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Many Retirees to Receive One-time Stipend
Frequently Asked Questions
The Legislature authorized a one-time payment for many TRS retirees in HB 1340. This bill provides a “stipend” to members who were retired as of October 1, 2013. The amount will be 2% of the gross annual benefit up to a maximum of $1,000 to TRS retirees. It provides a minimum stipend of $350 for retirees who had at least 20 years of service credit as of their retirement. The law takes effect October 1, 2018. Here are some questions TRS has received from several members.
Yes. When a TRS member retires and names a beneficiary (joint annuitant) to receive the retirement benefit at the member’s death, there is only one annuity. The contract right to receive the annuity at death is enforceable by the beneficiary/annuitant and that individual steps into the shoes of the member.
No. TRS will issue a separate payment of the stipend in mid-October 2018. We will be sending out letters with more specific information soon.
TRS will be using service credit which is the number of years used in the retirement benefit formula. That will include years that could be rounded up for sick leave, service purchases and transported years of service.
HB 1340 clearly states that the 2% amount is based on your gross, unreduced annual benefit amount before any withholding.
Yes. This payment is considered an additional payment as part of your normal monthly retirement benefit payments and will be included as earnings reflected on your tax Form 1099-R.
No. Certain distributions from an eligible retirement plan can’t be rolled over. The stipend is considered to be a distribution that’s one of a series of payments that’s ineligible for rollover. www.irs.gov/taxtopics/tc413
Yes. But nothing will be withheld if you selected no withholding from your regular monthly benefit.