TRA has been providing pension coverage to Minnesota teachers since 1931.
The key advantage of a defined benefit plan is that your contributions (and those made by your employer) do not determine your retirement benefit. Your age, highest successive five years of salary, length of service, and a multiplier determine your benefit. You need not make any decision until you retire, and then you are eligible to choose one of six plans offering a lifetime benefit and post-retirement increases, if specified by current law.
Another advantage of participating in a defined benefit plan is that the plan always outlives the retiree and often the beneficiary.
As a defined benefit plan, your TRA benefit offers the following features:
Lifetime payments -- a lifetime benefit with no investment risk to you despite any volatility of the market. Based on your high-five average salary at the time of retirement, not on the investment market.
Investment returns -- invested with a long-term horizon in large asset pools by experts through the Minnesota State Board of Investment (SBI), the risk is minimized through diversification. Historically, this type of investment management generates higher rates of return than the more conservative, individual investments usually made by individual defined contribution plan participants.
Low three-year vesting -- Vesting means the years of service and age needed to be eligible for monthly benefits. You are eligible for monthly retirement benefits at age 55 with three years of service. With three years of service, you are also eligible for monthly disability benefits and benefits for a survivor if you are deceased prior to your retirement.
Portability -- If you decide to leave teaching, you may leave your contributions in TRA. Your future monthly benefit amount will grow, at a rate designated in statute, until you retire. This deferred option protects your right to receive a monthly TRA annuity benefit in the future, even if you decide to leave your TRA-covered position. Your deferred benefit is predictable and not dependent on investment performance.
Post-retirement increases -- post-retirement increases, each January, if specified by law.
Predictability -- a specific percentage of your high-five average salary based on your age and years of service at retirement determine your benefit. Your benefit is not dependent on investment performance before you retire.
Pre-retirement coverage -- survivor benefits are available if you die before retirement. Disability benefits are also available. This comprehensive coverage requires no additional cost to you beyond your ongoing employee contributions.
If you are vested and terminate service with a TRA-covered employer before attaining the minimum retirement age of 55, you may defer payment of your annuity until you become age 55 or older.
|Members hired prior to July 1, 2006||
Prior to July 1, 2012: Approximately 3.0 percent annually through December 31 of the year in which you have reached 55 and 5.0 percent annually thereafter each year the benefit is deferred.
After July 1, 2012: 2.0 percent
|Members hired on or after July 1, 2006||
Prior to July 1, 2012: 2.5 percent
After July 1, 2012: 2.0 percent
The deferral period must be at least three months. If you are on a leave of absence, you are not eligible for interest on a deferred annuity for any portion of time that you are on leave.
We are required by law to provide your spouse with the projected estimates of your monthly retirement benefit and we always provide spouses with the same estimates that you receive when you apply for retirement.
Your spouse also will sign your application for retirement, acknowledging awareness of your elections and designations rather than consent to them. Although your spouse may disagree with your elections or designations, TRA must comply with your intentions. Your spouse must also complete a notarized copy of the Spousal Waiver of Survivorship Benefits form if you choose a life plan other than a survivorship plan.
Under a provision of Minnesota state law enacted in 1999, public pension fund members may name a supplemental needs trust as an optional joint annuitant or beneficiary at retirement. A supplemental needs trust permits the transferring of assets to a disabled child or person who is not one's spouse without eliminating the disabled person from eligibility for federal and state assistance programs. The legislation requires that a copy of the trust be filed with TRA along with documentation of the trust's funding. We suggest you take a minute to view our Qualified Supplemental Needs Trust flyer or call our office for more information before creating a supplemental needs trust.