Q: I am a student graduating this May and I will be going into teaching. I have heard so many negative things about the proposed Tier 6. Is there a way I can get into Tier 5 now?
A: There is considerable talk about the governor's plan to create a new retirement tier for state and local government employees. Under the Tier 6 proposal, the retirement age for new employees would rise to 65, worker contributions would increase, and an option for a 401(k)-style defined contribution plan would be created.
NYSUT and other public employee unions are strongly opposed to the plan and working hard to prevent its approval, arguing it would harm the current pension funds, actually cause employer contributions to go up, and hurt the ability of schools to attract and retain educators.
That said, it is possible for future employees like you to enroll in the pension system before you are able to secure full time employment. If at all possible, you can attempt to substitute teach for one day in order to enroll in Tier 5. Be sure to join TRS before you start.
TRS confirms that a membership application must be completed, notarized and filed with the New York State Teachers' Retirement System prior to the first day of substitute service in order to effect a Tier 5 membership. Once you substitute for 20 days you would not only attain Tier 5 membership, you'd earn one month of service credit. For more information, call TRS at 800- 348-7298.
Q: My benefit profile estimates a lump sum in-service death benefit. How is this figured and do I still have a death benefit after I retire?
A: Members in all tiers are covered by an in-service death benefit. Those in Tiers 2-5 are eligible after earning credit for one year of service. The benefit is generally one year's salary after a year of service, increasing to a maximum of three years' salary after three years or more of service. However, the benefit is reduced after age 60.
For Tiers 2-5, the in-service death benefit becomes a post-retirement death benefit and is paid this way: 50 percent of the death benefit in effect at retirement for the first year; 25 percent in the second year and 10 percent for the third year and beyond. So essentially, Tier 2-5 members have a certain amount of life insurance with the benefit after retirement. If a person works beyond age 62, there is a slight change, so members should contact the system to see how that might impact your situation.
If you die as the result of an accident sustained in the performance of your duties, certain surviving family members may be entitled to receive an accidental death benefit in lieu of an in-service death benefit. The annual payment to your beneficiary would be 50 percent of the regular salary during your last year of service.