TERRP 401(a)
Frequently Asked Questions

1.  What is the TERRP plan?

In September 2001, Education Service Center Region 10 established the Teacher/Employee Recruitment and Retention Program ("TERRP") for school districts within Region 10. This supplementary retirement program is designed to:

• Encourage teachers and other employees to increase their retirement savings;

• Reward teachers and other employees for helping achieve district goals in attendance and student performance; and

• Provide financial incentives to encourage teachers and other employees to stay with the district or work at certain campuses.

2.  How does the TERRP plan work?

A district will make contributions on the employees' behalf to a TERRP account established for each participating employee. The district's contributions to an employee's account are based on a certain formula. This may include a match of the employee's own contributions to the district's 457, or 403(b) plan ("Tax-Deferred Annuity Plan"). The district's plan can also be established with a formula that offers employer contributions based on attendance, school site, student performance and other criteria established by the District within the design features available.

3.  Is there an enrollment process?

Participants are automatically enrolled in the TERRP program if they meet the eligibility criteria in the plan. No individual enrollment paperwork is necessary.

4.  How much does a district contribute to an employee's account?

Contribution rates and formulas vary with each district. TERRP allows districts to make a direct contribution on either a fixed dollar or a percentage of salary basis. It allows for match contributions of employee voluntary contributions to 457 or 403(b) plans based on a dollar ratio basis or as a percentage. Additional contributions may be made to certain plan participants if they meet certain attendance or performance criteria or by working at specific campuses.

5.  Who is eligible for a match contribution?

An employee is only eligible for a "match" contribution from the district if the employee contributes to a 457 or 403(b) plan.

6.  Can an employee make voluntary contributions to the TERRP plan?

No, only employer contributions are permitted to TERRP.

7.  How are contributions invested?

Educational Service Center Region 10 has appointed an Investment Advisory Committee to make investment decisions. The Investment Advisory Committee will utilize professional investment advisory services from TCG Consulting.

8.  What are TERRP benefits?

TERRP is a "defined contribution" plan or an "individual account plan" that provides for an individual account for each participant and benefits are based solely on the amount contributed to a participant's account plus any investment earnings (and may include forfeitures of accounts of other non-vested participants).

9.  When does an employee become eligible to receive the account balance?

An employee is eligible to receive his/her vested account balance upon separation from employment with the district due to voluntary or involuntary termination, retirement, death or disability.

10.  What is a vested account balance?

Vesting is an employee's right to receive a benefit upon termination from service. If an employee is fully vested, then the employee can receive the entire balance in his/her account and it is no longer contingent upon remaining employed by the district. An employee is fully or partially vested based on meeting the district's requirements for years of service.

11.  How can a participant find out what his/her account balance is?

Participants will receive periodic statements. Employees can also call a toll-free number for account information or access the TERRP website for further information. In addition, account information will be available online in the near future.

12.  How does an employee receive an account balance once eligible to
         receive a distribution from the plan?

In order for the TERRP trust administrator to begin processing the distribution of your account balance, an authorization from the district to distribute the account balance will be needed.

13.  What are the distribution options?

An eligible participant may receive a lump sum distribution, transfer the account balance to another tax-qualified plan, or roll it over into an Individual Retirement Account (IRA), depending on the amount of your account balance.

14.  How can a participant defer taxation on distributions?

A lump sum distribution of an account will be subject to taxation, including excise taxes with termination of employment prior to the age of 59½ or retirement prior to age 55. A participant can defer taxation by rolling over the distribution into an IRA or transferring it to another tax-deferred retirement plan.

15.  How can a participant designate or change a beneficiary?

The participant will need to complete a TERRP Designation of Beneficiary Form, available by calling the toll-free TERRP phone number. If no beneficiary is designated, the participant's spouse will be the automatic beneficiary if the participant is married and the participant's estate if he or she is not married.

16.  How can I find out more information about TERRP?

For more information on TERRP, you may contact the TERRP Trust Administrator, JEM, toll-free at:  (800) 943-9179 or email us at:  info@jemtpa.com