whynotspendit
When you reach retirement, you will probably have to add many new words to your vocabulary. Since retiring is something that you have never done, there will be a bunch to learn. I have compiled a short list of terms that are essential for you to know so that you can be able to understand all of the forms that you will fill out when you are close to retirement. The following terms are rather generic and will generally apply to all states. If anything is unclear, I would urge you to check with the Ohio Retirement System. HAPPY RETIREMENT!

Active Member

This is just someone that is employed and covered by a Teacher Retirement System (TRS) position and is accruing service to retirement. In order to be an active member, you must have contributed to the TRS at least one year in the last 5 consecutive years.

Average Salary

This is the retirees average monthly salary for the highest continuous 24 month period while being an Active Member. This is used in the calculation of your monthly pension check.

Benefit Options

The choice made by the retiree as to how their pension distribution will be made to them and their beneficiaries. Here is a post that details the benefit payout options that are available to you.

Consumer Price Index (CPI)

Measure by the Bureau of Labor Statistics that shows changes in the price of goods and services bought by people in the United States. This is used to calculate the cost of living adjustment (COLA)to your monthly retirement check.

Cost of Living Adjustment (COLA)

Increase in the amount of your monthly check based on the (CPI).

Credible Service

The time accumulated as an Active Member of a TRS employer.

Defined Benefit Plan

Pension plan that provides a member with a lifetime monthly benefit based on a formula that includes years of service and average compensation. This is a pretty neat plan to be in. The amount of your monthly benefit is not tied to the investment returns that the plan administrator makes.

Early Service Retirement

If you are in the TRS plan and you decide to retire earlier than the plan allows, your benefits will be reduced. But this benefit will still be determined by the formula determined by the retirement system.

Employee Contribution

The amount that actually comes out of your check each month to contribute to your retirement.

Lump-Sum Refund

If for some reason you terminate your employment with the school system and are not eligible to contribute, all of the money that you paid into the TRS plus interest may be given to you in one lump-sum.

Normal Service Retirement

This is when you meet the requirements that your retirement system has in order to receive your full monthly pension amount. Check your specific retirement system, but 2 of the most common requirements is reaching age 60 with at least 10 years of service or 30 years of credible service.

Pension

Lifetime monthly benefit payments to retired TRS members and/or their beneficiaries.

Service Purchase

This is a provision of the TRS system that allows teachers to “buy” additional years toward your retirement. There are many different formulas as to how much it would cost. For instance if you taught in a different state than you are retiring in and those years of teaching do not count to your current retirement program, you may be able to “buy” the years from the previous state.