TRS Frequently Asked Questions (FAQs)
How can I obtain the contribution account balances for my account? How can I obtain the same information for my spouse's account?
Your contribution account balance and any information related to your account is available to you upon proper identification.
Administrative regulations do not allow us to release information regarding personal or financial data to anyone other than the member without the member's prior written authorization unless the inquiring party has a subpoena or a court order to secure the information. We are allowed to release the information to the member's employer, former employer, or other authorized state agency.
A member's spouse or legal counsel is NOT entitled to the member's information without a properly executed release.
Highly compensated employees may become subject to the salary limitations under IRS 401(a)(17) if they earn more than the maximum allowed salary for the year. If salaries exceed the limit ($265,000 for 2015) contributions will cease to be taken from their salaries until the start of the next tax year. Any contributions taken in error will be refunded, with interest, to the member and will represent taxable income. Members receiving a refund of contributions under this provision will receive a 1099 at the end of the tax year.
Can I borrow money from my contribution account balance in an emergency?
No! Your account balance is not available to you until you are terminated from employment. Layoff or leave without pay status is not termination for purposes of obtaining a refund.
What are my options regarding my contribution account balance if I terminate my position?
You always have the option of leaving the money in your account. If you are a vested member intending to retire in the future, or are a non-vested member and intend to become reemployed in a covered position in the future, it may be wise to do so.
CAUTION: If you refund your contributions and do not return to TRS-covered employment before July 1, 2010, you will forfeit the service and your tier. If you return to TRS-covered employment on or after July 1, 2010, you will be enrolled in the PERS/TRS DCR Plan.
If you refund your account, you become a former member and forfeit any rights you had as a member. If you refund your account, you must take a full refund. You cannot obtain a partial refund.
To obtain a refund of your contribution account balance you must complete a Refund Election Form [PDF 142K].
If you are non-vested (less than eight paid years of service) or single, completing the form is sufficient. If you are a married member, your spouse must consent to the refund on a form provided by the Retirement and Benefits Division. This form must be notarized. If the rights to your refund are subject to a Qualified Domestic Relations Order (QDRO), you must also provide the notarized consent of each person entitled under the order.
When can I expect to receive the refund of my account balance?
You should have completed a Refund Election Form [PDF 142K], which tells us your intentions concerning your refund. If you did not, contact your employer or contact us directly.
There is a minimum waiting period of 60 days from your termination date or 30 days from the receipt of your application, whichever is later, before your refund will be processed. This is to make sure your employer has transmitted all of your contributions and your account can be refunded in full. There would be another week to ten days processing and mailing time once the waiting period has been met.
What are the tax consequences if I choose to take a refund of my contribution account balance?
First, the Division of Retirement and Benefits and the State of Alaska do not provide tax advice. Each member's tax situation is unique and you must consider the effect on your individual taxes. You should consult with the Internal Revenue Service (IRS) and a consultant as you deem necessary.
Contributions placed in the TRS before January 1, 1991, are "post-tax" contributions. The contributions have already been taxed and you should owe no further tax on them. The interest earnings from these periods are still subject to income taxes. Both interest and contributions taken as a lump sum refund are subject to a penalty for early withdrawal.
Contributions and interest placed in the TRS on or after January 1, 1991, are "pre-tax" contributions. These contributions have not been taxed previously. Therefore, both the contributions and interest earned on these amounts are subject to income tax.
In January following the year in which a refund is made, members will receive a 1099R informational return which indicates the amount of the taxable and nontaxable portions.
For the "pre-tax" contributions, if you choose to have the refund sent directly to you at your address or to your regular account at a banking institution, the IRS requires that we withhold 20% of the taxable portion of your refund, even if you later choose to do a "rollover" within the 60-day rollover period. You may also be subject to an additional early withdrawal penalty if you receive the refund before age 59-1/2.
You can avoid the withholding tax on the portion of your refund that you have us "Direct Transfer" to another qualified plan that accepts your transfer, such as an IRA. Only the taxable portion of your refund can be transferred. If your refund includes money that has already been taxed, we will refund that portion directly to you without withholding any taxes on it.
How do I arrange for a direct transfer of my refund?
You must arrange for another qualified plan, such as an Individual Retirement Arrangement / Account (IRA), to accept a direct transfer of your taxable contribution account balance. Once you have arranged for an institution to accept this transfer, you would complete a Refund Election [PDF 142K] form filling in the appropriate information. Be sure to include the plan name, address, plan contact person, and your account number.
Can a refund be attached by other parties and therefore the account may not be paid to the member directly?
Generally, except for a few exceptions, employee contributions and other amounts held in the system are exempt from levy to enforce the collection of a debt, and are not subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge of any kind, either voluntary or involuntary, without first being received by the person entitled to the amount under the terms of the system.
The exceptions primarily include unpaid state, local, or federal taxes, a Child Support Enforcement Order for unpaid child support, and up to one month's unpaid earnings of an individual employed by a member. In addition, a member's right to receive benefits may be assigned by a Qualified Domestic Relations Order as a result of a divorce or dissolution.
Can my contribution account balance be attached if I have not terminated my employment?
Until an employee terminates employment or is appointed to retirement, the employee has no right to receive his regular contribution account balance, and therefore, it cannot be distributed at that time. However, while we will not distribute your account balance, we will place a hold on your account. A valid attachment, still in effect when the employee terminates, or is appointed to retirement, will be honored at that time.
Will I lose my right to retire if I am a terminated, vested member and there is a valid attachment placed on my account?
Yes! If we are forced to honor a valid attachment, a member becomes a former member and loses any rights he or she may have had as a member. Even if the attachment is for a portion of your account balance, we would be forced to refund the balance to you, since there can be no partial refunds from the system. In this instance, an involuntary refund, plus any accumulated accrued interest, may be repaid to the system to reinstate your service without becoming reemployed in a system covered position. However, if the original attachment is still in effect, any repayments will be forwarded to the appropriate agency to satisfy any amount still due.
In an emergency, is there any way to obtain a refund of my account prior to the 60-day waiting period?
The Division of Retirement and Benefits takes a critical view of what constitutes an emergency. For any emergency consideration, you must request a waiver in writing, and provide sufficient proof of your emergency. If you have other extenuating circumstances that you feel warrant consideration, you must provide a written detailed description to us along with your request for a waiver. If a waiver is granted in that case, a refund will be processed as soon as your employer has transmitted all of the contributions that were withheld from your pay (generally at least 30 days).
Note: You must be terminated from employment to be eligible for any refund of TRS contributions.
I've just been rehired into a system covered position. Can I reinstate my previously refunded service?
If you hire before July 1, 2010, yes. You may reinstate previously refunded service by repaying your refund amount and any interest that has accrued as required by law. Refunded service does not count toward vesting or retirement eligibility unless the indebtedness is paid in full.
If you hire on or after July 1, 2010, no. You will forfeit your refunded service and tier and will be enrolled in the PERS/TRS DCR Plan.
How can I make payments on my indebtedness?
After receiving verification that your indebtedness has been established, you may make payments on your indebtedness directly to the Division of Retirement and Benefits either in full or with periodic payments over time.
If you intend a payment to pay off your indebtedness balance, you should contact us for the balance. You may also establish a monthly payroll deduction through your employer. We can estimate when your indebtedness would be paid in full based on the amount of deduction you set up. If you have not received verification that your indebtedness has been established, contact us. Interest on your indebtedness will continue to accrue until your indebtedness is paid in full.
What is the interest rate charged on my indebtedness, and when is it posted?
The interest rate for the TRS is 7 percent, and it is compounded annually. Interest on an indebtedness is posted monthly (see question below regarding interest posting).
What happens if I have an indebtedness balance left when I retire?
If you have not completely paid your indebtedness by the time you retire, your monthly benefits will be actuarially reduced over your lifetime, unless the reduction causes your benefit to be less than what it would have been without the service related to your indebtedness. If that is the case, your indebtedness payments would be refunded to you.
When does a payment on my indebtedness have to be received to have it post prior to interest posting?
Interest posts to an account during the last monthly processing cycle during the last week of the month. Your indebtedness payments must be received by the cutoff for input to that processing. Please call the Division for cutoff times.
Will I lose my tier on July 1, 2006 when the new PERS/TRS DCR Plan becomes effective if I am not vested?
No. Non-vested members whose employer has elected to participate in the conversion option may choose to transfer to the new plan. The decision to elect to convert to the new plan is solely the eligible employee's choice.
How long will a member have to elect to participate in the defined contribution plan once their employer decides to participate in it?
The window period for election begins on the date the resolution to participate is approved by the TRS Administrator and ends 12 months later or when the member vests, whichever occurs first.
I am a deferred former member and my former employer is participating in the conversion option. Can I convert my account to the new plan?
Yes and No. Since you are not an active employee with your former employer, you do not have the option to convert to the new plan. However, if you reemploy with your former employer before you vest and before the 12 month conversion period ends, you may elect conversion.
I worked for two other TRS employers besides my current TRS employer. Will all the TRS employers I worked for have to agree to participate in the conversion option before I can convert?
No. Only the employer you are currently working for must agree to participate in the conversion option. Your current employer is responsible for matching the balance of your employee contribution account up to the allowable limits of the IRC Sec. 415(c) regardless of which TRS employer you may have earned service with in the past.
TRS Death Benefits
What happens to my benefits if I die before retirement?
When a member dies from nonoccupational causes after completing:
- less than one year of TRS service, the death benefit is the employee's contribution account described in (1) below.
- at least one year, but before becoming vested, the death benefit is equal to the total of (1), (2), (3) and (4) below.
- the balance of the employee contribution account, which includes mandatory contributions, any voluntary contributions or indebtedness principal and interest payments, any supplemental contributions, and interest that has accrued on the account;
- a lump sum payment of $1,000;
- $100 times the number of years of TRS service that the member had at the time of death (the total of (2) and (3) may not exceed $3,000); and
- $500 if the member is survived by at least one dependent child at the time of death. This benefit is payable only if the member's dependent child or the child's parent or legal guardian is the designated beneficiary.
When a vested member dies from nonoccupational causes and the spouse is the designated beneficiary, he or she may select one of the following benefits:
- the lump sum amount described in (1), (2), (3) and (4) above; or
- a monthly 50% joint and survivor benefit.
If someone other than a spouse is the designated beneficiary, that person will receive the lump sum amount described in (1), (2), (3) and (4) above.
When a member dies from occupational causes before retiring, the spouse, if the designated beneficiary, will receive a monthly survivor's benefit beginning the month following the member's death. If there is no surviving spouse, but the member has dependent children who are the designated beneficiaries, the monthly survivor's benefit will be divided equally among those children. The monthly amount of the survivor's benefit is equal to 40% of the member's gross monthly salary at the time of death.
Is a completed beneficiary designation a requirement?
Yes, because this is the only record we have of ensuring that death or survivor benefits are paid in accordance with your wishes. If you are married at the time of your death and you were married to the same person during part of your TRS employment, your spouse is automatically your beneficiary, regardless of your written designation, unless:
- your spouse consents to another beneficiary on Form Gen053 [PDF 110K]. However, your spouse's consent to name another beneficiary is not required if the member was married for less than 2 years at the time of his or her death and the member and spouse were not living together when the designation was changed; or
- another person (such as a former spouse) is eligible for the benefits under a qualified domestic relations order (QDRO). That person would be entitled to the portion of the benefit that is ordered by the QDRO.
TRS Disability Benefits
If I am unable to work because of a disability, can I expect any benefits?
Yes, if you qualify. To qualify for disability, you must have been in a TRS position for 5 years, for which no indebtedness is owing, and be unable to perform the usual duties of your job, or the duties of another job that an employer makes available for which you are qualified by training or education. While disabled, you will receive monthly benefits equal to 50% of your annual base salary immediately before becoming disabled (divided by 12 months). You will receive an additional 10% for each of your dependent children, if any, up to a maximum of four children.
Pension Benefits at Retirement
When can I retire?
If you meet retirement eligibility based on age and you were first hired in a TRS-covered position before July 1, 1990, you can retire with an early reduced benefit at age 50. Normal retirement is age 55. If you were first hired in a TRS-covered position after June 30, 1990, you can retire with an early reduced benefit at age 55. Normal retirement is age 60.
You may retire at any age with unreduced benefits if you have:
- 20 paid-up years of TRS membership service;
- 20 paid-up years of combined TRS membership and Alaska BIA service, if the last five years are membership service;
- 20 paid-up years of combined years of part-time and full-time TRS membership service (you must have at least one-half year of membership service as a part-time teacher or one full year of membership service as a full-time teacher in each of 20 school years; or
- 25 paid-up years of credited service, if the last five years are TRS membership service.
How much will I receive when I retire?
How much depends upon the option you elect at retirement. A member can elect a benefit or elect from three different survivor options. The benefit is calculated based upon the following calculation:
2% * first 20 years * average base salary, plus
2.5% * all years over 20 * average base salary
(All service creditable before July 1, 1990, will be calculated using the 2% multiplier.)
Average base salary is calculated on the three highest salary years during your TRS employment. Salaries that exceed the maximum salary limit under the IRS 401(a)(17) limits cannot be used in the calculation.
Please contact the Member Services Contact Center if you have any questions.
When I retire, am I required to elect a survivor option if I am married?
Yes. State law requires that a married member select a survivor option unless their spouse waives their entitlement to survivor benefits. If survivor benefits are waived, benefits will not continue past the member's death. If health insurance benefits were payable, they will also be discontinued at the retiree's death unless a survivor benefit was elected at retirement.
What is the 1% Supplemental Option program?
Members who were first hired before July 1, 1982, and have made the additional 1% contribution for one year, may provide survivor's benefits to their spouses and eligible dependent children upon their death. There are two aspects to the benefit. The first is provided if there are dependent children. The monthly benefit is equal to:
- 35% of base salary at the time of death paid to the surviving spouse
- 10% for each dependent child, up to a maximum of 4 children
- 10% for each court-appointed guardian.
When there is no longer any dependent children, the surviving spouse will receive a benefit based on 50% of the retirement benefit the member was receiving at the time of death, or 50% of the benefit the member had accrued at the time of death.
Will my retirement benefit increase as a result of increases to inflation?
Yes, the TRS provides automatic increases to retiree benefits. The Post Pension Retirement Adjustment (PRPA) is calculated, effective July 1 each year, by multiplying the recipient's base benefit, including past PRPAs, times:
- 75% of the cost of living increase in the preceding calendar year or 9%, whichever is less, if the recipient is at least age 65 or on TRS disability on July 1; or
- 50% of the cost of living increase in the preceding calendar year or 6%, whichever is less, if the recipient is at least age 60 on July 1, or under age 60 if the recipient has been receiving TRS benefits for at least 8 years as of July 1.
What is the Alaska Cost-of-Living Allowance (COLA)?
If you reside in Alaska after you retire, you may receive COLA in addition to your regular monthly benefit. COLA is equal to 10% of your base benefit. "Residing in Alaska" means domiciled and physically present in Alaska. A domicile is that place where you have your true, fixed and permanent home and principal establishment and to which, whenever absent, you intend to return. An absence which exceeds 90 days constitutes a break in residency for COLA purposes.
The following are eligible to receive COLA:
- Members who were first hired under the TRS before July 1, 1990, and their survivors;
- members who were hired under the TRS after June 30, 1990, and their survivors if they are at least age 65; and
- all disabled members.
If I leave Alaska for a vacation will I still be entitled to COLA?
Yes, if you return to Alaska in less than 91 days. Absences greater than 90 days will result in the removal of COLA beginning the month following your departure for the entire absence. COLA will be reinstated the first of the month following your return and receipt of your application requesting reinstatement. If your absence is required because of illness, you may be out for up to 6 months, however, your absence must be necessary and certified by your physician.
What other types of service can I claim in the TRS?
You can purchase outside teaching service, Alaska Bureau of Indian Affairs service, or Military service. These are explained in greater detail in other questions and answers.
Can I purchase teaching service from outside Alaska?
You are eligible to claim up to 10 years of full-time service in an out of state school or Alaska private school if you were a:
- certified elementary or secondary teacher or certified employee in a position which requires a teaching certificate as a condition of employment in an out-of-state public school either inside or outside the United States supported by U.S. funds, or an approved or accredited nonpublic school either inside or outside the United States supported by U.S. funds; or
- employment in an out-of-state institution of higher learning requiring academic standing and accreditation by a nationally recognized accrediting agency listed in the Education Directory, Colleges and Universities, by the National Center for Education Statistics; or
- teacher in an approved or accredited nonpublic institution of higher learning in Alaska.
The cost to purchase outside experience will vary depending upon your entry date and entry base salary after the service was performed in the Alaska TRS. Please contact the Division of Retirement and Benefits for cost information.
Can I purchase teaching service with the Alaska Bureau of Indian Affairs?
You may claim service as a full-time certified teacher in a position which requires a teaching certificate as a condition of employment; or a professional educator. Alaska BIA service may count toward vesting and retirement eligibility. The cost is based on your entry in the Alaska TRS after the service was performed. If your entry was before July 1, 1970, you will be charged 5% of base salary for each year of Alaska BIA. If your entry was after June 30, 1970, you will be charged 7% of base salary for each year of Alaska BIA and if your entry was after June 30, 1990, the charge is 8.65% of base salary.
If you receive a federal benefit based on Alaska BIA, the Alaska TRS will offset their benefits by the amount you receive in federal benefits for that service.
Can I buy Military time?
You can purchase up to five years of active service including active duty National Guard time. If you were first hired in the TRS after June 30, 1990, and are eligible for a federal benefit based on the same service, you cannot claim the service in the TRS. The cost for eligible service is 7% of your base salary for each year claimed, if you were hired prior to July 1, 1990, or 8.65% of your base salary for each year claimed, if you vested after June 31, 1990.
Can I receive credit in the PERS at the same time I am receiving TRS credit?
Members cannot receive duplicate credit in PERS except as an elected official. Benefits are payable if you are retired in the TRS and you meet the following:
- the service occurs while you are a full-time TRS employee;
- the service is with a municipality or political subdivision that is participating in the PERS at the time the elected service occurs;
- you are compensated for the elected service; and
- you pay the mandatory PERS contributions for the elected service (6.75% of salary).
What type of plan is the TRS?
For members who first entered the Teachers' Retirement System (TRS) on or before June 30, 2006, the TRS is a Defined Benefit plan. Your eventual benefit from the plan, if you do not refund your account, is based upon a computation method defined in statute and regulation. It is not based on the amount of money in your refundable account.
Who is the Plan Administrator?
The TRS is administered by the Division Director, Division of Retirement & Benefits, PO Box 110203, Juneau, AK 99811-0203. To call, 1-800-821-2251, or in Juneau call (907) 465-4460; FAX (907) 465-3086; TDD (907) 465-2805.
How do I change my address?
You should contact your employer and ask them to submit a change of address for you. If you have trouble getting your address changed through your employer, you should contact the Division of Retirement and Benefits, Accounting Section. If you are retired or no longer working for a TRS employer, you should complete a change of address card and send it to the Division.
When will I become vested?
You will be vested when you have at least:
- eight paid-up years of membership service; or
- five paid-up years of membership service and three paid-up years of Alaska Bureau of Indian Affairs (BIA) service; or
- fifteen years of paid-up credited service, if the last five years are membership service and you were first hired under the TRS before July 1, 1975; or
- twelve paid-up years of combined part-time and full-time TRS membership service. You must have at least one-half year of membership service as a part-time teacher or one full year of membership service as a full-time teacher in each of twelve school years.
How does Leave Without Pay (LWOP) affect my vesting or eligibility for a service based retirement?
Periods of Leave Without Pay (LWOP), whether considered "active" or "inactive," cannot be used to satisfy vesting or retirement eligibility. This would extend the length of time needed to vest or meet eligibility for a service based retirement.
Can I purchase periods of LWOP?
For "active" LWOP you must pay both the employee and employer contributions to the TRS each month while on LWOP. Contributions should be paid through your payroll office.
For "inactive" LWOP you are not required to pay TRS contributions while on LWOP. When you return to work and claim LWOP, an indebtedness equal to the employee and employer contributions will be established.