1. What is a tax-sheltered annuity?
2. How does a TSA fund work?
3. What are the requirements for participating in the program?
4. How much can I contribute?
5. What if I have a tax-deferred plan somewhere else?
6. How are the funds invested?
7. What rate of return can I expect?
8. How can I withdraw my funds?
9. If I stop working in the Oklahoma public education system, what happens to my TSA contributions?
10. What happens to my TSA in the event of my death?
11. When I retire, what options do I have?
12. Is my retirement benefit subject to state income tax?
13. How do I increase the federal taxes withheld from my retirement check?
14. Will federal and state income taxes be withheld from my retirement check?
15. How should TRS be notified of a death of a retired member?
16. When do I need to provide proof of birth information?
17. Downloading PDF Documents
18. How should I notify TRS of my new home mailing address?
19. What type of proof of birth is required?
20. How do I change my beneficiary with TRS?
21. Can I get an estimate of benefits with all plan options from this web site?
22. Can I withdraw my retirement contributions?
23. If I have 5 years of creditable service credit and terminate employment in Oklahoma public schools, must I withdraw my contributions? What options do I have concerning my account in the TRS?
24. If I leave covered employment and do not have 5 years of service credit (not vested), what are my options in reference to my contributions?
25. When will my Annual Member Statement be mailed?
26. Do I get a refund if I terminate my membership with TRS?
27. If I select Option 2 or 3 when I retire and name my spouse as beneficiary, what happens if my beneficiary dies or we divorce? May I change my option and/or my beneficiary?
28. What about the $5,000 death benefit that will be paid at my death? Who is the beneficiary and can I change the beneficiary if necessary?
29. How do I change my beneficiary designation?
30. What happens to my benefits if I become divorced?
31. How can I obtain additional service credit?
32. How can I find out about retiring?
33. If I retire this year, what do I have to do?
34. When can a TRS member retire?
35. How do I go about making an appointment to discuss my retirement benefits?
36. What options do I have for health insurance after I retire?
37. I receive my retirement checks at home. What should I do if my check does not arrive?
38. My check was late because it went to another city before arriving. What can be done?
39. My check has two different date stamps. Why?
40. When do direct deposits go to the bank?
41. What if I wish to return to work after I have retired?
42. When will you mail my end-of-year tax Form IRS 1099R? If my check is electronically deposited, where will you mail this form?
43. I did not receive a 1099R tax form from TRS. How do I get one?
44. How do I determine the taxability of my retirement benefit?
45. When I retire, what will be deducted from my monthly retirement check?
46. Does the TRS staff decide how to invest the assets held by TRS?
47. How can I be sure that TRS is acting responsibly with my investment?
48. How would my account be settled in the event of my death as an active teacher?
1. What is a tax-sheltered annuity?
A tax-sheltered annuity is a fund that allows you to accumulate tax-deferred cash for your retirement. Your TSA usually reduces your current taxable income. You may pay even less after you've retired because you may be in a lower tax bracket.
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2. How does a TSA fund work?
Your monthly TSA contributions are invested by TRS. Net earnings are posted monthly and statements are mailed to you quarterly.
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3. What are the requirements for participating in the program?
First, your employer (school district, institution of higher learning or other public agency devoted primarily to educational functions) must agree to deduct TSA contributions from your salary and remit it separately to TRS.
Secondly, you must be a member of TRS and be employed by a participating employer. You must sign a written agreement that allows your employer to deduct a specified amount of income.
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4. How much can I contribute?
The Internal Revenue Code has set limits on the amount you can exclude from you income for tax purposes. The elective deferral limit for 2002 is $11,000. This amount will increase by $1,000 each year until year 2006, with a total elective deferral of $15,000. TRS advises you to consult with your tax accountant, financial planner or IRS Publications 571 or 575 prior to making annuity contributions.
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5. What if I have a tax-deferred plan somewhere else?
Funds from another qualified 403(b) annuity program, 401(K) or IRA may be transferred to the TRS program.
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6. How are the funds invested?
The TRS investment portfolio includes a diversified mix of stocks and bonds. This balanced approach is used because of the conservative, long-term nature of the investments. For more information about our investments, see our Investment Portfolio Report.
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7. What rate of return can I expect?
All participants share in the appreciation and depreciation of TSA's total investment portfolio. Net earnings are posted to accounts each month-end, based on the balance in the account as of the first day of that month.
The rate of return you earn each month will vary, depending upon changes in the market. There may be months when a loss is experienced, but the portfolio is designed to provide positive and meaningful returns over the long term. For information regarding rates of return, please contact TRS.
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8. How can I withdraw my funds?
Distributions from your account must be made in accordance with the Internal Revenue Code. Distributions of deposits made, or income earned, after December 31, 1988 will not be made except under one of the following circumstances: you reach age 59 1/2, death, disability, termination of employment, retirement or financial hardship. At any time, you may transfer your funds to another 403(b) TSA.
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9. If I stop working in the Oklahoma public education system, what happens to my TSA contributions?
Your contributions may remain on deposit with TRS indefinitely (earnings will continue to accrue), be withdrawn, be transferred to another 403(b), or rolled over to an IRA or another eligible retirement plan.
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10. What happens to my TSA in the event of my death?
Your spouse is entitled to the same privileges as you. All other non-spousal beneficiaries must begin taking distributions from the account by the end of the calendar year following your death.
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11. When I retire, what options do I have?
At retirement, you may elect one of the annuity distribution options offered by TRS and subject to IRS requirements. They are: minimum distribution option, lump-sum surrender, life annuity option and partial lump-sum surrender. Additional information will be furnished upon request.
The summarized data in this FAQ is provided for general information only. If any conflicts arise between material in this FAQ and that of the law, the law takes precedence. For more detailed information about 403(b) tax-sheltered annuities, we advise that you consult IRS Publications 571 and 575, your tax preparers or a financial consultant.
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12. Is my retirement benefit subject to state income tax?
If you are a resident of Oklahoma, your TRS retirement benefit is subject to state income tax. You may exclude the first $5,500 received in TRS benefits from your state adjusted gross income in tax year 2004. Senate bill 435 by the 2005 Legislature increases the amount TRS retirees can exclude from their income on figuring their Oklahoma state income taxes to $7,500 for tax year 2005 and to $10,000 for tax year 2006, and thereafter. If you reside in another state, TRS retirement income will be subject to the tax laws of the state of residence.
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13. How do I increase the federal taxes withheld from my retirement check?
You can change your federal or state tax withholding by completing IRS Form W-4P, Withholding Certificate for Pension or Annuity Payments, or by writing TRS to request a change. Simply indicate the new monthly deductions you want.
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14. Will federal and state income taxes be withheld from my retirement check?
Federal law requires TRS to withhold federal income taxes unless you request no taxes be withheld. When you retire, TRS will explain your options to have taxes withheld and give you the choice to keep monthly deductions in accordance with applicable tax tables. Or you can specify a monthly amount to be deducted that differs from the tax tables. You can change the amount withheld from your check at any time by written notice to TRS. Notices received by the 15th of the month will be reflected in the retirement check due the first of the next month. If you elect no deductions or an amount less than your annual tax liability, IRS may impose a penalty and/or interest on the unpaid amount. Some retirees do not have monthly deductions taken from their retirement check because they make quarterly estimated tax payments directly to IRS. TRS will also withhold state income taxes for Oklahoma residents when requested. TRS cannot withhold state income taxes for other states.
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15. How should TRS be notified of a death of a retired member?
Please notify TRS in writing or by phone in the event of a death of a retired member. One copy of the deceased member's death certificate will be required before any distribution can be made to beneficiaries. The funeral home normally provides several copies of the death certificate to the next of kin within a week of the member's death.
Upon notification of a member's death, TRS will contact the beneficiary(s) directly with final settlement information. For retired members, the final settlement includes a $5,000 death benefit and any payment due in accordance with the retirement plan selected by the member when he or she retired. State statutes also provide that beneficiary(s) receive a last benefit check for the month in which the member died. Any and all payments issued to the deceased member for the month(s) after the date of death must be returned to TRS.
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16. When do I need to provide proof of birth information?
We suggest you submit the necessary proof of your birth date as soon as possible after you start the retirement process. TRS must have this proof in order to avoid a possible delay in your retirement.
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17. Downloading PDF Documents
To view some of the documents on our site, you will need to use Adobe Acrobat Reader. Adobe? Acrobat? Reader? is free software that lets you view and print Adobe Portable Document Format (PDF) files.
You'll need to know your computer's operating platform (Windows 98, Macintosh OS, etc.) and then, with the click of a button, you'll be able to open and read any document in PDF format.
If you do not have this program visit www.adobe.com to download a free copy.
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18. How should I notify TRS of my new home mailing address?
You can complete a new TRS-1A Personal Data Form at your school's personnel or business office. The Personal Data Form is used to enroll new members, notify TRS of address changes and/or update your beneficiary designation. It is important that you keep TRS advised on your current mailing address. Retired and inactive members should notify TRS in writing or by completing a Change of Address Form. Call TRS for a Personal Data or Change of Address Form.
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19. What type of proof of birth is required?
A copy of a birth certificate is the best proof, but since one is not always available, TRS will accept any of the following documents as a substitute:
U.S. Census Record,
Military Record,
Naturalization Record,
Passport.
TRS will accept copies of documents. If you send original documents they will be copied and returned at your request. IMPORTANT: Be sure to identify any documentation you mail by writing your Social Security number on it.
It is YOUR responsibility to notify TRS of the date you want to retire. You should do so in writing, at least three months before the date you wish to receive your first retirement check. This will allow sufficient time for you and TRS to audit your records and correct any irregularities.
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20. How do I change my beneficiary with TRS?
Active members should obtain a TRS-1A Personal Data Form from your school's personnel or business office. It is very important to keep your beneficiary designation up to date. The Personal Data form provides for up to three primary beneficiaries and up to three contingent beneficiaries. It is not necessary to name six individual beneficiaries but you should name at least one primary and one contingent beneficiary. Your estate or a trust fund can be named as the beneficiary to your account. TRS requests you provide a copy of your trust if named as a beneficiary. Retired and inactive members should contact TRS for a Personal Data Form.
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21. Can I get an estimate of benefits with all plan options from this web site?
After supplying information specific to your account, the Retirement Benefit Calculator will provide an estimate for the Maximum, Option 2 and Option 3 retirement plans. TRS will provide monthly estimates for the Options 1 and 4 retirement plans upon request. You will need to have the following information to use the Retirement Calculator:
Projected retirement date
Date of birth
Beneficiary date of birth
Service credits (total service) prior to July 1, 1995
Service credits (total service) since July 1, 1995
Unused accrued sick leave days
Date of TRS membership
Salaries for last three or five years depending on membership date
NOTE: At this time, the calculator is not tied directly to your account; therefore, your estimate will be based solely on the information you give.
If you would like to request an estimate from TRS, you can fill out an online Benefit Request Form
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22. Can I withdraw my retirement contributions?
Upon termination of employment the member may withdraw all contributions and refundable interest. Interest is refundable based upon years of membership (date of first contributions) and in accordance with the following schedule:
Up to 16 years of membership 50% of accumulated interest
At least 16 years but less than 21 years 60% of accumulated interest
At least 21 years but less than 26 years 75% of accumulated interest
26 years or more 90% of accumulated interest
Note: Since July 1981, the interest rate set by the Board of Trustees is 8% compounded annually.
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23. If I have 5 years of creditable service credit and terminate employment in Oklahoma public schools, must I withdraw my contributions? What options do I have concerning my account in the TRS?
No. Once you are vested (have 5 years of service credit) and you leave covered employment, your contributions may remain in the system. With as few as 5 years of Oklahoma contributory service you will be eligible for reduced monthly benefits at age 55, or unreduced benefits at age 62. You could be eligible for unreduced benefits when your age and total credited service equal 80 (providing you joined TRS prior to July 1, 1992) or when age and total service equal 90 (if your TRS membership date was after June 30, 1992).
You would also have the option of withdrawing your retirement contributions and refundable interest upon termination of employment.
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24. If I leave covered employment and do not have 5 years of service credit (not vested), what are my options in reference to my contributions?
As an inactive member, you are not required to withdraw your funds immediately. Your account will continue to accrue interest for up to five years. However, you should contact TRS for information on your options. Generally, you should consider withdrawing your deposits and any applicable interest unless you plan on returning to covered employment within five years. Be sure to keep TRS informed of your current home mailing address.
With less than 5 years of service, there are three options:
You may leave contributions in the system for up to five years. If you don't resume active participation by the beginning of the sixth year, your account will be terminated and no additional interest will accrue on the account, or
Your may withdraw all retirement contributions and refundable interest at termination of employment. Your contributions are only refunded at your request and cannot be made until at least four months after termination of employment, or
Any tax deferred contributions and interest may be transferred to an IRA or another qualified tax-deferred savings plan.
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25. When will my Annual Member Statement be mailed?
Annual statements for both active and inactive members are customarily mailed by the end of November to the home address in our records. Statements will reflect salary and deposits credited to your account during the period from July to June of the preceding year. The statement will also show credited service as of June 30 and the beneficiary named to the account. If you are not receiving an annual statement, it's because TRS does not have your current mailing address or you have retired. Annual statements are not mailed to retired TRS members. Instead, retired members receive an annual IRS Form 1099R at the end of January to report taxable income for the preceding calendar year. If you are not retired and have not received a statement, please contact TRS to fill out a change of address form.
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26. Do I get a refund if I terminate my membership with TRS?
Members who terminate employment with any agency covered under TRS may request a withdrawal of their contributions and refundable interest. Withdrawal request forms must be submitted by any member wishing to withdraw his or her contributions. Click here for more information on withdrawal privileges. Please contact TRS about withdrawal forms.
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27. If I select Option 2 or 3 when I retire and name my spouse as beneficiary, what happens if my beneficiary dies or we divorce? May I change my option and/or my beneficiary?
Your retirement options cannot be changed after your retirement. If your beneficiary dies before you, your monthly retirement benefit "pops-up" (increases) to the equivalent of the Maximum retirement plan. In the case of a divorce the contract remains in force and your beneficiary (ex-spouse) will receive your monthly benefit after your death.
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28. What about the $5,000 death benefit that will be paid at my death? Who is the beneficiary and can I change the beneficiary if necessary?
Statutes provide that the beneficiary(s) of a retired member will receive a $5,000 death benefit following the member's death. This applies regardless the retirement option you selected or how long you receive benefits. When more than one beneficiary is named, the $5,000 is divided equally among the surviving beneficiaries. You can change the beneficiary for the $5,000 death benefit at anytime.
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29. How do I change my beneficiary designation?
A beneficiary designation form may be requested by calling or writing to TRS.
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30. What happens to my benefits if I become divorced?
A court may order that your former spouse receives a portion of your retirement benefits. This can only be accomplished if a copy of the court order or judgment is filed and approved by TRS. Such an order is commonly known as a Qualified Domestic Order (QDO) and the former spouse is referred to as an Alternate Payee. If you anticipate a divorce, you or your attorney should download the documents on this website for either In-state Qualified Domestic Order or Out-of-State Qualified Domestic Order. It is important that you, your alternate payee and your attorney(s) understand the difference between Oklahoma statutes concerning QDOs and the division of Oklahoma pension assets compared to how private pension plans assets can be divided. If you have any other questions, please contact TRS.
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31. How can I obtain additional service credit?
Members may purchase service for employment in the public schools of other states, District of Columbia and territories of the United States to obtain additional credited service. Other ways to purchase credit include Service for six months or more in the U.S. Armed Forces and Peace Corps (at least 180 days) or employment as a member of the other public retirement systems operated by the state of Oklahoma.
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32. How can I find out about retiring?
Retiring members should contact TRS at least 90 days before the expected retirement date. A Retirement Allowance Estimate showing projected monthly benefits for available retirement plans will be prepared and mailed to you. You then select a retirement option and return the estimate to request a retirement contract. That final retirement contract must be submitted to TRS no less than 30 nor more than 90 days before the first of the month that retirement is to be effective. If a final contract is received less than 30 days prior to the projected retirement date, the retirement date will be delayed by one month.
You can request a preliminary estimate by filling out our online Benefit Request Form or do your own rough estimate with our Benefit Calculator
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33. If I retire this year, what do I have to do?
you are planning to retire, you should contact TRS ) for an application (TRS Form 40, Retirement Allowance Estimate) and follow the accompanying instructions to complete it and file your Final Contract for Retirement. Each member is responsible for filling out the proper application and completing all necessary paperwork in a timely manner. Generally, you should start the application approximately 90 days before the effective retirement date. Retirement always begins the first of the month. Most members retire effective June 1, at the end of the school year. These retirees file a TRS Form 40, Retirement Allowance Estimate, requesting a Final Contract for Retirement under one of five retirement plan options. The Final Contract for Retirement must be filed by May 1 to retire June 1 and receive a retirement check July 1. Members can and do retire on the first of other months during the year depending of eligibility and desire. You can request a retirement estimate online or contact TRS by phone, mail or email.
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34. When can a TRS member retire?
A member of TRS is eligible to apply for retirement benefits:
At age 55 with at least 5 years of Oklahoma service, or
If you joined TRS prior to July 1, 1992, when age and total service equal 80 or more, or
If you joined TRS after June 30, 1992, when age and total service equal 90 or more.
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35. How do I go about making an appointment to discuss my retirement benefits?
You may contact TRS to talk to a TRS staff member or schedule an appointment. Many questions CAN be answered by telephone if you are unable to make an appointment. You may also request an estimate of your benefits by phone. TRS responds to inquiries in a timely manner, providing estimates of retirement benefits under all options for the date(s) requested.
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36. What options do I have for health insurance after I retire?
At retirement (or termination) of employment a vested member may elect to continue health insurance coverage in the insurance program he or she was enrolled in prior to termination of employment. This can be the Oklahoma State and Education Employees Group Insurance Plan or a private health insurance plan provided by the local school district, college or university. Dependent and dental coverage is available when the retiree is enrolled in the Oklahoma State and Education Employees Group Insurance Plan. If the retiree's insurance plan is not the state plan, dependent coverage is subject to the provisions of the specific plan.
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37. I receive my retirement checks at home. What should I do if my check does not arrive?
You may contact TRS and make sure your address is correct. If it isn't, TRS can send you an affidavit to complete. Note: The form MUST be completed with your notarized signature. Once the affidavit/form is returned, TRS will cancel the original check and issue a duplicate to replace the original. A duplicate check cannot be issued until at least 10 days after the first of the month.
IMPORTANT: Because of the length of time it takes to issue a duplicate check, there will be a delay in receipt of your monthly retirement check. You may wish to consider direct deposit of your retirement benefit, which provides for electronic transfer of your monthly benefit. This means your check is automatically deposited into your bank account on the first business day of the month. Direct deposits eliminate the need to worry about your check being stolen or delayed in any way. It is safe, convenient and on time.
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38. My check was late because it went to another city before arriving. What can be done?
Make sure the address including the zip code is correct.
Make a copy of the check and return the copy with the envelope to TRS and we can notify the postal service or Presort First Class Co. for an inquiry. Don't forget to send the original envelope.
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39. My check has two different date stamps. Why?
Generally, when a check or any piece of mail is returned to TRS by the Presort First Class Co., it is for one of following reasons:
New Address - These are returned to give TRS the opportunity to obtain the member's new address from the National Change of Address (NCOA) directory in order to mail a change of address notification.
Incomplete Address - This shouldn't be a problem on retirement checks. However, if a staff member has addressed the envelope using a typewriter, there is a possibility for human error.
Short Paid (Postage Due) - This shouldn't be an issue on a retirement check.
The postal service returns mail for the following reasons:
Bad address
Forwarding order has expired
No forwarding address on file
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40. When do direct deposits go to the bank?
Direct deposits are credited to your account on the first working day of each month. Please note: It is your responsibility to inform TRS of all address changes that affect retirement checks. These changes must be in our office by the 10th of the month to take effect by the next check.
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41. What if I wish to return to work after I have retired?
Rules have been established regarding employment after retirement. See Returning To Work After Retirement for more information.
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42. When will you mail my end-of-year tax Form IRS 1099R? If my check is electronically deposited, where will you mail this form?
Your IRS Form 1099R will be mailed by the end of January to the home address in our files. Be sure to always keep us informed of your current home address. If your address has changed, contact TRS to get a change of address form.
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43. I did not receive a 1099R tax form from TRS. How do I get one?
TRS will provide a duplicate Form 1099R upon request. Your original Form 1099R is mailed to your home address on file with TRS. If you have moved and have not provided TRS with your corrected address, the postal service may not forward your Form 1099R.
To change your mailing address, TRS must receive written verification of your new address. Be sure to include your full name, Social Security number, phone number and complete mailing address. Contact TRS for a change of address form.
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44. How do I determine the taxability of my retirement benefit?
When you retire, you will be notified of the amount that you contributed to the retirement plan on an "after-tax" basis, how much of each monthly benefit payment will be taxable and how much will be a return of your after-tax contributions. The amount of money you contributed to the plan that was subject to tax in the year in which the contributions were made is known as the "investment in contract." This amount will include any after-tax payments you may have made toward the purchase of additional service credit.
Each year TRS will send you an IRS Form 1099R. This form will show the gross amount you received during the last calendar year, the taxable amount and the amount you received that is not subject to federal income taxes. The form will also include federal and state taxes that were withheld to pre-pay your tax liability for the year. It is very important that you follow directions on the IRS 1040 Form under the heading "Pensions & Annuities" in filing your taxes after retirement. For more information, please contact the IRS directly or visit their website. For more information on taxes, visit our Income Tax Obligation section.
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45. When I retire, what will be deducted from my monthly retirement check?
TRS will deduct for federal and state income taxes, health insurance premiums for retirees enrolled in the Oklahoma State and Education Employees Group Insurance Plan and monthly dues for membership in the Oklahoma Retired Educators Association. TRS is required to deduct for federal income taxes unless you request no withholding. Federal and state income tax withholdings can be made based on federal withholding tables or you can specify an amount to be withheld each month. You must remember that IRS may charge a penalty if federal income taxes are not pre-paid prior to the end of the tax year. For more information on taxes, see our section on Income Tax Obligation.
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46. Does the TRS staff decide how to invest the assets held by TRS?
No. The TRS Board of Trustees has the legal responsibility for investments. They oversee the hiring of highly qualified experts, some of whom help the Board develop an investment strategy, policies and objectives. Others are hired to manage different investment portfolios to implement the Board's investment plan.
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47. How can I be sure that TRS is acting responsibly with my investment?
The TRS Board of Trustees and staff are fiduciaries and monitor the activities of the firms employed to make day-to-day investment decisions. They also oversee the activities of the custodial bank, which keeps track of every investment transaction made on behalf of TRS. Each portfolio manager prepares written reports to the Board on the purchase and sale of securities held in their account. The Board's investment consultant meets monthly with the Board's Investment Committee to review performance of each portfolio manager, and to ensure the asset allocation model and investment strategy is being following and is working. In addition, the Oklahoma State Pension Commission receives a quarterly update on the investment performance of each of the state-run pension plans.
For more about TRS investment information and view portfolio status, visit our Investment Portfolio section.
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48. How would my account be settled in the event of my death as an active teacher?
Upon the death of a TRS member, your designated beneficiary or estate is entitled to survivor benefits. The amount of those benefits depends on whether you were an active in service, inactive or retired member. "Active in- service" is defined in TRS administrative rules, but generally means a member currently employed by an Oklahoma public education institution.
Upon the death of an active in-service member, the member's beneficiary(s) or estate will receive a lump sum distribution that includes an $18,000 death benefit, total contributions paid during membership, plus interest on those contributions. If one beneficiary had been named as the primary beneficiary, and the member had 5 or more years of Oklahoma service and had reached age 55, or if the member's age and total service equal 80 or more, the beneficiary may be entitled to a monthly benefit instead of the lump sum payment.
Upon the death of an inactive member, the member's beneficiary(s) or estate will receive a lump sum distribution of the member's contribution plus interest on those contributions. Beneficiaries of inactive members do not qualify for the $18,000 death benefit or the monthly retirement benefit payment payable to the beneficiary of active in-service members.
Upon the death of a retired member, the member's beneficiary(s) or estate will receive a $5,000 death benefit, plus any survivor benefits provided under the terms of the retirement option chosen by the member at the time of retirement. Certain retirement plan options provide the beneficiary(s) with a continuing monthly retirement benefit.
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