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Pre-Retirement
Planning
Facilitated by: UT Health Benefits Office
Agenda
During today’s presentation we will review…
UT Retiree Health Benefits
Eligibility Criteria
Basic Coverage
Optional Coverage
UT Select & Medicare COB
Employment After Retirement (ORP vs TRS retirees)
Teacher Retirement System of Texas
Membership
Refund of TRS contributions
Service Credit
Grandfathering
Retirement Eligibility Tiers
Retirement Planning
At the conclusion of the presentation, you will have an opportunity to ask
questions.
Eligibility for UT Retiree Benefits
“Grandfathered”
If you were employed with UT in a benefits eligible position on
August 31, 2003 you must:
• Meet the Rule of 80 (total of age plus years of state service
credit equals or exceeds 80) or be at least age 55 with (5)
years of state service credit; and
• Have at least (3) years of UT service; and
• Be eligible to retire under TRS, ERS or ORP; and
• Last place of state employment must be with UT
If you were employed with UT in a benefits eligible position
on or after September 1, 2003 you must:
• Meet the Rule of 80 (total of age plus years of state
service credit equals or exceeds 80) with at least ten (10)
years of UT service or be at least age 65 with (10) years
of UT service; and
• Be eligible to retire under TRS, ERS or ORP; and
• Last place of state employment before retirement must be
with UT
Eligibility for UT Retiree Benefits
“ Not Grandfathered”
UT Retiree Basic Coverage
UT provides eligible retired employees with the following
Basic Coverage Package at NO COST.
• UT Select Medical Plan with Prescription Drug
Coverage
• $6,000 Basic Group Term Life Insurance
UT Retiree Optional Coverage
The following Optional Coverage may be selected:
• UT Select Medical Plan with Prescription Drug Coverage for
eligible dependents
• Dental
• Vision
• Voluntary Term Life Insurance - Retiree Coverage Options: 7,000, 10,000, 25,000 or 50,000
- Spouse Coverage Options: 3,000
If enrolled in the Standard Plan, can continue the amount in effect on the date your
employment terminates or $500,000 whichever is less.
• Long Term Care Insurance (direct billing through CNA)
Eligible Dependents
• Your spouse as defined by the Texas Family Code
• Your child under age 25 (age 26 for medical only)
• Your unmarried grandchild under age 25 when you
can certify in writing that your grandchild is a
dependent for tax purposes.
• Your child over age 26, if determined to be medically
incapacitated by the UT System Office of Employee
Benefits.
Documentation to enroll dependents must be turned in
within 31 days of retirement.
Change of Status During the Year
You are allowed to make changes to your benefits during
the year if you have a qualifying change in status.
Examples:
• Marriage, divorce, annulment, or spouse’s death
• Birth of a child, adoption, or death of dependent
• Change in spouse or dependent’s employment status
• Change in dependent eligibility
• Change in coverage or cost or another employer
benefit plan available to you and your family
Enrollment form and proof of status change must be
turned in within 31 days from the date of the qualifying
event.
UT Select and Medicare COB
UT retirees and their covered dependents must sign up
for Medicare Part B at age 65 to receive the maximum
amount of benefits from the UT Select Medical Plan.
If you decline Medicare Part B, you will be required to
pay the portion that Medicare pays for Part B covered
items.
UT Select and Medicare COB continued
If eligible for Medicare:
• Medicare Part A (hospitalization) and Part B
(outpatient services) will be primary
• UT Select plan will be secondary
• Medicare Part D enrollment not required
• UT Select plan provides prescription drug coverage
Vacation Leave
You will receive a payout for your unused vacation hours at
the time of separation.
-OR-
You can defer your unused vacation leave into the UT Saver
Deferred Compensation Plan (DCP) 457-B up to the
contribution limit.
You must set up a DCP account and contact the UT Health
Benefits Office at least a month before your retirement date
if you wish to defer your vacation payout.
Employment After TRS Retirement (with a TRS covered employer)
No longer eligible to participate in TRS if re-hired by UT
Health or another TRS employer as a return to work retiree.
Must have a 1 full calendar month break in service before
returning to TRS employment after retirement.
You can work for UT Health or another TRS employer
without loss of your monthly annuity at:
• Half-time or less
• Full-time (greater than ½ time) after a consecutive 12
month (1 year) break in service
Employment After ORP Retirement (with a ORP employer)
No longer eligible to participate in ORP if re-hired by UT
Health or another ORP employer as a return to work
retiree.
No working restrictions for ORP retirees.
Additional Resources
UT Policy 220 Retired Employee Eligibility and Enrollment
http://www.utsystem.edu/benefits/policies/220_RetiredEmployee.pdf
UT Retirement Eligibility Flowchart
http://www.utsystem.edu/benefits/policies/Flowchart.pdf
UT Benefits Handbook for Retired Employees for FY14
http://www.utsystem.edu/benefits/pubs/2013RetHandbook.pdf
UT Benefits Cost Worksheet for FY14
http://www.utsystem.edu/benefits/pubs/2013RetCostWorksheet.pdf
TRS Calculators
http://www.trs.state.tx.us/global.jsp?page_id=/ossa/calculators
TRS Request for Estimate of Retirement Benefits
http://www.trs.state.tx.us/global.jsp?page_id=/benefits/trs18
TRS Service Credit Brochure http://www.trs.state.tx.us/benefits/documents/brochure_texas_service_credit.pdf
Benefits Office
For more information or questions, contact the UT Health
Benefits Office:
Main Line: (713) 500-3935
Fax: (713) 500-0342
Address: 10th floor UCT
Hours: M-F 8 am – 5 pm
Email: [email protected]
Web: https://inside.uthouston.edu/finance/benefits/
To schedule a one-on-one appointment with a UT benefits counselor, contact:
Sherry Haytten, 713-500-3856 Staff
Christina Logan, 713-500-3950 Faculty/A&P (non-supplemental plans)
Questions
Retirement benefits are calculated based on a formula established by law and funded by
Member
Contributions
6.7%
for FY14
TRS is a Defined Benefit Plan 401(a)
State
Contributions
6.8%
for FY14
Investment
Earnings
Permanently terminate all employment with all TRS-
covered employers
and
Have not applied for or received a promise of
employment with the same or another TRS-covered
employer
Refund of Your TRS Contributions
Service credit is an important component
in determining eligibility for TRS benefits
and is part of the retirement formula.
Establishing TRS Service Credit
Minimum of 90 days
Service Credit Eligible for Purchase
Withdrawn Service
Unreported Service
Substitute Service
Out-of-State Service
Development Leave
Active Duty Military Leave
USERRA (Uniformed Services
Employment and Re-employment Act)
Career Technology and Work Experience
State Sick and/or Personal Leave
Membership Waiting Period
Proportionate Retirement
A member who has active membership credit in more
than one Texas Public Statewide Retirement System
may be eligible to combine all of their service credit to
satisfy eligibility requirements to retire under TRS.
Examples:
Teacher Retirement System of Texas
Employees Retirement System of Texas
Judicial Retirement System of Texas
Texas Municipal Retirement System
Texas County and District Retirement System
City of Austin Employees Retirement System
El Paso City Employees’ Pension Fund
City of Austin Police Retirement System
Are you Grandfathered?
At least 50 years of age
or
Age and years of service credit equal at least 70
or
Have at least 25 years of service credit
Was a TRS member and met one of the criteria below
on or before August 31, 2005
Calculation of Benefits
Average of the highest
three annual salaries
Average of the highest five
annual salaries
Partial Lump Sum Option –
eligible for normal-age
(unreduced) service
retirement benefit
Partial Lump Sum Option –
Must meet rule of 90
Members age 55 or older
with 20-24 years of service
credit not eligible for normal
age retirement – early
retirement reduction is
“subsidized”
Members age 55 or older
with 20-24 years of service
credit not eligible for normal
age retirement – early
retirement reduction is “not
subsidized”
“Grandfathered” “Non-Grandfathered”
Average of three or five highest
annual salaries
Total years of Service Credit x
2.3% = Total %
Total % x Average Salary =
Annual Annuity
Annual Annuity ÷ 12 = Monthly
Standard Annuity
Calculating Your Standard Annuity
“The Formula”
Distribution:
An amount equal to 12 months is
issued at the same time as your first
monthly annuity payment.
An amount equal to 24 months may
be taken in either one or two annual
payments.
An amount equal to 36 months may
be taken in one, two or three annual
payments.
Partial Lump Sum Option
What is My Tier?
• Changes to the retirement plan over the years has
resulted in four distinct membership categories, each
with its own retirement eligibility requirements
• To confirm what requirements apply to you, contact
TRS or submit a request for an estimate of your
retirement benefits
TIER 1
If you are grandfathered and your current TRS membership began
prior to September 1, 2007, you are eligible for
Normal-Age Service Retirement
• At age 65 with at least 5 years of service credit or
• Meet the Rule of 80 (your age and years of service credit total at
least 80) and you have at least 5 years of service credit
TIER 2
If you are not grandfathered and your current TRS membership
began prior to September 1, 2007, you are eligible for
Normal-Age Service Retirement
• At age 65 with at least 5 years of service credit or
• Meet the Rule of 80 (your age and years of service credit total at
least 80) and you have at least 5 years of service credit
TIER 3
If you are grandfathered and your current TRS membership began
after September 1, 2007, you are eligible for
Normal-Age Service Retirement
• At age 65 with at least 5 years of service credit or
• You are at least age 60, meet the Rule of 80 (your age and
years of service credit total at least 80), and have at least 5 years
of service credit
TIER 4
If you are not grandfathered and your current TRS membership
began after September 1, 2007, you are eligible for
Normal-Age Service Retirement
• At age 65 with at least 5 years of service credit or
• You are at least age 55, meet the Rule of 80 (your age and
years of service credit total at least 80) and you have at least 20
years of service credit
TRS Rule Change Effective 9-1-14
If you are not vested in TRS by September 1, 2014, you are eligible
for
Normal-Age Service Retirement
• At age 65 with at least 5 years of service credit or
• You are at least age 62 and meet the Rule of 80 (your age and
years of service credit total at least 80).
Getting Started….
1. Contact TRS at least six months prior to your
anticipated retirement date.
2. Complete and submit your “Request for Estimate of
Retirement Benefits” form (TRS 18).
3. TRS will send your retirement packet within 31 days
after receipt of your TRS 18.
4. Complete and return your retirement forms at least 6
weeks prior to your retirement date as recommended
by TRS.
Your Retirement Packet will include:
Instructions for Service Retirement form (TRS31)
Retirement Estimate of Benefits Form (TRS25/25L)
List of Acceptable Proof of Age Documents form (TRS13)
Application for Service Retirement form (TRS30)
Direct Deposit Request form (TRS278)
Income Tax Withholding form (TRS228A)
Notice of Final Deposit before Retirement form (TRS7)
Other forms as applicable….
TRS
Deductions from Monthly Annuity
FEDERAL INCOME TAX
Disability Retirement
As a TRS member, regardless of your age and years of
service credit, you may apply for disability retirement if:
You are mentally or physically disabled from the further
performance of your job,
and
Your disability is probably permanent
Please contact TRS for additional information.
Questions
