September 2011
August 31, 2011

TRS: Laid off? How to protect your retirement benefits

Source: NYSUT United

When you are dealing with the stress of a layoff, your retirement benefits may not be a high priority. But because your retirement benefits are linked to your employment status, it is important to have clear, specific guidance on how unemployment, re-employment or a change in careers could affect your benefits at retirement.

Q: How can I retain my membership in the New York State Teachers' Retirement System during the time I am laid off?

A: If you have five or more years of service in NYSTRS, you are vested in the system. New employees hired after Jan. 1, 2010, however, must have 10 years of service before they are vested, according to a new Tier 5 pension provision signed into law in 2009. The membership of any person credited with fewer than five years of service will automatically terminate if they do not receive the equivalent of 20 or more full-time days of credit in a school year, within a seven-year period.

Q: How can I accrue vested rights if I am laid off?

A: If you have less than five years of service, you can continue to work toward vested rights if you work as a part-time employee (for example, as a substitute teacher or part-time teaching assistant). The equivalent of 20 full-time days equals one month of credit, and nine months of credit equals a full year for NYSTRS.

Q: What happens if I have worked for different school districts?

A: All service would be counted, but only in the respective retirement systems that cover the position. For example, a business teacher could substitute-teach, which would be reported to NYSTRS, but if he or she filled in as a principal's secretary or a custodian, that service could only be reported to the Employees' Retirement System. The end result would mean it would take longer for the person to accrue service credit toward vesting.

All of your service in New York state public schools counts, regardless of how many different employers you have had, provided the appropriate transfer guidelines are followed. If an employer mishandles your records or does not submit them to the retirement system, you will not receive credit. If you have concerns, contact your retirement system immediately. You may have to contact the employer as well. Be sure to keep all pertinent records, including pay stubs, W-2 forms, income tax filings and retirement system annual statements and correspondence.

Q: What happens if I withdraw my benefits from the system?

A: We strongly recommend that you NOT withdraw. If you do, you forfeit all benefits. If you are re-employed after such a withdrawal, you may rejoin the system. Current guidelines allow you to apply for reinstatement in your plan and to pay for prior service credit. You will be enrolled in the plan in effect at the time of such new employment and would need to apply and pay for a re-instatement of your former membership to effect a change in your date of membership. Tier 1 and 2 members may withdraw from membership at any time. You would need to submit a signed statement indicating you understand the consequences of withdrawing your membership and terminating your rights to any future benefit. Tier 3 and Tier 4 members may withdraw only if they have less than 10 years of service credit.