Teachers, Avoid a Potential Retirement Credit Disaster

I know what you’re thinking, “I put in 35 years and they’re not getting another day out of me- I’m retiring.”  This is all well-deserved, but what if (after retiring) you find out that you didn’t accumulate enough service credits for a full retirement?

Teachers nearing retirement (and teachers who are taking maternity, extended sick time, or working part-time) should pay close attention to the retirement credits being awarded to you.

Recently, I’ve had two new clients share similar stories about retirement credit woes.  One had to postpone her official retirement for 6 months because the credits she was awarded did not match the amount of credits she earned.  What this means is she decided to retire at the end of the school year, but upon doing some research, she found that the amount of years she worked did not match what was awarded to her.  She was awarded more credits than she truly earned.

Some might be thinking, well, if it was awarded to me, then I shouldn’t have to worry.  Not always.  What she learned is NYS will audit you for the actual retirement credits only AFTER you retire!  This means, if you retire based on what the school district tells you via the annual TRS statement you receive in the mail, but upon the audit (after you’ve retired) NYS finds you did not earn the retirement credit that was written on your annual statement, they will adjust your retirement payout accordingly.

You are responsible for making sure the retirement credits reported are correct.  Let me say this another way- YOU need to be tracking your retirement credits now to avoid a potential disaster later!

Best Practices to Avoid a Disaster Later

1.      Keep your calendars

2.      Record all your sick time

3.      Keep detailed records of part time work

4.      If you’ve taken maternity leave or another leave of absence, make sure you retain those letters

5.      Annually, check the credit you were awarded to confirm it is what you should have received

The credits are awarded monthly and twenty days equals a one month award.  If you worked 19 days or less, than you will not receive credit for that month.

It’s better to know the exact credits you have and that they match what the school is suggesting, as opposed to submitting for retirement only to find out you need to work another few months.  Or even worse, not realize you need more credits after you’ve retired. 

Many schools offer seminars about this topic.  I encourage everyone to attend one of these seminars as they approach retirement.