The improved pension benefit enables current eligible members who opt into the plan to retire on or after June 30, 2008, and collect full (unreduced) benefits at age 55 if they have at least 25 years of credited service. Future members will also receive an improved benefit to retire at age 55 with 27 years of service.

Eligible Tiers II, III, and IV members of TRS and BERS who wish to opt into the plan must complete the opt-in form with their respective retirement system. This one-time-only, 180-day period to opt in will end on Aug. 25, 2008. Given how long and hard this struggle was, it is highly unlikely that current members will ever have another opportunity to join the 55/25 plan so it is important to consider now whether or not you want to opt into this plan.This Q & A is part of the UFT’s comprehensive effort to provide members with the information they need to make this important life decision. To get the latest news and information about 55/25, click the fuchsia “55/25 Update” button on the UFT Web site, www.uft.org. To find out about the union’s informational meetings, check the UFT Web site or call your borough office.

1. When does the legislation take effect?

The legislation providing for the age 55 pension improvement was enacted into law effective Feb. 27, 2008.

2. When is the opt-in period for enrollment in the 55/25 plan?

The opt-in period for current eligible members of TRS and eligible titles in BERS to enroll in the 55/25 plan is from Feb. 27, 2008, until and including Aug. 25, 2008.

3. What do I gain by opting into the 55/25 plan?

Your pension is a percentage of your final average salary (generally the average of the last three years of service). The percentage is based on the number of years of service. The more years of service you have, the higher the percentage (for example, in Tier IV it’s 50 percent for 25 years, 54 percent for 27 years, 58 percent for 29 years). An unreduced pension is payable to TRS members at age 62 or after reaching age 55 with 30 years of service and to BERS members at age 62 regardless of years of service.Until now, if a TRS member retired prior age 62 with fewer than 30 years of service, his or her benefit would be reduced by up to 27 percent (see chart with the next question), depending on how many years shy of 62 the member was. The same pension reductions would apply to all BERS members who retired prior to age 62. (The minimum retirement age in both pension systems is 55.)Now, if you are an eligible TRS or BERS member and opt into the 55/25 plan, you will be permitted to collect your full benefit based on the formula once you reach age 55 and have at least 25 years of service. That is up to seven years earlier than the existing pension benefit.

4. If I do not opt into the 55/25 plan and I retire before age 62 with fewer than 30 years of service, what pension reduction do I incur?

The following table shows the actuarial reduction on the pension at different ages for members of TRS with fewer than 30 years of service and for members of BERS regardless of the number of years of service:

5. Who is eligible to enroll in the 55/25 plan?

All active (currently on the payroll) UFT-represented DOE employees who were TRS members in Tiers II, III, and IV on Feb. 27, 2008, the enactment date of the new legislation, are eligible. So, too, are active DOE employees who were BERS members in Tiers II, III and IV on Feb. 27, 2008, in the following UFT-represented titles: all nurse and therapist titles, substitute vocational assistants, all non-annualized adult education titles, directors and assistant directors of drug and alcohol programs, sign language interpreters, all military science instructor titles, and all education officer and analyst titles. Employees of certain eligible charter schools may also opt in if they are active members of TRS.

6. How do I opt in and do I have to pay for this additional benefit?

If you wish to enroll in the 55/25 plan, you must file the appropriate enrollment form at TRS or BERS during the opt-in period. An additional 1.85 percent of your salary will be deducted from your paycheck and federal taxes on that amount will be deferred. The deferment of federal taxes for the additional contributions of means that the net effect on your take-home pay is less, depending on your tax bracket. For example, if you are in a 30 percent federal tax bracket, the 1.85 percent will have a net cost of 1.295 percent.

7. If I opt in, when does the deduction from my paycheck start? When does it end?

For those who opt into the plan, the additional member contributions will be applied prospectively from the effective date of the law. That is, after you opt into the plan, the additional member contributions of 1.85 percent of salary will be charged as of the first full payroll period following the law’s enactment (March 1 - 15) and will continue to June 29, 2008 or the date on which you complete 25 years of credited service, whichever is later. No additional member contributions will be required for service rendered prior to the date that the 55/25 law took effect.

8. I already have 25 years of credited service. If I opt into the 55/25 plan on June 30, 2008, do I have to make any retroactive contributions?

If you already have 25 years of service, you will have to make the additional 1.85 percent pension contribution from the first full payroll period following the law’s enactment (March 1-15) until June 29, 2008, regardless of when during the opt-in period you enroll in the plan. You don’t have to make any other retroactive – or future – pension payments.

9. What is the earliest date a participant in the 55/25 plan may retire with an unreduced pension if he or she has 25 years of credited service?

The earliest that a member who opts into the 55/25 plan may retire is June 30, 2008, provided that the member has reached age 55, has completed 25 years of credited service and has paid the additional member contributions that are required before the effective date of retirement.

10. If I opt into the 55/25 plan, will I have to pay an additional 1.85 percent to purchase my prior service?

No, all additional member contributions will be prospective from the first full payroll period following the law’s enactment (March 1-15) until June 29, 2008, or the date when the member completes 25 years of service, whichever is later.

11. Who may benefit from the new law?

TRS members who began full-time service, with no prior pension credit, between the ages of 25 and 37 are the likeliest to benefit from the new law. These members will have to consider their total service now and project forward to predict the chances that they will neither have 30 years of service before attaining age 55 nor reach age 62 before completing 25 years of service.TRS members who began working before age 26 may also benefit from 55/25 if they have breaks in service (for child care, for example) that mean that they don’t have 30 years of credited service by age 55.TRS members who have opted into the 55/25 plan may also leave service after 25 years and collect an unreduced pension once they turn 55. This is seven years earlier than they otherwise would have been able to.There is no hard-and-fast rule. Each eligible TRS member will have to do an analysis of his or her years of credited service to date and when he or she hopes to retire in order to decide whether or not to opt into the 55/25 plan.The following chart illustrates the number of years a TRS member may retire earlier with an unreduced pension under the 55/25 law than under current laws. Please note: This chart assumes uninterrupted service:

Age of Starting Full-time City Employment	Retirement Age Under Present Laws	Retirement Age Under 55/25	Years Gained
26	56	55	1
27	57	55	2
28	58	55	3
29	59	55	4
30	60	55	5
31	61	56	5
32	62	57	5
33	62	58	4
34	62	59	3
35	62	60	2
36	62	61	1

The calculus for eligible BERS members is more straightforward because they cannot now attain unreduced pensions before age 62 regardless of years of service. The key for BERS members is to consider whether they will likely have attained 25 years of service at age 55 through 61. If so, the 55/25 plan would allow them to retire early without incurring a pension reduction.

12. I will be age 62 before I have 25 years of service. Should I opt in?

No.

13. I am a TRS member who may have 30 years of service before I reach age 55 or before I retire. Should I opt in?

If you believe you will complete 30 years of service before you reach 55 (or have purchased or may be able to purchase prior service credit that would give you 30 years of total service credit at age 55), you may not want to opt in. However, if you have a break in service – for example, to raise kids, care for an elderly relative or try another career — you may not complete 30 years on the job by age 55 after all. If you leave work before you hit that 30-year mark or reach age 62, your pension will be reduced if you are not a participant in the 55/25 plan. Deciding whether or not to opt in is a personal decision that only you can make, weighing all the possibilities of your career and life trajectory. One of the reasons that the opt-in period is 180 days long is to give members the opportunity to gather the facts and take the time to consider their alternatives so they make the best possible decision..

14. I will have 25 years of credited service before I reach age 55. If I enroll in the 55/25 plan, can I resign or take a leave of absence without pay once I have 25 years and then collect an unreduced pension when I turn 55?

Yes, this is called deferred payability. It was one of the final provisions that we were able to add to the legislation and makes 55/25 a valuable plan for members in your position who started their DOE careers in their 20s.

15. What do I lose by not opting into the 55/25 plan?

If you do not opt into the 55/25 plan, you are covered by the provisions of the current Tiers II, III and IV laws that allow you to retire with an unreduced pension at age 62 after having at least five years of service or after reaching age 55 with 30 years of service (TRS). If you retire before age 62 unless you are a TRS member with 30 years of service, your pension will be reduced by the statutory actuarial factor.

16. I am a Tier IV member who is on leave of absence or suspension without pay but plan to return to active service. Am I eligible to enroll in the 55/25 plan?

Yes. After you return to the regular payroll in an eligible New York City position, you may opt into the plan by filing the appropriate form within 180 days of your return to active service (the regular opt-in window does not apply). In the case of a leave of absence, your return to active service must be within five years of the beginning of your leave.

17. If I am on payroll during the opt-in period and miss the deadline, will there be a re-opener that will allow me to opt in at a later date? Will I be able to opt in to the plan for new hires?

No. We do not anticipate that current members will have another opportunity to enroll in the 55/25 plan and you will not be able to join the 55/27 plan that is in effect for new members.

18. I am an eligible Tier IV member who is vested. I resigned and will not return to active service during the opt-in period. Can I opt into the 55/25 plan if I decide to return at a later date?

Yes, you will be able to opt in to the 55/25 plan if you return to active service in an eligible New York City position. You must opt into the 55/25 plan within 180 days of returning to the regular payroll.

19. What happens if I opt in and then resign or retire without qualifying for the 55/25 plan?

Generally, you will not be entitled to receive any refund of your additional member contributions in the 55/25 plan if you voluntarily quit or retire before you are eligible for the plan. However, if your participation in the plan ends for one of the following six reasons, you will be entitled to a refund of one-half of your additional member contributions plus the applicable credited interest on such contributions:

• you are approved for disability retirement;
• you die before retirement;
• you retire at or after reaching age 62 and were in active service for a total of at least six months out of each of the two 12-month periods immediately preceding your service retirement date;
• you transfer to another New York City or state retirement system into a title that is not eligible for participation under this program;
• you remain in TRS but no longer hold a position that makes you eligible to participate in the program;
• you are laid off for economic reasons.

20. Can I withdraw from the 55/25 plan once I’ve opted in?

Participation in the 55/25 plan is irrevocable once you have opted in. However, if you become a participant and your total service including all prior service could not possibly equal 25 years or more before you reach age 62, you will be able to withdraw from the 55/25 plan by filing the appropriate form with TRS or BERS within one year of the date you opted into the plan.

21. What plan is in effect for members who join the retirement system after Feb. 27, 2008?

The plan for eligible members of TRS and BERS who join the retirement system on or after Feb. 27, 2008, the effective date of the new law, is the 55/27 plan. It is mandatory for all new eligible members and will allow them to receive an unreduced pension if they retire after reaching age 55 with 27 years of service.They will pay 4.85 percent of salary (deferred from federal taxes) for the first 10 years of service, including service rendered prior to the enactment date of the law, and 1.85 percent of salary to the 27-year date. Again, the fact that the contributions are federally tax deferred means that they are paying less on a net after-tax basis.

22. Will a 27-year member of the 55/27 plan be able to resign after 27 years of service and begin collecting an unreduced pension when he or she reaches age 55?

Yes.

23. Who can enroll in the 55/27 plan?

DOE employees and eligible charter school employees who enroll as members of TRS or BERS after the enactment date of the legislation will be mandated into the 27-year plan.