20-Year TRS Suit Settlement Payouts

20-Year TRS Suit Settlement Payouts
Current Pension Topics
By JOEL FRANK

Attention retired members of the eight public-employee retirement systems of the State and the City of New York:

You may have noticed a decrease in your net pension amount. This decrease is due to a change in Federal tax withholding. Last year, tax tables were changed as a result of the 2009 American Recovery and Reinvestment Act (“Stimulus Bill”). The tax tables for 2010 have reverted back to the prestimulus tax tables.

Attention all active and retired members of Tiers 1 and 2 of the Teachers’ Retirement System of the City of New York (TRS):

Payments for the “20-Year Pension Class Settlement” Have Begun

The payment of benefits in the “20-Year Pension Class Settlement” is underway. Nonretired TRS members who are part of the settlement class received a credit in their Increased- Take-Home-Pay accounts in January. For qualifying retirees and other class members, disbursement of the onetime payments occurred between Feb. 5 and 12. During the same period, settlement class members should have received letters concerning the distribution of their benefits.

The class-action suit challenged the calculation of a specific portion of the TRS retirement benefit for Tier I/Plan A and Tier II/Plan C members. All inquiries about the settlement should be directed to the claims administrator, Gilardi & Co., at 1 (800) 295-4716. If your settlement check was made payable to you, you still have the right to roll over the gross amount within 60 days from the day you received the check.

As a public employee, are you deferring all you can to the Deferred Compensation Plan of the State or City of New York? One way of motivating yourself to increase your contribution is to make believe there is no public-employee retirement system and no Social Security System. Make believe you will get nothing from these two systems.

Having said that, the Maximum Annual Contribution Amount remains unchanged for 2010. Based on the plan you are contributing to and provided you are at least 50 years old, the following table lists the most you can defer for 2010.

Are you contributing to the city’s 401(k) plan and a 401(k) or 403(b) plan with another employer? You must ensure that your contributions to ALL 401(k)’s and ALL 403(b)’s COMBINED do not exceed $16,500 in 2010.

If you contribute $16,500 to the TDA/403(b) Plan of the Teachers’ Retirement System, you can also contribute $16,500 to the city’s 457 Plan but nothing to the city’s 401(k) Plan.

If you contribute $16,500 to the TDA/ 403(b) Plan of the Health and Hospitals Corporation, you can also contribute $16,500 to the city’s 457 Plan but nothing to the city’s 401(k) Plan.

Mr. Frank is a fee-only Retirement Financial Planner and a retired city high school Teacher of Accounting. He can be reached by telephone at (732) 536-9472, or via e-mail at rollover@optonline.net.

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