RSA DDR 1 - Retirement Systems of Alabama - rsa-al 2025

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Tier 1 member: You are eligible to retire at any age with 25 or more years of service or at age 60 with 10 or more years of service. Tier 2 member: You are eligible to retire at age 62 (age 56 for State Police and certified, full-time firefighter and law enforcement officer) with 10 or more years of service.
RSA-1 is a voluntary, supplemental, deferred compensation plan administered by the Retirement Systems of Alabama (TRS). As explained in the RSA-1 brochure, by contributing pre-tax dollars, a member lowers his/her taxable income and reduces the amount of taxes they pay.
The RRA has two components. Tier 1 is the equivalent of Social Security benefits and Tier 2 is like an employers pension plan. Social Security Benefits: Payments made under Title II of the Social Security Act. They include old- age, survivors, and disability benefits.
RSA-1 is a voluntary plan that allows you to save and invest extra tax-deferred or after tax money. Not only can you defer taxes immediately, but your contributions and any earnings will also grow on a tax-deferred basis.
Tier 2 participants are employees who become members on or after Jan. 1, 2013. They have a payroll deduction equaling 6.2% of earnable compensation. A retirement factor of 1.65% for each year of service is applied to the average of the five highest years of earnable compensation during the last 10 years of employment.
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All RSA-1 distributions are subject to federal income tax. A portion may be subject to Alabama income tax.
Level 1, referred to as tier 1, is a mandatory basic national social security managed by SSNIT with a constituted Board of Trustees. Level 2, referred to as tier 2, is a mandatory occupational pension scheme managed by a Corporate Trustee who appoints a Fund manager and a Custodian.

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