~ Cash Balance Plan ~ April 2013 Cash Balance Plan Cash Balance Plan 1
We re here to help. Contact us: Internet: Website: www.trsl.org Email: web.master@trsl.org Your questions will be answered within 1-2 business days. Phone: Main: 225-925-6446 Toll free (outside Baton Rouge area):1-877-ask-trsl (1-877-275-8775) After normal office hours, you can leave a message for a return call the following business day. Mail: PO Box 94123, Baton Rouge, LA 70804-9123 Send overnight or certified mail to our physical address below. Fax: 225-925-4779 Visit 8401 United Plaza Boulevard, Suite 300, Baton Rouge, LA 70809-7017 Office hours are 8 a.m. - 4:30 p.m., Monday-Friday (excluding holidays) Member Access You have secure, online access to your Teachers Retirement System of Louisiana (TRSL) account information through Member Access on our website. To register, just visit www.trsl.org, click on the Member Access link, and follow the easy instructions. If you have any problems with registration, contact the TRSL HelpDesk at support@trsl.org. Directions to TRSL s office TRSL is located in Baton Rouge in the Louisiana Retirement Systems Building at 8401 United Plaza Boulevard, which is just off Essen Lane between Interstates 10 and 12. From Lafayette: Exit I-10 and turn left on Essen Lane, or exit I-12 and turn right on Essen Lane; From New Orleans: Exit I-10 and turn right on Essen Lane; From Hammond: Exit I-12 at Jefferson Highway/Drusilla Lane, turn left on Drusilla Lane, then right on Jefferson Highway. Proceed to Essen Lane, and turn left. Turn at the United Plaza Boulevard traffic signal on Essen Lane at the sign that reads: LA RETIREMENT SYSTEMS BLDG. Cash Balance Plan 3
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Contents About TRSL...8 Overview...9 Legal disclaimers Pending litigation...10 Social Security equivalency...10 Other issues...11 Eligibility What you need to know...12 Higher education personnel (Mandatory group)...12 K-12 personnel and others (Optional group)...13 Election to participate in Cash Balance Plan...13 Contributions What you need to know...14 Cash Balance Plan contributions...14 Formula: Cash Balance Plan account pay credits...14 Interest credit...14 Actuarial rate of return...14 Guaranteed return of employee contributions...15 Table: TRSL actuarial rates of return (2003-2012)...15 Plan participation, vesting, and service credit What you need to know...16 Plan participation...16 Vesting...16 Service credit...16 Earning service credit...16 Changing employment What you need to know...17 Reciprocal recognition of service credit...17 Transfer of Cash Balance Plan funds...17 Cash Balance Plan 5
Separation from employment and refund of contributions What you need to know...18 Refund following withdrawal...18 Members with fewer than five years of plan participation in the Cash Balance Plan...18 Members with five or more years of plan participation in the Cash Balance Plan...18 Refund Distribution...18 Maintaining your account with TRSL...18 Applying for a refund...18 Rolling over a Cash Balance Plan account...19 Tax-sheltered contributions...19 Unsheltered contributions...19 Income tax withholding...19 Retirement eligibility What you need to know...20 TRSL retirement options...20 Annual COLA option (ACO)...20 Deferred Retirement Option Plan (DROP)...20 Table: TRSL retirement options...21 Initial Lump-Sum Benefit (ILSB) What you need to know...22 ILSB eligibility...22 Cash Balance Plan (TRSL Regular Plan as alternative)...22 Cash Balance Plan (TRSL Plan B as alternative)...22 How does it work?...22 Get an annuity payment estimate...23 Calculating your retirement benefit What you need to know...24 Formula: Maximum lifetime annuity...24 Sick leave...24 Get a benefit estimate...24 Survivor benefits What you need to know...25 Table: Survivor benefits for Cash Balance Plan members...26 6 www.trsl.org
Disability retirement What you need to know...27 Disability retirement eligibility...27 Disability retirement benefit...27 Returning to work What you need to know...28 Optional Retirement Plan (ORP) What you need to know...29 Table: Comparison of benefit features...30 Community property and beneficiaries Community property...31 Consult an attorney about community property settlements...31 Beneficiaries and community property...31 Social Security Important information regarding Social Security participation...32 Social Security reductions...32 Government Pension Offset (GPO)...32 Windfall Elimination Provision (WEP)...33 Forfeiture of benefits What you need to know...34 Managing your membership data Annual member account statement...35 Glossary...36 Cash Balance Plan 7
About TRSL The Teachers Retirement System of Louisiana (TRSL) is a public trust fund established in 1936 to provide retirement benefits for its members. As Louisiana s largest public retirement system, TRSL serves active members, as well as retirees, survivors, and beneficiaries for whom we provide benefits. TRSL is governed by a Board of Trustees which includes 12 elected members representatives from each of TRSL s seven districts; two trustees for retired teachers; one trustee for employees paid with school food service funds; one trustee for employees of state colleges and universities; and one trustee employed as a parish or city superintendent of schools. There are also five ex officio members on the board the State Superintendent of Education; the State Treasurer; the Commissioner of Administration; and the Chairs of the retirement committees in the Louisiana House of Representatives and Senate. The TRSL Board is responsible for safeguarding and managing the assets held in trust to provide retirement income for System members. 8 www.trsl.org
Overview TRSL administers a governmental defined benefit plan. The TRSL defined benefit plan consists of two tiers. Tier 1 is the tier in place prior to July 1, 2013, and consists of the TRSL Regular Plan as well as Plan A and Plan B for school food service personnel. Beginning July 1, 2013, new employees of TRSL employers will be either required or eligible to participate in the cash balance tier of TRSL s defined benefit plan (referred to as the Cash Balance Plan ). The Cash Balance Plan is a hybrid defined benefit plan that provides post-employment income through member retirement accounts. These accounts grow in value from pay credits funded through employee and trust-funded contributions as well as interest from TRSL s investment performance. Employers are required to make contributions related to the cost of the Cash Balance Plan. Cash Balance Plan members do not make their own investment decisions and do not bear the risk of investment losses. The TRSL Board of Trustees and its investment professionals are responsible for the investments that impact the Cash Balance Plan. When a member is eligible for retirement, a retirement benefit is determined by the accumulated value of his or her Cash Balance Plan account. NOTE: This handbook does not address any legislation filed in the 2013 Regular Session of the Louisiana Legislature. Cash Balance Plan 9
Legal disclaimers NOTE: The information provided below is current as of the publication date of this Cash Balance Plan handbook, as provided on page 39. Act 483 of the 2012 Regular Session of the Louisiana Legislature created the Cash Balance Plan. This plan is a tier of the Teachers Retirement System of Louisiana (TRSL) defined benefit plan. TRSL is a qualified governmental plan under section 401(a) and 414(d) of the Internal Revenue Code. This disclaimer is intended to provide members and prospective members with information in reference to all known legal matters regarding the Cash Balance Plan which are pending, and which may or may not be resolved when the Cash Balance Plan is implemented on July 1, 2013. These matters include pending litigation, and requests submitted or to be submitted to the Internal Revenue Service (IRS). This disclaimer does not address any legislation pending in the 2013 legislative session which may amend the Cash Balance Plan. Pending litigation Retired State Employees Association, et al vs. State of Louisiana et al., 19th Judicial District Court, East Baton Rouge Parish, State of Louisiana No. 614,675 In January 2013, Judge William A. Morvant of the 19th Judicial District Court ruled that Act 483 of the 2012 Regular Session of the Louisiana Legislature was passed in violation of the constitutional requirements found in Article X, Section 29(F) of the Louisiana Constitution. This ruling was appealed, which has suspended its effect until a higher court determines if Morvant s ruling should be upheld. If the Morvant ruling is upheld by the Louisiana Supreme Court, Act 483 will be null and void, and the Cash Balance Plan, as enacted therein, will no longer be a tier of TRSL s defined benefit plan. Social Security equivalency Federal law generally provides that employees of state or local government that participate in such government s retirement system are not required to participate in Social Security if the employees retirement system provides certain minimum retirement benefits to that employee. To meet this minimum requirement, the benefits provided by the retirement system must generally be comparable to those provided by Social Security. The IRS reviews each retirement plan to determine if it meets these minimum requirements. The Louisiana Division of Administration has submitted an expedited request for a Private Letter Ruling to the IRS, seeking a determination that the Cash Balance Plan meets the Social Security equivalency requirements. If the IRS determines that the Cash Balance Plan does not meet the Social Security equivalency requirements, possible outcomes may include, but are not limited to, a restructure of the Cash Balance Plan or a requirement that members of the Cash Balance Plan contribute to Social Security in addition to the Cash Balance Plan. 10 www.trsl.org
Other Issues Plan Qualification. As part of a periodic review, TRSL will submit its defined benefit and Optional Retirement Plan (ORP) to the IRS for evaluation. The defined benefit portion of the review will include the Cash Balance Plan. Attorney General Opinion. TRSL has requested an Attorney General Opinion related to the appropriate employer contribution to the accounts of members electing to join the ORP on or after July 1, 2013. The creation of the Cash Balance Plan and a 2012 change in TRSL law regarding the establishment of employer contribution rates by subplan has raised legal questions concerning this rate. All of TRSL s forms and publications are just a click away. Find them on our website at www.trsl.org Cash Balance Plan 11
Eligibility What you need to know Individuals who are first eligible for membership in one of three public state retirement systems on or after July 1, 2013, are eligible for membership in the Cash Balance Plan. The three state public retirement systems with Cash Balance Plans are: Teachers Retirement System of Louisiana (TRSL), Louisiana State Employees Retirement System (LASERS), and Louisiana School Employees Retirement System (LSERS). Higher education personnel (Mandatory group) New hires in post-secondary education institutions or employed by a post-secondary education management board are required to join the Cash Balance Plan if they do not choose to participate in the Optional Retirement Plan (ORP). The ORP is a defined contribution plan, similar to a 401(k). Post-secondary education personnel are not eligible to participate in TRSL s Regular Plan. Post-secondary education employers include: University and community colleges University and community college management boards University-run medical centers Vocational and technical colleges While certain employees of university lab schools are employees of a university, these employees are not required to participate in the Cash Balance Plan. In addition, employees of the Louisiana School for Math, Science, and the Arts are not required to participate in the Cash Balance Plan. See the TRSL publication, Optional Retirement Plan (ORP), for more information on this retirement plan. All TRSL brochures are available online at www.trsl.org. K-12 personnel and others (Optional group) Newly hired employees in a K-12 institution or other non post-secondary educational settings can make an irrevocable election to participate in the Cash Balance Plan instead of the TRSL Regular Plan or Plan B, as applicable. K-12 institutions and other non postsecondary education employers include: Traditional K-12 public schools K-12 charter schools that participate in TRSL University laboratory schools Unions State agencies Other non post-secondary education employers See the TRSL Member Handbook: Regular Plan, Plan A, and Plan B for more information about the TRSL Regular Plan. All TRSL brochures are available at www.trsl.org. NOTE: Certain K-12 employees at university lab schools have the option to participate in the TRSL Regular Plan or make an irrevocable election to participate in either the Cash Balance Plan or the Optional Retirement Plan (ORP). 12 www.trsl.org
Election to participate in the Cash Balance Plan Individuals in the optional group have 60 days from the date of employment to elect to participate in the Cash Balance Plan. Employees in the optional group, who do not elect to participate in the Cash Balance Plan, will be enrolled in the TRSL Regular Plan or Plan B, as applicable. IMPORTANT: The decision to participate in the Cash Balance Plan is irrevocable. As such, individuals who choose to participate can never join the TRSL Regular Plan, Plan B, or the Optional Retirement Plan (ORP). Cash Balance Plan 13
Contributions What you need to know Your retirement benefit is determined by the accumulated value of your Cash Balance Plan account. A Cash Balance Plan account accumulates value through pay credits as well as interest credits derived through the earnings from TRSL investments. Cash Balance Plan accounts are never debited for investment losses. Cash Balance Plan contributions Employee contributions: Cash Balance Plan members contribute eight percent of salary. Employer contributions: Employers contribute a percentage of payroll to the TRSL trust which funds member retirement benefits. Employer contribution rates are determined annually. Cash Balance Plan account pay credits Each month, your Cash Balance Plan account receives a pay credit equal to 12 percent of your salary. The eight percent employee contribution along with a four percent trustfunded credit make up the 12 percent of salary pay credit. Cash Balance Plan account pay credits Employee-funded credit: 8% of salary + Trust-funded credit: 4% of salary = Cash Balance Plan account credit: 12% of salary NOTE: School food service employees who were eligible to participate in TRSL s Plan B, but elected to join the Cash Balance Plan, will also be required to contribute to Social Security. Interest credit In addition to the 12 percent of salary pay credit, the Cash Balance Plan account earns interest annually based on TRSL s actuarially realized rate of return (less one percent). Actuarial rate of return Each year, an actuarial rate of return is determined for TRSL s investment portfolio. The rate becomes official upon adoption by the Public Retirement Systems Actuarial Committee (PRSAC). To determine the actuarial rate of return, TRSL uses a smoothing method that is based on the gradual recognition of the prior four years market gains and losses. NOTE ON CONTRIBUTIONS AND SALARY: Employee contributions of eight percent of salary are based on the earnable compensation received from the individual s employer(s). Earnable compensation is defined in law as the compensation a member receives during his or her full, normal working time in a TRSL-covered position. This includes all salary, differential pay, overtime, contract pay, and grants paid to a TRSL member. Generally, all earnings of a member are considered earnable compensation, unless specifically excluded by law. 14 www.trsl.org
For purposes of the Cash Balance Plan, accounts will be credited annually with the actuarial rate of return, less one percent. Example: TRSL s 2012 actuarial rate of return is 5.05 percent, so Cash Balance Plan accounts would be credited with 4.05 percent. Cash Balance Plan members are eligible to receive the interest credit to their Cash Balance Plan accounts until separation from TRSL-covered employment. No interest will be credited after separation, except for those months during the plan year prior to separation of service. Guaranteed return of employee contributions Cash Balance Plan members are guaranteed the return of their employee contributions either through a refund or a monthly annuity. In the event that total benefits received prior to an employee s death are less than the employee s total contributions, the difference is paid to the member s estate. TRSL actuarial rates of return (2003-2012) Fiscal Year TRSL Actuarial Rate of Return 2003-5.55% 2004 9.85% 2005 9.87% 2006 15.65% 2007 15.20% 2008 5.15% 2009-12.31% 2010-0.89% 2011 6.44% 2012 5.05% Cash Balance Plan 15
Plan participation, vesting, and service credit What you need to know Cash Balance Plan members rights related to their account balance and retirement eligibility are based on their years of membership in the Cash Balance Plan, while eligibility for survivor and disability benefits is based on their years of service credit. TRSL will maintain records for each Cash Balance Plan member reflecting both years of membership and service credit, which can be different. Plan participation The number of years an individual is a member of the Cash Balance Plan is called plan participation. TRSL uses plan participation to determine vesting and retirement eligibility for Cash Balance Plan members. Vesting Upon attaining five years of plan participation, a Cash Balance Plan member is vested. Once vested, members who separate from employment covered by TRSL are eligible to withdraw (refund) the entire balance in their Cash Balance Plan accounts, which includes the four percent trust-funded pay credit and interest credits. Vested members are also eligible at age 60 to retire and receive an annuity in a retirement allowance payable throughout life. Service credit Service credit is determined based on the time a Cash Balance Plan member is an active working and contributing member. Service credit is used solely for purposes related to survivor and disability benefits. The amount of service credit a Cash Balance Plan member has determines eligibility for survivor or disability benefits and the amount due, as provided under applicable provisions of the TRSL Regular Plan or Plan B. Earning service credit Members earn a full year (100 percent) of service credit for each full contract year worked, regardless of whether they are employed on a 9-, 10-, 11-, or 12-month contract. Members cannot earn more than one year of service credit in a 12-month period, beginning July 1 and ending June 30. Members who earn a year of service credit for a 9-month contract will not receive more than one year of service credit, even if they work during the summer. (In some cases, a member may receive experience credit from his or her employer for pay purposes. However, retirement credit is based strictly on the amount of time he or she works and for which TRSL receives contributions.) Members employed by year-round schools receive a full year of service credit if they work all available days of a fiscal year (July 1 to June 30). Members who are not vested are eligible to withdraw only their employee pay credits upon separation from employment. The trustfunded pay credit and interest credits remain with TRSL. 16 www.trsl.org
Changing employment What you need to know If you change employment to a job covered by another public retirement system, you have options with regard to your Cash Balance Plan participation and account. Reciprocal recognition of service credit Cash Balance Plan members can establish a reciprocal recognition of service credit for credit earned in any public retirement system in the state. Under a reciprocal recognition of service credit, members holding credit in more than one Louisiana public retirement system can combine years of service credit to determine eligibility for retirement. However, no transfer of funds or service credit takes place. Each retirement system will recognize credit in the other system to meet retirement eligibility requirements. A member must meet the highest minimum retirement eligibility requirements of each system in order to receive a retirement benefit from each system. Members who intend to restore any refunded service credit with the other retirement system must complete the restoration before reciprocal recognition can be established. Transfer of Cash Balance Plan funds A Cash Balance Plan member who changes employment and becomes a member of a Cash Balance Plan in another Louisiana public retirement system can elect to transfer amounts in his cash balance account to the Cash Balance Plan of his new retirement system. The amount a member can transfer is the amount he would be entitled to withdraw from his cash balance account. See page 18 for an explanation of withdrawal amounts members are eligible to receive based upon plan participation. The three state public retirement systems with Cash Balance Plans are: Teachers Retirement System of Louisiana (TRSL), Louisiana State Employees Retirement System (LASERS), and Louisiana School Employees Retirement System (LSERS). Active TRSL members seeking reciprocal recognition of service credit in another Louisiana public retirement system should submit their retirement application to TRSL. Inactive members, for whom TRSL was the last retirement system contributed to, should do the same. To reciprocate service from another retirement system to TRSL, a member must have at least six months of plan participation in TRSL. Cash Balance Plan 17
Separation from employment and refund of contributions What you need to know Upon separation from employment, you are eligible to withdraw from the Cash Balance Plan and receive a refund. The refund amount you are entitled to receive and your ability to maintain your account with TRSL are based on whether you are vested. NOTE: Active members considering terminating employment due to illness or injury should note that they may be eligible for TRSL disability benefits. Cash Balance Plan members are eligible to apply for disability benefits after accruing 10 years of service credit. Contact TRSL for more information. Refund following withdrawal Members with fewer than five years of plan participation in the Cash Balance Plan These individuals are eligible to take a refund of their employee contributions only. TRSL will retain all trust-funded credits and interest. Members with five or more years of plan participation in the Cash Balance Plan Refund Distribution Cash Balance Plan members can receive a refund of the amount they are entitled to in one of the following ways: A lump-sum payment; or A distribution in the form of a trusteeto-trustee, single-sum transfer between qualified plans, or a payment made directly to an individual retirement account. Maintaining your account with TRSL Members with at least five years of plan participation are vested in the Cash Balance Plan, and pursuant to law, are eligible to leave their account with TRSL and draw an annuity when they reach the age of 60. Applying for a refund To apply for a refund, complete and submit to TRSL the Application for Refund (Form 7). By law, your former employer cannot certify the refund application until 90 days after your resignation or termination. The application is then forwarded to TRSL for payment. To have your refund direct deposited to your bank, submit a Direct Deposit for Refund of Contributions (Form 7D) along with Form 7 to TRSL. Both are available on our website at www.trsl.org. Refunds are issued twice a month on the 5th and 20th. These individuals are vested and eligible to take a refund of their entire account balance, including employee contributions, trustfunded credits, and interest. 18 www.trsl.org
Rolling over a Cash Balance Plan account Tax-sheltered contributions A refund of a tax-sheltered account is eligible for rollover into a traditional IRA, Roth IRA, or transfer to another qualified retirement plan that accepts the funds. Unsheltered contributions If you made after-tax contributions (unsheltered), these contributions may be rolled into either a traditional IRA, Roth IRA, or to certain employer plans that accept rollovers of the after-tax contributions. tax consequences of a rollover to a Roth IRA. TRSL does not offer income tax withholding for any distribution to a Roth IRA. For information on rolling over your contributions and federal income tax withholding, please read our brochure, Special Tax Notice Regarding TRSL Payments, available at www.trsl.org. NOTE: Funds in the Cash Balance Plan cannot be borrowed or assigned against, nor can they be attached by a lien in bankruptcy, etc. These funds must remain in the Cash Balance Plan until you retire or terminate employment making you eligible to refund contributions. For more information regarding retirement plans and rollovers, review the Tax Information for Retirement Plans page on the IRS website, www.irs.gov. Income tax withholding If any portion of the refund is eligible for a rollover distribution but is paid directly to you, TRSL is required to withhold 20 percent of the sheltered distribution for federal income tax. IMPORTANT: You may also be subject to an additional 10 percent federal withholding penalty for early withdrawal of retirement funds, if the account is paid directly to you. This penalty is in addition to any income taxes owed. Rollovers of a Cash Balance Plan account to a Roth IRA are considered taxable distributions, but are not subject to the mandatory 20 percent withholding. There are penalties for not paying enough taxes during the year, either through withholding or estimated tax payments. You should consult a tax advisor to determine the Cash Balance Plan 19
Retirement eligibility What you need to know Deferred Retirement Option Plan (DROP) Under provisions of the law, Cash Balance Plan members are not eligible to participate in DROP. Members are eligible for retirement once they reach age 60 and have at least five years of plan participation in the Cash Balance Plan. After reaching retirement eligibility, you can elect to receive a lifetime annuity payable through one of TRSL s retirement options or a lump-sum payment of your Cash Balance Plan account balance. TRSL retirement options Cash Balance Plan members who decide to annuitize their account will have eight retirement options, as well as an annual COLA retirement option, from which to choose. Members can also choose to receive an initial lump-sum benefit (ILSB) if certain eligibility requirements are met. The option a member selects determines how much he and his beneficiary (if chosen) will receive in retirement benefit payments. See next page for an explanation of the eight TRSL retirement options. Annual COLA option (ACO) The annual cost-of-living (COLA) option, referred to as ACO, is a retirement option that allows a retiring member to receive a self-funded, guaranteed annual 2.5 percent COLA by accepting an actuarially reduced retirement payment. For more information, see our brochure, Annual COLA Option (ACO), available on the TRSL website, www.trsl.org. 20 www.trsl.org
TRSL retirement options Member Annuity Payment Beneficiary Annuity Payment Conditions Maximum Option Member receives largest annuity payment possible. There is no beneficiary annuity payment. All payments cease at death. Only the amount of member contributions that have not been paid out in annuity payments is due the member s estate. Option 1 Member receives an annuity payment slightly less than Maximum Option, determined by the total amount of accumulated member contributions and member s age at time of retirement. More than one beneficiary may be designated, and can be changed at any time by member/retiree. Beneficiaries receive remaining balance of member s accumulated contributions in one lump-sum payment. (Option 1 may not be selected if member participates in Initial Lump-Sum Benefit.) Lifetime Benefit Options: Under the following lifetime payment options, only one beneficiary can be named and that beneficiary cannot be changed. The benefits are actuarially reduced from the Maximum Option benefit based on reduction factors determined by your age and the age of your named beneficiary. Option 2 Option 2A (Pop Up) Option 3 Option 3A (Pop Up) Option 4 Member receives a reduced annuity payment. Member receives a reduced annuity payment. Member receives a reduced annuity payment greater than Option 2 or 2A benefit. Member receives a reduced annuity payment greater than Option 2 or 2A payment, but less than Option 3 payment. Member receives a reduced annuity payment determined by cost of the amount member designates for beneficiary. Beneficiary receives same lifetime annuity payment member received. Beneficiary receives same lifetime annuity payment member received. Beneficiary receives lifetime annuity payment equal to ½ of amount member received. Beneficiary receives lifetime annuity payment equal to ½ of amount member received. Beneficiary receives lifetime annuity payment designated by member, not to exceed Option 2 amount. If beneficiary dies before member, the reduced annuity payment pops up to Maximum Option. If beneficiary dies before member, the reduced annuity payment pops up to Maximum Option. Option 4A (Pop Up) Member receives a reduced annuity payment determined by cost of the amount member designates for beneficiary. Beneficiary receives lifetime annuity payment designated by member, but not to exceed the Option 2 amount. If beneficiary dies before member, the reduced annuity payment pops up to Maximum Option. Annual COLA Option (ACO): A retirement option that allows a retiring member to receive a self-funded, guaranteed annual 2.5 percent cost-of-living adjustment (COLA) by accepting an actuarially reduced annuity payment. Cash Balance Plan 21
Initial Lump-Sum Benefit (ILSB) What you need to know The Initial Lump-Sum Benefit (ILSB) allows you to take a portion of your cash balance accumulation in a one-time, lump-sum payment, and receive a reduced annuity payment upon retirement. The annuity payment will be actuarially reduced based on the lump-sum amount chosen and your age at retirement. ILSB eligibility In order to participate in ILSB, a member must meet certain eligibility requirements. These requirements differ based on whether the member would have been in the TRSL Regular Plan or Plan B had they not elected to join the Cash Balance Plan. How does it work? ILSB provides a one-time, lump-sum payment of up to 36 months of the Maximum Option monthly benefit, along with a reduced annuity. Members can choose an ILSB payment that is less than the maximum allowed. The reduced annuity payment due to ILSB is permanent. Members should carefully consider whether the reduced payment will be enough to meet future financial obligations. Once a member chooses ILSB, he must also select a retirement option: Maximum Option, Option 2, 2A, 3, 3A, 4, or 4A. These options determine the amount of the lifetime annuity payment the member (and beneficiary, if chosen) will receive. Option 1 cannot be chosen. For more information about retirement options, see page 21. Cash Balance Plan (TRSL Regular Plan as alternative plan) Any age with 30 years of service credit At least age 55 with 25 years of service credit At least age 60 with 10 years of service credit Cash Balance Plan (TRSL Plan B as alternative plan) At least age 55 with 30 years of service credit At least age 60 with 10 years of service credit 22 www.trsl.org
Get an annuity payment estimate TRSL recommends that any member considering ILSB get an estimate to see how it will reduce their annuity, because the reduction is permanent. To get an estimate based on ILSB participation, you will need to provide the following: Benefit Estimate Request (Form 10) Specific amount you want to receive as an initial lump-sum benefit Specific date you plan to retire Names and ages of your beneficiary(ies), if any IMPORTANT: If you choose ILSB, your lump-sum payment may be subject to special tax provisions. TRSL recommends that you discuss the matter thoroughly with a tax advisor. For more information, see our brochure, Initial Lump Sum Benefit (ILSB), available on the TRSL website, www.trsl.org. Get secure, online access to your retirement account information. Visit www.trsl.org and click on MEMBER ACCESS! Cash Balance Plan 23
Calculating your retirement benefit What you need to know The maximum lifetime annuity available through the Cash Balance Plan is determined by a formula that is based on the balance in the cash balance account and a reserve annuity factor. Formula Cash Balance Plan account balance reserve annuity factor = maximum lifetime annuity Sick leave Eligible unused sick leave can only be converted for use in determining disability and survivor benefit amounts, as those calculations utilize service credit. It will not be used to determine your monthly retirement benefit. Get a benefit estimate If you are nearing retirement eligibility, you can request an estimate of your retirement payments, either by mail using a Benefit Estimate Request (Form 10) or by contacting TRSL. 24 www.trsl.org
Survivor benefits What you need to know The surviving spouse and/or minor children of Cash Balance Plan members who were actively employed at the time of death may be eligible for survivor benefits from TRSL, if certain criteria are met. The eligibility requirements for survivor benefits differ based on whether the member would have been in the TRSL Regular Plan or Plan B had they not elected to join the Cash Balance Plan. There are also differences in the benefits available to spouses and/or minor children, which depend upon years of service credit in the Cash Balance Plan. Survivors and beneficiaries should notify TRSL as soon as possible following the death of a member or retiree. Monthly benefits or payments to any eligible survivor or beneficiary will be effective the first day of the month following the death of the member or retiree. IMPORTANT: Unused sick leave can only be converted for use in calculating disability and survivor benefits. Survivor benefits for Cash Balance Plan members are governed by the provisions of the TRSL Regular Plan or Plan B, as applicable. Find more detailed information about survivor benefits and eligibility in TRSL s publication, Death and Survivor Benefits, available on the TRSL website, www.trsl.org. Cash Balance Plan 25
Survivor benefits for Cash Balance Plan members TRSL Regular Plan as alternative plan Years of service credit Eligible benefit Surviving spouse only 5 but less than 10 Lump-sum payment of total account balance only Minor children only 5 or more Receive survivor benefits as outlined in TRSL Regular Plan Surviving spouse with minor children 5 or more Receive survivor benefits as outlined in TRSL Regular Plan Surviving spouse only 10 or more Receive lump-sum payment of total account balance, or Survivor benefits provided as outlined in TRSL Regular Plan No surviving spouse or minor children less than 5 5 or more Lump-sum payment of employee contributions to named beneficiary or estate Lump-sum payment of total account balance to named beneficiary or estate Surviving spouse, minor children, or both less than 5 Lump-sum payment of employee contributions to named beneficiary or estate TRSL Plan B as alternative plan Surviving spouse may be eligible for a survivor benefit if certain criteria are met: Surviving spouse only Generally, the member must have been actively employed at the time of death and have had at least: 20 years of service credit; 30 years of service credit at age 55; or 10 years of service credit at age 60. The surviving spouse benefit is the equivalent of the TRSL Option 2 benefit. Minor children Minor child benefits are paid by Social Security. 26 www.trsl.org
Disability retirement What you need to know A disability retirement is available to members who are no longer able to perform their current jobs because of a disabling condition. As part of the application process for disability retirement, the State Medical Disability Board must certify that you are permanently (physically or mentally) incapacitated for further performance of the duties you currently perform. However, members should be aware that disability benefits are not normally provided for long-term disabling illnesses that do not prevent the member from performing his or her current job or are not considered to be permanent disabilities. If the member is not in active service at the time of application and has not withdrawn his or her Cash Balance Plan account, TRSL must receive clear, competent, and convincing evidence that the disability occurred while the applicant was an active, contributing Cash Balance Plan member. Disability retirement benefit A Cash Balance Plan member eligible for disability retirement can choose a disability benefit as outlined in TRSL Regular Plan or Plan B, as applicable; or take a lump-sum payment of the Cash Balance Plan account. Disability retirement for Cash Balance Plan members is governed by the provisions of the TRSL Regular Plan or Plan B, as applicable. More detailed information about disability benefits, including survivor benefits, provisions for periodic re-examinations, earnings limitations, workers compensation, and tax considerations is available in TRSL s publication, TRSL Disability Retirement, which is available on the TRSL website, www.trsl.org. IMPORTANT: Unused sick leave can only be converted for use in calculating disability and survivor benefits. Disability retirement eligibility With the exception of certain school food service employees, Cash Balance Plan members are eligible for disability retirement if they have 10 years of service credit, excluding years on workers compensation. School food service employees who were eligible to participate in TRSL s Plan B, but elected to join the Cash Balance Plan must have at least five years of service credit to be eligible for disability retirement. Cash Balance Plan 27
Returning to work What you need to know For members returning to work in a TRSLcovered position prior to the completion of the payment or distribution, federal law requires TRSL to suspend the payment or distribution until the member is no longer in active service. If a member retires and annuitizes his cash balance account or terminates employment and withdraws the funds to which he is entitled, he may later decide to return to work in a position covered by TRSL. Upon re-employment, the member will begin to accumulate funds in a new Cash Balance Plan account. Re-employment will not affect his receipt of annuitized payments from his initial cash balance account. If you withdraw from the Cash Balance Plan and elect to receive a lump-sum payment or take a distribution of your account balance in one of the following two ways, the payment or distribution must be completed prior to your return to active service or during a period in which you are not in active service. Trustee-to-trustee, single-sum transfer between qualified plans Payment made directly to an individual retirement account Have questions about returning to work? Contact TRSL. 225-925-6446 1-877-ASK-TRSL web.master@trsl.org 28 www.trsl.org
Optional Retirement Plan (ORP) What you need to know The Optional Retirement Plan (ORP) is a defined contribution plan. It is an alternative retirement plan available to unclassified and administrative employees of public institutions of higher education and employees of higher education management boards. ORP accounts are portable and provide retirement and death benefits to participants. Employees who choose to participate in the ORP do not contribute to the Cash Balance Plan and waive all rights to TRSL retirement, survivor, and disability benefits. If individuals later change to employment that makes them eligible to belong to the TRSL Regular Plan or the Cash Balance Plan, they are required to continue ORP participation. REMEMBER: The decision to participate in the ORP is irrevocable. Individuals who choose the ORP can never join the TRSL Regular Plan or Cash Balance Plan. For more detailed information about the ORP, please contact your personnel office or TRSL. An online calculator comparing the benefits of TRSL s retirement plans and the ORP as well as the TRSL brochure, Optional Retirement Plan (ORP), are available at www.trsl.org. Cash Balance Plan 29
Comparison of benefit features Cash Balance Plan TRSL Regular Plan Optional Retirement Plan (ORP) Plan Type Hybrid defined benefit plan: Option of monthly annuity is based on account balance, consisting of 12% of salary pay credit and TRSL investment performance. Defined benefit plan: Monthly pension is determined by years of service, highest five-year average annual salary, and a 2.5% benefit factor. Defined contribution plan: Monthly annuity is based on employer and member contributions, and investment return on those contributions. Contributions Accumulation in cash balance account determines benefits. Employee contribution: 8% of salary TRSL trust-funded contribution: 4% of salary Contributions do not determine benefits. Employee contribution: 8% of salary Employer normal cost contribution has historically ranged between 5% and 7% of salary Contributions determine benefits. Employee contribution: 8% of salary (less a 0.05% administrative fee) Employer makes normal cost equivalent contribution. Duration of Benefit Lifetime benefit Lifetime benefit Duration of benefit is based on the amount accumulated in member s ORP account. When Benefit is Payable Lifetime annuity is payable after five years of plan participation at age 60. Refund of total Cash Balance Plan account is available, upon request, at termination of employment with five or more years in the plan. Or, with fewer than five years in the plan, a refund of employee contributions only is available. Lifetime benefit is payable after five years of service credit at age 60. Refund of employee contributions is available, upon request, at termination of employment. Annuity (with or without a partial lump-sum payout) is possible at time of retirement. All ORP funds are rollover eligible to an IRA or qualified plan after termination of all ORP-covered employment. Guarantor Guaranteed by the State of Louisiana Guaranteed by the State of Louisiana Guaranteed by solvency of ORP carrier Plan Election Participation is mandatory for post-secondary education employees who do not elect to participate in ORP. It is optional for K-12 and other employees of TRSL-covered employers, but the decision is irrevocable. Decision to join the Cash Balance Plan must be made within 60 days of employment. New hires (excluding individuals in postsecondary education) are enrolled in the TRSL Regular Plan unless they make an irrevocable decision to join the Cash Balance Plan. The decision to join ORP is irrevocable. ORP members are ineligible for membership in the TRSL defined benefit plan. Survivor Benefits Upon death of member with five years of service credit, the spouse and minor children may be eligible for survivor benefits. Upon death of member with five years of service credit, the spouse and minor children may be eligible for survivor benefits. Upon death of participant, the ORP account balance is paid in a lump sum or as an annuity to named beneficiary or participant s estate. Disability Benefits If member has 10 years of service credit (excluding service credit earned while on workers compensation) and becomes disabled, the member may be eligible for TRSL disability benefits for life. If member has 10 years of service credit (excluding service credit earned while on workers compensation) and becomes disabled, the member may be eligible for TRSL disability benefits for life. Benefit is based on accumulated contributions, payable at participant s option, after termination of ORP participation. No other disability benefits are included. Portability of Benefit With five years of plan participation, entire account balance can be withdrawn or rolled over. With fewer than five years, the member is entitled to employee contributions only. Funds are transferrable to other Louisiana Cash Balance Plans. Reciprocal recognition is available to other public retirement systems. Transferrable to other Louisiana public retirement systems. Reciprocal recognition of service credit is available for Louisiana public retirement systems. Portable to many U.S. colleges and universities Investment Decisions TRSL controls plan investments, which include employee contributions, and bears the risk. Cash balance accounts are not debited for investment losses. TRSL controls plan investments, which include employee contributions, and bears the risk. Benefits received from the TRSL Regular Plan are not dependent upon the investment decisions of TRSL or changes in the investment markets. Member controls own investments and bears the risk. (See ORP carrier s brochure.) TRSL s Plan B benefits vary from the TRSL Regular Plan, as outlined in this chart, in four respects: Benefit factor: 2.0%. Employee contributions: 5% of salary plus contributions to old age portion of Social Security. Disability benefits eligibility: Must have 5 years of service credit. Survivor benefits eligibility: Must have 20 years of service credit or otherwise meet Plan B retirement eligibility. Disability and survivor benefit requirements also apply to Cash Balance Plan members who would have been eligible for Plan B, had they not elected to join the Cash Balance Plan. 30 www.trsl.org
Community property and beneficiaries Community property The state of Louisiana considers most payments or benefits that members receive from TRSL to be community property, which should be accounted for in any community property settlement. The funds and payments from TRSL that may be considered community property include: Annuity payments Refunds of contributions ILSB withdrawals Death benefits The court system ultimately determines which of these funds or payments are considered community property. If a TRSL member divorces or legally separates, the ex-spouse may claim a portion of any of the above-mentioned payments and benefits that were earned during the time the member and ex-spouse were married, even if the benefits are not payable until after the divorce. Consult an attorney about community property settlements NOTE: The Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code concerning Qualified Domestic Relations Orders (QDRO) do not apply to TRSL. Questions about specific community property settlements and their effects on TRSL retirement benefits or withdrawals should be directed to the following: Legal Division Teachers Retirement System of Louisiana P.O. Box 94123 Baton Rouge, LA 70804-9123 Phone: 225-925-1829 Beneficiaries and community property The issues of community property settlements and the designation of beneficiaries are distinct, and governed by different laws. Simply because a retiree divorces a spouse does not allow him or her to automatically change or delete the beneficiary listed for retirement benefits. The issues of divorce, community property, and beneficiaries of funds or benefits are separate issues and must be dealt with separately and in most cases by court order. For more information about community property and beneficiaries, see the TRSL brochure, Community Property and TRSL Benefits, which is available on the TRSL website, www.trsl.org. TRSL members who divorce or must otherwise agree on a community property settlement should consult their attorneys concerning the partition of their retirement and other community assets and liabilities. If a member s legal counsel is preparing an order to divide TRSL retirement benefits or withdrawals, he or she should refer to Louisiana Revised Statutes, Title 11, Section 291. Cash Balance Plan 31
Social Security Important information regarding Social Security participation The Louisiana Division of Administration has requested an expedited ruling from the Internal Revenue Service (IRS) on whether the retirement benefits afforded in the Cash Balance Plan meet Social Security equivalency requirements. Federal law requires employers to offer retirement options to employees that are at least the equivalent of a Social Security benefit. If the IRS determines that the Cash Balance Plan does not meet Social Security equivalency requirements, Cash Balance Plan participants and their employers may have to contribute to Social Security in addition to the Cash Balance Plan. For more information, please refer to the Legal Disclaimers information on page 10. Social Security reductions Social Security benefits may be a major source of retirement income for you. To find out your projected Social Security benefits, file a Request for Social Security Statement (Form SSA-7004) with the Social Security Administration, www.ssa.gov. If you receive an annuity payment from TRSL and you are also eligible for Social Security benefits, federal regulations may reduce your Social Security benefit. Your TRSL annuity payment will not be reduced. There are two types of Social Security benefits: A spouse s or widow(er) s benefit is paid to spouses or surviving spouses of Social Security pensioners if those spouses did not work long enough under Social Security to have earned their own benefit or if their earned benefit is less than the pensioner s benefit. The spouse s benefit is generally one-half of the benefit paid to the Social Security pensioner. An earned benefit is paid to people who worked at other jobs where they paid Social Security taxes long enough to earn a Social Security benefit. The type of Social Security benefit you receive determines the formula used to calculate the reduction to this benefit. Government Pension Offset : reduction for spouse s or widow(er) s benefit Normally, when your spouse retires on Social Security, you are eligible for a spouse s or widow(er) s benefit if you are at least age 62. However, if you are eligible for an annuity or payments from TRSL, you may be subject to the Government Pension Offset (GPO) with certain exceptions. The GPO formula could reduce your Social Security spouse s or widow(er) s benefit by two-thirds of your TRSL annuity payment. In some cases this offset could entirely eliminate your Social Security benefit. 32 www.trsl.org
Windfall Elimination Provision: reduction for earned benefit If you receive a TRSL annuity payment, a modified benefit formula, known as the Windfall Elimination Provision (WEP), is usually used to reduce your own Social Security earned benefit. The WEP takes effect when you reach age 62 or become disabled with certain exceptions. If you have at least 10 years of earnings, your Social Security benefit will not be completely eliminated by the WEP provision. IMPORTANT: When you receive an estimate of your Social Security benefit, the amount probably will not have been reduced by either the GPO or WEP provisions. You should specifically ask Social Security to calculate the reduction for you. For more information about Social Security reductions, including criteria for exceptions to these reductions, see TRSL s publication, TRSL and Social Security Benefits, which is available on the TRSL website, www.trsl.org. The WEP formula is complex, so we recommend that you contact the Social Security Administration for explanations of possible reductions. Cash Balance Plan 33
Forfeiture of retirement benefits What you need to know Louisiana law (La. R.S. 11:293) provides for the forfeiture of retirement benefits by a public employee or elected official (hired or beginning service on or after January 1, 2013) convicted of a public corruption crime. This law defines public corruption crime as a state or federal felony committed on or after January 1, 2013, in which the sentencing judge finds that the public servant acted willfully and in the course and scope of his official capacity, and that any of the following apply: The public servant realized or attempted to realize a financial gain for himself or for a third party. The public servant committed any criminal sexual act with or upon the person of a minor, and there was a direct association between the public servant and the minor related to the public servant s employment. All individuals employed on or after January 1, 2013, are required to read and sign an attestation form. For more information regarding this attestation form, which contains the provisions of the forfeiture law, contact your employer. The forfeiture law can be found at www.legis.state.la.us. NOTE: La. R.S. 11:293 does not apply to the Optional Retirement Plan (ORP). 34 www.trsl.org
Managing your membership data Annual member account statement TRSL will send you a member account statement at the end of each fiscal year if you were actively employed with a TRSL-covered employer. This statement details the salaries and pay credits reported by your employer(s), and interest credits, plan participation, and service credit for the fiscal year. The statement also shows your accumulated funds, total plan participation, and service credit as of the end of the fiscal year. Your current beneficiary designation and your home address as last reported to TRSL are also listed on the statement. When you receive your statement, check it carefully. If your mailing address or beneficiary is outdated, notify TRSL by submitting an Active Member Change of Address Authorization (Form 2AC) or a Beneficiary Designation (Form 3). These forms are available on TRSL s website at www.trsl.org. Active members can change their names and addresses using TRSL s online Member Access, which gives members secure access to their retirement account information through our website. If information on the statement does not agree with your employer s records, ask them to submit corrections to TRSL, or have them contact us about any problems that cannot be resolved. An uncorrected error could affect your future retirement benefit. We are here to help you! Contact us. 225-925-6446 1-877-ASK-TRSL web.master@trsl.org Cash Balance Plan 35
Glossary Actuarial rate of return The actuarial rate of return is a four-year weighted average of the unrealized gain or loss in the value of all assets plus 100 percent of the realized gain or loss. The actuarial return is calculated with the following information: 100 percent of the realized gain or loss for the current fiscal year One-fourth of unrealized gain or loss of current year One-fourth of unrealized gains or losses of each of the previous three years Realized gains/losses result from the actual sale of assets. Unrealized gains/losses are market values on a given day only; no money has changed hands. This method of calculating the actuarial rate of return results in a four-year smoothing that lessens the dramatic effect of sharp turns in the market. It softens the blow of down years, but it also moderates the effect of upswings. It is usually late September before TRSL knows what the actuarially realized rate of return will be for the fiscal year ending June 30. The Public Retirement Systems Actuarial Committee (PRSAC) must review and adopt the rate. Actuary A statistician who calculates pension and annuity rates based on risk factors obtained from experience tables. Annuitized payment A fixed sum of money calculated to be paid over a lifetime in monthly installments. Beneficiary The person (trust or succession) who receives either a monthly benefit or the balance of the member s contributions depending upon the member s status at the time of death or the retirement option selected by the member. Defined benefit plan TRSL is a defined benefit plan. In general, a defined benefit plan provides a specific benefit at retirement for each eligible member. TRSL has two tiers within its defined benefit plan. Tier 1, or the TRSL Regular Plan, is a traditional defined benefit plan in which members are guaranteed a lifetime benefit at retirement if they meet certain age and/ or service requirements. The benefit amount is based on age, length of service, and final average compensation. Guaranteed member benefits are prefunded by contributions made by the employer, employee, and investment earnings. The other tier is the Cash Balance Plan. The Cash Balance Plan is a defined benefit because the benefits are defined in terms of the member s account balance. Cash Balance Plan members have the option to annuitize the account and receive a lifetime benefit. The plan sponsor (the State of Louisiana) must ensure that sufficient monies are available to pay all promised benefits to current and future retirees and their eligible beneficiaries. Defined contribution plan A retirement plan under which contributions are made by the employer, employee, and investment earnings. The benefit amount at retirement is the sum that accumulates in the member s account. Members (employees) are responsible for ensuring that their accounts have enough funds to provide them with adequate incomes in retirement. Employee-funded pay credit The eight percent of salary an employee contributes that will be credited to his or her Cash Balance Plan account. 36 www.trsl.org
Estimated payment The initial retirement benefit calculated according to information on file at TRSL. Before TRSL can finalize a retirement, additional information, such as certification of member earnings, may be needed. Initial Lump-Sum Benefit (ILSB) An optional program, selected at retirement, in which the member can receive a lumpsum payment of up to 36 months of the maximum monthly retirement benefit with reduced annuitized payments. This option is available to members who meet certain eligibility requirements. Interest credit Interest earned by a Cash Balance Plan account that is based on TRSL s actuarially realized rate of return (less one percent). Interest is credited to Cash Balance Plan accounts annually. Minor child An unmarried child of a TRSL member, who is under the age of 21 or is an unmarried, full-time student under the age of 23, or an unmarried, permanently disabled child who became disabled prior to age 21. Optional Retirement Plan (ORP) The ORP is a defined contribution plan. It is an alternative retirement plan available to unclassified or administrative employees in higher education. Employees who choose to participate in the ORP do not contribute to TRSL and waive all rights to TRSL retirement, survivor, and disability benefits not otherwise provided by state law. Participation in the ORP is irrevocable. Pay credits The 12 percent of salary that a Cash Balance Plan account receives each month. Pay credits include eight percent of salary from employee contributions, and four percent of salary funded through the TRSL trust, to which employers contribute. Plan B members School food service employees in the parishes of Allen, Assumption, Avoyelles, Cameron, Catahoula, Concordia, DeSoto, East Feliciana, Jefferson, Jefferson Davis, Lafayette, LaSalle, Morehouse, Orleans, Red River, St. Helena, St. John the Baptist, St. Mary, Washington, and West Feliciana. Plan B members contribute five percent of salary to TRSL for retirement; they also contribute to Social Security. Plan participation Refers to the number of years an individual is a member of the Cash Balance Plan, and is used to determine retirement eligibility as well as vesting in the trust-funded pay credit and interest credit. Reciprocal recognition of service Service credit or plan participation in a Louisiana public retirement system that is recognized by another Louisiana public retirement system. It is used to determine eligibility for regular retirement, disability retirement, ILSB eligibility, and survivor benefits. There is no cost to the member for reciprocal recognition, but this must be requested in writing. Regular Plan members Members of the TRSL Regular Plan (Tier 1) defined benefit plan. These individuals represent the majority of TRSL membership, and include those employed in any classification defined by law as teacher for whom enrollment in TRSL is a mandatory condition of employment, and who meet eligibility requirements. TRSL Regular Plan members contribute eight percent of salary toward retirement. After July 1, 2013, new post-secondary education employees will not be eligible to enroll in the TRSL Regular Plan. Cash Balance Plan 37
Retirement beneficiary A person named as the recipient of a onetime lump sum or monthly benefits. Once named, the retirement beneficiary cannot be changed, except for Option 1. The retirement beneficiary is not necessarily the same as the ILSB beneficiary. School food service employee For purposes of the Cash Balance Plan, school food service employees in the parishes of Allen, Assumption, Avoyelles, Cameron, Catahoula, Concordia, DeSoto, East Feliciana, Jefferson, Jefferson Davis, Lafayette, LaSalle, Morehouse, Orleans, Red River, St. Helena, St. John the Baptist, St. Mary, Washington, and West Feliciana who choose to participate in the Cash Balance Plan. These members contribute eight percent of salary to TRSL for retirement; they also contribute to Social Security. Service credit Credit earned while actively working and contributing to TRSL. Service credit is used to determine eligibility and benefit amount for survivor and disability benefits which are available to Cash Balance Plan members under provisions of the TRSL Regular Plan or Plan B, as applicable. A member receives service credit for each full year worked, regardless of whether the member was employed on a 9-, 10-, 11-, or 12-month contract. Members cannot receive more than one year of service credit in any fiscal year (July 1 through June 30). In most instances, service credit is calculated by dividing the actual earnings by the full-time rate that constitutes a full contract. Sheltered contributions Employee contributions paid into TRSL on or after July 1, 1988, which were not taxed; or any funds rolled over from an IRA or other qualified plan to purchase service credit. Sick leave Eligible unused sick leave days are used to determine disability and survivor benefit amounts. Survivor benefits Upon the death of an eligible active member, payments made to a surviving spouse and/ or minor children, including children who are totally and permanently disabled either mentally or physically. Certain eligibility requirements must be met by the member before death. Transfer of Cash Balance Plan funds Upon change of employment, this is an option to transfer the Cash Balance Plan funds to which a member is entitled to the Cash Balance Plan of another state public retirement system that covers the new employer. Trust-funded pay credit The four percent of salary credited to a Cash Balance Plan account and funded through the TRSL trust to which employers contribute. Unsheltered contributions Employee contributions paid into TRSL before July 1, 1988, which were taxed; or any funds paid by the member directly to purchase service credit. Vested (Vesting) The five years of plan participation required to withdraw (refund) the entire balance of the Cash Balance Plan account or to receive an annuity upon reaching age 60. 38 www.trsl.org
The Teachers Retirement System of Louisiana is an equal opportunity employer and complies with the Americans with Disabilities Act. Publication date: April 2013 This public document was published at a cost of $6,166.50. Five thousand copies of this document were published by the Teachers Retirement System of Louisiana, Post Office Box 94123, Baton Rouge, Louisiana 70804-9123, to inform TRSL members of laws and policies that affect them. Printing of this material was purchased in accordance with the provisions of Title 43 of the Louisiana Revised Statutes.
Teachers Retirement System of Louisiana 8401 United Plaza Boulevard, Suite 300 Baton Rouge, LA 70809-7017 PO Box 94123 Baton Rouge, LA 70804-9123 Telephone: 225-925-6446 Fax: 225-925-4779 Toll free (outside Baton Rouge area): 1-877-ASK-TRSL (1-877-275-8775) Email: web.master@trsl.org Website: www.trsl.org