay stub. “Goal amount” on the bottom right of your check indicates how much you can still contribute for the year before hitting your maximum.

10. You can choose from a number of investment options. One option is a fixed return. The current rate for UFT members is 7%. Other options include diversified, international equity, sustainable equity, U.S. equity index, international equity index. The market is a gamble, but if you play it right, you can outgain the fixed rate. A chart with profit statistics for each option is available on TRS website.

Retirement Options

1. Withdrawal/Rollover – Withdraw your TDA funds or roll them over to an eligible successor program. You CANNOT go back to TDA if you do this.

2. Annuitize – Receive your TDA funds as a monthly annuity, which is separate from, and in addition to, your QPP retirement allowance. You need to pay extra if you would like your beneficiary to continue to receive these monthly payments after you pass away. 

3. Deferral – Elect TDA Deferral status to maintain your TDA balance during retirement. Take money out whenever you want. Take out however much you want. Beneficiaries get everything when you pass away. 99% of people choose this option. 

TDA Advice

1. Increase your TDA contributions every time you get a salary increase.

2. Give yourself a birthday gift by increasing your TDA by 1%. 

3. By doing these things, you can slowly increase your TDA instead of increasing it in tremendous chunks.

UFT Retired Teachers Chapter (RTC)

1. **No price given. Not sure how much it costs to join.** Once you retire and join the RTC, you will have access to these programs and perks:

1. Supplemental Health Insurance Program (SHIP) – See #2 below for details.
2. Nationwide retiree social services
3. Life insurance and travel discounts
4. Continuing education courses & workshops
5. Union support and full voting rights
6. New York Teacher subscription
7. Community and connection

2. SHIP is a unique package of benefits developed by the RTC. Helps cover things not ordinarily covered by your primary health insurance. SHIP supplements your city health plan. Reimburses certain out-of-pocket expenses (ambulance/ambulette, dental stipend, emergency alert system, hearing aid, hospital deductibles, private duty nursing). To receive SHIP, you MUST apply within one year of retirement. Must have optional benefits rider or comparable coverage from another source. You must submit a copy of your marriage certificate or domestic partner registration in order to cover your spouse or domestic partner. SHIP costs $10 per month for you and $10 per month for your spouse/domestic partner.

Minutes by David Ginsberg