THE MID-CAREER PROFESSIONAL
What you need to know now
Here you are in your mid-30s to early 50s, on top of your game. With family responsibilities and teaching demands, retirement might not be a priority. But it’s wise to take stock of your finances, read up on TRA benefits and take care of your beneficiary arrangements.
What is a TRA pension?
TRA is a defined-benefit pension plan, which differs from a 403(b) or 401(k) because you receive a predictable retirement benefit for your lifetime, not an account balance that you might outlive. With TRA:
- Membership is automatic. From your first day of employment with a TRA-covered employer, you are a member of TRA.
- Savings are automatic. During your teaching years, a percentage is deducted from every paycheck for your retirement.
- It’s easy. Contributions from you and your employer are pooled with all state public pension fund assets. The State Board of Investment manages these assets and the risk so you don’t have to.
- Contributions are pretax. This reduces your taxable income.
- Job change? No worries. If you stay employed in city, county or state government in Minnesota, you can keep your money at TRA and continue to accrue public-sector service credit toward your eventual pension.
Your TRA contributions are tax-sheltered until you retire or take a refund. Your TRA paycheck deductions are determined by Minnesota law and are subject to change. As of July 1, 2018, your contribution rate is 7.50 percent of your salary. Your employer is contributing 7.71 percent to your pension plan.
Service credit affects eligibility for benefits and 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.
Benefits and Options
There are several types, including sabbatical, medical, parental, family, extended, legislative, military. You may purchase service credit for the aforementioned leave types.
If you’re currently working full time (1.0 FTE) but plan to work part time, you may be eligible to purchase full-time service credit toward your pension if you meet eligibility requirements.
Available to those with at least three years of service who become disabled.
Certain benefits are available to your survivor(s) if you die before retiring with the TRA pension plan.
If you leave teaching, you may opt for a refund. The refund consists of all your employee contributions plus interest, compounded annually. Partial refunds are not permitted. Your employer’s matching contributions remain with TRA and are not included in the refund.
To-do list for the mid-career teacher
- Create a MyTRA account. Update your mailing and email addresses. Review your annual statement to see your accumulated service credit, contributions and employer deductions.
- Name/update your beneficiary or beneficiaries so TRA knows who should receive the assets in the event of your death.