All public school teachers in Texas are entitled to Texas teachers’ retirement benefits (PDF) if they meet certain conditions. If you are a teacher working at a state school, all your hard work and dedication pay off in two ways – your students fulfill their goals while your post-retirement needs get taken care of by the state. Educators often have little time to think about themselves. So to help them secure their future, the state has introduced a systematic financial plan. To know more about Texas Teachers retirement and how it affects your salary and post-retirement life, read on below:
1. What is the Texas teachers’ retirement system (TRS)?
The TRS is a pension plan for educators in Texas. Teachers working in Texas public schools are automatically subscribed to this plan. As long as they work at an institute that is covered by TRS, their retirement fund keeps growing. The TRS provides assured benefits to teachers once they attain retirement age. The state of Texas provides its employees with different retirement plans but the TRS is its biggest once so far. More than a million educators are covered by this plan.
One of the reasons teaching is such a sought-after job in the state is teachers stand to gain in many ways – monthly pension and health insurance – after they retire. And this is assured by TRS.
At the administrative level, a board of Trustees looks after the TRS and the board enjoys the backing of the state government.
2. Am I eligible for TRS?
All public school educators who complete teaching at least one school semester are eligible to receive the benefits of the Texas teacher’s retirement system. Educators need to work at least 20 hours (part-time) out of a full 40 hours and a minimum of four and a half months at one TRS-covered institute. If you are employed with a publicly funded institution and the salary you draw for your position is comparable to other educators in similar positions, you are set to draw the benefits too.
Another factor that decides your pension payout is the number of salary credits you have earned. At present, the minimum number of salary credits required by a public school educator is 80. The full benefits are unlocked if you also have at least 5 years of work behind you. Once you turn 65, you receive a monthly pension and the health cover activates.
3. How much pension do I get every month?
In-service teacher salary undergoes a deduction every month. According to the existing regulations, the deduction rate stands between 6% and 7%, and the rate is revised based on a number of factors. Along with this, your TRS-covered institution also contributes to your pension. However, it is up to the Independent School Districts (ISD) to decide on the rate of employer contribution. So it varies from one ISD to another. These two amounts together form your monthly pension.
Salaries vary too. Not just between two school districts but also across one’s teaching career. For instance, a teacher with a Master’s Degree and 3 years of work earns around $37,000 while one with 6 years earns $40,000. Hence, the Texas teacher’s retirement system stipulates that retirement annuity is calculated on the highest salaries drawn by an educator. As such, the average of the five highest salaries is considered and the monthly pension is computed using the formula mentioned below:
Pension = Avg. of highest salary * Total number of years worked * 2.3
4. What is the health insurance for retired teachers?
Apart from a fixed regular pension, retired teachers also enjoy quality health care at affordable costs. This is made possible through health insurance that teachers can choose. Different school districts offer different types of health cover and these are voluntary in nature.
This health insurance enables retired educators to foot the bills for a number of health conditions, their prevention, and treatments. Some of the expenses common to most health plans are related to hospital visits and stays, in and outpatient care, surgery, and different types of medication. In addition, the TRS also covers a few other things, for instance, the cost of dental and vision treatment and medical expenses arising out of prolonged disability.
It is not mandatory for anyone to buy a health cover. Teachers can also choose the monthly deductions made for the cover. A higher deduction during service usually means low health expenses after retirement.
5. Can I opt out of the Texas teacher’s retirement plan?
TRS membership is mandatory for all eligible employees; as such, participation in the retirement plan cannot be waived. However, only full-time faculty members employed in institutions of higher learning who have been identified by their employer as eligible for the Optional Retirement Program (ORP) may opt out of TRS in order to participate in ORP.
Usually, there are three types of retirement – standard, early, and disability. For standard retirement, teachers start getting full pension when they hit 65. In some cases, it might happen that you terminate your employment after having regularly contributed towards your pension. Opting out of the plan is usually an option when you are no longer employed with a TRS-member institution.
If you do choose to opt out with your current employer, there are a couple of things you can do. First, you can check with TRS schools for teaching vacancies. If you can secure a job with them, your contributions will continue. Second, you can ask for a reimbursement. Usually, a full refund is issued. It is best to remember that early retirees, who leave TRS-backed positions, may have to bear the burden of certain penalties in connection to the sum received as a refund.
However, there is a case for disability retirement. If an in-service teacher suffers permanent disability (physical or mental) and cannot work, the state disburses pension to them according to terms of service. Mostly, a 10-year service period is required.
6. How can I apply for a refund?
The first thing to do is get a refund form from the official TRS website. Once you have the softcopy (Application for Refund), you fill it up and get it duly notarized. Finally, mail the filled-in form to the TRS office. Your job is done here.
After that, it is up to the TRS. They will start verifications as regards your records and employment details. The entire process usually takes a month.
However, since the teacher is getting back the money, there will be no pension upon retirement.
7. Can I get a single payment as opposed to the monthly pension?
It might be possible for educators to get a part of the retirement fund at one go and receive a smaller pension every month. But not everyone can avail of it. This option is only applicable to those retirees whose pensions are not subjected to any other deductions. The expected sum handed out is roughly about the size of a 36-month pension amount.
However, no one gets the full annuity as a lump sum.
Educators in Texas not only earn a respectable salary at a noble profession, but they also stand to reap the fruits of labor. Texas teachers’ retirement system ensures fair compensation post-retirement that enables them to live out post-retirement life with dignity. Texas welcomes teachers and school districts to advertise vacancies across grade levels.
Becoming a teacher at one of these state-sponsored schools requires candidates to possess a valid teaching certificate. If you are a teacher working at a position that doesn’t support TRS, get in touch with an Educator Preparation Program near you to improve your career prospects and secure your future.