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TRS members have several methods available to purchase optional service, to pay Early Retirement Option contributions, to repay refunded service, and to upgrade pre-1998 service to the 2.2 flat rate formula. This brochure will help you decide the best way to arrange payment.
If you have not already done so, contact TRS to record qualifying service, even if you are not ready to pay for it. You will receive helpful counseling and you will be assured that the qualifying service is permanently recorded at TRS. This will protect you in the event that your former employer’s records are lost or destroyed. You are under no obligation to purchase the service you record at TRS.
After-tax payments
What are the pros and cons of after-tax payments?
It is quick and simple, generally with no complicated rules. Full-time, part-time, and substitute teachers are eligible. Once you have established your optional service purchase or repay refund cost by contacting TRS, simply mail your check to TRS along with the payment coupon you received from us.
The disadvantage is that there is no immediate tax savings.
What types of optional contributions may I make through a direct payment?
You may make a single-sum payment directly to TRS when you purchase optional service credit, upgrade your service credit to the 2.2 flat rate formula, or repay a refund.
A check(s) payable to THIS Fund is required for health insurance contributions due for periods of optional service after June 30, 1995.
Only purchases of optional service credit or repayments of refunds may be made in installment payments. You may not make after-tax, direct installment payments for the 2.2 flat rate formula.
Other information
Each installment payment must be a minimum of $50. If your total balance due is less than $50, your payment must be for the full amount due. Six percent annual interest is charged on the unpaid balance for most optional service credit. Annual interest is charged at 8.5 percent for the purchase of private school service credit.
What forms of payment are accepted?
We accept personal checks, money orders, or cashiers’ checks. Cash and credit card payments are not accepted.
Before-tax payments–Rollovers
What are the pros and cons of rollovers?
Rollovers allow you to transfer funds from many different types of retirement plans to TRS to pay for optional service, upgrades or refund repayments without loss of tax benefits. In many cases, this is a real advantage. Your current custodian must agree to make the transfer, and you must follow specific requirements set forth in federal tax regulations.
From where may a rollover originate?
TRS will accept most all qualified retirement plans. For specifics, call (800) 877‑7896.
TRS will accept spousal rollovers of distributions from Section 401(a), 401(k), Keogh, 403(a), 403(b), and 457(b) plans that the member’s deceased spouse participated in or that have been divided by a Qualified Domestic Relations Order.
Internal Revenue Service regulations do not allow TRS to accept rollovers from Roth IRAs.
Other information
Please note the following restrictions regarding rollovers:
- A rollover may be accepted after a balance is established at TRS for the optional contribution.
- A rollover will be accepted in an amount equal to or less than the balance owed. Checks made out in an amount greater than your balance will be returned.
- We will accept your rollover payment after a Trustee to Trustee Transfer/Rollover Certification form is completed by both you and the custodian who will be making the payment.
Questions?
If you have questions, please contact us.
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