TFFR Member Online Services is Now Availablelibrary.nd.gov/.../RetirementToday/201802.pdf · 2018-04-10 · spell I could cast over your personal data to ensure it would be kept safe.

Retirement Today | February 2018 | www.nd.gov/rio/TFFR

todayRETIREMENTTFFR Member Online Services is Now Available

TFFR Board of TrusteesMike Gessner, President, Active Trustee

Toni Gumeringer, Active TrusteeRob Lech, Active Trustee

Mike Burton, Retired TrusteeMel Olson, Retired Trustee

Kirsten Baesler, State SuperintendentKelly Schmidt, State Treasurer

RIO Administrative OfficeDavid Hunter, Executive Director/CIO

Fay Kopp, Deputy Executive Director/ Chief Retirement Officer

Darren Schulz, Deputy CIO

Shelly Schumacher, Editor

ND Retirement & Investment Office3442 East Century Ave, P.O. Box 7100

Bismarck, ND 58507-7100701-328-9885

Toll free: 1-800-952-2970www.nd.gov/rio/TFFR

Articles are for general information only and are not intended to provide specific advice or recommendation. Other forms of this newsletter are available upon request.

FEBRUARY 2018

The North Dakota Teachers’ Fund for Retirement (TFFR) is very happy to announce a new secure Internet application for TFFR members.

Before you can access TFFR Member Online Services, you must have or create a Personal ND Login ID and password.

After you enter your North Dakota Login ID and password, you will be asked to supply additional personal information to validate your identity. This information will be entered the first

time you access TFFR Member Online Services. Future visits to TFFR Member Online will only require you to enter your Personal ND Login and password.

Non-retired TFFR members can access the following account information:• MemberAccountValue• AnnualStatement• SalaryandServiceDetail

by Fiscal Year• RefundAccountDetails• PurchaseofServiceDetails

Retired TFFR members and beneficiaries in payment can access the following:• RetirementAccountDetails• PensionPaymentDetails• PensionDeductionDetails

Accessing Your

Account

• Gotowww.nd.gov/rio• SelectTFFRlink• SelectTFFROnlineApplicationLink• ReviewTFFRMemberOnlineInstructions• SelectTFFRMemberLogin

Sign up for TFFR Member Online today!

Retirement Today | February 2018 | www.nd.gov/rio/TFFR

Protego Maxima! Fay Kopp

NDTFFR Chief Retirement OfficerNDRIO Deputy Executive Director

Memo to Members

Over the years, I have written quite a bit about the importance of protecting your long term financial security under the TFFR plan. It is a responsibility that the TFFR Board and staff take very seriously.

But in today’s world, protecting your financial security also involves protecting your personal data (i.e. Social Security number, date of birth, address, and other personally identifiable information) which TFFR needs in order to accurately administer your retirement plan and maintain tax reporting records.

As TFFR rolls out TFFR Member Online in February 2018 (see front page article), our commitment to protecting your personal information is even stronger.

ND state standards and industry best practices require that we have multiple layers of data security in place in an effort to keep member data safe from outside hackers. Some of the safety steps we take include storing your data behind the state’s firewall and encrypting the data when it is being transmitted across the Internet. The State regularly measures and evaluates the security of state systems so you can be confident when you connect with TFFR on the web.

TFFR utilizes state security standards to make sure that only you have access to your personal TFFR information. Online, that means logging in with your user ID and password, among other security measures, before accessing your account. It is of the utmost importance to select a unique password, keep it safe, do not share it with others, and change your password periodically. As you monitor your account, please contact TFFR if you notice anything suspicious.

We are also taking steps to protect your information over the phone. When you call our office, TFFR staff will ask questions to verify your identity before

discussing any personal information with you. While we understand it can be frustrating to answer several questions before getting the information you need, TFFR takes very seriously the protection of your identity and we are dedicated to safeguarding your information. We greatly appreciate your patience and cooperation.

Sometimes I wish there was a magical spell I could cast over your personal data to ensure it would be kept safe. But I’m no Albus Dumbledore from the Harry Potter book series, and unfortunately his protective enchantment, “Protego Maxima!” won’t work to protect your personal information from harm. (In case you are wondering, “Protego Maxima!” was one of the many magical charms cast by Headmaster Dumbledore and others to shield and protect Hogwarts Castle in various Harry Potter books by J.K. Rowling.) TFFR and the State of North Dakota take great precautions to shield and protect your personal retirement account information. It’s important to you, so it’s important to us. Please contact me if you have any concerns.

TFFR Receives AwardThe ND Teachers’ Fund for Retirement has received the 2017 Public Pension Coordinating Council Recognition Award. This award is designed to recognize and commend public employee retirement systems that meet professional standards for pension plan administration.

Public Pension Coordinating Council

Recognition Award for Administration

2017

Presented to

North Dakota Teachers' Fund for Retirement

In recognition of meeting professional standards for plan administration as

set forth in the Public Pension Standards.

Presented by the Public Pension Coordinating Council, a confederation of

National Association of State Retirement Administrators (NASRA) National Conference on Public Employee Retirement Systems (NCPERS)

National Council on Teacher Retirement (NCTR)

Alan H. Winkle

Program Administrator

P CP C

...protecting your financial security also involves protecting your personal data.

Retirement Today | February 2018 | www.nd.gov/rio/TFFR

2017 Valuation Shows Funding Improvement

The NDTFFR Board of Trustees received the annual pension valuation results from its actuarial consultant, Segal Consulting. The 2017 actuarial valuation report provides a financial “snapshot” status of the NDTFFR plan as of July 1, 2017. The measurement of the plan’s liabilities and funded status are of vital importance to the TFFR Board of Trustees and Management.

For funding purposes, the annual valuation shows TFFR’s actuarial accrued liability (AAL) increased from $3.59 billion to $3.73 billion. The unfunded portion of the actuarial accrued liability (UAAL) decreased from $1.36 billion to $1.35 billion. The actuarial value of assets (AVA),whichaveragesinvestmentgainsandlossesoverfive years, increased from $2.23 billion to $2.38 billion. TFFR’s funded ratio (percent of actuarial assets on hand compared to plan liabilities) increased from 62.1% to 63.7% in 2017, primarily due to the actuarial gain on assets and demographic experience emerging more favorably than assumed. This means TFFR currently has nearly 64 cents for every one dollar it needs to pay present and future benefits earned by members.

For accounting and financial reporting purposes underGovernmentalAccountingStandardsBoard(GASB)requirements,TFFR’sfundedratioiscalculated based on the market value of assets which increased from $2.12 billion to $2.36 billion. On this basis, the funded ratio increased from 59.2% to 63.2% in 2017.

TFFR’s funding level is projected to gradually improve over the long term. As you can see from the chart below, if TFFR earns 7.75% investment returns in the future, the plan should be fully funded in about 30 years if all actuarial assumptions are met. Member and employer contribution rates will be reduced to 7.75% each when 100% funding is achieved. If long term returns are greater than 7.75%, funding progress will be reflected sooner. However, if returns are less than 7.75%, funding improvement will take longer.

A long term focus is important in financing pensions. Legislative changes approved in 2011 increased member and employer contribution rates and modified the benefit provisions for non-grandfathered and new members. Because of this, TFFR’s long term funding outlook is positive, and benefits are secure for past, present, and future ND educators.

To ensure TFFR’s sustainability going forward, however, we must continue to recognize and adapt to changes that impact the plan now and in the future – issues like life expectancies that are increasing and financial markets that remain challenging and uncertain. In recognition of these issues, the Board took steps a few years ago and reduced the investment return assumption from 8.0% to 7.75% and adopted new mortality tables to reflect that people are living longer. Both of these changes increased the time TFFR will need to become fully funded.

The complete 2017 actuarial valuation report is available on the TFFR website or by request to our office.

Projected TFFR Funded Ratios (AVA Basis)

19870%

64%ofbenefitsarecurrently prefunded.

Projected 7.75% return in each future year

Projected 8.75% return in each future year

Projected 6.75% return in each future year

Actual

Actual Projected

20%

40%

60%

80%

120%

100%

140%

1992 1997 20072002 2012 2017 2022 2027 2032 2037 2042 2047

Retirement Today | February 2018 | www.nd.gov/rio/TFFR

TFFR Net Investment Performance 12.9%14%

12%

10%

8%

6%

4%

2%

0%

5.4%

9.2%

6.2%7.8%

Years Ended June 30, 2017

3.8%

Market Value of TFFR AssetsYears Ended June 30, 2017

24002200200018001600140012001000

800600400200

0

$2.36 Billion

1997 2001 2005 2009 2013 2017

TFFR Funded Ratio – Market vs ActuarialYear Ended June 30

Actuarial Market

0%

20%

40%30%

10%

60%

80%

90%

70%

50%

100%110%

1997 2001 2005 2009 2013 2017

63%

64%

2017 Annual Report Summary NDRIO’s annual Comprehensive Annual Financial Report (CAFR) has been published for fiscal year July 1, 2016 – June 30, 2017. The report provides a detailed look at investment, financial, actuarial, and statistical information. The 2017 CAFR, actuarial report, and audit report are posted on the TFFR website or by request from our office.

Retirement Today | February 2018 | www.nd.gov/rio/TFFR

Retired MembersAvg Annual Pension . . . . . . $23,400 Avg Current Age . . . . . . . . . Age 72 Avg Service . . . . . . . . . . . . . 27 yrs Oldest Retiree . . . . . . . . . . . Age 108Most Service . . . . . . . . . . . . 57.5 yrs

Membership Statistics – June 30, 2017Tier Membership Active Members

Avg Annual Salary . . . . . . . . $59,780Avg Age . . . . . . . . . . . . . . . . Age 42Avg Service . . . . . . . . . . . . . 12 yrsOldest Active Member . . . . . Age 81Most Service . . . . . . . . . . . . 50 yrs

2,221

5,416

3,237

TFFR Fast FactsLooking for a simple summary of TFFR statistics and plan benefits?

ND TFFR Fast Facts is your answer. The document is available on the TFFR website.

Member Stats Actives Retirees

Avg. Annual Salary/Benefit $59,780 $23,400

Avg. Service Credit 11.9 yrs 27.4 yrs

Avg. Current Age 42.1 yrs 71.7 yrs

MEMBER/EMPLOYER SATISFACTION: 3 .8 (4 .0 Sca le )

ND Teachers’ Fund for Retirement, 3442 E. Century Avenue, P.O. Box 7100, Bismarck, ND 58507

1-800-952-2970 or 701-328-9885 | Email: [email protected] | Website: www.nd.gov/rio/tffr

Investment Returns

1 year 12.9%

5 year 9.2%

30 year 7. 8%

10,874 ACTIVE MEMBERS

8,501 RETIRED MEMBERS

215 EMPLOYERS

MEMBERS

TFFR assets $2.4 bil l ion

To positively impact the

state’s economy,

was distributed to

retirees in FY 2017.

64% of BENEFITS are PREFUNDED

Mar

ket v

alue

of benefitsare paid

to ND residents.

84%

TFFR Funded Ratio (AVA)

19870%

Projected 7.75% return

in each future year.

TFFR’s long-term funding outlook

is positive, and benefits are

secure for past, present, and

future ND educators.

Actual

20%

40%

60%

80%

100%

120%

1992 1997 20072002 2012 2017 2022 2027 2032 2037 2042 2047

ofThe ND Teachers’ Fund

for Retirement plan

(ND TFFR) provides ND

educators with a financial

foundation for the future

that includes a secure and

stable retirement. This is

possible due to TFFR’s

plan design, professional

plan management, strong

investment performance,

and outstanding customer

service.

FY End 6/30/2017

ND TFFR Fast Facts

$19 1 million

58 %

1 %

23%

WE SERVE

FIXED INCOME

18%

EQUITIES

CASH

REALASSETS

FundingSources

(30 Years)

56% Investment

Income

22% Member

Contributions

22% Employer

Contributions

ASSET ALLOCATION

Total Active Members: 10,874

Statement of Net Position as of June 30, 2017in millions $Assets

Equities $1,275.6Fixed Income 521.9Real Assets 407.5Private Equity 77.0Invested Cash 27.2Receivables 35.3Other Assets 31.9 Total Assets $2,376.5Deferred Outflows Related to Pensions $ .4

LiabilitiesAccounts Payable $ 1.8Accrued Expenses 1.7Other Liabilities 12.8 Total Liabilities $ 16.3Deferred Inflows Related to Pensions $ .1

Net Position on June 30, 2017 $2,360.5

Changes in Net Position During Fiscal Year 2017in millions $

Cash PositionNet Position on June 30, 2016 $ 2,124.3

-Additions-Member Contributions $ 79.3 Employer Contributions 86.1Other Additions 2.8Investment Income (Loss) 266.7 Total Additions $ 434.8

-Deductions-Benefits Paid $ 191.1Refunds 5.4Administrative Expenses 2.2 Total Deductions $ 198.7

Total Change in Net Position $ 236.2

Net Position on June 30, 2017 $ 2,360.5Columns may not foot due to rounding.

Retirement Today | February 2018 | www.nd.gov/rio/TFFR

PRESORTED STANDARD

U.S.POSTAGEPAID

PERMIT NO. 325BISMARCK, ND

58501

P.O. BOX 7100BISMARCK, ND 58507-7100

2018 Tax Withholding Changes in Effect

Although tax law changes were effective January 1, 2018, the 2017 tax withholding tables were used for January 1, 2018 TFFR payments since the IRS had not yet issued new tables. The IRS has now provided updated 2018 tax withholding tables. These new tables were implemented by TFFR for February 1, 2018 retiree benefit payments. Consequently, many TFFR benefit recipients may have noticed a reduction in their taxes, and increase in their net benefit amount, in their February 1, 2018 payment. A TFFR Benefit Change Notice was sent informing you of any changes in your monthly benefit, or confirming your current monthly benefit amount.

The 2018 federal tax withholding tables reflect the increase in the standard deduction, repeal of personal exemptions, and changes in tax rates and brackets. The updated tables were designed to work with the existing W-4 form you have already filed with TFFR, so you are not required to do anything at this time unless you wish to have more or less withheld from your monthly TFFR benefit payment.

To help people determine their tax withholding, the IRS is revising the Tax Withholding Calculator on IRS.gov. Taxpayers are encouraged to use the calculator to adjust their withholding once it is released. The IRS is also working

on revising the Form W-4. The updated Tax Withholding Calculator and new Form W-4 can be used by those taxpayers who wish to update their withholding in response to the new law or changes in their personal circumstances.

As you know, pensioners have the option of having both federal and North Dakota state income tax withheld from your TFFR retirement benefit. You may change your tax withholding election at any time. Since your TFFR benefits are subject to federal and state taxes, you should periodically review your tax withholding election. If your tax withholding is not adequate, you may have to pay estimated taxes during the year or a tax penalty at year end.

Your current withholding election will remain in effect until you file a new tax withholding form with TFFR. If you wish to adjust your tax withholding, you may obtain a W-4P tax withholding form by contacting the TFFR office, or downloading a form from the TFFR website. If you believe your tax withholding is sufficient, no action is necessary.

All TFFR benefit recipients are encouraged to review your individual tax situation with a qualified tax advisor, particularly this year, as the new tax law takes effect.

The Tax Reform bill (Tax Cuts and Jobs Act, H.R.1) was approved by Congress and signed into law on December 22, 2017. TFFR benefit recipients who have federal tax withheld may receive a higher net benefit payment than in the past because less tax may be withheld.