Hi everyone, Kevin Jr. here.
I work with a lot of educators. You all are excellent at grading papers, assessing progress, and spotting when a student is falling behind. But when was the last time you graded your own retirement plan?
For most New Jersey teachers, the pension—the Teachers’ Pension and Annuity Fund (TPAF)—is the "A+" asset in their portfolio. It’s the reason you endure the grading, the conferences, and the chaos. But to feel genuinely comfortable about a benefit you might not touch for another 10 or 20 years, you need to move from "hoping it’s there" to "verifying it’s healthy."
Because you are in a defined benefit plan, your security relies on the financial health of the State’s pension fund, not just your local school board’s budget.
Here is a step-by-step guide to verifying your TPAF safety so you can sleep at night.
1. Understand the "Segregation of Assets" (State vs. School)
The first layer of comfort is understanding who actually pays you.
● The Comfort: Your pension check does not come from your local Board of Education or their property tax revenue.
● The Reality: In New Jersey, the State acts as the employer for pension purposes. Your contributions go into the TPAF trust, which is separate from the state's general operating fund. This separation is crucial. Even if your specific school district faced financial hardship, your pension is pooled at the state level. It is locked away specifically for you and your colleagues across the state.
2. Check the "Report Card" (The State’s Contribution)
If you worked in the corporate world, I’d tell you to read an "Annual Funding Notice." For NJ teachers, the equivalent "report card" is the State Budget.
For years, New Jersey had a bad habit of skipping pension payments. However, the news for 2026 is actually quite good.
● What to look for: The "Actuarially Determined Contribution" (ADC). This is the fancy term for the full bill the actuaries say the state must pay to keep the plan healthy. ● The Current Grade: As of the FY2026 budget proposals, New Jersey has continued a streak of making the full pension payment.
● Action Step: You don’t need to read the 500-page financial report. Just keep an ear to the ground during budget season (typically spring). If the headlines say "Full Pension Payment Made," that is a passing grade. If they say "Pension Holiday," that is a fail. Right now? We are passing.
3. The "Federal Insurance" Myth (And What You Have Instead)
This is the most common misconception I hear from teachers.
● The Myth: "If the state runs out of money, the federal government steps in."
● The Reality: This is false. The Pension Benefit Guaranty Corporation (PBGC)—the federal insurance I talk about with my corporate clients—does not cover public teachers.
● The Real Safety Net: Your "insurance" is the New Jersey Constitution. A few years back, voters approved an amendment that requires the state to make those full pension payments I mentioned above. Your security isn't a federal agency; it is the state's power to tax and a constitutional mandate to pay its bills. It is a strong promise, but it is different from federal insurance.
4. Verify Your Personal Data (The "Ghost" Audit)
Sometimes the TPAF fund is healthy, but your records are wrong. If the state thinks you started working in 2018 instead of 2015, your check will be permanently smaller. We call this a "ghost" error—it haunts you later if you don't find it now.
● Trust: Assuming your district HR entered your hire date and hours correctly every single year.
● Verify: Log in to MBOS (Member Benefits Online System).
● The Checklist:
○ [ ] Does the "Years of Service" match your actual time in the classroom? ○ [ ] Did your transfer from another district carry over correctly?
○ [ ] If you took a maternity leave or break in service, was it recorded accurately? (Note: A new law in late 2025 extended the protection for your "Tier" status during breaks in service up to 10 years—make sure your account reflects your original Tier!).
5. Build a "Sidecar" for Peace of Mind
The ultimate comfort comes from not being 100% dependent on one source.
● The Strategy: Treat your TPAF pension as your "Bond" allocation. It is safe, steady, guaranteed income.
● The Hedge: Use your 403(b) or 457(b) to invest differently. Since your pension is conservative, your 403(b) can potentially afford to be the growth engine (depending on your risk tolerance).
● Why? If inflation runs high (common) and your pension COLA (Cost of Living Adjustment) remains suspended (which has been the case for many years), your pension buys less bread and milk over time. Your 403(b) "sidecar" is there to pick up the slack.
Summary Checklist for Comfort
● [ ] Check the News: Did the state make the full ADC payment this year? (Spoiler: For 2026, it looks good).
● [ ] Know the Backer: Remember, you rely on NJ Taxpayers, not the PBGC. ● [ ] Audit MBOS: Log in this week. Verify your service years. Fix errors now, not when you are 64.
Next Step for You:
I know MBOS can be clunky to navigate. If you pull your statement and see a "Tier" or "Service Year" discrepancy that doesn't look right—especially if you have moved districts recently—I can help you interpret what you are looking at. Would you like me to walk through your benefit statement with you to ensure your records match your career history?
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