Preparing for Retirement - Minneapolis Federation of Teachers

Report
Teachers Retirement Association
A Minnesota Public Pension Fund
60 Empire Drive, Suite 400
St. Paul, Minnesota 55103-4000
MinnesotaTRA.org
Facebook.com/MinnesotaTRA
Twitter.com/MinnesotaTRA
[email protected]
TRA is a Defined Benefit Plan
Defined
Benefit Plan
Defined
Contribution Plan
Monthly lifetime benefit
Yes
No
Post-retirement increases
(if specified under current law)
Yes
No
Predictable
Yes
No
Pre-retirement survivor death
benefits
Yes
Lump sum
Disability benefits
Yes
Lump sum
Limited
Yes
Portability
Contribution Rates
Rates are set by state statute
Members
6.5 percent of salary
Employers
6.5 percent of salary
2010 legislation increased member and employer contribution rates
by 0.5 percent annually over a four-year period beginning July 1, 2011.
Contributor
July 1,
2012
July 1,
2013
July 1,
2014
Members – Coordinated Plan
6.50%
7.00%
7.50%
Employers – Coordinated Members
6.50%
7.00%
7.50%
Employers – Minneapolis Additional 3.64%
3.64%
3.64%
TRA Web Site
www.minnesotatra.org
•
Members may view their
TRA account online by
choosing “MyTRA Login.”
•
The “online logo” will be
displayed throughout this
presentation indicating
information you can access
from your online account.
•
View the “Online Account
Instructions”
Online Member Account
Active members
 Address change
 Benefit estimates utilize member
account data, or can be customized
 Retirement
 Survivor
 Applications
 Retirement
 Refund
 Forms
 Beneficiary
 Release of information
 View
 Personal statement of pension
benefits
 Leave of absence history
 Account value letter (generate)
 Account information and service
credit
 Account history
 Schedule
 Individual counseling session
 Group workshop
Online Member Account (continued)
Benefit recipients
 Address change
 Edit account information
• Direct deposit
• Current and future tax
withholding
 View
 Applications
• Earnings Limitation Savings
Account (ELSA) Refund
 Forms
• Beneficiary (No Refund,
Guaranteed Refund or 15-Year
Guaranteed Plans only)
• Payment detail
• Beneficiary (ELSA account)
• ELSA annual statement
• Release of Information
• 1099-R form
• ELSA Account Value Letter
• Payment History
• Income Verification
Letter for Lender
Beneficiary Designation
•
•
•
•
•
Who is listed as your beneficiary?
Single member beneficiary designation options
Married member beneficiary designation options
Important to keep your beneficiary designation up-to-date
Survivor benefit calculator and beneficiary forms available
by viewing your online member account
Eligibility for Retirement
•
•
Age 55, minimum of 3 years of service
If employed before July 1, 1989:
o
Any age with at least 30 years of service
o
Rule of 90 = age + years of service
(includes partial years for age
and service)
Minnesota Public Pension Funds
Funds that fall under the Combined
Service Annuity Laws
•
St. Paul Teachers Retirement Fund
Association (SPTRFA)
•
Duluth Teachers Retirement Fund
Association (DTRFA)
•
Minnesota State Retirement System
(MSRS)
–
–
–
–
–
–
–
State Employees Retirement Fund
Legislators’ Retirement Plan
Correctional Employees Retirement
Program
Unclassified Employees Retirement Plan
State Patrol Retirement Fund
Judges Retirement Fund
Elective State Officers’ Retirement Plan
•
Public Employees Retirement Association
(PERA)
–
–
–
–
–
Public Employees Retirement Fund
Public Employees Police and Fire Fund
Public Employees Local Government
Correctional Service Retirement Plan
Minneapolis Employees Retirement Fund
(2010 legislation, now a division of PERA)
Repayment of Refunds
•
May repay refund after accumulating 2 years of allowable service credit
with TRA or another state public pension fund (combined service)
•
•
•
Payment must be received before your effective date of retirement
Repay with interest (8.5 percent compounded annually)
You may repay using money from a 403(b) tax-sheltered annuity
account, governmental 457(b) plan, a Roth IRA, a traditional IRA or
another qualified plan
•
Partial repayment option:
With 2 or more years of refunded service,
you may repay 1/3 minimum
TRA High-5 Formula
High-5
% Factor
Annual
Average x based on years = Lifetime Benefit
Annual
of service and
(Life No Refund)
Salary
age
High-5 Average Annual Salary
•
•
•
•
Salary associated with highest five consecutive years of
formula service credit
May not include more than the equivalent of 60 months of
earned salary
“TRA-eligible salary” means compensation before deductions
for deferred compensation, supplemental retirement plans, or
other voluntary salary reduction programs.
Employer-paid fringe benefits, severance payments, etc. are
not TRA-eligible salary
o
o
No TRA deductions taken
Not included in High-5 average annual salary
Sample
Estimate
Estimates provided
are for planning
purposes. Upon
retirement, TRA will
make actual
calculations based
on a final audit of
your Teachers
Retirement
Association records
and not on the basis
of this statement.
Periodically, by law,
the TRA benefit
structure may
change, which may
affect your final
monthly benefit.
Annuity Plans
•
•
•
•
•
•
No Refund
Guaranteed Refund
15 Years Guaranteed
100% Survivorship with Bounceback
75% Survivorship with Bounceback
50% Survivorship with Bounceback
If you are married, you must choose a
survivorship plan covering your
spouse, unless your spouse waives
rights to this type of annuity.
Example of Annuity Plan Payouts
Assumes member is age 59
Annual Statements Reflect
No Refund Plan Estimates
Plan
Monthly
Amount
Beneficiary’s
Age
No Refund
$2,021
N/A
Guaranteed Refund
$2,010
N/A
15 Years Guaranteed
$1,955
N/A
100% Survivorship with Bounceback
$1,816
59
$1,731
49
$1,899
69
$1,862
59
$1,794
49
$1,927
69
$1,910
59
$1,862
49
$1,955
69
75% Survivorship with Bounceback
50% Survivorship with Bounceback
Retiree Statistics
Annuity Plan Selection
Retirements for
Fiscal Year 2012
(July 1, 2011 –
June 30, 2012)
Acceleration
Age 59 as of July 1, 2010
Accelerated
Accelerated
Plan
No
Acceleration
To 62
After 62
To 65
No Refund
$2,021
$3,159
$1,718
Guaranteed Refund
$2,010
$3,150
15 Years Guaranteed
$1,955
100% Survivor
Accelerated
After 65
To
NRA*
After
NRA*
$2,982
$1,415
$2,924
$1,314
$1,708
$2,974
$1,407
$2,917
$1306
$3,104
$1,662
$2,936
$1,369
$2,882
$1,271
$1,816
$2,986
$1,544
$2,839
$1,271
$2,792
$1,181
50% Survivor
$1,910
$3,066
$1,624
$2,905
$1,337
$2,853
$1,242
75% Survivor
$1,862
$3,025
$1,583
$2,871
$1,303
$2,821
$1,210
Amounts shown reflect maximum acceleration; less than maximum acceleration is also an option.
*For this example, normal retirement age (NRA) means age 66.
Social Security
www.ssa.gov/retire2/retirechart.htm
Year of Birth
Full Retirement Age
1937 or earlier
65
1938
65 and 2 months
1939
65 and 4 months
1940
65 and 6 months
1941
65 and 8 months
1942
65 and 10 months
1943 – 1954
66
1955
66 and 2 months
1956
66 and 4 months
1957
66 and 6 months
1958
66 and 8 months
1959
66 and 10 months
1960 and later
67
When to Apply for Retirement
Teachers
Administrators
Up to 120 calendar days prior to
termination.
Up to 120 calendar days prior to
termination.
Example:
Your last day is June 5, 2013.
Example:
Your last day is June 30, 2013.
You may apply as early as
February 11, 2013.
You may apply as early as
March 4, 2013.
Termination Date
•
Your termination date is an important date! It is used to establish
and calculate your retirement benefits.
•
Termination date or “termination of teaching service" is the date you
withdraw from active teaching service by resignation or the
termination of your teaching contract by the district.
•
If that date changes (snow days, summer teaching, etc.), contact
TRA.
Effective Date of Retirement
•
•
•
Effective date of retirement is latest of:
o
The day after termination of teaching
o
Receipt of application if you apply more than six months after termination
o
Date designated within six months of termination
July 1 for administrators and principals
If under age 62, there cannot be a written contract in effect to return to
teaching service, if over age 62, copy of written contract must be
provided.
•
If death occurs prior to effective date, active member survivor benefits
are payable
•
Payment: 1st business day of each month
Cancel or Change Plans
•
You have two (2) months following your initial payment to:
o
Cancel an application for retirement
o
Choose a different annuity plan
o
Change the accelerated annuity option
o
Change your optional joint annuitant
o
Your initial benefit payment will be
based on an estimate. If necessary,
a retroactive adjustment will be
made to subsequent payments
based on final data.
Earnings After Retirement
•
•
•
•
Earnings limitation applies only if resuming TRA-covered service
For members under full retirement age (age 66) = $46,000
Prorated if retired a portion of the year
Earnings limit is based on salary earned in a fiscal year
(July 1 – June 30)
•
•
•
Over full retirement age: No limit on earnings
$1.00 for every $2.00 over the limitation goes into a savings account
Request refund one year after the last deferred amount was redirected
to your savings account. No interest paid on the account after January 1,
2011.
•
All or a portion of the payment may be rolled over to a qualified plan
Post-Retirement Increases
2010 Legislation
•
Current law provides that beginning January 1, 2013, annual post-
retirement increases will be 2.0 percent, provided members have
been retired for 18 months.
•
Also, current law provides that once
market value funding ratio reaches
90 percent, increase will be restored
to 2.5 percent.
Other Retirement Concerns
•
•
•
•
Social Security
Medical insurance
Tax-sheltered annuities
Psychologically ready
Contact Information
Name
Phone #
Toll Free #
Teachers Retirement Association
651-296-2409
800-657-3669
www.minnesotatra.org
MN State Retirement System
651-296-2761
800-657-5757
www.msrs.state.mn.us
Public Employees Retirement Assn.
651-296-7460
800-652-9026
www.mnpera.org
Duluth TRFA
218-722-2894
www.dtrfa.org
St. Paul TRFA
651-642-2550
www.sptrfa.org
Education Minnesota
651-227-9541
Internal Revenue Service
MN Department of Revenue
800-652-9073
www.educationminnesota.org
800-829-1040
www.irs.gov
651-296-3781
www.taxes.state.mn.us
Nat’l Council on Teacher Retirement 916-394-2075
Retiree Health Plan System
Social Security Administration
612-692-7962
Web Site
www.nctr.org
800-829-5601
www.mmb.state.mn.us/
peip/28-ins-peip
800-772-1213
www.ssa.gov
Thank you for Attending

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