Texas public school teacher retirement question

[ronocnikral]

assuming someone works a full career, I can't see how anyone would complain about TRS.

Federal employees don't get nearly as sweet of a deal. Even working for an oil company, I don't get nearly as sweet of a deal retirement wise.

the grass does certainly seem greener on the otherside of the fence. complaining about not "getting" to pay into SS....

[brewercm]

Theres also been talk to treat the active duty military retirement the same as SSN where you wont be able to collect retirement until you turn 62. That would be for anyone new coming in but I doubt you'd have much of that if they ever pass that law.

[Buddha]

The key word there was 'work all of your life in TRS.'
Lots of teachers begin teaching later in life, for a variety of reasons, such as leaving the military or a job which goes bad. Then there are the private schools and charter schools which are not under TRS. In both cases, there is a mixture of SS and TRS time that penalizes people unfairly.
As far as I know, the federal retirement system, FERS, reduces payments by the amount that SS pays a retiree, same as TRS.
Sure sounds like a private retirement system would work better, maybe the way Chile does it.

[ronocnikral]

Perhaps you are in an entirely different social security system than I am. The system I am in, I can max out my "contribution" for 40 years and under current rules walk away with less than 30% of my income. In TRS, one can work between 12 and 13 years to walk away with the same deal. Not mention, SS rules can change anytime, while pension rules can change, one's service is grandfathered in.

FERS works the same way my (small) pension does, which deducts social security contributions which the employer makes (since they pay for half). I'm sure this is an option for those in TRS, but for some reason those who represent them think they have a better deal right now.

To each their own, i still think the TRS rules are better than SS, anytime from vesting to retirement age. And given the choice, I would take TrS' rules any day.

[Buddha]

Yep. I'm in Texas. Teachers don't get SS here, even if they have payed into it at some time.

[ronocnikral]

Correction, they get to choose not to take it. Not to mention the 7.2% they don't have to contribute.

[Buddha]

The choice has been made for them, at least that is what the teachers I have talked to say.
While they don't have to pay into SS, they do pay into TRS, which does not yield well investment wise.

[brewercm]

Still a better investment than SS is though. Then again so is my mattress. The difference is SS was never supposed to be a retirement fund, it was and stol is nothing more than a safety net with a crap load of holes in it.

[acymc]

Teachers pay into teacher retirement system rather than social security. Railroad employees pay into Federal RR Retirement rather than SS. My Dad taught for 35 years, retired at age 58 and with the COL raises now draws a little more per month than when he was teaching. He had enough quarters of work that he paid into SS that he gets Medicare benefits paid by his SS but no extra money. Texas Teacher Retirement (and RR retirement) are both better systems than SS. Only people that worked and paid into the system draw checks. The Tx Ret Sys also governs its own funds and has not had the "pot" raided by politicians.

[ronocnikral]

Well, instead of throwing around conjecture, I figured we should go straight to the horse's mouth (errr...website).

Here are the TRS rules in their handbook...http://trs.state.tx.us/benefits/docu...dbook.pdf#Home

Next, it is Federal Law, (not texas state law - I did not know that!), which limits the benefits gummit pensioners' access. Social Security Publications More commonly known as the GPO (gov't pension offset). Their explanation, below...

Benefits we pay to wives, husbands, widows and widowers are “dependent’s” benefits. These benefits were established in the 1930s to compensate spouses who stayed home to raise a family and who were financially dependent on the working spouse. But as it has become more common for both spouses in a married couple to work, each earned his or her own Social Security retirement benefit. The law has always required that a person’s benefit as a spouse, widow or widower be offset dollar for dollar by the amount of his or her own retirement benefit.

And here is a calculator for the GPO for those who find themselves in such an enviable position. Benefits Planner: Government Pension Offset Calculator

Lastly, those who choose to "serve" in their careers here and there, do get a reduced benefit. Social Security Publications Referred to as WEP (windfall elimination provision)

Social Security benefits are intended to replace only a percentage of a worker’s pre-retirement earnings. The way Social Security benefit amounts are figured, lower-paid workers get a higher return than highly paid workers. For example, lower-paid workers could get a Social Security benefit that equals about 55 percent of their pre-retirement earnings. The average replacement rate for highly paid workers is about 25 percent.

Before 1983, people who worked mainly in a job not covered by Social Security had their Social Security benefits calculated as if they were long-term, low-wage workers. They had the advantage of receiving a Social Security benefit representing a higher percentage of their earnings, plus a pension from a job where they did not pay Social Security taxes. Congress passed the Windfall Elimination Provision to remove that advantage.

[auddii]

Hm, I beginning to feel like TRS is bs. I work at a university, so I have to contribute according to Texas law. However, I'm not a teacher, and the position I'm in has little opportunity for advancement. I could easily end up at another institution, a private corporation, or the federal government if I want to find advancement. So, I will probably never qualify to retire and file for a pension.

I can get my money back, but it earns no interest, and the university match goes into the fund to be shared by the retirees who qualify. I get nothing except a holding place for my money. What kind of crap is that? I want my money to work for me!

Also, management positions in the university qualify for an optional retirement plan, which is a standard investment account, and they get university matching up to 8.5%. But not for the lowly peons. We get screwed.

[ronocnikral]

Audrey, You should understand how these systems work. TRS is a state program (which is good b/c they cannot declare bankruptcy, opposed to municipalities). And it is a very good deal should you become vested. I believe if you go to another institution which they participate in TRS, your service will be carried with you (you may have to be vested). In fact, TRS accepts individual's service from other state systems, so you may not even be confined to the "great state of texas." I am not a TRS expert, as I have only looked at the rules at a high level.

The fact that you can get your contributions back is a good thing. I used to work at a private corporation where I had a pension. I was vested, but if I left before I was vested, I could make the same argument you do--I want the cash and it's not fair that was part of my compensation etc etc. And I wouldn't have seen a dime. It's fair for employers to give their employees incentives to stay with them long term.

As for the mgmt positions, they typically get paid more. And their positions come with "fringe benefits." My manager at my old company got stock options, and I got nothing. But such is life. This is a program most likely administered at the University level and is independent of TRS or SS.

SS is probably the worst of the programs, and is, unfortunately, the program I find myself in. The good thing is, if you don't become vested in TRS and switch to SS, the few years you worked in a different system will hardly have any effect on your overall SS benefit.

I would encourage you to study TRS to really understand how it can benefit you in the long term. If you ever decide to change employment, at least you can weigh these benefits against the benefits at the new employer. Most people just look at the pay, and this is far from making an educated decision.

[ChrisTX]

I've been in the teacher retirement, county and district, and municipal, and I never paid into SS. Retirement was a mandatory 7%.