TEACHERS’ FUND FOR RETIREMENT
TODAY M AY 2001
Photo by Garry Redman, NDDOT
Improves Retirement Benefits
Representatives from the TFFR Board, RIO staff, NDEA and NDRTA
witness Governor Hoeven signing House Bill 1102.
The 57th Legislative Assembly $2 multiplied by the retiree’s years
passed House Bill 1102 in almost its of service, plus $1 multiplied by the
original format, although many number of years since the member’s
amendments were considered. For retirement. In addition, retirees will
future retirees, approval of the bill receive a conditional annual benefit
means an increase in the retirement adjustment (CABA) of 0.75% times a
multiplier from 1.88% to 2.0% for retiree’s current monthly benefit,
members retiring on July 1, 2001 or payable on July 1, 2001 and July 1,
after. 2002. On average, this benefit
adjustment will increase the average
For current retirees, passage means retired teacher’s benefit to about
an increase in retiree benefits on $1,071 per month – an increase of
TFFR Board of Trustees July 1, 2001. The formula for calcula- $78, or 7.8%.
Mark Sanford, President
Barb Evanson Paul Lofthus
ting the benefit improvement is
Norman Stuhlmiller H.L. “Curly” McLain
Kathi Gilmore Wayne Sanstead
RIO Administrative Office EXAMPLE:
Steve Cochrane, Executive Director/CIO Member retired in 1987 with 28 years of service credit and current benefit
Fay Kopp, Deputy Director/Retirement Officer is $994 per month.
Shelly Schumacher, Editor
ND Retirement and Investment Office 2001 retiree increase
1930 Burnt Boat Drive, P.O. Box 7100
Bismarck, ND 58507-7100 (0.75% x $994 = $7.46) + ($2 x 28 years + $1 x 14 years = $70) = $77.46
701-328-9885, Toll free: 1-800-952-2970 New Benefit on July 1, 2001 = $1,071.46
Articles are for general information only and are not 2002 retiree increase (0.75% x $1,071.46) = $8.04
intended to provide specific advice or recommendation.
Other forms of this newsletter are available on request. New Benefit on July 1, 2002 = $1,079.50
I’ve been watching a lot of soccer
again this spring. As I hunker down
in my portable “quad” chair on these
cold spring nights wrapped up in a
heavy patchwork quilt, I find my
mind occasionally drifting off to
thoughts not related to soccer. OK. I’ll
admit it. I’ve actually thought about
how the changes made by the 57th
Legislative Assembly will affect active
and retired teachers. Fay Kopp
Deputy Executive Director
Maybe that’s why this legislative-
soccer idea got stuck in my head. I
mean just look at all the people on a monthly benefit increase to all
Team T.F.F.R. that were responsible retired members and beneficiaries.
for the legislative changes. We saw The retiree increase was equal to $2
Coaches, Team Captains, and Players per year of service plus $1 per
represented by Legislative Leaders, number of years retired for current
Committee Chairpersons, and retirees, plus a 0.75% guaranteed
individual Legislators. We also heard annual benefit adjustment for all
the strong voices of NDEA, NDCEL, current and future retirees.
and NDRTA leading the Crowd of
active and retired teachers in rousing During the course of the game, many
cheers. Referees and Line Judges – or amendments were considered. In the
was it the TFFR Board and its first half of the legislative session, the
actuarial consultant – followed the House made the 0.75% annual retiree
players up and down the field as they benefit adjustment conditioned on an
tried to maintain actuarial balance actuarial test. In the second half, the
and stay within boundaries that kept Senate turned the conditional annual
moving. benefit adjustment (CABA) into an ad
hoc adjustment by approving the
Like any good soccer game, intensity 0.75% CABA for July 1, 2001 and 2002
was high.To participate, everyone only. Future retiree benefit adjust-
involved needed actuarial shin ments must continue to be brought
guards, investment jerseys, and before each Legislature for approval.
pension administration goalie gloves. The final version uses about half of
Signals got crossed once in a while the available actuarial margin now,
and a few minor scuffles broke out. and saves the remainder for future
But there were some awesome goals benefit improvements.
scored, and even a few opportunities
to make the “winning” one. Each When the final whistle blew on
time, the ball was deflected by a April 5, 2001, Governor Hoeven
strong goalie. The team worked hard signed HB1102 authorizing significant
to accomplish their goals and win the benefit improvements for active and
game. retired teachers. The two biggest
goals scored were increasing the
So, what happened and who won? multiplier to 2.00% for future retirees
and raising the average benefit for
You may recall that the original TFFR current retirees to nearly $1,100 per
benefit increase bill was approved by month.
the TFFR Board and the interim
Legislative Employee Benefits Even though the game ended in a
Programs Committee last year. The virtual tie, all TFFR members have
bill (HB1102) increased the benefit something to celebrate. Way to go
multiplier to 2.00% and provided for Team T.F.F.R!
R E T I R E E E M P L OY M E N T P R OV I S I O N S E X PA N D E D
Approval of House Bill 1101, Senate GENERAL RULE – EXCEPTION B – EXCEPTION C –
Bill 2180, and receipt of a favorable 700 HOUR LIMIT EDUCATIONAL FOUNDATION BENEFIT SUSPENSION
IRS determination letter which made DONATION AND RECALCULATION
1999 retiree employment provisions After 30 days elapse from your
effective, have expanded the options retirement date, you may return to You may also return to TFFR covered After 30 days elapse from your
given retirees to return to TFFR TFFR covered employment for a employment with no waiting period retirement date, you may return to
covered employment. Because of the maximum of 700 hours in a fiscal year for one year only and exceed the 700- TFFR covered employment and
impact returning to work could have (July 1 – June 30). You will continue to hour limitation without losing your exceed the 700-hour limitation. Under
on your TFFR retirement benefits, we receive your monthly retirement retirement benefits. Under this option, this option, your TFFR benefits will
strongly encourage retirees who are benefits; employer and employee you may immediately return to work, be suspended the first of the month
considering employment to contact contributions will not be paid to earn an additional salary from the following the month you reach the
our office to discuss all of your TFFR; and your monthly TFFR school district, and donate at least one 700-hour limit. At that time, employer
options. benefit amount will not be affected. half of your salary to an educational and employee contributions must be
foundation (nonprofit or charitable paid on any salary earned after the
After you retire, you may return to Example: Jane Teacher retires July 1, 2001 organization under Section 501(c)(3) 700 hours based on your employer’s
TFFR covered employment under and begins collecting monthly TFFR of the Internal Revenue Code). TFFR payment model. Upon your re-
certain employment limitations. The retirement benefits. On August 1, she signs Your employer must pay both the retirement, your benefits may be
limits apply to TFFR covered a contract with a ND school district to work employer and employee contributions recalculated. If you re-retire with:
employment which includes teaching, for 700 hours during the school year (4 to TFFR on your full salary (including
supervisory, administrative, or extra- hours/day for 175 days). With the exception • Less than 2 years of additional
the amount you donated to an
curricular services in a ND public of substitute teaching, all compensated earned service credit – receive
educational foundation). This option
school or state institution covered by hours count toward the 700-hour limit. Jane discontinued benefit plus benefit
expires on July 31, 2005.
TFFR. receives salary from the school district for increases granted during the benefit
the part time employment, but no retirement suspension and a refund of any
contributions are paid to TFFR. Jane Because of the tax implications involved additional employee contributions
The retiree employment limits
continues to receive her monthly TFFR in donating one-half of your salary to an paid plus interest
DO NOT apply to: retirement benefit while teaching part time. educational foundation, you should also • 2-5 years – greater of the
• Substitute teaching (non-contracted) contact your tax advisor for assistance.
• Teaching in public colleges and discontinued annuity, plus additional
universities years at the new multiplier, plus
EXCEPTION A – benefit increases granted during the
• Teaching in private schools CRITICAL SHORTAGE AREA
• Employment outside of education suspension OR all the years
• Employment outside of ND recalculated at the new multiplier,
You may return to TFFR covered
less an actuarial offset for the amount
employment in an approved critical
To help you determine which return of benefits already paid
shortage area and exceed the 700-hour
to work option best suits your needs, limitation without losing your • 5 or more years – greater of the
you should consider the following retirement benefits. If you retired on calculation above or the retirement
questions: or prior to January 1, 2001, no waiting benefit recalculated using all the years
• How long have I been retired? period is required. However, if your at the new multiplier with no
• How long do I plan to work? retirement date is after January 1, actuarial offset.
• Do I plan to work full or part time? 2001, a one-year waiting period is
required before you can consider this Failure to notify TFFR in writing that
Please also keep in mind that in order option. You may perform non-
you have exceeded the 700-hour limit will
to retire and receive monthly TFFR contracted substitute teaching during
the one-year waiting period. Critical result in the loss of one month’s annuity
retirement benefits, you must resign
shortage areas will be determined by benefit.
from your position and complete the
necessary TFFR paperwork. Then, the Education Standards and Practices
after the applicable waiting period (if Board (ESPB) by rule. Each year, you
any), should you decide to return to must re-apply for this exception and
work, both you and your employer receive verification that it remains a
must notify TFFR by completing an critical shortage area. Like the General
“Employment of a Retired Member” Rule, you will continue to receive
form. your monthly retirement benefits, Because of the impact returning to work could have on your TFFR retirement
employer and employee contributions
will not be paid to TFFR, and your benefits, we strongly encourage retirees who are considering employment to
monthly TFFR benefit amount will not
be affected. This option expires on
contact our office to discuss all of your options.
July 31, 2005.
TFFR APPROVED LEGISLATION AT A GLANCE
Allows retired members who have been receiving a retirement benefit for
at least one year to return to TFFR covered employment without loss of
their TFFR benefits in critical shortage areas as determined by the
Education Standards and Practices Board.
• Clarifies the definition of • Increases the benefit multiplier
“contract” and “teacher.” from 1.88% to 2.0% for future
• Allows limited disclosure of retirees.
certain retirement information
to a member’s employer, state • Provides a post-retirement
and federal agencies, and benefit increase for current
member interest groups retirees including:
approved by the TFFR Board – Conditional annual benefit
(limited to information adjustment (CABA) of 0.75%
concerning a member’s death). times the retiree’s current
• Modifies retiree return to monthly benefit (payable on
TAX teach provisions. 7-1-2001 and 7-1-2002); and
WITHHOLDING – $2 multiplied by the retiree’s
years of service plus $1
REMINDER multiplied by the number of
years since the member’s
Since your TFFR benefits are
retirement (payable 7-1-01).
subject to federal and state
taxation, don’t forget to periodi-
cally review your tax withholding
election. If your tax withholding is
not adequate, you may have to CONFIDENTIAL RECORDS
pay estimated taxes during the What you should know…
year or a tax penalty at year end.
Some retirees have telephoned the TFFR office and have been surprised to
You may elect no withholding, learn that making an address change or attaining your monthly benefit can not
specify withholding based on be handled over the telephone.
marital status and allowances, or
specify withholding plus an To protect your privacy, records relating to your TFFR retirement benefits are
additional amount. You may also confidential and are not public records. Although approval of House Bill 1101
have North Dakota state taxes expanded access, release of confidential member information is still very
withheld from your retirement limited. Your retirement information and records may only be disclosed to:
benefit. Keep in mind we can not
• A person to whom you have given written consent.
withhold taxes for another state.
• A person legally representing you.
The amount of your withholding
• A person authorized by the court.
may change on January 1 when
the tax rates are adjusted. You may • A member’s participating employer, limited to information concerning your
also see a change to your with- years of service credit, age, employer and employee contributions, and salary.
holding on July 1 when the retiree Any information provided to your employer must remain confidential.
benefit increase approved by the
Legislature is paid. • Staff of the Public Employees Retirement System to determine membership
If you would like to start, change, • State and federal agencies to validate your eligibility or an employer’s
or stop tax withholding, contact compliance with state and federal law.
our office for a tax withholding
form. • Member interest groups approved by the TFFR Board, limited to information
concerning a member’s death.
Retirement savings and pension
reform legislation has once again
been introduced in Congress. This
bipartisan legislation increases
retirement savings opportunities,
expands portability, and eliminates
cumbersome pension rules. The
TFFR Board supports this legislation.
PassPensionReform.org is preparing
a national petition that will be
submitted to Congress and the
President demonstrating that
increasing retirement savings is a
critical priority for working
Americans. Supporters may visit
learn more about pension reform and
TFFR RECEIVES AWARD sign the electronic petition. Once
signed, your name will be forwarded
For the fifth time, the ND Teachers’ Fund for Retirement has received the to North Dakota’s congressional
prestigious Public Pension Principles Achievement Award. This award is delegation.
designed to recognize and commend public employee retirement systems that
adhere to high professional standards. Please join the grassroots effort to
urge Congress to pass pension
TFFR qualified for this achievement award based on reform legislation this year.
compliance with specific principles in the areas of benefits,
actuarial valuations, financial reporting, audits,
investments, and disclosure to plan members and the
MAILED IN JUNE
Check your mail in early June for your benefit
increase statement. The statement will include
the amount of your monthly benefit increase,
your new PERS health insurance premium,
and your net benefit amount for July 1, 2001.
Also take the time to review your beneficiary
designation. If your beneficiary has passed
away, please contact the administrative office.
Understanding Survivor Benefits
Based on the retirement plan you Under the joint and survivor options,
selected at retirement, your a pop-up provision is available if FAVORABLE
designated beneficiary may be your beneficiary precedes you in
eligible to receive survivor benefits death or a divorce grants you sole IRS
from your account: ownership of your retirement
benefits. Your annuity will convert to
• Single Life Annuity – balance of
account value, if any.
the higher single life annuity plan. LETTER
• 100% Joint & Survivor Annuity – Upon remarriage, you can re-elect a On January 29, 2001, TFFR
monthly benefits of the same amount joint and survivor option. Under the received a favorable determination
will continue for the remainder of single life annuity, five and ten year letter from the IRS regarding its
your beneficiary’s life. term certain and life options, if a qualified status. Although
retiree marries, the retiree may also governmental retirement plans like
• 50% Joint & Survivor Annuity – elect to change to a joint and
one half of the monthly benefit TFFR are not required to do so,
survivor option. The retiree must receiving a favorable determin-
amount will continue for the provide proof of their good health
remainder of your beneficiary’s life. ation letter from the IRS is an
and proof of age for the new
added measure of assurance that
• 5 Year Term Certain and Life – beneficiary. The monthly benefit will
also be actuarially adjusted based on plan provisions conform to IRS
remainder of the 60 months of
payment, if any. the new beneficiary’s age. requirements so TFFR can
continue receiving favorable tax
• 10 Year Term Certain and Life – treatment.
remainder of the 120 months of
payment, if any.
BISMARCK, ND 58507-7100
P.O. BOX 7100
1930 BURNT BOAT DRIVE
PERMIT NO. 325