ND Retirement and Investment Office Summary of 2009 Legislative Changes Affecting TFFR

HB 1022 - NDRIO Budget

HB 1022 Status

HB 1022 includes the budget authority and continuing appropriations for the ND Retirement and Investment Office (NDRIO) administrative expenses for operating the Teachers’ Fund for Retirement (TFFR) pension program and the State Investment Board (SIB) investment program.

HB 1022 also includes an employer/school district contribution increase of 0.5% (8.25% increase to 8.75%) effective July 1, 2010. This increase is intended to offset the cost of the one-time TFFR retiree supplemental benefit payment outlined in SB 2277 and begin improving TFFR funding levels which have declined due to investment losses and economic conditions.

HB 1080 - TFFR Administrative Changes

HB 1080 Status

HB 1080 includes technical and administrative changes to the TFFR program. The changes have no financial impact on the Fund.

Most of the amendments are needed to incorporate federal tax law changes as they relate to qualified governmental plans. Other changes include clarification that non-contracted substitute teaching does not apply to the annual hour limit for re-employed retirees. In addition, confidentiality provisions are modified to allow disclosure of retirement information in certain limited situations outlined in the bill.

HB 1114 – SIB Administrative Changes

HB 1114 Status

HB 1114 updates the funds under management of the State Investment Board.

HB 1360 – Regional Education Association (REA) Changes

HB 1360 Status

HB 1360 clarifies TFFR statutes by including licensed and contracted employees of REAs in the definition of "teacher" for TFFR participation and benefit eligibility purposes. This clarification does not change current TFFR practices

SB 2277 – Supplemental Retiree Benefit Payment

SB 2277 Status

SB 2277 provides a one-time supplemental retiree benefit payment to all TFFR retirees and beneficiaries who retired before January 1, 2009 and are receiving annuity benefits on December 1, 2009. The supplemental payment is equal to an amount determined by taking $20 per year of service credit, plus $15 per number of years since the member's retirement. The supplemental payment can not exceed the greater of 10% of the member's annual annuity or $750. The supplemental payment will be made in December 2009 and will be paid from the TFFR trust fund.

Example 1: Retiree with 30 years of service credit who retired in 1994 (15 years retired).
Current monthly annuity = $1,500

The supplemental payment can not exceed the greater of $750 or 10% of annual benefit ($1,500 x 12 months x 10%) = $1,800. Since the supplemental payment does not exceed $1,800, the payment will not be capped in this example.

Example 2: Retiree with 25 years of service credit who retired in 1979 (30 years retired).
Current monthly annuity = $600