Duluth Teachers’ Retirement Fund Association

Plan Summary - New Plan, Tier I

Membership Eligibility:  DTRFA New Plan, Tier I benefits are available to members of the DTRFA who were first hired prior to July 1, 1989, and have not taken a refund of those contributions.

Contributions:  Employees contribute 5.5% of covered salary.  Employer contributes 5.79% of salary.

Eligibility for Retirement Benefits:

    Full Retirement Benefits - Eligible at age 65, or if age plus years of service totals at least 90.

    Early Retirement Benefits - Eligible at age 55 with 3 or more years of credited service.  An early retirement reduction is applied equal to ¼% per month between retirement and age 65. Also eligible at any age with at least 30 years of credited service.  In this case, an early retirement reduction is applied equal to ¼% per month between retirement and age 62.

Note: New Plan Tier I members receive a retirement benefit from New Plan Tier I or from New Plan Tier II, whichever is highest.

Annual Benefit Formula:  1.20% for each of the first ten years of credited service, 1.70% for each year over ten, times high 5 average salary.

Vesting:  Retirement benefits vest after 3 years of service, or at age 65.

Disability Benefits:  Eligible after 3 years of service.  Must be totally and permanently disabled from any substantial, gainful employment.  Full benefits paid regardless of age.  Termination of employment with the school district is not required.

Survivor Benefits:

    Death Before Retirement: Refund of member contributions, plus 6% interest, to beneficiary.  If member had at least 3 years of service, a surviving spouse may elect to receive a 100% joint and survivor annuity or term certain annuity of equivalent actuarial value.  A reduction is applied to the benefit amount based on the years of service and age of the member at time of death.  Term certain benefits are payable to dependent children if there is no spouse.

    Death After Retirement: The optional annuity elected at retirement is payable.  Options include a 50% joint and survivor annuity, a 100% joint and survivor annuity, or a life and term certain annuity for 5, 10, 15 or 20 years.

Refunds:  30 days after ceasing to render teaching service, a member may receive a refund of their contributions with 6% interest.  Refunds may be rolled into an IRA to defer current tax.

Deferred Benefits:  A vested, terminated member may leave contributions in the fund until eligible for retirement.  The annuity formula at time of termination is used.  Benefit is increased 3% per year between termination and age 55, and increased 5% per year after age 55 until benefit payments begin.

Cost of Living Adjustment:  Eligible benefit recipients receive an automatic 2% increase in their benefits each January 1.  An additional increase is allowed to the extent that 5-year annualized returns of the fund exceed the plan's assumed rate of return of 8.5%.