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Big Death-Benefit Drop-Off For In-Service Tiers 2+

By JOEL FRANK
Posted 8/19/19

It's quite peculiar to contribute, on a tax-deferred basis, to the 403(b) Plan of the Teachers' Retirement System of the City of New York and then have the State and City of New York treat distributions from the Plan as tax-free income. (See: Current Pension Topics of Aug. 5, 2019.)

Once upon a time when there were no retirement system tiers, everyone was covered under the same benefit structure. This structure was given the name "Tier 1" when Tier 2 was enacted into law.

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