An indebtedness can be established on your Teachers' Retirement System (TRS) account for several reasons.
- Qualified claimed service
- Deficient Contributions
Payment(s) on an after tax basis may be made directly to our Juneau office, or by arranging payroll deductions through your payroll office. Payments may continue after termination of employment, provided that you do not take a refund. Payments that are made with after tax monies are not eligible for IRA rollover or tax deferred status.
There is also a new option for payment that involves using a pretax transfer from certain Defined Contribution plans. Because of the variety of allowed and nonallowed plan transfer types, you must contact the Division directly to determine if you, and the plan you wish to transfer the money from, are eligible to be used to pay an indebtedness.
Interest at the rate of 7 percent compounded annually of the unpaid balance will be added at the end of each month. Interest will continue to accrue until the indebtedness is paid in full or you retire, whichever occurs first.
If at retirement, you have an indebtedness that has not been paid to the TRS, your monthly retirement benefit will be actuarially reduced over your lifetime.