Question 1

QUESTION 1: What Is The Impact Of The Internal Transfer Of Money From The TRA Active Fund To The TRA PRIF That Is Required To Pay 45% Of The Positive Difference Between The �IMP� And The �High 5� Pension Benefits For Each Eligible �Pre-1969 Teacher� At The Time Of Retirement?

(The following calculations assume an effective date of July 1, 2003. S.F.676 Article 20
stipulates an effective date of July 1, 2004, thereby reducing the
dollar amount that would be transferred to a figure less than $205,488,000.)

WE NEED YOU ON OUR TEAM! A Capitol Action Team has been formed. Joe O'Neill will contact the team if he needs people quickly. If you are a metro-area member and can be in St. Paul on short notice for lobbying or attending meetings, you could make the difference in getting our legislation moving and passed. Can you be part of our team?

Year of Retirement	# of Pre 1969 Teachers Retiring with Positive Difference of IMP over High 5	Internal Transfer from the Tra Active Fund to the TRA PRIF Required to Achieve a Pension Benefit Equal to 45% of the Positive Difference
1998	678	$15,102,000
1999	848	$33,354,000
2000	764	$41,661,000
2001	607	$46,521,000
2002	468	$37,134,000
2003	271	$17,455,500
TOTALS	3,636	$191,227,500
*Active Members	452	$14,260,500
TOTALS	4,088	$205,488,000

*TRA in the future might transfer $14,260,500 from TRA Active Fund to the TRA PRIF, but the actual amount would depend on many other factors such as final pay, amount of positive difference (if any), etc. at the time of retirement.

TRA would transfer from the TRA Active Fund to the TRA PRIF $191,227,500 to fund 45% of the positive difference between IMP and High 5 for 3,636 retirees.

According to the June 30, 2003 Report, TRA had combined Current Actuarial Assets of $17,384,179,000, (both the TRA Active and the TRA PRIF) with Actuarial Assumed Liabilities of $16,856,379,000. Therefore, $205,488,000 represents only an increase of approximately 1.2% in Actuarial Assumed Liabilities. (In comparison, the TRA fund was only 71.6% funded in 1972, with only $389 million in assets when the 1973 legislature funded the Pre-1973 retired teachers with a 25% total pension benefit increase. In spite of the substantial underfunding in 1972, the 1973 legislature used Minn. Stat. 354.55, subd. 15 because the legislature had changed the pension benefits to a High 5 year computation from a career average salary computation, and the adjustment corrected a serious inequity.)

Hosted by www.Geocities.ws