FAQs
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Frequently Asked Questions
1. Death Benefits
2. Impact of Retirement Application Deadlines
3. Making Changes After Retirement
4. Partial Lump-Sum Distribution at Retirement
5. Pension Max post-retirement products
6. Proportionate Retirement Program
7. Receiving Your Monthly Retirement Benefit Payment
8. Taxes and Your Monthly Retirement Benefit
1. Death Benefits
1a. Will my beneficiary receive any additional benefits?
Any benefits paid to your beneficiary at the time of your death are determined by the retirement option you choose on your Retirement Option Selection (TCDRS-23) form. If authorized by your employer, a supplemental death benefit will be paid as explained below.
Optional Group Term Life (if authorized by your employer)
Your employer may provide a program of life insurance benefits for retired members as a lump-sum payment in the amount of $5,000. Please note that if you have not designated an Optional Group Term Life beneficiary, in the event of your death, the beneficiary or beneficiaries named on your Retirement Option Selection (TCDRS-23) form will be entitled to this payment in addition to any applicable retirement benefit payments. Should you wish to designate someone other than your retirement beneficiary to receive this benefit, please submit a Optional Group Term Life Beneficiary Designation(TCDRS-51) form .
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2. Impact of Retirement Application Deadlines
2a. What if I do not get all of my retirement paperwork submitted by my effective retirement date?
TCDRS requires that all paperwork be submitted to our office by your effective retirement date. Depending on the retirement option you select, paperwork requirements vary. We require all documentation that would enable us to issue your pension payment to be completed and in our office before calculating your monthly benefit. If your retirement application is submitted by your effective retirement date, you will have until the last day of the following month to submit all other necessary documents. Additionally, we will notify you of any missing documents. If those documents are not fully completed and received by our office within the grace period, your retirement will not be processed until the end of the following month. If you have not sent in all required documents by the end of the fourth month after your effective retirement date, your retirement will be cancelled and you will need to make a new application to TCDRS for your pension payment.
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3. Making Changes After Retirement
3a. How do I change my address, direct deposit or withholding?
Address Changes
Please advise TCDRS of any address changes so you will receive all correspondence such as the TCDRS Currents newsletter and yearly tax information. You may notify us of your new address and phone number by one of the following methods:
- Written notification signed by you. You may also request a Change of Address Form (TCDRS-72) from our office; or
- Written notification signed by a TCDRS-authorized representative from your former employer.
Direct Deposit Changes
If you have a change in your direct deposit information (such as an account number or a change in bank name) you will need to submit a new Direct Deposit Authorization (TCDRS-70) form, completed by you and forwarded to the financial institution for its agreement. You may also request the direct deposit form from our office.
Withholding Changes
You may submit a withholding change as frequently as you like. If we receive your change by the 15th of the month, your change will be incorporated into your payment issued that month.
3b. How do I change my payment plan and/or my beneficiary?
You may cancel or change your payment plan and/or beneficiary up until the last day of the month following your effective retirement date. Cancellations and changes may be submitted with new applications or a written request. After this time, you may not change your payment plan. You may change your beneficiary only if you selected a single-life annuity option (Life Only, or the 5-, 10- or 15-Year Guarantee). If appropriate, a Spousal Consent Form (TCDRS-11A) will be required.
3c. Can anyone else make changes to my account?
Endorsement of Payments
If you have waived direct deposit and are receiving a check, TCDRS requires that you personally sign your own pension checks. If you wish to have someone endorse your monthly pension payments in your name, please contact our office for instructions.
Power of Attorney (POA)
If you become physically or mentally incapacitated, a durable power of attorney (POA) can avoid the complexities of guardianship proceedings. If you have not previously executed a POA authorizing someone to handle your affairs, you might consider doing so if you become incompetent. This document gives your designated representative the power to act on your behalf. You may specify in the document the scope of the powers you wish this representative to have, and it may be canceled at any time.
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4. Partial Lump-Sum Distribution at Retirement
4a. What is a partial lump-sum distribution at service retirement?
A partial lump-sum distribution allows eligible members to receive a payment up to 100 percent of their personal deposits and interest at the time of service retirement. You are eligible only if your employing county or district has authorized this option and only at the time you apply for service retirement. The county/district's matching contribution is calculated on your total account balance at retirement before any deductions for the partial lump sum are applied. In addition to receiving a partial lump-sum distribution payment, you will also receive a monthly retirement benefit based on the matching portion of the total deposits at retirement as well as any balance of deposits and interest remaining in your account. The amount of your monthly pension payment will be lower than it would have been if you had not taken the partial lump-sum distribution.
We strongly advise all members interested in receiving a lump-sum distribution at retirement to request a retirement estimate so that the impact of the distribution on your pension payment can be ascertained and evaluated. Please contact our Customer Service department for an estimate. We also strongly recommend that you thoroughly research the federal tax consequences of a lump-sum distribution.
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5. Pension Max post-retirement products
5a. Can a "pension max" product enhance my TCDRS benefit?
Insurance companies selling products to "maximize your pension" may actually put your long term security at risk. Check out our article detailing what "pension max" is and what you need to know before considering it.
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6. Proportionate Retirement Program
6a. What if I have service with another Texas public retirement system?
If you have eligible service with another public retirement system, you may be able to apply this service toward satisfying your TCDRS eligibility requirements as long as you have not refunded your other account(s) or earned simultaneous service credit. In addition to TCDRS, retirement systems participating in this program are:
- Teacher Retirement System of Texas (TRS)
- Texas Municipal Retirement System (TMRS)
- Employees Retirement System of Texas (ERS)
- Judicial Retirement System of Texas (JRS)
- City of Austin Employees' Retirement System (COA)
As long as the combination of service you have earned with TCDRS and the other retirement system(s) makes you eligible for service retirement with TCDRS, then we will count that service toward retirement. Also, you may retire with TCDRS on a different date from the date you elect to retire with the other system. However, the participating retirement systems vary with respect to their requirements for combining service to meet retirement eligibility and to different retirement dates. As a result, you should contact the other system directly to verify its eligibility requirements and to coordinate your retirement with that system if necessary.
If you have terminated your account with one of these participating systems and have an open account with TCDRS, you may be eligible to reinstate your terminated account with the system from which you refunded. Because each system's requirements and processes are different, you should contact the other system about its requirements on buying back and/or restoring that time. If you reinstate your previously refunded account, TCDRS will recognize your service time as detailed above. Please contact us once you have restored your account with the other system.
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7. Receiving Your Monthly Retirement Benefit Payment
7a. What do I do if I don't receive my payment?
With direct deposit, payments cannot be lost or stolen, and they are rarely delayed. If payment is not credited to your account by the first of the month, please contact our office.
If you have waived direct deposit and are receiving your payment by regular mail, your check could be lost, stolen or delayed. You may request a replacement check by submitting a written request to TCDRS by either fax or mail. We suggest that you wait seven business days prior to requesting a replacement check. Please include in your correspondence: your Social Security number, phone number, address and signature in longhand. Upon receipt of this information, we will confirm that your payment has not been deposited and reissue the payment within three business days.
7b. When do I get my pension payment?
If your paperwork is complete and in order, your first
payment will be electronically deposited and usually posted to your account on
the last business day of the month following your effective retirement
date.
If you have waived direct deposit and are receiving a check, your first payment will be mailed the last business day of the month following your effective retirement date.
7c. What happens to my pension payments if I return to work?
You may return to TCDRS-covered employment with no suspension of your retirement benefits. If you return to work with the county or district from which you retired, you must:
- Have been retired for at least one full calendar month. For example, if you retired in April, you couldn't be rehired until June.
- Have a bona fide separation from employment. In other words, there can be no "understanding" between you and your former employer that you will be rehired after you retire.
Not meeting these requirements can have serious tax consequences for your and your former employer. You may owe a 10 percent excise tax and be required to repay all your monthly payments to TCDRS. Your former employer's TCDRS plan may lose its qualified status.
7d. How do I waive direct deposit?
Direct deposit is mandatory for
new retirees. However, if you do not want your payment directly deposited to
your bank account, you can complete the waiver on the second page of the Direct Deposit Authorization (TCDRS-70) form. Additionally, you can call TCDRS and notify us of your intent not to participate in the program.
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8. Taxes and Your Monthly Retirement Benefit
8a. How are taxes calculated on my pension payment?
The taxable
portion of your monthly pension payment is subject to federal income taxes. The
taxable portion of your pension includes all regular deposits made after 1985,
the portion of your benefit based on your employer matching, and your interest
earnings. You will receive a notice indicating how much of your monthly benefit
is taxable at the time your first payment is issued. You will also receive an
annual 1099 tax statement showing the total taxable and non-taxable benefit
reported to the IRS. Please complete an Income Tax
Withholding Form (TCDRS-73) to elect a withholding allowance. If you do not complete an Income Tax Withholding Form, we are required to withhold income tax based on a taxable status of married with three allowances. You will be responsible for any taxes and penalties due if you fail to have adequate amounts withheld from your pension payments.
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