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Required Minimum Distributions
(For Members with TDA Deferral Status)
Pre-1987 and Post-1986 TDA Funds
The IRS applies different distribution requirements to
Pre-1987 and Post-1986 TDA funds. Pre-1987 funds are
all TDA contributions and earnings accumulated as of
December 31, 1986. Post-1986 funds are all TDA
contributions and earnings accumulated after
December 31, 1986 (including earnings on Pre-1987 funds).
Beginning in 2023, for members who elect TDA
Deferral status upon leaving service, RMD rules
require that distribution of Post-1986 funds begin as
of the later of the following:
• The year you separate from service; or
• The year you reach age 73.
You must receive an annual distribution based on your
Post-1986 TDA balance until the year in which you
reach age 75. The distribution requirements change as
of that year, as described in the following paragraph.
The IRS allows the balance of your Pre-1987 Funds
to be “grandfathered” (i.e., exempt from distribution
requirements) until the year in which you reach age 75.
Then, distribution based on the total balance must
begin. Accordingly, TRS uses the total TDA balance
(both Post-1986 and Pre-1987 funds) to calculate the
yearly distribution amount once you reach age 75.
Note: If you take any TDA withdrawal prior to age 75
that exceeds your RMD amount in a given year, your
Pre-1987 balance will be reduced.
Subsequent Year Distribution Option
If this is the first year that you are subject to RMD rules,
you may elect to receive your distribution as late as April 1
of the following year. This “subsequent year” distribution
option is available only for the first RMD; all future RMDs
must be received by December 31 of each year. Note: If
you elect the “subsequent year” option, two distributions
Internal Revenue Service (IRS) regulations dictate how long participants in Section 403(b) plans such as
TRS’ Tax-Deferred Annuity (TDA) Program may defer receipt of their tax-deferred funds. In general,
participants must begin receiving distributions from their TDA accounts if they have retired, electing TDA
Deferral status, and reached a beginning age set by the IRS—now 73 for members who reach age 72 in
2023 or later. The amount they must receive is known as the Required Minimum Distribution (RMD), and
they must generally receive an RMD for every year that they maintain a TDA balance.
Note: Members who reached age 72 before 2023 must continue receiving RMDs as they did in previous years.
If you are subject to distribution requirements in a given year, TRS will send you an RMD packet with a
letter indicating your calculated RMD amount and an “RMD Election Form” (code TD39). As a convenient
alternative to filing the paper election form, you may instead file online in the secure section of our website.
If you are required to receive an RMD for a given year and TRS does not receive a timely RMD election from
you, TRS will make a distribution to you at the end of the year to meet the IRS’ distribution requirements.
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would normally be required in that calendar year: the
first, representing the previous year’s distribution, by
April 1; and the second, representing the current year’s
distribution, by December 31.
RMD Calculation
Your annual RMD amount for a given year is
determined by applying an actuarial factor from an
IRS life-expectancy table to your applicable TDA
balance. If your spouse is more than 10 years younger
than you, and is your sole primary TDA beneficiary,
your spouse’s date of birth will be factored into
calculating the amount of your RMD.
If you are under age 75, your RMD amount is
calculated based on your Post-1986 balance as of
December 31 of the previous year. Your Post-1986
TDA balance is determined by subtracting your
Pre-1987 balance from your total TDA balance as of
December 31 of the previous year.
If you are age 75 or older, your RMD amount is
calculated based on your total TDA balance as of
December 31 of the previous year.
Please note that any outstanding TDA loan balances
as of the preceding December 31 will be included in
the amount subject to distribution.
Distribution Options
To meet the IRS distribution requirements for a given
year, you may choose one of the following options on
your “RMD Election Form” or online equivalent. In
general, TRS must receive your election by October 31
(or, for paper forms, the last business day in October).
If you do not make a timely RMD election, TRS will
issue you a payment that meets your distribution
requirements (from TRS’ TDA Program) for the year.
1) Receiving payment from TRS in the amount of
your RMD:
You may elect that TRS issue you a payment
equaling your RMD amount in a designated month
during the current year (or as late as March, if you
are eligible for a “subsequent year” distribution).
If you receive an RMD from TRS, whether by
election or default, your payment will be deducted
from any funds in the Fixed Return Fund first
(until depleted), and then from any funds in the
variable-return Passport Funds, in proportion to
their balances. Any RMD made from the variable-
return Passport Funds will be based on the unit
values for the month prior to the distribution
date (e.g., distributions made on the last
business day of December will be based on
November’s unit values).
Note: TRS will issue your RMD payment by
Electronic Fund Transfer (EFT) into the same account
where you receive your retirement allowance
payments from TRS. If the RMD cannot be paid
electronically, a check will be issued.
2) Receiving TDA Direct Withdrawals from TRS that
represents your RMD:
You may apply TDA Direct Withdrawals that you
receive from TRS toward your RMD for the same
calendar year. Direct Withdrawals of TDA funds
that equals or exceeds your RMD amount will
satisfy IRS requirements for the year; Direct
Withdrawals in a lesser amount will count toward
your RMD, but you must still receive the difference.
You must receive the withdrawal during the same
year (or by April 1 of the following year if you are
eligible for a “subsequent year” distribution).
If your withdrawal amount is not sufficient to meet
your RMD amount, TRS will issue an RMD
payment to you for the difference. If you have not
yet made a TDA Direct Withdrawal this year, you
will need to file a “TDA Withdrawal Application”
(code TD32) in addition to the “RMD Election
Form” to initiate this distribution. Withdrawals are
generally processed within 15 to 45 days after
application is received. Please note that amounts
rolled over to an Individual Retirement
Arrangement (IRA) or another eligible successor
program, or transferred to another Section 403(b)
plan, cannot be applied toward your RMD.
3) Annuitizing your entire TDA balance:
Only members who have retired (or are retiring)
under the Qualified Pension Plan may annuitize
their TDA funds. To initiate annuitization, you will
need to file a “TDA Annuitization Election Form”
(code TD6). In general, in order for you to meet
RMD requirements for a given year, the effective
annuitization date on your annuitization election
form must be before April 1. Otherwise, TRS will
issue you an RMD payment before annuitizing
your TDA balance.
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If you elect to receive your TDA balance as a monthly
annuity, your TDA balance will be distributed
over your lifetime (or, depending on your payment
election, your lifetime and that of your beneficiary).
In such a case, TRS will not send you RMD
materials in future years.
4) Receiving payment from another Section 403(b)
plan not administered by TRS:
If you maintain more than one Section 403(b) plan
account, you may combine the account balances
for calculation purposes and receive an aggregate
RMD from one of these accounts. However, TRS
will calculate the distribution that is required from
TRS’ TDA Program only.
If you elect to receive your RMD amount through
a new Direct Withdrawal, through annuitization,
or from another Section 403(b) plan not administered
by TRS, you will assume responsibility for filing
the form to initiate the required distribution for the
year and (except for annuitization) ensuring that
the distribution satisfies the IRS’ RMD requirements.
Tax Considerations
The IRS imposes an excise tax on any amounts that
are required to be distributed for a given year but are
not. Therefore, it is imperative that the amount
of your RMD be distributed to you each year. This is
important to remember if you elect a distribution
option that requires you to initiate the distribution: a
TDA Direct Withdrawal, annuitizing your TDA
account, or receiving payment from another plan.
The RMD amounts are federally taxable and may be
subject to state and local taxes. The RMD amounts
are taxable in the year in which they are distributed.
Distributions for a given year that are made by April 1
of the following year are taxable in that following year,
even though they represent the preceding year’s RMD.
If you elect to receive an RMD payment from TRS,
you may designate the percentage of federal
withholding to be applied to your RMD. If you do
not make an election, 10% withholding will be
applied automatically to your RMD payment. Yo u
may claim any amounts withheld as tax paid on your
federal income tax return for the year of distribution.
RMD amounts are not eligible for transfer to another
Section 403(b) plan, or for rollover to another
successor program or to an IRA; as a result, the 20%
withholding that is normally applied to TDA withdrawals
is not applied to RMD payments. However, for new
Direct Withdrawals that are used to meet RMD
requirements, 20% withholding will be applied to the
amounts distributed in excess of the RMD unless those
excess amounts are directly rolled over or directly
transferred. (You may claim the amount withheld as
tax paid on your federal income tax return for the year
of distribution.) Any amount withdrawn that exceeds
the RMD amount is eligible for Direct Transfer to
another Section 403(b) plan, or for rollover to another
eligible successor program or to an IRA.
If you meet your RMD requirements by annuitizing
your TDA balance, regular withholding requirements
will apply unless you elect that no withholding be
applied. The TDA funds distributed to you as an
annuity are federally taxable and may be subject to
state and local taxes.
TRS suggests you consult with a tax advisor if you
have any specific tax questions.
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Code 5.4
This publication should not be solely relied upon, as it is based on currently available information that is subject to change.
In all cases, the specific provisions of the governing laws, rules, and regulations prevail.
Teachers’ Retirement System of the City of New York
55 Water Street, New York, NY 10041
www.trsnyc.org • 1 (888) 8-NYC-TRS •
