Pension Basics

What is TRA?

TRA is a defined-benefit (“DB”) pension plan. 

During your career, you and your employer make mandatory payroll contributions to TRA. The funds are pooled and managed by the State Board of Investment to pay your eventual benefit.

  • 73 percent of Minnesota pension system revenue comes from investment earnings,
  • 27 percent comes from contributions (combined employee and employer)

What is a pension?

Defined-benefit pension
Who bears the investment risk? Plan bears investment risk.
Who pays the investment fees? Fees divided among members.
Who manages my assets? Minnesota State Board of Investment professionally manages TRA’s assets.
Can I take it with me? If you change careers, you may request a refund or leave your contributions with TRA until you’re ready to retire.
What determines my benefit amount? Predictable benefit based on age, length of service and high-five average salary.
Beware Financial Entities Claiming Affiliation With TRA

TRA is not affiliated with, nor do we endorse, any commercial companies selling retirement savings products. Occasionally, financial planning companies will use “TRA” in their advertising or presentation materials or otherwise imply that they represent TRA or can provide you with your personal TRA retirement information. However, if you receive any solicitations from third parties that appear to indicate that they have a connection with us, beware.

  • TRA never grants permission for the use of our name or materials in any sales solicitations or presentations by financial planners or commercial entities. When we learn of the unauthorized use of our name or materials, we immediately contact the offender and advise them to modify their materials so that they in no way suggest that the information has been supplied, approved, sponsored or endorsed by us.
  • TRA does not share your personal data with financial planners or firms. Your account data is confidential; we will provide it only to you or someone authorized by you, and only after we have verified your identity or your representative’s identity. 
  • TRA may only provide your name, benefit amount and benefit type to the public, according to Minnesota public data laws governing TRA.

If you ever receive a solicitation from a company offering to sell you financial services and claiming to have a connection with TRA or have access to your personal TRA data, first, be cautious. Second, call us at 800-657-3669.

TRA math

Here’s how we translate the statistics of your career into retirement income later.

Years of service multiplied by high-five average salary multiplied by formula percentage equals benefit amount.


Most TRA members are “vested” in the TRA plan after three years of service. If your last service was before 1989, your vesting requirement might be five or 10 years. If you have service with another Minnesota pension fund or funds, a combined five years may be required based on the other funds’ vesting requirements. Once you’re vested, you have earned enough service credit to be eligible for TRA benefits such as leaves of absence and disability.

Service Credit

Service credit affects eligibility for benefits as well as benefit amount. Paid sick leave, vacation days and all required attendance days and hours (such as workshops) count toward service credit. TRA allows no more than one year of service during any fiscal year. Service credit for part-time teachers, extracurricular pay, retro pay, and summer pay is prorated. Minnesota State service credit is determined by the full-time equivalent as defined in the Minnesota State bargaining agreement. For example, if a Minnesota State employee works 0.5 FTE during the fiscal year, 0.5 (one half) year of service credit is earned.

Contribution Rates

During your teaching years, a percentage is deducted from every paycheck for your retirement. The current employee contribution rate is 7.75 percent. Your TRA contributions are pretax, reducing your taxable income. Your TRA paycheck deductions are determined by Minnesota law and are subject to change.

High-Five Average

Your annual retirement benefit is a percentage of your highest average annual salary over five successive years of formula service credit. One year of formula service credit is a full year of teaching service during which the maximum deductions are withheld. Formula service credit is measured each fiscal year (July 1 – June 30). You may not earn more than one year of formula service credit in a fiscal year. In years where you did not perform a full year of teaching service or did not pay the maximum deductions as prescribed by TRA law, the formula service credit is prorated.


Tier I and Tier II formulas

If you were first employed before July 1, 1989, and earned service credit, and your age plus allowable service credit equals 90 or more, you may retire under the Rule of 90. Eligible members retiring under the Rule of 90 receive benefits without any reduction for early retirement. If you were employed before July 1, 1989, and earned service credit, your retirement benefit will be calculated under both Tier I and Tier II formulas. At retirement you automatically receive the greater of these two benefits. If you were first employed after June 30, 1989, your retirement benefit will be calculated under Tier II only.

Tier I formula

  • First 10 years of service prior to July 1, 2006, 1.2 percent per year
  • First 10 years of service on or after July 1, 2006, 1.4 percent per year
  • Years 11 and thereafter earned prior to July 1, 2006, 1.7 percent per year
  • Years 11 and thereafter earned on or after July 1, 2006, 1.9 percent per year

TRA normal retirement age for members first employed before July 1, 1989, is age 65.

Tier II formula

  • All years of service prior to July 1, 2006, 1.7 percent per year
  • All years of service on or after July 1, 2006, 1.9 percent per year

Normal retirement age for Tier II members, those first employed after June 30, 1989, is age 65.

All this information is available in our brochure Pension basics for new teachers.

Information on your Social Security Normal Retirement Age (By Year of Birth)

Year of birth Age
1943-1954 66
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 and later 67 years

All about early retirement

You might be considering retiring early. If you do, your benefit must be reduced because you will be receiving it for a longer period of time.

“Early retirement” is any age earlier than 65, and the younger you retire before age 65, the higher the reduction — similar to Social Security.

Learn more about early retirement