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Frequently Asked Questions

Active and Inactive Members

  1. What type of retirement plan do I have?
  2. Am I a Tier 1 Grandfathered, a Tier 1 Non-grandfathered, or Tier 2 member?
  3. What are the differences between Tier 1 Grandfathered, Tier 1 Non-grandfathered, and Tier 2 retirement membership?
  4. How will changes approved by the 2011 Legislature affect my retirement account?
  5. How do I change my address?
  6. How do I change my beneficiary designation?
  7. What interest rate is my account earning with TFFR?
  8. How can I find out the value of my retirement account?
  9. Why can't you give my account value over the telephone?
  10. I am a teacher in a small school district and have read about the Pre-retirement Seminars and the Benefits Counseling Sessions you offer. How can I get this service in my hometown?
  11. I am a vested member considering leaving North Dakota. What are my options with my retirement account?
  12. I am no longer teaching. How do I receive a refund of my account value?
  13. I am leaving North Dakota to teach in another state, can my TFFR account be rolled over to the qualified retirement system in that state?
  14. Can I purchase service credit with TFFR?
  15. Can my employer purchase service credit on my behalf?
  16. How many years of service credit do I need to be eligible for disability benefits through TFFR?
  17. Should the salary I earn from coaching be included in the amount reported to TFFR?
  18. Is the salary I earn for subbing for a fellow teacher in my school district subject to TFFR?
  19. What if I substitute teach for another school district? Will the income be reported to TFFR?
  20. Next year I will not be taking the school's health plan and will receive the cash instead.  Will this increase my salary for TFFR purposes?
  21. I drive the bus for part of each school year. Is the income subject to TFFR?
  22. If I take unpaid days during my last year of teaching, will my retirement benefits be affected?
  23. I received .99 year of service credit in 1975. Can I purchase the difference to make 1 year?
  24. How soon should I notify you that I am retiring and when will I get my first check?
  25. How can you start paying my benefits in June when the school doesn't report my final salary for the year to you until mid-July?
  26. If I have paid taxes on the money paid to TFFR, why will my retirement benefits be taxable?
  27. How did the dramatic decline in the financial markets in 2008-2009 impact TFFR funding?
  28. Will a couple years of excellent investment performance close TFFR's funding gap?

  1. What type of retirement plan do I have?

    TFFR is a qualified defined benefit public pension plan covered under Section 401(a) of the Internal Revenue Code. North Dakota Century Code Chapter 15-39.1 and Title 82 of the North Dakota Administrative Code govern your retirement plan.

  2. Am I a Tier 1 Grandfathered, a Tier 1 Non-grandfathered, or Tier 2 member?

    A Tier 1 grandfathered member had TFFR service on July 1, 2008 and was vested (3 years of service credit) and at least age 55 OR had the Rule of 65 or greater (age + service) on June 30, 2013.

    A Tier 1 non-grandfathered member had TFFR service on July 1, 2008 and did not qualify for grandfathered status as of June 30, 2013.

    A Tier 2 member includes all new members and returning refunded members who are employed on or after July 1, 2008.

  3. What are the differences between Tier 1 Grandfathered, Tier 1 Non-grandfathered, and Tier 2 retirement membership?

    Tier 1 Grandfathered

    • Rule of 85 or age 65 eligibility for unreduced retirement
    • 3 year vesting
    • High 3 final average salary calculation
    • 6% reduction factor for early reduced retirement

    Tier 1 Non-grandfathered

    • Minimum age 60 with rule of 90 or age 65 eligibility for unreduced retirement
    • 3 year vesting
    • High 3 final average salary calculation
    • 8% reduction factor for early reduced retirement

    Tier 2

    • Minimum age 60 with rule of 90 or age 65 eligibility for unreduced retirement
    • 5 year vesting
    • High 5 final average salary calculation
    • 8% reduction factor for early reduced retirement

  4. How will changes approved by the 2011 Legislature affect my retirement account?

    To improve TFFR funding levels over the long term, the Legislature approved increases in member and employer contribution rates as follows:

    Current Effective 7/1/2012 Effective 7/1/2014
    Employee 7.75% 9.75% 11.75%
    Employer 8.75% 10.75% 12.75%
    Total 16.50% 20.50% 24.50%

    The higher employee and employer contribution rates will be in effect until TFFR reaches 100% funded level on an actuarial basis at which time the contribution rates will be reduced to 7.75% each. Effective July 1, 2012, employee and employer contributions will be required on all salary earned by re-employed retirees.

    The Legislature also modified eligibility for unreduced retirement benefits and the reduction factor for reduced retirement benefits for certain non-grandfathered employees. Disability benefit provisions were also changed. See legislative link for details.

  5. How do I change my address?

    Requests for address changes must be made by the member in writing and can be mailed or faxed to the administrative office. A TFFR address change form can be used OR a signed note or letter from the member is also acceptable.

  6. How do I change my beneficiary designation?

    Active members may change their beneficiary by completing a member action form. Keep in mind if you are married, you must name your spouse as primary beneficiary unless you have written spousal consent to name another beneficiary. If you are not married or have spousal consent, you may name any person or persons, organization, or your estate as your beneficiary.

  7. What interest rate is my account earning with TFFR?

    Your TFFR account earns interest at an annual rate of 6% compounded monthly. This interest rate is set by law and has been in place since 1983. It is not related to the investment return rate earned by the TFFR pension trust fund.

  8. How can I find out the value of my retirement account?

    Annual statements are sent to active and inactive members each August and should be kept as a permanent record. However, at any time you may request an updated account copy by contacting the administrative office.

  9. Why can't you give my account value over the telephone?

    Due to confidentiality laws and for the protection of our members, specific account information can not be obtained over the telephone. You can, however, make a telephone request and we will send the information to your address on file.

  10. I am a teacher in a small school district and have read about the Pre-retirement Seminars and the Benefits Counseling Sessions you offer.
    How can I get this service in my hometown?

    If you wish to work with your school (and other area schools) to host a Preretirement Seminar or Benefits Counseling Sessions, you will need to organize a minimum of 25 teachers for the Preretirement Seminar or 10 teachers for the Benefits Counseling sessions. See the Member Services Directory.

  11. I am a vested member considering leaving North Dakota. What are my options with my retirement account?

    As a vested member, you have two options: 1) Take a refund of your account value. A refund can either be paid to you or rolled over to an eligible retirement plan. 2) Leave your money in TFFR and defer drawing retirement benefits until you are eligible for retirement. Deferred benefit estimates can be obtained by contacting RIO.

  12. I am no longer teaching. How do I receive a refund of my account value?

    You must contact the administrative office for a refund application. This application will allow you to choose to have your refund paid to you or directly rolled over to an eligible retirement plan. See the Special Tax Notice Regarding TFFR Refund Payments.

  13. I am leaving North Dakota to teach in another state. Can my TFFR account be rolled over to the qualified retirement system in that state?

    The taxable portion of your TFFR refund can be rolled over to another eligible retirement plan if they accept rollovers. Since not all qualified plans accept rollovers, you need to discuss this with your new retirement plan.

  14. Can I purchase service credit with TFFR?

    Yes. Current law allows an active member to purchase various types of service credit to use toward retirement eligibility and benefits once certain eligibility requirements have been satisfied. See the Purchase of Service Credit brochure.

  15. Can my employer purchase service credit on my behalf?

    Yes. Once an employer establishes guidelines, an employer may purchase up to three years of service credit as long as the member's age plus service credit equals 77 for a Tier 1 member, or 82 for a Tier 2 member; or the member is at least age 55 with three years of service credit. In addition, the employer can't give the member the option between an employer service purchase and an equivalent amount in cash.

  16. How many years of service credit do I need to be eligible for disability benefits through TFFR?

    Under current law, a member needs five years of service credit to be eligible. You must be an active member of the Fund, or apply for disability benefits within thirty-six months of leaving teaching due to the disability. See the Disability Benefits fact sheet .

  17. Should the salary I earn from coaching be included in the amount reported to TFFR?

    Yes. Salary is defined as earnings in eligible employment for teaching, supervisory, administrative, and extracurricular duties. See the definition of Salary in the TFFR Employer Guide.

  18. Is the salary I earn for subbing for a fellow teacher in my school district subject to TFFR?

    Yes. TFFR salary includes in-staff subbing if the member is certified to teach and under contract with the school district. See Substitute Teaching in the TFFR Employer Guide.

  19. What if I substitute teach for another school district?
    Will the income be reported to TFFR?

    If there is no contract or written agreement to perform the substitute teaching duties, the income is not reportable to TFFR. However, if a contract or written agreement exists for the substitute teaching, the income is reportable to TFFR. See Substitute Teaching in the TFFR Employer Guide.

  20. Next year I will not be taking the school's health plan and will receive the cash instead.  Will this increase my salary for TFFR purposes?

    No. TFFR salary does not include fringe benefits or salary received by a member in lieu of a previously employer provided fringe benefit that are made on an individual selection basis.

  21. I drive the bus for part of each school year.
    Is the income subject to TFFR?

    No. Bus Driving pay is not included in reportable salary for TFFR. See the definition of Salary in the TFFR Employer Guide.

  22. If I take unpaid days during my last year of teaching, will my retirement benefits be affected?

    The answer is probably yes. If you are compensated for at least 700 hours during the fiscal year, you will still earn a full year of service credit. However, if your last salary is one of your high salaries, the reduction for the unpaid days will decrease your monthly benefit.

  23. I received .99 year of service credit in 1975. Can I purchase the difference to make 1 year?

    Years ago, service credit was granted based on the number of days worked. If a teacher took even one unpaid day, the service credit was reduced. Now, service credit is based on 700 hours of employment during the fiscal year. Once a teacher is compensated for 700 hours, one year of service credit is earned. If compensated less than 700 hours, service credit is earned in proportion to 700 hours.   The .01 year will have little or no effect on your retirement eligibility or benefits.   However, if you are an active member and have at least 5 years of earned service credit, you may purchase up to 5 years of Additional Service Credit (Airtime).  See the Purchase of Service Credit Brochure.

  24. How soon should I notify you that I am retiring and when will I get my first check?

    If you provide us with at least 90 days advance notice of your retirement date, we should be able to provide you your first retirement check right on time. Benefits are paid on the first of the month.

  25. How can you start paying my benefits in June when the school doesn't report my final salary for the year to you until mid-July?

    TFFR provides benefit payments based on a "Estimated Retirement Salary." This means that we estimate the salary that will be reported by your employer, take 90% of this amount and begin your benefit payments before the salary is actually reported to TFFR. In order to do this, we need a copy of your final year teaching contract and written documentation of any "extra" salary earned. After the school district final reports are received by TFFR, a salary comparison is made and your retirement benefits will be adjusted accordingly. See the Estimated Retirement fact sheet.

  26. If I have paid taxes on the money paid to TFFR, why will my retirement benefits be taxable?

    If you have already paid taxes on the member contributions that were paid to TFFR, you will recover the total amount of previously taxed member contributions by way of a monthly exclusion to income. The recovery period is set by the IRS and can be as long as 35 years. The balance of your benefit is taxable income under both federal and state law. See the Taxation of Retirement Benefits fact sheet.

  27. How did the dramatic decline in the financial markets in 2008-2009 impact TFFR funding?

    While TFFR can make promised retirement benefit payments for many years into the future, TFFR's funding level was expected to decrease to unacceptable levels without legislative action. The financial well being of the TFFR trust fund is our #1 priority and legislation approved in 2011 was a huge step in addressing our funding challenge. See legislative link for details.

  28. Will a couple years of excellent investment performance close TFFR's funding gap?

    No, a funding deficit will likely still exist. One or two good investment years will not undo the damage from the huge investment losses that occurred in 2008-2009. Because of the 2011 legislative changes and recent strong investment performance, TFFR funding levels are expected to improve. Investment returns above or below the 8% expected return will impact the timing and look of TFFR's long term funding picture.

 

 
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