The Minnesota Legislature adjourned on May 18, 2009. Before adjourning, the 2009 Omnibus Pension Bill (Chapter 169) was finalized, but without the inclusion of the TRA Reform Proposal. Governor Pawlenty signed the bill into law on May 22, 2009. The final bill included the following provisions:
Beginning January 1, 2010, members applying for retirement may begin earning TRA retirement benefits on any day of the month, rather than being restricted to either the 1st or 16th of the month. Payments will continue to be issued the first day of each month. (Clarification from printed version)
Active members with prior military service, and who have been honorably discharged, may purchase TRA service credit at full actuarial value.
Members may designate a Supplemental Needs Trust as as the recipient of a lifetime annuity benefit. This does not take precedence over the mandatory spousal coverage by a survivorship plan. (Clarification from printed version)
MnSCU faculty members, who first achieve tenure after June 30, 2009, may elect to transfer retirement coverage to TRA within one year of achieving tenure. The purchase cost will be calculated using the full actuarial value method.
Disability benefits paid will be deducted from the amount of any refund subsequently paid to a member (or beneficiary) who terminates service.
For retirees resuming work for a TRA covered employer, the post-retirement earnings limit is now applied on a fiscal year basis (July 1 - June 30), rather than a calendar year basis.
Clarification of the post retirement adjustment calculation: Members who have been receiving a benefit payment for at least one full month will receive a post retirement adjustment equal to 1/12 of 2.5 percent for each month they have received a benefit. Members retired at least 12 months prior to the January 1 adjustment will receive the full 2.5 percent increase.
Also of interest is a new state law that requires the State Board of Investment (SBI) to divest its holdings in companies that do business in Iran. All TRA assets are invested by the SBI. The bill requires SBI to scrutinize its holdings for companies actively doing business in Iran and notify the businesses they are subject to divestment. After a 90-day period, SBI has to sell its stock holdings in those companies.
Additional information can be found online at www.minnesotatra.org.
Initial programming is complete and TRA staff are diligently testing online access for members with Minneapolis service. We are happy to announce that our goal is to provide access to all TRA members by early fall. Watch for the official announcement at www.minnesotatra.org.
Everyone has been affected by the changing times. The TRIB newsletter is no different. Beginning in November 2009, the newsletter schedule will change from four issues per year to three — November, February and June. Also in November, you will notice that the newsletter will take on a new look.
Reducing the frequency of this newsletter will not reduce the information you can easily access through the TRA web site or your online account. Important information is always at your fingertips by going to www.minnesotatra.org. Taking advantage of the TRA web site presence will considerably reduce TRA printing and mailing costs, and the environmental impact of printing thousands of newsletters.
Reducing the frequency of newsletters is just one step in reevaluating how best to serve our members while considering fiscally responsible budget reduction measures. As additional changes take place at TRA, we will convey them to you on our web site, as well as in this newsletter.
(Also see Fall 2009: Online statement savings on page 4.)
Our promise to you: a guaranteed retirement benefit. Although the U.S. has experienced economic instability, be assured that TRA stands by that promise.
Although some improvement in market investments has occurred since early March, as of the end of May, the State Board of Investment (SBI) is reporting a fiscal year investment return of about -19 percent. The TRA contribution rate deficit is certain to increase and will require close attention by the TRA Board and legislators.
Recognizing the need to address the contribution rate deficit, the 2009 Legislature considered increasing TRA employee and employer contribution rates. These contribution increases would have helped to restore financial stability to the fund and reform benefits to attract and retain quality teachers.
Although the proposal was dropped during the waning days of the session due to concerns over the fiscal impact on members, employers and taxpayers, it will surely surface next year as contribution rate deficiencies and funding issues continue to need attention.
On July 1, two newly-elected members, Robert Gardner and Mary Supple, will join the TRA Board of Trustees. In addition, one of the statutory members of the board, Commissioner Tom Hanson of Minnesota Management and Budget (MMB), has designated Brian Steeve to represent MMB. The three new board members will bring fresh perspectives to the funding challenges faced by TRA.
The election of previous active member representative, Marti Zins, to the retiree representative position will provide the Board with proven experience and continuity to crucial pension decisions in the future.
Carol Ackerson, the current retiree representative, will also be stepping down from her position with the Board of Trustees. Carol has served on the board for 20 years, including four years as President. Carol’s insight and wisdom have been valuable assets to the Board of Trustees. She has set a high standard of excellence for others to follow.
As a young teacher in 1970, I began attending legislative meetings on pensions and retirement, and in 1987, I was elected to the TRA Board of Trustees. Over the years, I have seen many changes to the teacher pension program. I continue to be concerned about teacher recruitment and teacher pensions – two issues I feel go hand-in-hand.
I also feel the current legislatively structured pension program for teachers hired after 1989 is not adequate. I want to thank all of our TRA members who have helped convey that message to the Minnesota Legislature. We need to continue to remind them that providing an adequately funded, defined benefit program is the best, time-tested approach for our teachers, children and the taxpayers. Teachers should be focusing on our children, not the ups and downs of a market driven retirement account.
Even though I am leaving the TRA Board of Trustees on June 30, I will continue my involvement with these issues and retiree groups. I encourage you to stay involved and actively support this worthy endeavor. Our children and teachers deserve our attention and support.
It has been an honor serving on the TRA Board of Trustees and working with many wonderful teachers, retirees, as well as the staff of TRA and the National Council on Teacher Retirement.
You are the best! Thanks again.
Everyone has felt the effects of the downturn in the economy. If you are nearing retirement, now more than ever, you will need additional information about your TRA retirement benefit. That’s why we encourage you to attend a Preparing for Retirement group workshop. Since these 2-hour workshops are limited to 20 attendees, you will need to make an appointment to attend. Individual counseling sessions in outstate locations will resume this fall. You are always welcome to schedule an individual session at our satellite offices in Mankato, St. Cloud and Detroit Lakes.
To make a reservation
Go to www.minnesotatra.org, choose member login and choose Group Workshop Reservations. Select the date you wish to attend and complete the workshop registration form. Reservations are accepted up to six months in advance.
Contact TRA by calling 800‑657‑3669 and pressing “1” to connect to our appointment desk.
Be sure to have the following information available so an individual retirement estimate can be prepared: current year salary, anticipated retirement date(s), your spouse’s date of birth (if applicable), and if you have previous service with another Minnesota public retirement system.
Once your reservation has been made, a confirmation letter, including a map and directions, will be mailed to you.
A combined service annuity is a retirement benefit based on allowable service earned in two or more of the Minnesota public pension funds. If your combined service meets your vesting requirement of 3, 5 or 10 years, you may elect at retirement to receive a combined service annuity (CSA) from each fund in which you have at least one-half year of allowable service. Allowable service earned in any fund may be used with TRA allowable service to qualify for combined service.
Application for a combined service annuity must be made to each retirement fund individually within a one-year period. If you will not be resigning from each fund at the same time, please contact all applicable pension funds.
If you are one of thousands of public employees who has service with TRA and the Minnesota State Retirement System (MSRS) or the Public Employees Retirement Association (PERA), you can take advantage of our common location in St. Paul when you need retirement plan information or wish to apply for retirement benefits.
Scheduling an appointment with each fund on the same day will save you time, and provide you with the assurance that all information needed to process your retirement request has been received by each retirement fund.
Each fall, TRA produces a Personal Statement of Pension Benefits for all active and inactive members. Statements provide you with an accounting of your beginning and ending service credit and contribution balances, estimates of your projected monthly pension benefits, and much more.
Beginning this fall, statements will be available by accessing your online member account. Statements will no longer be mailed to you. A few of the reasons why TRA made this decision are:
Annual savings of over $52,000
“Going green” – environmental savings by use of less paper, ink, fewer discarded statements that aren’t recycled, etc.
Online statements will be available earlier
Font size will increase, allowing easier reading, since statements will no longer be restricted to two pages for mailing
Statements can be printed by you at any time – 8.5 x 11
Secure online access helps guard against identity theft
Since this is a change to past practices, this fall, you will receive a postcard from TRA reminding you when your statement will be available. Also, this year and in the future, reminders will be posted in this newsletter and on our web site.
Now is the perfect time to establish your online account, if you haven’t done so already, and become familiar with all of the resources available at your fingertips.
Go to www.minnesotatra.org and choose Member login. You will be able to choose your own User ID and password during the registration process.
Online account instructions are available on the TRA homepage under the Hot Topics section. These instructions also provide you with a full list of items you can currently access online, as well as a list of functions you will be able to access once you retire and begin receiving monthly benefits from TRA.
Providing online statements is just one way TRA is working to become more fiscally and environmentally responsible.