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TFFR Member Handbook (continued)

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Disability Retirement

Eligibility for Benefits

If you become disabled, you may be entitled to monthly disability retirement benefits if the following conditions are met:

  • Five or more years of North Dakota service credit.
  • Employed by a TFFR employer at the time of disability.
  • Application must be filed within 36 months from the last day of employment.
  • Disability must be “total” and result in your inability to perform the duties of a teacher for 12 months or more due to a medical condition.
  • Certified eligible by the TFFR Board.

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Application Process

Upon request, a disability application packet will be sent to you containing disability information and forms to be completed by you, your employer, and your physician.

The disability application must be filed within thirty-six months from your last day of covered employment. However, you may apply for and receive disability benefits while on an approved medical leave of absence as long as you applied for benefits within the 36-month time frame.

In order to review your disability application, your employer must provide us with information about your employment status, sick leave benefits, and explain how your disability affects performance of job duties.

You must also provide TFFR with a medical examination report completed by your physician. A medical examination report is not necessary if you provide written proof documenting your eligibility for Social Security disability benefits. The Retirement and Investment Office is not liable for any costs incurred in undergoing the medical examinations and completing and submitting the necessary reports. This also applies to the recertification process.

Once we receive all of the necessary documentation, TFFR’s independent medical consultant will review your application and make a recommendation to the TFFR Board of Trustees.

The TFFR Board will review your application and determine your eligibility for disability benefits. You have the right to attend or be represented at this meeting. The discussion is confidential and closed to the public.

If approved, you will be notified and receive disability enrollment forms. If denied, you may appeal this decision by initiating a formal action against the Board in accordance with NDAC 82-10-01-01 and NDCC 28-32.

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Benefit Calculation and Payment Options

The disability benefit is calculated using the current retirement formula without reduction for age and the member's actual years of service credit.

Your disability retirement annuity is payable to you for life unless you return to teaching or no longer recertify eligible for disability benefits. You may elect a reduced benefit to provide additional survivor benefit protection for your beneficiary under joint and survivor or term certain options. If you are married, your spouse, if designated as beneficiary, must consent in writing to the form of payment option you elect. If spousal consent is not obtained, the form of benefit payment will be the 50 percent joint and
survivor option.


Teacher A
Age: 30 years
Service: 10 years
Final Average Monthly Salary: $2,000

$2,000 × 10 years × 2.0% = $400 month
Single Life Annuity Disability benefit

Payment of Disability Benefits
Your disability retirement date will be the first day of the month following your last date of paid employment. Benefits are paid on or retroactive to this date. You may receive this benefit for life, as long as you remain eligible. Periodic eligibility recertification's are required.

If you pass away before accepting this benefit, disability retirement would not have occurred, and disability retirement benefits would not be payable. Instead, your beneficiary would be eligible for survivor benefits the first of the month following your passing.

Direct Deposit
Direct deposit (electronic fund transfer) is the required method of payment. It is a safe, fast, and cost effective method of receiving your monthly benefit. Direct deposit guarantees that your annuity check is deposited to your checking or savings account on the first working day of every month. It also eliminates problems with lost or misplaced checks.

Disability payments are taxable as ordinary income until you reach normal retirement age. After you reach normal retirement, you will begin to recover the nontaxable part of your annuity, if any. The taxable and nontaxable portions of your benefit are calculated using a formula provided by the Internal Revenue Service. You will receive a 1099-R tax form each year indicating your taxable income.

A member who retires under disability may be able to qualify for the “Credit for the Elderly or the Disabled.” See IRS Publication 524. Personal income tax questions should be directed to your accountant, tax advisor, or Internal Revenue Service Center.

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NDPERS Group Insurance

Individuals who are receiving a monthly disability benefit from TFFR may be eligible to participate in the group health (Medicare eligible only), dental and vision insurance programs administered by the North Dakota Public Employees Retirement System (PERS). Monthly premiums can be deducted from your TFFR pension check or bank account. For additional information and rates, visit www.nd.gov/NDPERS or contact the NDPERS office at 701-328-3900 or toll-free 1-800-803-7377.

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Postretirement Benefit Increases

The TFFR plan does not contain provisions for automatic cost of living adjustments.

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Return to Employment

If you return to teach, you must notify the administrative office in writing. The disability benefit will cease the first day of the month following the date you return to teach or are not recertified eligible for continued benefits.

However, in some cases, a disability benefit may continue for up to six months while the individual returns to work on a trial basis. Contact the administrative office for details.

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Survivor Benefits

Eligibility for Benefits

Survivor benefits are payments made by TFFR to a beneficiary(ies) of a deceased member. The benefit to a qualified survivor may be a lump-sum refund of your account value or a monthly payment.

The following are eligible for survivor benefits on your account:

  • designated beneficiary; if none,
  • surviving spouse; if none,
  • estate.

All TFFR members should designate a beneficiary in writing for the purpose of directing payment of a claim due to death. If you are married, your spouse must be your beneficiary unless you have provided written spousal approval to name an alternate beneficiary. If you are not married, or if you have written spousal consent, you can name any person(s), organization, church, charity, or your estate, as beneficiary of your retirement account. However, if more than one beneficiary is named, they are not eligible to receive a monthly annuity for life.

NOTE: In all cases, a minimum payout equal to the member's account value is guaranteed.

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Death Prior to Retirement

Should you die before retiring, your beneficiary will have the following options concerning your TFFR account:

Nonvested member (Tier 1 member - less than 3 years service credit; Tier 2 member – less than 5 years service credit):

  • Refund of account value.
Vested member (Tier 1 member – 3+ years service credit; Tier 2 member – 5+ years service credit):
  • Refund of account value
  • Monthly annuity for life (not available if more than one beneficiary is named)

Keep in mind that the beneficiary you name affects the survivor benefit options available. For example, if you are a vested member and die before retiring, here are the options available to your beneficiary:

  • One beneficiary named
    Refund of account value, or
    Monthly annuity for life
  • Multiple beneficiaries or estate named
    Refund of account value
  • No beneficiary named
    Surviving spouse - refund or monthly annuity for life
    Estate - refund option only

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Death After Retirement

The survivor benefits your designated beneficiary receives (if any) is based on the plan you select at retirement:

  • Single Life Annuity - balance of account value, if any.
  • 100% Joint and Survivor Annuity- 100 percent of the monthly annuity to continue to the beneficiary for life.
  • 50% Joint and Survivor Annuity- 50 percent of the monthly annuity to continue to the beneficiary for life.
  • 10-Year Term Certain and Life - remainder of the 120 months of payments, if any.
  • 20-Year Term Certain and Life - remainder of the 240 months of payments, if any.
  • Level Income - the increased level benefit amount until the member's Level Income age, or the reduced amount after the member would have reached the Level Income age, in accordance with the joint and survivor and term certain options.

Retired members who retire under the single life, 10 or 20-year term certain and life annuity plans may change their beneficiary at any time.

Retired members who select the 100 percent or 50 percent joint and survivor annuity plans can only name one beneficiary at the time of retirement and may not change their beneficiary after retirement. If the 100 percent joint and survivor plan is selected and the beneficiary is not the spouse, the beneficiary must be no more than ten years younger than the member.

Under the joint and survivor options, a pop-up provision is available if your beneficiary precedes you in death or a divorce grants you sole ownership of your retirement benefits. Your annuity will convert to the higher single life annuity plan. You may then designate a new beneficiary for contact purposes or for payment of account value, if any. Upon remarriage, you can re-elect a joint and survivor option. Under the single life annuity, ten and twenty year term certain and life options, if a retiree marries, the retiree may also elect to change to a joint and survivor option

The retiree must provide proof of the retiree’s good health and proof of the new beneficiary’s age. The monthly benefit will also be actuarially adjusted based on the new beneficiary’s age.

It is very important to name a beneficiary for your retirement account. Even if there is no death benefit due to the beneficiary, a contact person is needed to close a deceased member’s retirement account. Please keep your beneficiary designation current. Beneficiary change forms can be printed from the TFFR website.

If a member dies, the administrative office should be notified promptly. We will then send the necessary forms to your designated beneficiary. A copy of the following documents must be submitted before survivor benefits can be paid:

  • Member’s death certificate;
  • Designated beneficiary’s proof of age (if a monthly survivor benefit is selected).

Additional information may be required to process the application for survivor benefits.


  • Refund of Account Value
    TFFR is required to withhold federal tax at 20 percent of the taxable portion of the refund. However, the refund may be paid in a direct rollover to an IRA or an eligible retirement plan to avoid the mandatory 20 percent withholding. (See Special Tax Notice Regarding TFFR Refund Payments.)
  • Monthly Survivor Benefit
    Survivor benefits are taxable as ordinary income under both federal and state law. The survivor will recover the remainder of the previously taxed member contributions by way of monthly exclusion if the deceased member did not already recover the total. Taxable and nontaxable portions of the annuity are calculated according to a formula provided by the Internal Revenue Service (Simplified General Rule).

A final 1099-R will be issued for the deceased retired member’s account the following January. If a survivor begins drawing a monthly benefit, a 1099-R will also be issued for the survivor each year.

Contact a qualified tax advisor for details regarding your tax liability on survivor benefits.

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Investment of Funds

Prudent Investor Rule

Employee and employer contributions are invested under the direction of the State Investment Board (SIB) using the Prudent Investor Rule.

The Prudent Investor Rule means that in making investments, the fiduciaries shall exercise the judgment and care, under the circumstances then prevailing, that an institutional investor of ordinary prudence, discretion, and intelligence exercises in the management of large investments entrusted to it, not in regard to speculation, but in regard to the permanent disposition of funds, considering probable safety of capital as well as probable income.

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Exclusive Benefit

State statutes require the retirement funds belonging to TFFR be invested exclusively for the benefit of TFFR members and in accordance with the TFFR Board’s investment goals and objectives.

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Asset Allocation

Diversification of the investments to the various asset classes must be determined by the TFFR Board of Trustees. The staff and consultants of the Retirement and Investment Office (RIO) are used to assist in determining the proper allocation.

Investment performance information is on the TFFR website at www.nd.gov/rio.

The current TFFR asset allocation plan is as follows:

Domestic Equity 31%
International Equity 21%
Private Equity 5%
Domestic Fixed Income 17%
International Fixed Income 5%
Real Assets 20%
Cash Equivalents 1%
Total 100%

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Member Services

The RIO staff offers many services as part of the continuing effort to keep members informed about their retirement program. All services are furnished without charge. Employers and/or members may contact the administrative office to schedule the various outreach programs.

For Americans with Disabilities Act compliance, appropriate auxiliary aids and services can be made available to ensure effective communication with all members. All printed materials can be made available in alternate formats. Contact the administrative office should you require these services.

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Annual Statement

Each year, you will receive an annual statement of your account. The information reported on the statement includes your beneficiary on file, accumulated service credit, value of account, service credit earned during the current fiscal year, annual salary reported, and other information pertinent to your account.

Your annual statement is usually mailed the end of August. Review this statement to ensure the information maintained in your file is accurate and is being properly reported.

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A TFFR Member Handbook is updated when material changes occur and is available on our website. This booklet provides an overview of the benefits available to you and your beneficiary(ies) in the form of retirement, disability, and survivor income.

A Member Services Directory is published each year to provide a schedule of all outreach programs available to members. This directory is included with your annual statement.

Individual brochures or fact sheets are available on the following topics: retirement benefits, disability retirement benefits, purchasing service credit, retiree re-employment, and marriage dissolution payment options.

RIO also publishes a comprehensive annual financial report of the system's financial and actuarial condition.

To supplement these publications, member newsletters report legislative changes and other items of interest to TFFR members. The Report Card newsletter is sent twice each year to active and inactive members. Retirement Today is sent twice each year to retired members. In addition, Your Vested Interest, an investment newsletter, is sent to all members twice each year.

Copies of all publications are available at the administrative office and on our website at www.nd.gov/rio.

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Conferences & Group Presentations

Staff members are available for questions and will provide information at education conferences throughout the year.

Speakers are also available to present general retirement information at your school. Contact the administrative office to arrange a group presentation.

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Preretirement Program

Comprehensive pre-retirement seminars are offered to all members to assist them in preparing for retirement. The statewide seminars include information on TFFR pension benefits, social security benefits, health insurance options, financial planning, estate planning, and adjusting to retirement.

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Benefits Counseling Program

Statewide Counseling Sessions
Retirement specialists travel throughout the state to conduct individual and group benefits counseling sessions. You will receive personalized TFFR information and a TFFR retirement specialist will explain the different retirement options, the paperwork required to begin TFFR benefits, and answer questions about the TFFR program. Counseling locations can be viewed on our website.

Office Visits
Members are also invited to visit the Bismarck office to discuss their individual retirement records. Retirement specialists are available during office hours (Monday through Friday from 8 a.m. to 5 p.m.). Please schedule your appointment in advance to ensure that a retirement specialist is available to meet with you.

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Financial Planning Program

Financial planning seminars can also be arranged for members. This seminar stresses the importance of early planning for future financial security. Topics covered include TFFR pension benefits, financial planning, and estate planning.

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Retirement 101

This program is geared to new North Dakota teachers. Retirement 101 covers TFFR basics and provides new teachers the opportunity to ask questions about their retirement account.

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Teachers in Transition Program

A specialized counseling program and group presentation is offered to TFFR members whose school may be facing closure or consolidation. It is designed to provide information about the retirement options available to members leaving TFFR-covered employment.

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Telephone & Written Communication

A nationwide toll-free telephone number (1-800-952-2970) is available for the convenience of members and retirees calling the administrative office. RIO staff may also be reached by email at rio@nd.gov. Remember, personal information cannot be obtained over the telephone or via email due to confidentiality of records.

Members who prefer to write may address inquiries to the Member Services Division.

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Web Site: www.nd.gov/rio

The site includes information about our agency, the TFFR Board, legislation, investments, membership and employer information, plan benefits, benefit calculator, publications, forms, and much more.

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