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NJ Pension Insights: TPAF

(Teacher Pension Annuity Fund)
PERS Members Pension Benefits differ slightly. Information below still applies but please contact me to discuss differences.

As an employee of your NJ school district the NJ Pension system is an important part of your retirement. As of right now 7.5% or your salary goes into the pension for your retirement.

 

There are different types of the NJ Pensions, most of the employees of the school districts are members of the Teacher Pension Annuity Fund (TPAF). Some, usually administrators, may be in the Public Employee Retirement System (PERS). The two are very similar and have only slight differences. The information below applies to both. If you have questions about the differences, reach out and we can discuss the differences.

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Membership Tiers 

Knowing your membership Tier is important to all aspects of the NJ Pension especially retirement.

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  •  Tier 1 – Members enrolled prior to July 1, 2007

  •  Tier 2 – Members enrolled on or after July 1, 2007 and prior to November 2, 2008

  • Tier 3 – Members enrolled on or after November 2, 2008 and on or before May 21, 2010

  •  Tier 4 – Members enrolled after May 21, 2010 and prior to June 28, 2011

  • Tier 5 – Members enrolled on or after June 28, 2011

RETIREMENT
*Must have 10 yeas of service (Vested) to be eligable for the NJ Pension

Service “Normal” Retirement

  • Tier 1 and Tier 2 members upon reaching age 60 or older

  • Tier 3 and Tier 4 members upon reaching age 62 or older

  • Tier 5 members upon reaching age 65 or older

tpaf formula pic_edited.jpg

(This is a chart, not a calculator)

Want a better Idea of how your Pension fits with your retirement plan, 

Schedule Your:

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Early Retirement

  • –Available to members who have 25 years or more of pension service credit before reaching age 60 for Tier 1 and Tier 2 members, or before age 62 for Tier 3 and Tier 4 members; and with 30 years or more of pension membership credit before age 65 for Tier 5 members.

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  • –For Tier 1 members who retire before age 55, your allowance is reduced by 3% per year under age 55.

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  • –For Tier 2 members who retire before age 60, your allowance is reduced 1% per year under age 60, so between age 55 and 60, and additional 3% percent per year if retiring under age 55.

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  • –For Tier 3 and Tier 4 members who retire before age 62, your allowance is reduced by 1% per year under age 62 through age 55, and an additional 3% per year under age 55.

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  • –For Tier 5 members who retire before age 65 with at least 30 years of service, your allowance is reduced by 3% per year under age 65.

Retirement Pension Options

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There are 9 pension options to choose from when you are preparing for retirement. Understanding them will help you make an informed choice that fits your personal retirement goal. If you choose an option with a beneficiary (A-D or 1-4) your monthly amount will be less than the max option.

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Maximum Option -

  • Highest monthly benefit

  • No Pension Benefit to a Beneficiary (formula based on tier)

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Options A through D - Percentage to Beneficiary with Pop-Up

  • Option A – 100% to beneficiary with increase to maximum option

  • Option B – 75% to beneficiary with increase to maximum option

  • Option C – 50% to beneficiary with increase to maximum option

  • Option D – 25% to beneficiary with increase to maximum option

Pop-up means if your beneficiary passes away before you, then your monthly benefit will increase to the maximum amount.

 

Option1- Reserve to a Beneficiary (reserve calculated at time of retirement)

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Options 2 - 4

  • Option 2 – 100% to beneficiary with permanent reduction

  • Options 3 – 50% to beneficiary with permanent reduction

  • Options 4 – Choice of Amount to beneficiary with permanent reduction

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Important Note - No matter which pension option you choose there is no cost of living increase. What your benefit is today, is what your benefit will be in 1, 5, 10, 20+ years.

MBOS - Member Benefit Online System
 

All of your important information can be found on the MBOS

  • Date of hire

  • Tier

  • Pension system (TPAF/PERS)

  • # of years active in the system

  • Health insurance

  • Life Insurance (contributory/noncontributory)

  • Estimated retirement amount

  • Purchase Service Credit - is started in the MBOS system

  • and more.... 

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MBOS is also where you will have to apply for your retirement when you are ready.

Health Insurance - NJEA links about your healthcare:

Questions about Your Pension:

To get Clarity about your concerns

The information presented on this  is webpage is not related to, endorsed by nor connected with and not approved by any Government Agency or organization. Although the page is providing information of value to the consumers, the webpage is a solicitation for investment products.

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J. Silvagni

Financial Advisor

Maui Wealth Solutions LLC

Regional Office:

113 Elgin Ave

Westmont, NJ 08108

(609)332-4918

Disclosures:

J. Silvagni is an Investment Adviser Representative

Investment advisory services are offered through Advisor Share Wealth Management (ASWM) doing business as Maui Wealth Solutions LLC., a registered investment advisor. ASWM, Maui Wealth Solutions LLC and A Financial Road Map operate independently of each other. For a comprehensive overview of investment risks, fees, and services, please refer to the ASWM firm brochure (ADV Part 2A), obtainable from your Investment Advisor Representative or by contacting ASWM. The content provided on this website is for informational purposes only and should not be construed as a solicitation or recommendation of any investment strategy. Investments and/or investment strategies carry inherent risks, including the potential loss of principal. There is no guarantee that any investment strategy will achieve its objectives.

​PLEASE NOTE:
The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.

 

 

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