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Early Retirement Option Renewed

6/04/2013
Although the General Assembly adjourned on May 31 without resolving the pension crisis, they did pass key legislation that potentially impacts IFT members in K-12 schools statewide.

Lawmakers approved Senate Bill 1366, which renews the Early Retirement Option for teachers through June 30, 2016. The bill now goes to the Governor’s desk for consideration.

The Early Retirement Option (ERO) provides TRS members who are under age 60 and have fewer than 35 years of creditable service the option to pay a one-time contribution to TRS in exchange for receiving a full annuity at retirement.  TRS members who retire early and do not use the ERO receive a discounted retirement benefit.

Under the ERO extension in SB 1366, participating members and their employing school districts will still be responsible for a one-time contribution to cover the cost of the program, but the new law increases the contribution rates for both members and school districts.

The new law also “grandfathers” in two groups of members in the current program who will turn age 55 between July 1 and December 31, 2013:
 
  • The law allows members who turn 55 between July 1 and December 31 to retire on a date that precedes their 55th birthdays and participate in ERO with the current contribution rates if they will receive at least 74.6 percent of their final average salaries in retirement.


  • The law allows members who turn age 55 between July 1 and December 31 to retire on their 55th birthdays and participate in ERO with the current contribution rates if those members file their formal intent to retire with their employers prior to July 1, 2013. Employers must provide TRS with proof that these members filed their paperwork before July 1.

Visit the Teachers Retirement System (TRS) Web site for additional information about the extension.
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