TRA overview
The Teachers Retirement Association (TRA) is a defined benefit pension plan that provides lifetime monthly retirement benefits to Minnesota’s public school teachers and administrators, licensed school professionals, certain employees of the Minnesota State colleges and universities system, and others.
In retirement, you will receive a monthly retirement benefit for the rest of your life. Depending on the annuity option you select at retirement, upon your death, your survivor(s) may be eligible to receive a continuing benefit for their lifetime(s).
The following information generally applies if you are actively serving in a TRA-covered position and you started covered service on or after July 1, 1989.
Contributions
TRA is funded through a combination of employer and employee contributions as well as investment earnings. Employees contribute 8.0% and employers contribute 9.81% of each paycheck earned by an employee. These dollars are then professionally managed by the Minnesota State Board of Investment.
TRA contribution rates are set in Minnesota state law and are subject to change. Employee contributions are made on a pre-tax basis.
Eligibility
You are eligible, or “vested,” to receive a lifetime monthly retirement benefit after you have earned three years of service credit.
Vested members can apply for a reduced retirement benefit as early as age 55, and an unreduced retirement benefit at their normal retirement age, which for most members is age 65.
Combined service annuity
If you have service with other Minnesota public pension plans, your service in those plans may be combined to meet TRA vesting requirements. A combined service annuity also allows you to calculate the retirement benefit for all plans using the same highest five successive years of salary, no matter where it was earned.
Calculating your retirement benefit
Your monthly retirement benefit is calculated using a formula defined in Minnesota law.
You earn a percentage multiplier for each year of service credit. The resulting cumulative percentage is then multiplied by your high-five average salary to determine your annual base retirement benefit.
Calculation example
Assume you retire at age 65 with 20 years of service credit (all after July 1, 2006) and a high-five average salary of $75,000.
You would earn a percentage multiplier of 1.9% for each of your 20 years of service. The resulting cumulative percentage is 38%. That 38% is then multiplied by your high-five average salary of $75,000 to determine a full annual retirement benefit of $28,500. This amount is divided by 12 to calculate your full monthly benefit of $2,375.
A reduction for early retirement will be applied if you retire before age 65 in order to account for the anticipated additional years of benefit payments.
Percentage multiplier
The percentage multiplier is 1.7% for each year of service rendered before July 1, 2006, and 1.9% for each year of service rendered on or after July 1, 2006.
Service credit
If you are employed in a PreK–12 setting, service credit is calculated by dividing your salary each month by the monthly base salary for your Minnesota public school district. You may earn up to 11.1% of a year of service credit in a calendar month, and up to one full year of teaching service in a fiscal year.
If you are employed by Minnesota State, your service credit is the full-time equivalent as defined in the Minnesota State bargaining agreement covering your employment.
High-five average salary
Your high-five average salary is the highest average fiscal year salary over five successive years of service credit.
Reduction for early retirement
Your age at retirement determines if your benefit is subject to an early retirement reduction.
The reduction is 4.0% for each year from age 55 through age 58, and 7.0% for each year from age 59 through age 65.
If you retire at age 60 or older with 30 years of service credit, the reduction is lowered to approximately 2.5–3.0% for each year from your age at retirement to age 65.
Disability benefit
As a traditional pension plan, TRA also provides protection should you become totally and permanently disabled. You are eligible for a disability benefit so long as you are vested, actively employed in a TRA-covered position, and meet the plan’s disability requirements.
Death benefit
If you die before retirement, TRA may pay a death benefit to your beneficiaries.
TRA members are encouraged to submit a “Pre-Retirement Death Benefits for Single Members” or “Pre-Retirement Death Benefits for Married Members” form to TRA to ensure that their beneficiary designations are current.
Member handbook
The TRA Member Handbook of Benefits and Services contains plan information. Read the handbook for membership details.
