If you’re a member of the Teachers’ Retirement System (TRS) or the Board of Education Retirement System (BERS), you have a voluntary, supplemental savings plan in addition to your defined benefit pension. This savings plan with low fees allows you to build personal savings on a tax-deferred basis.

Started in 1970, the Tax-Deferred Annuity is among the most popular benefits TRS offers members, with more than 75% of in-service and retired members participating.

The TDA program is a Section 403(b) plan. You will not pay New York State or New York City taxes on your contributions or earnings until you withdraw your funds. (Members who live in other states should consult with their tax experts.) As a result, your contributions may reduce your taxable income and current tax liability.

Taxes are also deferred on the investment earnings generated by your contributions. Normally, payments won’t occur until after retirement. At that point, it’s likely you’ll be in a lower tax bracket than you were in during your working years, so the distributions will be taxed at a lower rate.

The IRS allows annual contributions of up to $22,500 for members under age 50 and up to $30,000 for members age 50 and older. Contributions are deducted automatically from your paycheck.

The TDA is intended for retirement and therefore has strict rules and possible penalties for early withdrawals. You can access your TDA money before retirement through a loan, but it is not intended for use in an emergency.

All TRS and BERS members are eligible to participate in the TDA program. You can enroll by logging in to the secure sections of the TRS website or the BERS website. When you enroll, you choose the percentage of your pay you want to contribute and designate how your contributions will be applied among the investment options. You can make changes yourself to your original choices on the website.

Both TRS and BERS members have a Fixed Return Fund, which offers a guaranteed rate of return set by the New York State Legislature. The current annual rate is 7%.

BERS members can also invest in the Diversified Equity Fund.

TRS offers you seven other investment options in its Passport Funds to match your risk tolerance:

• Diversified Equity Fund invests primarily in the stocks of U.S. companies.
• Balanced Fund invests in stocks and bonds and targets a conservative mix of approximately 70% bonds and 30% stocks.
• International Equity Fund invests primarily in the stocks of non-U.S. companies located in developed markets.
• Sustainable Equity Fund invests in the common stock of large-and mid-cap U.S. companies that, in the manager’s view, effectively implement sustainable business strategies.
• U.S. Equity Index Fund invests in the 3,000-plus securities in the Dow Jones U.S. Total Stock Market Index.
• International Equity Index Fund invests in the 6,000-plus securities in the MSCI All Country World ex USA Investable Market Index.

More detailed information can be found on the TRS and BERS websites.

This column is compiled by Tom Brown, David Kazansky and Victoria Lee, teacher-members of the NYC Teachers’ Retirement Board.