June 2011
May 20, 2011

TRS: What if I leave before I'm vested?

Source: NYSUT United

Q: What happens if I'm laid off before I'm vested?

A: Members attain vested status with a certain amount of New York state service credit, making them eligible for a retirement benefit at age 55. Tier 5 members vest with 10 years of state service credit. For all other tiers, five years of credit is necessary to vest. If you leave teaching before you vest and do not intend to return to service, you should withdraw your member contributions and interest earned and cancel your membership.

You will not receive your employer's contributions. Should you return to teaching at a later date, you may reinstate your former membership under your former tier.

If you don't withdraw your contributions and interest earned, you can keep your New York State Teachers' Retirement System membership active by working the equivalent of 20 full-time days in a school year for a participating TRS employer every seven years.

Q: My district has a buyout you can take every year rather than take health insurance. If I were to take the payout, would it be considered part of my salary and count toward my final average salary?

A: No, because it is not regular salary.

Q: Is there any progress in negotiating some form of compensation for the 3 percent contribution paid out over and beyond the first 10 years of service? I remember some discussion about one month credit for every year worked over the 10 years but I think that deal stalled. Any update would be greatly appreciated.

A: With the advent of Tier 5 (which requires the 3 percent contribution for an employee's entire career), the likelihood of that bill ever passing is negligible.

Q: I am a teaching assistant in Tier 4, working in the district continuously for 13 years. I will be 68 in April and my plan is to retire after I reach age 70. I read in the NYSUT magazine a question from a reader pertaining to a penalty for retiring with less than 30 years of service. Your answer to that person was, in part "...However there is no penalty for a member who is 62 or older." If I would retire at age 68, 69, or my planned 70, would I incur a penalty for the significant number of years less than the required 30 years?

A: There is no penalty for not reaching 30 years of service IF you retire at 62 or older. However, IF you have not attained a minimum of 20 years of service credit, regardless of your age, you will sustain a penalty.