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TFFR Member Handbook

View pdf version of TFFR Member Handbook

Effective 7/1/2013

North Dakota Retirement & Investment Office
1930 Burnt Boat Drive
P.O. Box 7100
Bismarck, ND 58507-7100

Telephone: 701-328-9885
Toll Free: 1-800-952-2970
Fax: 701-328-9897
Email: rio@nd.gov
www.nd.gov/rio

The TFFR Member Handbook was created to provide you with a quick reference source for questions regarding TFFR. This booklet is not intended to encompass all aspects of TFFR. It is updated to reflect changes made to the plan by the 2013 Legislature. Detailed information can be obtained by contacting RIO. This publication can be made available in alternative formats.


Table of Contents

General Information

Membership

Service Credit

Benefits Refund of Contributions

Retirement Benefits

Disability Retirement Benefits

Survivor Benefits

Investment of Funds

Member Services

Actuarial Tables for Benefit Options

Glossary of Terms

Index

Map


Table of Contents

Teachers' Fund For Retirement

Mission Statement

The mission of TFFR, a trust fund, is to advocate for, develop, and administer a comprehensive retirement program for all trust fund members within the resources available.

Investment and Funding Goals:

  • Improve the Plan's funding status to protect and sustain current and future benefits.
  • Minimize the employee and employer contributions needed to fund the Plan over the long term.
  • Avoid substantial volatility in required contribution rates and fluctuations in the Plan's funding status.
  • Accumulate a funding surplus to provide increases in retiree annuity payments to preserve the purchasing power of their retirement benefits.

Service Goals:

  • Administer accurate, prompt, and efficient pension benefits program.
  • Deliver high quality, friendly service to members and employers.
  • Provide educational outreach programs including pre-retirement seminars and individual benefits counseling sessions.

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Letter to Members

July 2013

Dear TFFR Member:

2013 marks TFFR's 100-year anniversary. TFFR has a long tradition of dedicated service to North Dakota's educational community. With nearly 20,000 active and retired members, TFFR has been helping North Dakota teachers and administrators prepare for the future for a century. Our purpose has always been to provide lifetime retirement security for our state's educators.

Whether you are a new teacher, a mid career educator, or a seasoned veteran, TFFR is here for you. As you go about your career, TFFR is behind the scenes – answering your questions, safeguarding your benefits, investing your retirement funds, and administering a financially sound retirement plan – so that when it comes time for you to retire, you can enjoy your retirement years.

Please review the 2013 edition of the TFFR Member Handbook. It summarizes the benefits available to you and your beneficiary(ies) in the form of retirement, disability, and death benefits. You can obtain additional information from our website, newsletters, brochures, outreach programs, and personal consultations with retirement counselors. We hope that you will find the information helpful in your retirement planning.

The updated Member Handbook includes legislative changes approved by the 2011 and 2013. These changes were designed to address declining funding levels brought on by the 2008-09 economic down turn. The legislation increases the employee and employer contributions paid into the TFFR plan, and modify certain benefits for non-grandfathered employees as described in the Member Handbook. Recent funding improvement legislation, along with a stable, healthy economy, should strengthen the TFFR plan, and help it to remain financially stable for decades to come.

On behalf of the TFFR Board of Trustees and RIO administrative staff, we pledge to you our continued commitment to lifetime security and service for North Dakota’s public school educators. We look forward to serving you throughout a long and successful career in education.

Sincerely,

Fay Kopp, CRA
Deputy Executive Director/
Chief Retirement Officer


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TFFR Board of Trustees

The TFFR Board of Trustees is responsible for administering the TFFR retirement program. The Board has the authority to establish investment policy; arrange for actuarial and medical consultants; pay benefits and consultant fees; submit proposed legislative changes; and determine appropriate levels of service to TFFR members. The TFFR program is administered by the Retirement and Investment Office (RIO).

The TFFR Board consists of the state treasurer, state superintendent of public instruction, and five members appointed by the Governor. Members are appointed for five-year terms and include one active school administrator, two active teachers, and two retired members.

Current TFFR Board Members

Rob Lech, Active Administrator
Mike Gessner, Active Teacher, President
Kim Franz, Active Teacher
Clarence Corneil, Retired Member
Melvin Olson, Retired Member
Kelly Schmidt, State Treasurer
Kirsten Baesler, State Superintendent

Four TFFR Board members also serve on the State Investment Board (SIB).


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State Investment Board

The State Investment Board (SIB) is responsible for setting policies and procedures guiding the investment of about $1.8 billion in assets for TFFR. The funds are invested following the “Prudent Investor Rule” and must be invested exclusively for the benefit of TFFR members. The investment program is administered by the Retirement and Investment Office (RIO). The SIB is also the administrative board for RIO.

Current SIB members:

Drew Wrigley, Lt. Governor, Chair
Adam Hamm, State Insurance Commissioner
Kelly Schmidt, State Treasurer
Cindy Ternes, CPA, (Designee), Workforce Safety and Insurance
Lance Gaebe, University and School Land Commissioner
Rob Lech, TFFR Trustee
Mike Gessner, TFFR Trustee
Clarence Corneil, TFFR Trustee
Levi Erdmann, PERS Trustee
Howard Sage , PERS Trustee
Mike Sandal, PERS Trustee


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Retirement & Investment Office

The North Dakota Retirement and Investment Office (RIO) exists in order that:

  • SIB clients receive cost-effective investment services directed at meeting their written financial goals under the Prudent Investor Rule.
  • SIB clients receive investment returns consistent with their written investment policies and market variables.
  • Potential SIB clients have access to information regarding the investment services provided by the SIB.
  • TFFR benefit recipients receive their retirement benefits in a cost-effective and timely manner.
  • TFFR members have access to information that will allow them to become knowledgeable about the issues and process of retirement.
  • SIB clients and TFFR benefit recipients receive satisfactory services from the boards and staff of the office.

Table of Contents

Type of Plan

TFFR is a qualified defined benefit public pension plan covered under Section 401(a) of the Internal Revenue Code (IRC). TFFR must be administered in compliance with IRC regulations, in particular with Section 415 maximum benefit limitations; Section 401(a)(9) minimum distribution requirements; Section 401(a)(17) maximum compensation limit; and Section 401(a)(31) rollovers and transfers.

North Dakota Century Code (NDCC) Chapter 15-39.1 contains the actual language governing the Fund. The NDCC, along with Title 82 of the North Dakota Administrative Code (NDAC), are summarized in this handbook. If differences exist between the information in this handbook and state or federal law, the laws shall govern.

The TFFR plan is funded on an actuarial reserve basis. That is, money is invested for your future retirement benefits while you are actively teaching. Benefit funding comes from three sources:

  • Employee contributions
  • Employer contributions
  • Investment earnings

TFFR serves almost 10,000 teachers from 219 employer groups and pays benefits to over 7,000 retirees and beneficiaries.


Table of Contents

Legislative Highlights

TFFR plan changes were made by the 2013 Legislature. Approved legislation:

  • Updates the definition of actuarial equivalent to more clearly describe its use in pension calculations.

  • Defines normal retirement age as the age a member becomes eligible for monthly lifetime unreduced retirement benefits.

  • Clarifies vesting provisions for compliance with federal statutes or rules.

  • Adds savings clause which allows TFFR Board to adopt terminology to comply with federal statutes or rules subject to approval of the legislative employee benefits programs committee.

  • Maintains the TFFR member and employer contribution rates approved by the 2011 Legislature until the Fund reaches 100% funded ratio (was 90%) at which time contribution rates will be reduced to 7.75% for member and 7.75% for employer.

The following TFFR plan changes were made by the 2011 Legislature and go into effect in 2013 or after:

  • Increase in employee and employer contributions.

      Effective 7/1/12 Effective 7/1/14
    Employee 9.75% 11.75%
    Employer 10.75% 12.75%
    Total 20.50% 24.50%

  • Effective July 1, 2013, disability benefit eligibility for all non-retired employees changed from 1 to 5 years of service credit and the benefit calculation will use actual service instead of the 20 year minimum.

  • Effective July 1, 2013 eligibility for unreduced retirement benefits and reduction factor for reduced retirement benefits changes for Non-grandfathered Tier 1 and all Tier 2 employees described below:

    Grandfathered Tier 1 employees who are within 10 years of normal retirement eligibility will not be affected by unreduced and reduced retirement changes.

    • Tier 1 employees who are vested (3 years of service credit) and at least age 55 OR had the Rule of 65 or greater (age + service) on 6/30/13 are grandfathered under retirement eligibility provisions in effect prior to July 1, 2013 (i.e. Rule of 85)

    Non-grandfathered Tier 1 employees and all Tier 2 employees have the following benefit changes:

    • Unreduced retirement: Eligibility age increases from Rule of 85 (Tier 1) or Rule of 90 (Tier 2) to minimum age 60 and the Rule of 90, OR minimum age 65 for those employees who do not reach the Rule of 90.
    • Reduced retirement: Reduction factor increases from 6% to 8% per year from the earlier of age 60/Rule of 90 or age 65

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