The one date that decides it
Tier I
First became a member of TRA, or of a pension fund listed in Minn. Stat. 356.30, subd. 3, before July 1, 1989.
Your benefit is figured under both the Tier I (Step) and Tier II (Level) formulas and you automatically get the greater. No election is necessary.
TRA Handbook (2022), p. 15, Tier I (employed before July 1, 1989)Tier II
First became a member of TRA after June 30, 1989.
Your benefit is figured under the Tier II (Level) formula only. The Rule of 90 is not available.
TRA Handbook (2022), p. 16, Tier II (employed after June 30, 1989)What Tier I gets
- Two formulas, the higher one paid. The Step formula pays 1.2% (1.4% after June 30, 2006) for the first ten years and 1.7% (1.9%) after. The Level formula pays 1.7% (1.9%) for every year. TRA Handbook (2022), p. 15, Tier I (employed before July 1, 1989)
- The Rule of 90. If your attained age plus credited allowable service totals 90 or more, you get the full Step benefit without any early-retirement reduction. Not available under Tier II. Minn. Stat. 354.44, subd. 6(c)(3) (2026)
- A smaller early cut on the Step formula: 0.25% a month under 65, or under 62 with 30 years. Minn. Stat. 354.44, subd. 6(c)(2) (2026)
- Retirement at any age with 30 years. TRA Handbook (2022), p. 14, Retirement eligibility
Why the Step formula usually wins for early retirees
The Level formula pays more per year, but its early cut is much bigger. Our illustration ($80,000 high-five, 10 years before July 2006):
- Age 59 with 30 years: Step pays $3,033.33 (9% cut); Level pays $2,126.67 (42% cut). You'd get the Step amount.
- Age 60 with 30 years: the Rule of 90 applies, so Step pays $3,333.33 with no cut. Level, even with 60-and-30, pays $3,188.01.
At 65, with no cut on either, the Level formula pays more because every year earns the higher rate.
The Tier I formula pays less for your first ten years. We assume your first ten years are your earliest ones.
Chronological order; the service-before-July-2006 figure is yours to enter (default: assumes continuous service up to retirement).
Minn. Stat. 354.44, subd. 6(b) (2026)A few long-time members may get a slightly higher benefit from a contribution-based formula we can't compute.
We show Step and Level only.
ACFR FY2025, p. 122, Plan StatementThe details
- TRA has two tiers. If you first became a TRA member before July 1, 1989 you're Tier I; if you first joined after June 30, 1989 you're Tier II.TRA Handbook (2022), pp. 15-16, Tier I and Tier II benefit calculations
- Tier I members get their benefit figured both ways, under the Tier I (Step) formula and the Tier II (Level) formula, and automatically receive whichever is higher. No election is needed.TRA Handbook (2022), p. 15, Tier I (employed before July 1, 1989)
- Tier II members are figured under the Level formula only, and the Rule of 90 doesn't apply to them.TRA Handbook (2022), p. 16, Tier II (employed after June 30, 1989)
- Membership before July 1, 1989 in another Minnesota fund listed in the combined-service law also counts for Tier I.Minn. Stat. 354.44, subd. 6(b) (2026)
- Members contribute 8.0% of pay and employers 9.81% (from July 1, 2025). Minneapolis schools pay an extra 3.64%.minnesotatra.org, New to TRA, Current and historical plan rates
Ready to see your numbers? Use the calculator or read how the formulas work.
Questions
What's the difference between Tier I and Tier II?
Tier I members first joined before July 1, 1989. They get the higher of two formulas, Step and Level, and can use the Rule of 90. Tier II members joined later and get the Level formula only.
Do I have to choose a formula?
No. For Tier I, TRA figures both and pays the greater automatically.
Does service in another Minnesota plan count for Tier I?
Membership before July 1, 1989 in another Minnesota fund listed in the combined-service law also counts.
Source: TRA Handbook of Benefits and Services, April 2022, with 2023-2026 law changes from Minnesota Statutes 2026 and TRA's 2025-2026 publications, TRA Handbook (April 2022) pp. 15, 15-16, 16. Also: ACFR FY2025 p. 121; minnesotatra.org; Minn. Stat. § 354.44 (2026). Last reviewed .