Most members of the UFT are lucky to be among the minority of U.S. workers who still have a traditional defined-benefit pension. A defined-benefit pension, which guarantees a lifetime annuity, is a hallmark of union benefits. It is a benefit that the UFT fiercely defends in its work with state legislators in Albany.

With a defined-benefit pension, a retiree receives regular payments for life based on a formula that takes into account years of service, salary and age. UFT-represented employees don’t have to worry about a fluctuating stock market in which a downturn can wipe out a 401(k) savings plan. Their pension benefit remains consistently dependable each month throughout retirement.

The numbers are pretty grim for private-sector workers who have access to a retirement plan through an employer, according to the most recent data from the federal Bureau of Labor Statistics:

But thanks to public employee unions, about 85 percent of public employees are still eligible for defined-benefit pensions. That’s just one of the many good things unions do.

The city pension systems

Department of Education employees in most UFT-represented titles are required to participate in the Teachers’ Retirement System. The UFT’s 27,000 paraprofessionals may join, and the union urges them to do so, but membership is not mandatory.

TRS is one of the largest pension systems in the nation, with more than 210,000 in-service members, retirees and beneficiaries.

The Board of Education Retirement System has about 60,000 in-service members and retirees. Occupational and physical therapists, nurses, substitute teachers and paraprofessionals and a number of other nonpedagogical titles are covered by the Board of Education Retirement System. To verify your eligibility or to enroll, please contact BERS at 929-305-3800 or online at nycbers.org.

Pension tiers

Contributions to your defined-benefit pension, which is formally known as the Qualified Pension Plan, are based on your date of membership in TRS or BERS. All members belong to one of five tiers of membership, which were established as the years passed. Your tier generally depends upon your date of membership in TRS or BERS. Benefits, legislated by the state, vary by tier. Members who joined TRS or BERS after March 31, 2012, are generally enrolled in the newest tier, Tier 6.

If you have previously been a member of an eligible city or state public retirement system in New York, your membership date and tier status may change if you transfer your membership from that other system to TRS or BERS.

The Tax-Deferred Annuity Program

Members of both TRS and BERS may contribute to the Tax-Deferred Annuity Program. The TDA is a supplemental retirement plan sponsored by the retirement system that allows members to save even more money for retirement. The TDA program is one of the most valuable benefits the UFT has gained for its members.

Established in 1970, this low-fee, voluntary supplemental savings plan offers a number of investment options, including a fixed rate of return.

In 2019, the maximum contribution to a TDA is $19,000 for members under age 50, while members who are age 50 or over may contribute an additional $6,000 — up to $25,000 each year. This money is taken from your pay before taxes and reduces your gross taxable income. Taxes are deferred on contributions and investment earnings until you choose to withdraw funds as income when you retire.