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:
- Savings are automatic. During your teaching years, a percentage is deducted from every paycheck for your retirement. This is a mandatory deduction based on state statute and there is both an employee and employer contribution for each paycheck.
- 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 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 contributions at TRA and continue to accrue public sector service credit toward your eventual pension under a Combined Service Annuity.
Contribution Rates
| Date effective | Employer contribution rate | Employee deduction rate |
|---|---|---|
| 7/1/2023 and after | 8.75% | 7.75% |
Vesting
You are “vested” in the TRA plan after three years of service. Once you’re vested, you have earned enough service credit to be eligible for TRA benefits.
The TRA website contains a wealth of additional information but a good starting point would be one of the following links:
*PENSION BASICS*TRA FOR EARLY CAREER EDUCATORS
*TRA FOR EDUCATORS NEARING RETIREMENT
The following four-minute video is also a great resource for understanding how your pension works:
EM-R Pension Specialist Todd Richter will be sending out pension updates throughout the school year. Please contact Todd via email at Todd.Richter@isd623 with any pension-related questions.