Can I change my beneficiary designations after retirement?

The answer depends on which retirement option you elected. For certain options, the age of the member's beneficiary is a factor in calculating a retirement allowance; as a result, the beneficiary cannot be changed after the retirement date has passed. However, for the following options, you can change your beneficiary(ies) after retirement:

• For Tier I and II members—Options I, IV-b, IV-d, and IV-e; and
• For Tier III, IV, and VI members—Options 3 and 4.

After retirement, you may also change your fractional beneficiary and your Death Benefit #2 beneficiary, if applicable.

Why do I need to provide TRS with my beneficiary's Social Security number?

Having your beneficiary's Social Security number^ on file with TRS prevents unnecessary delay and complications at the time death benefits become payable.

TRS cannot distribute death benefits from a member's account until we have identified and contacted all designated beneficiaries on file. And, while other demographic information may be incomplete in our records or become outdated over time, the Social Security number is the most reliable way of confirming the identity of your beneficiaries and initiating contact with them.

You are not required to enter Social Security numbers at the time you enter your beneficiary designations. However, if you don’t, TRS may follow up with you periodically to remind you to provide this information.

^If your beneficiary does not have a Social Security number, then an alternative number such as the Individual Tax Identification Number (ITIN) may be used instead. If your beneficiary is a charity or organization, the Employer Identification Number (EIN) may be used.

What is Death Benefit #1?

Under Death Benefit #1, the benefit would equal 1/12 of the member's last 12 months' regularly earned salary multiplied by each full year of Total Service Credit—to a maximum of three times the member's annual salary; this maximum would apply to members who have 36 or more years of Total Service Credit. (This description assumes that the member was in active service and died with at least one year of Total Service Credit since last joining TRS.)

As of October 1, 2000, beneficiaries of Tier II, III, and IV members receive the greater of either Death Benefit #1 or Death Benefit #2, even if the member had elected Death Benefit #1 coverage. Members who joined TRS after January 1, 2001 (including Tier VI members) are automatically enrolled in Death Benefit #2.

What is Death Benefit #2?

Under Death Benefit #2, the benefit would equal one year's salary upon the completion of one year of service, two years' salary upon the completion of two years of service, and three years' salary upon the completion of three or more years of service. If the member remained in service to age 61, the in-service death benefit would be reduced by 5% for each succeeding year until age 70, when the benefit would equal 50% of the applicable amount. This description assumes that the member was in active service and died with at least one year of Total Service Credit since last joining TRS.)

As of October 1, 2000, beneficiaries of Tier II, III, and IV members receive the greater of either Death Benefit #1 or Death Benefit #2, even if the member had elected Death Benefit #1 coverage. Members who joined TRS after January 1, 2001 (including Tier VI members) are automatically enrolled in Death Benefit #2.

The following table shows the age-reduction factors that affect the benefit payable under Death Benefit #2.

What should I do if I want to leave my death benefit to my estate or to a trust?

When you use the Beneficiaries feature in the secure section of our website, you may name your estate or a trust as a beneficiary. If you designate a trust, you will also need to provide TRS with a copy of the complete trust document. You may upload this document in the secure section of our website, or you may mail it to TRS with a completed Verification of Trust Instrument Legality form (code EN4), which is available on request.

When a retiree dies, what benefits may be payable?

A death benefit, representing all or part of the member's retirement allowance under the Qualified Pension Plan (QPP), may be payable to a designated beneficiary or the member's estate; this would be based upon the payment option that the member chose at retirement. In addition, a fractional payment of the retirement allowance payment for the month in which the member died would be payable to a designated beneficiary, as long as the member did not die on the last day of the month.

Why are beneficiaries required to return any retirement allowance checks the retiree received in or after the month of death?

When a retiree dies before the last day of a month, that month's check is no longer payable to the member. A fraction of the payment, representing the portion of the month the member was alive, is payable to a fractional beneficiary, whom the member designated on his/her retirement application. The remaining portion of the payment is payable as part of the regular death benefit.

If any retirement allowance payments were cashed or directly deposited after the member's death, TRS will contact his/her beneficiaries to inform them of the total amount due. TRS must receive payment in order to process any benefits payable.

Is interest included in death benefit payments?

Death benefit payments may include interest, when applicable, for a limited period of time after TRS is notified of the member's death. Claimants/beneficiaries are encouraged to promptly submit documentation of the member's death (and return payments issued by TRS after the member's death). This will enable TRS to begin determining benefit amounts and any interest payable.

What does a Section 212 Waiver cover?

Filing a Section 212 Waiver (Certification of Employment Under Section 212) (code RP76)allows service retirees under age 65 to return to public employment with New York State or any of its political subdivisions and earn up to a designated limit each calendar year without jeopardizing their retirement allowance. The earnings limit for 2020 is $35,000, up from $30,000 in 2019. (The $35,000 limit will remain the same unless the New York State Legislature changes it.) For more information, please see the Earnings After Retirement brochure.

What does a Section 211 Waiver cover?

If service retirees under age 65 anticipate that they will exceed the maximum earnings allowed under a Section 212 Waiver, they must file a Section 211 Waiver with their employer (not TRS) to continue receiving a retirement allowance subject to certain restrictions. Retirees are encouraged to contact TRS to request an estimate of their earnings limit prior to filing a Section 211 Waiver with their employer.

For more information, please see the Earnings After Retirement brochure.

What is the maximum that I can earn after retirement?

That amount differs under certain situations. For example:

There is no limit if you are at least age 65 or if you are working in any job other than public employment with New York State or its political subdivisions.

If you are a service or a disability retiree working in public employment in New York State, the total of the pension portion of your retirement allowance plus your post-retirement earnings must be less than $1,800 annually.

Service retirees may file a Section 212 Waiver (Certification of Employment Under Section 212) (code RP76) with TRS and earn up to the designated annual limit, which is $35,000 for 2020, up from $30,000 in 2019. (The $35,000 limit will remain the same unless the New York State Legislature changes it.) By filing a Section 211 Waiver with their employer, service retirees may be able to earn more than this amount. (Note that disability retirees are not eligible to file Section 212 or 211 waivers.) Retirees are encouraged to request an estimate of their earnings limit from TRS prior to filing a Section 211 Waiver with their employer.

For more information, please see the Earnings After Retirement brochure.

What happens if I exceed the earnings limitation for a retiree?

If you exceed your earnings limit, you must repay the excess earnings to your employer or your retirement allowance would be suspended. If you are working under a Section 212 Waiver, the suspension would begin in the month that you exceed the limit, and it generally would continue for the rest of the calendar year. Under a Section 211 Waiver, the suspension would continue until the amount of your suspended retirement allowance equals your excess earnings. For more information, please see the Earnings After Retirement brochure.

How can I be restored to active service after I retire?

You should first find employment in a TRS-eligible position. In addition, you must file with TRS either an Application for Restoration from Service Retirement (code GA1) or an Application for Voluntary Restoration from Disability Retirement (code DI20). The Application for Voluntary Restoration from Disability Retirement may be obtained by calling TRS at 1 (888) 8-NYC-TRS and speaking with one of our Member Services Representatives.

How long does it take to complete a restoration to active service?

The process takes four to six months from the effective date of restoration.

How soon after I am restored to active service can I apply for a QPP loan?

You may apply for a new QPP loan approximately four months after you receive your new TRS membership number.

What is a Power of Attorney (PoA)?

A PoA is a legal instrument that allows one or more individuals (referred to as agents or attorneys-in-fact) to act on behalf of another person (referred to as the principal). Agents can be granted the right to handle a broad range of personal, financial, legal, and other business affairs—including retirement benefits.

Please note the following:

By using a PoA, you are able to decide in advance whom you want to act for you in situations in which you are unable to make decisions for yourself. However, you do not lose your authority to act even though you have given your agent similar authority.

A durable PoA allows the agent to act for you even after you are legally incapacitated (i.e., when you lack sufficient understanding to make rational decisions or engage in responsible actions due to mental or physical disability or illness). A durable PoA may be used immediately and is effective until revoked by you, or until your death.

If you don't have a durable PoA in place and you become incapacitated, your affairs may need to be managed by a court-appointed guardian under a process that can be complex and expensive.

Once you appoint an agent under a PoA, that person may act on your behalf without telling you. When choosing an agent, you should select someone you trust who will act in your best interest.

TRS strongly recommends that you consult an attorney before executing a PoA.

How can I execute a Power of Attorney (PoA) granting an agent the authority to make decisions on my behalf regarding my TRS benefits?

If you are a TRS member wishing to execute a PoA granting another person(s) the authority to make decisions regarding your current and future TRS retirement benefits, you may either:

Complete and submit a TRS Special Durable Power of Attorney (code BK75) . This non-statutory form is for use by TRS members and is specifically limited to TRS retirement benefit transactions and does not authorize an agent to act in a transaction that is not related to TRS. Please note that TRS makes this form available merely as a convenience and assumes no responsibility with regard to your use of it.

If you execute a TRS Special Durable Power of Attorney form without placing any limitations in the form's Section (g): MODIFICATIONS, you are authorizing the agent to conduct ANY transaction that you would be authorized to do (discuss retirement benefits, request access to personal information, change depository account information, etc.) with these two exceptions: 1) The agent may not name himself or herself the beneficiary of your retirement benefits, or 2) designate or change your current beneficiary.

If you want a person to be able to name himself/herself as the beneficiary, or designate or change your current beneficiary as the holder of your PoA, you must specifically include this information in Section (g): MODIFICATIONS of the TRS Special Durable Power of Attorney form.

OR

Complete and submit a statutory short form PoA provided under the New York General Obligations Law. In order for an agent to have the power to make gifts and other transfers, including the authority to designate or change beneficiaries on retirement benefit plans, both a statutory short form PoA and a statutory gifts rider must be executed simultaneously and submitted to TRS. You may instead file a valid PoA document that was executed in another state, which grants your attorney-in-fact the ability to change your beneficiary designations in accordance with that state's applicable law.

TRS strongly urges you to consult with an attorney before you execute a PoA to address any specific legal questions concerning this information. In all cases, the specific provisions of the governing laws, rules, and regulations will prevail.

Can my Power of Attorney (PoA) agent change my beneficiary designations?

If you execute a TRS Special Durable Power of Attorney (code BK75) form without modifying the form's default grant of authority to agents, your agent would not be able to change your current beneficiary designations. However, you can specifically provide on this form that your agent is able designate or change your current beneficiary designations, or to name himself/herself as the beneficiary.

If you execute a statutory short-form PoA, your agent may not change your beneficiary designations or designate himself/herself as the beneficiary unless the form contains a paragraph granting gift-giving authority you initialed AND the PoA is accompanied by a valid statutory gifts rider, which was created simultaneously with the PoA. The rider must be executed pursuant to the requirements of General Obligations Law Section 5-1514, which includes it being acknowledged and witnessed by two witnesses.

A short-form PoA, properly executed in accordance with the law in effect prior to September 1, 2009, remains valid and will be honored by TRS.

How can I revoke my Power of Attorney (PoA)?

You may revoke your PoA at any time by sending us a signed, notarized statement.

Although a durable PoA is revocable before someone becomes incapacitated, if TRS is not notified when a PoA is revoked, TRS generally will be entitled to rely on its good-faith belief as to the PoA's continued validity.

If I have Power of Attorney (PoA) for a retiree, how may I obtain a copy of the retiree's 1099 Form?

If TRS has a copy of your PoA on file, you may submit a written request to TRS for a copy of the retiree's 1099 Form. You may also submit a written, notarized authorization from the retiree if you wish to have this information released to you.

How did the Pension Reform Law (Chapter 504 of the Laws of 2009) affect TRS members?

Chapter 504 had broad effects on New York State public retirement systems. Individuals who became TRS members after December 10, 2009, but before April 1, 2012, are affected as follows:

Members who are represented by the United Federation of Teachers (UFT) become vested after they have ten years of service credit.

Members who participate in the Age 55 Retirement Program ("55/27" participants) will make pension contributions of 4.85% of gross pensionable compensation until they have 27 years of service credit, and contributions of 1.85% of gross pensionable compensation after reaching 27 years of service credit.

In addition, Chapter 504 affected certain members regardless of their membership date: For all participants in the Tax-Deferred Annuity (TDA) Program who are serving in (or resigned/retired from) UFT-covered titles, the annual interest rate paid by the Fixed Return Fund is 7% as of December 11, 2009.

Note: Chapter 504 also established a new tier—Tier V—for New York State public retirement systems and the Optional Retirement Program (available to CUNY employees). This change did not apply to TRS.

What is the Goodman Settlement?

On March 17, 2014, a settlement between the City of New York and the United States Attorney's Office in the case of Goodman, et al. v. City of New York, et al. ("Goodman") became effective. The Goodman Settlement impacts the pension calculations of certain members and pensioners who served in the military after September 11, 2001.

How can I change the way my TDA contributions are invested?

In-service TDA participants, members with TDA Deferral status, and TDA annuitants may change their TDA investment elections four times a year. Investment election changes take place on the following conversion dates: January 1, April 1, July 1, and October 1.

In-service TDA participants may change their investment elections for their future TDA contributions and/or past TDA accumulations by logging in to the secure section of our website at any time; their elections would take effect on the next conversion date that occurs at least 30 days after TRS receives their form or online request.

Members with TDA Deferral status may change their investment elections for their TDA accumulations by logging in to the secure section of our website at any time; their elections would take effect on the next conversion date that occurs at least 30 days after TRS receives their form or online request.

TDA annuitants may change their investment elections for their TDA accumulations by filing a paper TDA Annuitant's Investment Election Change Form (code RP9) at any time; their elections would take effect on the next conversion date that occurs at least 60 days after TRS receives their form.

Why didn't my TDA investment election changes take effect in my account?

In general, TDA investment election changes made by in-service TDA participants and members with TDA Deferral status take effect on the next conversion date that occurs at least 30 days after TRS receives their form or online request. If your elections have not taken effect in that time frame, then TRS may not have received your TDA Investment Election Change Form (code TD45) or online request, at least 30 days before the next conversion date. In such a case, your elections would take effect on the following conversion date.

In general, TDA investment election changes made by TDA annuitants take effect on the next conversion date that occurs at least 60 days after TRS receives their form. If your elections have not taken effect in that time frame, then TRS may not have received your TDA Annuitant's Investment Election Change Form (code RP9) at least 60 days before the next conversion date. In such a case, your elections would take effect on the following conversion date.

Can I stop investment election changes already in progress?

In-service Tier I and II members under the QPP, all in-service TDA participants, and members with TDA Deferral status may file a new investment election change form or online equivalent; in this case, any 6-, 9-, or 12-month conversions in progress but not yet completed would stop as of the date the new election takes effect. However, any 1- and 3-month conversions in progress cannot be stopped because they would be completed by the next effective date.

For Tier I and II retirees under the QPP and all TDA Annuitants, in-progress conversions cannot be canceled before they are completed. However, they may submit a new investment election change form to make investment elections for any portion of their QPP or TDA funds that have not been affected by any in-progress investment election changes.

When will my TDA Quarterly Statement be available?

Members with TDA Deferral status can view their TDA Quarterly Statements by logging in to the secure section of our website. Statements are available within one to two months after the end of each quarter of the calendar year.

How can I correct an error on my TDA Quarterly Statement?

You may send a copy of the statement, along with a letter indicating the requested correction, to TRS, Member Accounting Unit, 55 Water Street, New York, NY 10041.

May I use a direct withdrawal to pay off a TDA loan?

Yes. You may use the withdrawn money at your discretion.

What are the tax consequences of making a Direct Withdrawal?

Direct Withdrawals of TDA funds are generally taxable. Other than hardship withdrawals, TRS is required to withhold 20% of any taxable amount over $200 you withdraw and do not instruct TRS to directly roll over to an eligible successor program(s). If you receive a Direct Withdrawal and do not roll over the distribution within 60 days of the withdrawal check, the withdrawal would generally be federally taxable and may be subject to state and local taxes. The IRS may impose an additional 10% tax on all Direct Withdrawals unless the withdrawal is made: a) in conjunction with your separation from service during or after the year in which you attain age 55; or b) during or after the year you attain age 59½; or c) as a qualified hardship withdrawal; or d) in conjunction with your disability retirement; or e) by your beneficiary in conjunction with a death benefit payment.

TRS suggests that you consult with your tax advisor should you have any specific tax questions.

When can I expect to receive my TDA withdrawal?

TRS would issue your distribution of TDA funds as follows:

• For partial withdrawals drawn only from your balance in the Fixed Return Fund: Generally within 15 days of TRS' receipt of your withdrawal request.
• For all other withdrawals: Generally within 45 days of TRS' receipt of your withdrawal request.

How are Direct Rollovers and Direct Transfers different from Direct Withdrawals?

If you make a Direct Withdrawal, TRS sends the withdrawn amount directly to you. If you make a Direct Rollover, TRS sends the withdrawn amount directly to the IRS-qualified Individual Retirement Arrangement (IRA) or other eligible successor program that you elect. Unlike Direct Withdrawals, Direct Rollovers are not subject to current taxes and penalties. If you make a Direct Transfer, TRS sends the withdrawn amount directly to the IRS-qualified Section 403(b) Program that you elect. However, as a result of new IRS regulations governing Section 403(b) Programs, TRS, on the advice of outside tax counsel, has suspended all processing of Direct Transfers pending further clarification from the IRS.

What unit value will be used to calculate a TDA withdrawal?

In most cases, the unit values used would be the unit values in effect for the month after TRS' receipt of your TDA Withdrawal Application (code TD32) or online equivalent.

However, as described on the TDA Withdrawal Application, different unit values would be used for withdrawals that are taken after the expiration of TRS membership rights or in conjunction with the withdrawal of QPP accumulations.

When does TRS mail out 1099 forms?

1099 forms for a given year are generally issued by the following January 31.

May I view my 1099 forms online?

Members with active TRS accounts and beneficiaries who received a lump-sum distribution from TRS in the past five years may view their current 1099 forms online by logging in to the secure section of our website. Please note that TRS will continue to mail paper forms, including corrected forms, to all members. If you have any questions about the distributions reported on your online or paper 1099 forms, please file a 1099-R/1099-INT Inquiry Form (code GA5) with TRS.

What is reported on the 1099 forms?

Generally, TRS issues a separate 1099-INT form for any interest payments associated with a distribution listed above. However, the full amount of any Direct Rollover is reported on a 1099-R form, including any portion of the Direct Rollover that is attributable to interest.

Why was I issued more than one 1099-R?

A separate 1099-R form must be issued for each distribution from TRS.

Why was I issued a 1099-R even though I rolled over my funds?

TRS must issue a 1099-R form even if a distribution was rolled over.

May I receive a duplicate 1099 form?

Yes. Members with active TRS accounts and beneficiaries who received a lump-sum distribution from TRS in the past five years may request a duplicate of the associated 1099 form online by logging in to the secure section of our website.

Of the sum represented on the 1099-R form, which portion is tax-free and which portion is taxable?

The tax-free amount is listed in box #5; the taxable amount is listed in box #2a.

What does "not determined" mean on the 1099 form?

"Not determined" is an indication that not all of the facts are available to figure the taxable amount. If you are a retiree, your Benefits Letter may help you calculate the amount. You may also wish to consult the following IRS publications: #571—Tax-Sheltered Annuity Plans (403(b) Plans) for Employees of Public Schools and Certain Tax-Exempt Organizations; #575—Pension and Annuity Income; #590-A—Contributions to Individual Retirement Arrangements (IRAs); #590-B—Distributions from Individual Retirement Arrangements (IRAs); #721—Tax Guide to U.S. Civil Service Retirement Benefits; and #939—General Rule for Pensions and Annuities.

Why didn't I receive a 1099 form from TRS?

TRS may not have made a taxable or tax-deferred distribution to you or on your behalf during the year. However, if you received a distribution, or if TRS processed a direct rollover of your QPP and/or TDA funds during the year, you should have received a 1099 form. If you changed your address without notifying TRS, the 1099 form would have been sent to your previous address.

You may update your permanent address with TRS by logging in to the secure section of our website.

Members with active TRS accounts and beneficiaries who received a lump-sum distribution from TRS in the past five years may view or request a duplicate of the associated 1099 form online by logging in to the secure section of our website.

Note: These FAQs do not reflect the SECURE Act, which as of 2020 changed the required beginning age for RMDs, or the CARES Act, which later waived RMDs for 2020.

 

What is the QPP?

Q-P-P stands for the Qualified Pension Plan. This defined-benefit plan, administered under Section 401(a) of the Internal Revenue Code, enables TRS members to receive a monthly retirement allowance upon meeting certain eligibility requirements.

What is an RMD?

R-M-D stands for a Required Minimum Distribution. This is the amount that certain participants in TRS' TDA Program must receive from their TDA funds in a given year to meet the distribution regulations of the Internal Revenue Service. RMDs apply only to TDA participants who have separated from service, are at least age 70½, and have TDA Deferral status. It is important to note that the IRS imposes a 50% excise tax on any amounts that are required to be distributed for a given year, but are not.

What are the tax consequences of making a Direct Withdrawal?

Direct Withdrawals of TDA funds are generally taxable. Other than hardship withdrawals, TRS is required to withhold 20% of any taxable amount over $200 you withdraw and do not instruct TRS to directly roll over to an eligible successor program(s). If you receive a Direct Withdrawal and do not roll over the distribution within 60 days of the withdrawal check, the withdrawal would generally be federally taxable and may be subject to state and local taxes. The IRS may impose an additional 10% tax on all Direct Withdrawals unless the withdrawal is made: a) in conjunction with your separation from service during or after the year in which you attain age 55; or b) during or after the year you attain age 59½; or c) as a qualified hardship withdrawal; or d) in conjunction with your disability retirement; or e) by your beneficiary in conjunction with a death benefit payment.

TRS suggests that you consult with your tax advisor should you have any specific tax questions.

When can I expect to receive my TDA withdrawal?

TRS would issue your distribution of TDA funds as follows:

• TRS suggests that you consult with your tax advisor should you have any specific tax questions.
• For all other withdrawals: Generally within 45 days of TRS' receipt of your withdrawal request.

How are Direct Rollovers and Direct Transfers different from Direct Withdrawals?

If you make a Direct Withdrawal, TRS sends the withdrawn amount directly to you. If you make a Direct Rollover, TRS sends the withdrawn amount directly to the IRS-qualified Individual Retirement Arrangement (IRA) or other eligible successor program that you elect. Unlike Direct Withdrawals, Direct Rollovers are not subject to current taxes and penalties. If you make a Direct Transfer, TRS sends the withdrawn amount directly to the IRS-qualified Section 403(b) Program that you elect. However, as a result of new IRS regulations governing Section 403(b) Programs, TRS, on the advice of outside tax counsel, has suspended all processing of Direct Transfers pending further clarification from the IRS.

What unit value will be used to calculate a TDA withdrawal?

In most cases, the unit values used would be the unit values in effect for the month after TRS' receipt of your TDA Withdrawal Application (code TD32) or online equivalent.

However, as described on the TDA Withdrawal Application, different unit values would be used for withdrawals that are taken after the expiration of TRS membership rights or in conjunction with the withdrawal of QPP accumulations.

Can I change my RMD options after filing my RMD Election Form (code TD39)?

You may change your RMD options by filing a new RMD Election Form. However, TRS must receive your new form at least 60 days before the expected RMD payment date, based on your elections on the previous form. (For example, if your RMD payment date would have been the last business day of December, TRS must receive a new form by the end of October.)

Do I have to withdraw or roll over my total TDA account balance when I reach age 75?

No. If you are maintaining a TDA balance through TDA Deferral status, you would need to begin receiving an RMD that is based on your entire TDA balance. If you are receiving your TDA funds as an annuity, your TDA payments would continue as usual.

When am I required to begin receiving a minimum distribution on my TDA funds?

In general, the IRS requires that TDA distributions begin if you have left service (having elected TDA Deferral status) and have reached or will have reached age 70½ by December 31 of a given year. In most cases, you will have to meet minimum distribution requirements for every year that you maintain a TDA balance. The amount you must receive is called your Required Minimum Distribution (RMD).

If you have retired (or are retiring), a TDA annuity would meet your RMD requirements as long as the annual amount of the annuity payment is equal to or greater than your RMD amount for that year. (Note: A separate distribution may be required for the year that you elect to annuitize your TDA funds.)

Will I receive notification when I need to take a Required Minimum Distribution (RMD)?

Yes. Each year, TRS sends a comprehensive RMD packet to members who are subject to distribution requirements for the year. This packet includes a letter indicating the RMD amount for that year, as well as an RMD Election Form (code TD39).

How is my RMD amount calculated?

Your annual RMD amount for a given year is determined by applying an actuarial factor from an IRS life-expectancy table to your applicable TDA balance. The actuarial factors used to calculate your RMD will change every year, as will the amount of your required distribution. If your spouse is more than 10 years younger than you, and is your sole primary TDA beneficiary, your spouse's date of birth will be factored into your RMD calculation.

If you are a retiree between ages 70½ and 75, your RMD amount is calculated based on your Post-1986 TDA balance as of December 31 of the previous year. Your Post-1986 TDA balance is determined by subtracting your Pre-1987 balance from your total TDA balance as of December 31 of the previous year.

If you are a retiree age 75 or older, your RMD amount is calculated based on your total TDA balance as of December 31 of the previous year.

If I have more than one TDA beneficiary, which one is considered when calculating my RMD?

The only time during your lifetime that an actual beneficiary is used to calculate your RMD is when your spouse is more than ten years younger than you, and is your sole primary TDA beneficiary. Otherwise, your RMD is calculated as if you have a beneficiary who is ten years younger than you. After your death, the life expectancy of your oldest beneficiary is considered when determining your final RMD.

Are there different ways that I can receive my RMD amount?

Yes. You have several choices: You may receive an RMD payment from TRS for the required amount; you may make a Direct Withdrawal of an amount equaling or exceeding your RMD amount; you may elect to annuitize your funds; or you may satisfy the RMD requirement by receiving payments from another Section 403(b) Program.

If I receive a distribution from my IRA, can it take the place of my receiving an RMD from my TDA funds?

No. Only a payment from another Section 403(b) Program can take the place of receiving a distribution from TRS' TDA Program in order to meet RMD requirements.

Is it possible for my TDA beneficiaries to get an annualized RMD payment?

Generally, RMD payments are made only to members. However, after a member dies, the member's beneficiary(ies) may defer distribution of TDA death benefits by establishing a TDA account with TRS. In this case, if the member had been receiving RMD payments, these distributions would continue to be made to the beneficiary(ies) in accordance with Internal Revenue Service (IRS) guidelines.

Can RMD payments be rolled over?

No. They must be received by the member (or, when applicable, a beneficiary who has established a TRS TDA account).

What are the tax consequences of receiving an RMD?

All RMD amounts are taxable in the year in which they are distributed. This is true even in the case of distributions for a given year that are made by the following April 1; they are taxable in that following year even though they represent the preceding year's RMD. On the RMD Election Form (code TD39), members may elect the percentage of the RMD amount to be withheld for federal taxes; the percentage must be a whole number from 0 to 100. Any federal tax withheld can be claimed as tax paid on the member's federal income tax return for the year of distribution. For new Direct Withdrawals that are used to meet RMD requirements, 20% withholding will be applied to any amounts distributed in excess of the RMD unless those excess amounts are directly rolled over or directly transferred.

It is important to note that the IRS imposes a 50% excise tax on any amounts that are required to be distributed for a given year, but are not.