Glossary

Assignment - The signed transfer of benefits to a third party. Retirement benefits are not assignable.

Annuitant - Any person in receipt of a retirement allowance as provided by the statutes governing the operations of TRS.

Beneficiary - A person(s), estate or trust named by an active, inactive or retired member to receive any payment or balance due upon the member's death.

Board of Trustees - The Board of Trustees is authorized by 70 O.S. Section 17-106 to administer the retirement system for the employees of the public schools of Oklahoma. The Board has 13 members. The Governor appoints six members, the president of the Senate appoints two, the speaker of the House of Representatives appoints two and the three remaining members are ex-officio trustees. The three ex-officio trustees include the state superintendent of public instruction, director of the Career and Technology Department of Education and director of the Office of State Finance. Eight trustees are active or retired TRS members and the other five are professional from law, accounting, insurance, finance, investments or public pension administration.

Contribution Rate - The percentage of the member's salary paid by the employee and the employer to the system to fund benefits. This percentage is determined by statute. Members contribute 7 percent of pay and local school districts contribute 7.05 percent.

Cost of Living Increase - A benefit increase authorize by the State Legislature payable to retirees.

Creditable Service - Any membership service, prior service and optional service credit as provided by statute.

Death Benefit - The amount due a beneficiary in the event a TRS member dies. Death benefits for active members include a return of employee contributions plus interest. Death benefits for retired members include a $5,000 payment plus an additional amount provided by the retirement option selected by the member when he or she retired.

Death Certificate - The official legal document issued at a person's death, which provides vital information relative to the time and circumstances of a person's death.

Decedent - A deceased person.

Employer - The public schools, colleges and universities of Oklahoma and certain state agencies whose mission is devoted to public education.

Employee Contributions - The monthly contribution made on behalf of each member. This money is refundable to the member upon termination of employment or the member's beneficiary in the event of member's death.

Employer Contributions - Employers contribute a percentage of covered wages into the retirement fund. This money is not refundable to the member or employer if the member withdraws his/her contributions.

Estate - The assets of an individual comprising total worth.

Executive Secretary - The chief executive officer employed by the Board of Trustees to oversee the administrative functions of the TRS. Tommy C. Beavers is the fifth executive secretary of TRS and has held that position since January 1988.

Executor/Executrix - A person or an institution named by an individual in his/her will to settle his/her estate in accordance with the terms of his/her will.

Exemption - A tax term used to describe certain exclusions in the calculation of federal tax withholdings.

Final Average Salary - The member's average salary used in calculating retirement benefits. For members who joined TRS prior to July 1, 1992, final average salary is the average of the three highest years in which contributions were made. For members who joined TRS after June 30, 1992, the final average salary is the average of the five highest consecutive years in which contributions were made. FAS is often used to denote Final Average Salary.

Fiscal Year - The accounting year for reporting earnings, service credit and contributions. The fiscal year for TRS is July 1 through June 30. This is not necessarily the same as a member's school year.

Inactive member - Refers to members who have previously contributed to TRS and still have an account with TRS although they are no longer in a covered position.

Joint Survivor Annuity - A retirement plan in which a member accepts reduced benefits so a beneficiary will receive a lifetime monthly benefit after the member's death. There are two joint survivor annuities available to TRS members. Option 2 is a 100 percent joint survivor benefit and Option 3 is a 50 percent joint survivor benefit.

Life Expectancy - The average number of years a member is expected to live according to actuarial tables.

Lump Sum Payment - A single payment for the purchase of membership service credit or the repayment of a previously withdrawn account.

Maximum Benefit - The largest annual benefit paid to a disability or service retirement annuitant, which is calculated based on the statutory formula, with no reduction for optional benefit payments.

Medical Board - The board of physicians employed by the TRS Board of Trustees to review the medical records of applicants for disability retirement benefits.

Medical Examination - The evaluation of a member's medical condition to assist in the determination of eligibility for disability benefits.

Membership Service - The years of credited service accumulated by a member since joining TRS.

Minor - A child under age 18 named as the beneficiary for an active or retired member's account.

OPERS - The Oklahoma Public Employees Retirement System is the retirement system for state and county employees.

Net Benefit - The amount of the member's gross benefit less deductions.

Normal Retirement - Unreduced retirement benefit paid to TRS members at age 62 or when service plus age equal 80 or 90.

Retirement Options - Methods of taking monthly retirement benefits. TRS provides five retirement plans members may choose from at retirement. All five plans pay the member a monthly benefit for life. The Maximum and Option 1 plans provide a lump sum payment of any unused member deposits after the retiree's death.

Option 2 and 3 are joint survivor benefits, whereby the member receives a reduced monthly benefit with a provision that the member's designated beneficiary will continue to receive a monthly benefit for life after the death of the retired member. Under Option 2, the beneficiary receives 100 percent of the retired member's benefit. Under Option 3, the beneficiary receives 50 percent of the retired member's benefit.

Option 4 guarantees the retired member will receive at least 120 monthly benefit payments. If the member dies before receiving 120 payments, TRS will continue to pay his or her beneficiary for the balance of payment required to make 120 payments.

Out-of-State Service - State statute provides for the purchase of out-of-state service. Service credit may be purchased for public, non-federal service performed in another state; or foreign service as a teacher in a U.S. territory, the Peace Corps or in U.S. military-sponsored American schools for dependents of U.S. citizens. Such service must have been of a nature that would have been covered, had it been rendered with a participating TRS employer.

Permanent Disability - A mental and/or physical condition that results in the inability to perform one's present duties and is likely to be permanent.

Pop Up - In TRS, this term describes the process of a retiree who selects a joint survivor annuity at retirement under Option 2 or 3, but returns to the maximum retirement allowance upon the death of the beneficiary named at the time the member retired.

Post Retirement Employment - The term describes the employment status of a retiree after the retiree has begun to receive benefits from TRS. Re-employment with a covered employer is limited by statute. Oklahoma statute provides for a reduction in a retiree's monthly benefits if post-retirement earnings from Oklahoma public schools exceed certain limits.

Power of Attorney - Written document by a person granting authority to another person to act in his/her place as outlined in the document. The document is signed by the parties involved, witnessed and/or notarized.

Prior Service - Employment with a covered agency prior to the member joining TRS. (Can also refer to service performed prior to July 1943).

Public School - A school district, state college or university, Oklahoma Department of Education, Oklahoma Department of Career and Technology Education or any other state educational entity operating within the state, supported wholly or partly by public funds and operating under the authority and supervision of a legally constituted board or agency having authority and responsibility for any function of public education.

Purchased Service - Service credit for time a member was employed in an eligible position for which no contributions were received but the member paid an established cost to add the credit to his or her count of total service.

Qualified Plan - A term used to denote that a pension or retirement plan has met the requirements of the IRS for favorable tax treatment.

Re-examination - The process of a periodic review by a physician of a disability annuitant's ability to work based on physical or mental problems.

Refund - A payout of member retirement contributions, plus any applicable interest, to a member or the member's beneficiary.

Redeposit - The replacement of withdrawn contributions and interest to restore membership service credit.

Retirement Allowance - Generally, an annuity for life payable each year in 12 equal monthly installments beginning on the date fixed by the Board of Trustees.

Service Credit - Credited years of employment in a particular retirement system. The amount of service the member has credited to his retirement account.

Student - An individual who is pursuing a course of regular full-time study.

Unfunded Liability - The accumulated cost of benefits previously earned by active, inactive and retired members but not funded.  The System's Actuarial Unfunded Accrued Liability (UAAL) is the difference between TOTAL future benefits minus current assets available to pay benefits.

Vested/Vesting - The right to specified benefits granted to eligible employees after a fixed period of employment and membership in the pension system. A member has vested status (is eligible for monthly benefits at some future date) with TRS after accumulating 5 years of participating Oklahoma service credit. This means being employed by Oklahoma public schools and contributing to TRS for at least 5 years. A member cannot convert unused sick leave to retirement credit in order to meet the minimum 5 years of service required for vesting.

Waiver - A formal written statement relinquishing certain rights, claims or privileges.