HOW TO PREPARE FOR RETIREMENT WITH EPISD
The first step is to contact TRS for an Estimate of Retirement Benefits. This can be done by either calling TRS or completing a TRS Request for Estimate of Retirement Benefits Form TRS 18:
- Call TRS directly at their toll-free number 1-800-223-8778
- Forms can be downloaded for printing from the TRS Website. Go to www.episdbenefits.org click on TRS and then click on Forms then click on TRS 18
- Forms are available at EPISD Employee Benefits at 779-4253
If you are resigning from EPISD to take advantage of the loophole in the Social Security Rules, you must inform TRS of this situation. TRS needs to know this information, so that they may include two (2) TRS 7 Forms. The TRS 7 (Notice of Final Deposit) provides TRS information on the total salary paid during the last year of employment. So if you are in this situation, then you will need to have EPISD complete this form as well as the other employing District from which you will be retiring.
Normal processing time for TRS to prepare your retirement package is approximately
4 –6 weeks. Once you receive your packet, take some time to review the options available to you and to complete as much of the requested information as possible.
Most important is the Beneficiary Information. Correct names, addresses and social security numbers are required. The TRS Direct Deposit Form (278) will need to be completed by your Financial Institution prior to the exit, if you choose to receive your TRS annuity payment through direct deposit.
Every individual’s circumstances and finances are different. There is no standard on the choices that every employee makes at retirement.
TRS has a new feature on their Website that will allow for you to view a video seminar on what you need to do to retire. It goes through each step of the TRS retirement process. Visit TRS at www.trs.state.tx.us
Decisions must be made on the retirement annuity payment option, partial lump sum option (PLSO) and the TRS-Care Retiree Health Insurance option that best meets your individual situation. It is recommended that you discuss these decisions with your spouse, family or financial representative before attending the Exit Interview with EPISD.
If you are participating in the Deferred Retirement Option Plan (DROP) then you must have your TRS DROP Distribution Election Form (573) completed by your rollover plan administrator or trustee.
Once you are ready, then you can attend the Exit Interview with EPISD Employee Benefits staff. (Remember that Benefits Staff are not advisors and are here to assist you with processing your TRS paperwork and informing you about when your benefits with EPISD end and when you will be receiving your last paycheck.) At the Exit, other information pertaining to portability of life and disability benefits and how to tax defer payments of accumulated leave will be provided.
Call EPISD Benefits at 779-4373 or 779-4318 to schedule an Exit Interview.
No Exit Interviews will be scheduled until you have received and reviewed your TRS Estimate of Service Packet. Remember the Request for TRS Estimate of Service does not commit you to retiring. It is a very useful tool for you to review when considering retirement so that you can understand what benefits you may be entitled to.
Human Resources is currently visiting various job fairs recruiting qualified teachers for the upcoming school year. It is critical to know who is considering retiring at this time so that recruitment efforts can focus on the exact subject matter positions that will become vacant if you retire. Notice to Benefits will be kept confidential. When you call Benefits, you can advise them of your anticipated retirement date and set-up your exit interview at the same time.
Payment for Accumulated Leave
The EPISD currently pays for all accumulate leave at half the current daily rate. Prior to September of 2003, there was no cap on accumulated leave balances. Therefore, for employees with many years of service, this usually means a large payment included with their last check.
The IRS rules for payment of accumulated leave does not allow for a rollover to other financial vehicles. However, as an employee of the EPISD, you have two tax deferred plans available to help offset the income tax you will have to pay if you choose to have the entire balance paid to you on your last paycheck.
For Calendar Year 2004 the maximum contributions that can be made to either the 403 (b) Tax Sheltered Annuity or the 457 Tax Deferred Compensation Plan is $13,000 with a $3,000 limit for age 50 ½ catch-ups. What this means to you is that you could choose to tax defer the payment for accumulated leave by participating in either one of these programs or both. By participating in both, you could tax defer up to $26,000 or $32,000 if using the catch-up.
Additionally, if after participating in either or both of these tax deferred programs, you would like to have the balance paid in the following tax year (February 2005), the EPISD can help facilitate that election. Prior to your Exit Interview, you would have to have already made the necessary arrangements to tax defer your funds. You would do this as follows:
- Contact a 403 (b) Representative to set up a 403 (b) TSA Program
- Call Great West Retirement Services to set up a 457 Tax Deferred Compensation Plan (NOTE: The 457 Plan allows for distributions prior to age 59 ½)
Subsequently, we would pay any accumulated leave balance in the 2005 Tax Year (usually in February). Normal income taxes would apply to the balance. No additional tax deferrals can be made because you would no longer be an active employee of the EPISD.
More information on both of these programs can be found at the Employee Benefits Website at www.episdbenefits.org
You must provide lead time for all the paperwork and processing to be complete. You must have made your contacts and set-up your accounts prior to the Exit Interview. Once you have been processed out, you will not be allowed to change the manner in which your accumulated leave will be paid.
During your Exit Interview, you would let the Employee Benefits Staff know that you will have your accumulated leave deposited into either or both of these tax sheltered retirement plans and if you choose to have the balance paid in the next tax year (February of 2005). Benefits will ensure that payroll knows your intentions and will assist them in making a smooth transition for your payment.
If you are interested in determining the dollar amount of your accumulated leave at retirement or if you are resigning to retire, then you must contact Payroll for that calculation. Payroll can be reached by calling 887-5803 or 887-5804.
Employment after Retirement
If you plan to retire and then return to work for a TRS-covered employer, it is important that you understand laws and rules pertaining to employment after retirement. In an effort to assist members with frequently asked questions, TRS has published a brochure “Employment after Retirement”.
Local school districts will determine acute shortage areas for classroom teachers based on guidelines issued by the TEA Commissioner of Education. These guidelines must include:
- A list of acute shortage areas;
- Suggested criteria for identifying local acute shortage areas; and
- A requirement that districts give preference to certified applicants that are not retirees.