Medford Education Association
Pension and Benefit Information

Changes in TPAF/PERS under Governor Corzine
 

TPAF Membership Tiers

The passage of Chapter 103, P.L. 2007, and Chapter 89, P.L. 2008, changed the enrollment and

retirement criteria for TPAF members enrolled as of certain dates. These differences in TPAF membership

— referred to as “membership tiers” — are defined as follows:

• Membership Tier 1 — Members who were enrolled prior to July 1, 2007.

• Membership Tier 2 — Members who were eligible to enroll on or after July 1, 2007 and

prior to November 2, 2008 — pursuant to the provisions of Chapter 103, P.L. 2007.

• Membership Tier 3 — Members eligible to enroll on or after November 2, 2008 — pursuant

to the provisions of Chapter 89, P.L. 2008.

Changes in Retirement Age for Membership

Chapter 89 raised the Service, Deferred, and Early Retirement age requirements for

members of Tier 3. Service, Deferred, and Early Retirement age provisions for the different membership
tiers of the PERS and TPAF are as follows:

• Tier 1 Membership: The retirement age is 60 for a Service or Deferred Retirement.
For an Early Retirement, a member must have at least 25 years of service credit;  however, if a member
is under the age of 55 at the time of retirement, the retirement allowance is reduced
3 percent per year (1/4 of 1 percent per month) for each year the member is under age 55.

• Tier 2 Membership: The retirement age is 60 for a Service or Deferred Retirement. For an
Early Retirement a member must have at least 25 years of service credit; however, if a member is
under the age of 60 at the time of retirement, the retirement allowance is reduced
1 percent per year (1/12 of 1 percent per month) for each year the member is
under age 60 but over age 55, and 3 percent per year (1/4 of 1 percent per month)
for each year the member is under age 55.

• Tier 3 Membership: The retirement age is 62 for a Service or Deferred Retirement.
For an Early Retirement a member must have at least 25 years of service credit;
however, if a member is under the age of 62 at the time of

retirement, the retirement allowance is reduced 1 percent per year (1/12 of 1

percent per month) for each year the member is under age 62 but over age

55, and 3 percent per year (1/4 of 1 percent per month) for each year the

member is under age 55.

Member Contribution Rate

The full rate of TPAF employee contributions is 5.5 percent of base salary. (Up from 5%)
The full rate of contribution is established by the statutes governing the TPAF.

Pensionable Salary — Your contribution rate is applied to your base salary
to determine your pension deductions. Base salary does not include overtime,

bonuses, or money you receive as an adjustment before retirement. Nor does it include additional

salary for performing temporary or extracurricular duties beyond the regular school day or
the regular school year. Your pension contributions are deducted from your salary each payday
and reported to the TPAF by your employer.

• The TPAF contribution rate for Tier 1 members is applied to the full pensionable salary

(up to the “federal pensionable maximum” described below).

• The TPAF contribution rate for Tier 2 and Tier 3 members is applied to the pensionable

salary up to a compensation limit based on the annual maximum wage for Social Security

deductions ($106,800 for 2009). Tier 2 and Tier 3 members who earn in excess of the

annual compensation limit will be enrolled in the Defined Contribution Retirement Program

(DCRP) in addition to the TPAF. A contribution of 5.5 percent of the salary in excess of

the limit (and three percent from the employer) will be forwarded to a DCRP account.