Many Retirees to Receive One-time Stipend October 2018
Frequently Asked Questions
The Legislature authorized a one-time payment for many TRS retirees in HB 1340. This bill provides a “stipend” to members who were retired as of October 1, 2013. The amount will be 2% of the gross annual benefit up to a maximum of $1,000 to TRS retirees. It provides a minimum stipend of $350 for retirees who had at least 20 years of service credit as of their retirement. The law takes effect October 1, 2018. Here are some questions TRS has received from several members.
1. Will TRS retired members and surviving beneficiaries of members both be eligible for the stipend?
Yes. When a TRS member retires and names a beneficiary (joint annuitant) to receive the retirement benefit at the member’s death, there is only one annuity. The contract right to receive the annuity at death is enforceable by the beneficiary/annuitant and that individual steps into the shoes of the member.
2. Will the amount of the stipend be added to my regular benefit check?
No. TRS will issue a separate payment of the stipend in mid-October 2018. We will be sending out letters with more specific information soon.
3. To qualify for the minimum $350 stipend, will TRS use employment years only or will it include other service credit like service purchases for out-of-state service in education or transports of service from another Oklahoma public retirement system?
TRS will be using service credit which is the number of years used in the retirement benefit formula. That will include years that could be rounded up for sick leave, service purchases and transported years of service.
4. Will the 2% amount be based on net pension benefit after taxes, or my gross benefit before anything is taken out?
HB 1340 clearly states that the 2% amount is based on your gross, unreduced annual benefit amount before any withholding.
5. Will the stipend payment be included in the earnings reflected on my tax Form 1099-R?
Yes. This payment is considered an additional payment as part of your normal monthly retirement benefit payments and will be included as earnings reflected on your tax Form 1099-R.
6. Can I elect to rollover my stipend payment to another eligible retirement account?
No. Certain distributions from an eligible retirement plan can’t be rolled over. The stipend is considered to be a distribution that’s one of a series of payments that’s ineligible for rollover. www.irs.gov/taxtopics/tc413
7. Will any taxes be withheld from my stipend payment?
Yes. But nothing will be withheld if you selected no withholding from your regular monthly benefit.