1. The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator. MnSCU Retirement Plans Basic Training for Campus HR Administrators

2. Slide 2 Planned Modules: Module 1: Retirement Plan Concepts Module 2: Eligibility for Primary Plans Module 3: Reporting in SCUPPS Module 4: SRP: Eligibility and Coding Module 5: Forms Completion & Processing Module 6: Phased Retirement Programs Module 7: Voluntary Retirement Programs Module 8: Retirement Plan Distributions

3. Slide 3 Module 1: Retirement Plan Concepts Acronyms Retirement Plan Terminology Overview of MnSCU Plans Differences Between Defined Benefit Plans and Defined Contribution Plans Resources

4. Slide 4 The “Alphabet Soup” of Acronyms: TRA: Teachers Retirement Association MSRS: Minnesota State Retirement System IRAP: Individual Retirement Account Plan SRP: Supplemental Retirement Plan PERA: Public Employees Retirement Association

5. Slide 5 Acronyms continued…. TSA Plan: Tax-Sheltered Annuity Plan (403(b)) MNDCP: Minnesota Deferred Compensation Plan (457) TIAA-CREF: Teachers Insurance Annuity Association-College Retirement Equities Fund (401(a)) DB Plans: Defined Benefit Plans DC Plans: Defined Contribution Plans

6. Slide 6 Acronyms cont’d A comprehensive list of common acronyms can be found on the MnSCU Retirement Resources web-site

7. Slide 7 Retirement Plan Terminology Term:Definition: Vesting:The point at which the employee is entitled to receive a benefit at retirement Service credit:FTE/time worked during a fiscal year that is used to calculate a retirement benefit from a Defined Benefit (DB) Plan “Rule of 90” (available only to those employed before 7/1/89): The point at which full retirement benefits become available for those whose age + years of service totals 90 under a Defined Benefit (DB) Plan

8. Slide 8 Retirement Plan Terminology (cont’d.) Term:Definition: Annuity:A guaranteed monthly payment based on accumulations in a DC plan, or based on a formula outlined in statute for a DB plan Combined Service Annuity:An annuity that is based on service in more than one State Defined Benefit (DB) plan “High 5”:The average fiscal year salary which is calculated over the 5 highest consecutive years of service credit in a Defined Benefit (DB) Plan

9. Slide 9 Retirement Plan Overview: Mandatory vs. Voluntary Plans

10. Slide 10 Mandatory Plans… Minnesota State Retirement System (MSRS) Teachers Retirement Association (TRA) Individual Retirement Account Plan (IRAP) Supplemental Retirement Plan (SRP)

11. Slide 11 Voluntary Plans… Tax-Sheltered Annuity (TSA), or 403(b) Plan –MnSCU is the Plan Sponsor –Administered by TIAA-CREF Deferred Compensation, or 457 Plan –The State of Minnesota is the Plan Sponsor –Administered by MSRS

12. Slide 12 MnSCU Retirement Plans Managed by TIAA-CREF

13. Slide 13 Defined Benefit (DB) v. Defined Contribution (DC) Plans Feature:DB Plans (TRA & MSRS): DC Plans (IRAP, SRP and voluntary plans): Benefit:Based on a formula of years of service and salary (“high 5”) Based on account value. Who invests contributions: State Board of Investment (SBI) Employee directs the investment Vesting:3 FTE years of serviceImmediate Portability:Only within public employment in the State of Minnesota Fully portable— stays with the employee regardless of future employment

14. Slide 14 Defined Benefit (DB) v. Defined Contribution (DC) Plans cont’d… Feature:DB Plans (TRA & MSRS):DC Plans (IRAP, SRP and voluntary plans): Risk:Lose or change jobs mid- career Employee bears investment risk Payout Options:Life annuities, lump sum + 6% interest, or rollover to a qualified plan Various Early Retirement: Reduced benefitsLower account accumulation In general:Best for those with long- term employment who are risk averse Portability and investment control

15. Slide 15 Resources…. IRAP/SRP Retirement Administration Manual MnSCU Retirement website TRA and MSRS websites TIAA-CREF website

16. Slide 16 Module 1: Retirement Plan Concepts Questions?