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.
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
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Tier 2 – Members enrolled on or after July 1, 2007 and prior to November 2, 2008
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Tier 3 – Members enrolled on or after November 2, 2008 and on or before May 21, 2010
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Tier 4 – Members enrolled after May 21, 2010 and prior to June 28, 2011
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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
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Tier 1 and Tier 2 members upon reaching age 60 or older
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Tier 3 and Tier 4 members upon reaching age 62 or older
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Tier 5 members upon reaching age 65 or older
(This is a chart, not a calculator)
Want a better Idea of your Pension Calculation,
Schedule Your:
Early Retirement
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–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
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.
Maximum Option -
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Highest monthly benefit
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No Pension Benefit to a Beneficiary (formula based on tier)
Options A through D - Percentage to Beneficiary with Pop-Up
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Option A – 100% to beneficiary with increase to maximum option
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Option B – 75% to beneficiary with increase to maximum option
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Option C – 50% to beneficiary with increase to maximum option
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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)
Options 2 - 4
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Option 2 – 100% to beneficiary with permanent reduction
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Options 3 – 50% to beneficiary with permanent reduction
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Options 4 – Choice of Amount to beneficiary with permanent reduction
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
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Date of hire
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Tier
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Pension system (TPAF/PERS)
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# of years active in the system
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Health insurance
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Life Insurance (contributory/noncontributory)
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Estimated retirement amount
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Purchase Service Credit - is started in the MBOS system
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and more....
MBOS is also where you will have to apply for your retirement when you are ready.
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.