Individual Retirement Account Plan (IRAP)

These are important details regarding this plan.


Employees are eligible to participate in IRAP at the time they are employed for at least 25% of a full-time equivalent position as a faculty member, in an unclassified educational administration position, or as a MnSCU Administrator.

Faculty members and employees in unclassified educational administration positions
Faculty members and employees in unclassified educational administration positions can elect to participate in the Minnesota Teachers' Retirement Association (TRA) within one year of their eligibility for the retirement program. The election to the TRA is irrevocable and applies to all subsequent qualified employment with MnSCU.

MnSCU Administrators
MnSCU Administrators are enrolled in IRAP immediately upon meeting the eligibility requirements, with one exception: MnSCU Administrators who were employed by the State of Minnesota prior to July 1 1995 may be eligible for participation in the State's defined benefit retirement plan.


An employee enrolled in IRAP is required to make contributions to the Plan each active pay period through payroll deduction. Deductions are taken at a rate of 4.5% of gross compensation for all participants. The rates may be changed statutorily.

Gross compensation does not include:

  1. Severance pay or early separation incentive pay;
  2. Amounts paid in lieu of vacation;
  3. Reimbursement amounts; or
  4. Payments that are not a part of regular compensation.
Contributions are deducted from each paycheck on a pretax basis and deposited in the Plan. The contributions are subject to FICA and Medicare tax so participants' future Social Security benefits are not reduced by participation in the Plan.


Participants who are currently employed and have employee contributions deducted from their pay receive matching contributions from their employer. A matching contribution equal to 6% of the employee's gross compensation is made to IRAP.


"Vesting" refers to an employee's right, usually earned over time, to receive some retirement benefits regardless of whether or not they remain with the employer.

Your contribution to this account will be 100% vested immediately.


Your employer offers you a variety of investment choices from an array of asset classes. You can see a list of the investment choices under this plan on the Investment Choices page.


Expenses vary from investment to investment. To learn about expenses associated with an investment, see a list of the investment choices under this plan on the Investment Choices page, and read the Fact Sheet or the prospectus for that investment.


You have a variety of options1 when it’s time to take income from this plan:

  • Interest Only

    You can receive the current interest earned on your TIAA Traditional Account in monthly payments. Your principal remains intact while you receive the interest.

    • These payments are generally available to individuals between ages 55 and 70½ when minimum distributions are required.
  • Lifetime Retirement Income

    • One-life annuity — provides income for as long as you live.
    • Two-life annuity — provides lifetime income for you and an annuity partner (your spouse or someone else you name) for as long as either of you live.
    • One- or two-life annuity with guaranteed period — guarantees income for up to 20 years, as long as the period you choose does not exceed your life expectancy. It ensures that income continues to go to your beneficiaries for the remainder of the guaranteed period if you (one-life annuity) or both you and your annuity partner (two-life annuity) die before the end of that period.
  • Lump Sum

    You can withdraw all or part of your account in a single cash payment, depending on your plan rules and the terms of your contracts.

    • Your right to a lump-sum distribution from your TIAA Traditional Account may be restricted to taking 10 annual payments under those terms.
  • Minimum Distribution Option

    Generally, you must begin taking minimum withdrawals from your account by April 1 following the year in which you turn age 70½ or retire, whichever is later.

    • This can help you defer the minimum required distribution while keeping you in compliance with federal regulations.
  • Retirement Transition Benefit

    If your contract allows, you can withdraw, in cash, up to 10% of your accumulation at the beginning of a conversion to lifetime annuity income. The amount you withdraw will reduce your lifetime annuity income accordingly.
  • Single-Sum Death Benefit

     A set amount your beneficiary(ies) will receive from your retirement account if you die before taking income.
  • Small-Sum Distribution

    If your plan doesn't otherwise allow cash distributions, upon separation from service you can withdraw your entire retirement savings if your TIAA Traditional Account value does not exceed $2,000 and your overall account balance is below a limit set by your employer's plan (typically $4,000). If your plan does allow cash distributions, upon separation you may be able to withdraw your TIAA Traditional accumulation if the value does not exceed $2,000. Talk to your benefits office for details.
  • Systematic Withdrawals

    If your plan allows, you can choose to receive regular income payments (minimum $100) on a semimonthly, monthly, quarterly, semiannual or annual basis. You can increase, decrease or suspend the payments at any time.

    • These withdrawals are not available from TIAA Traditional Account balances.
This plan is designed to provide you with income throughout your retirement. Leaving money in your account may allow the funds to grow on a tax-deferred basis.

This plan allows you to receive a cash withdrawal. This may be restricted by the terms of your TIAA-CREF contracts. Taxes and penalties may apply.


Retirement plan contributions are usually made with before-tax dollars so Federal income taxes are deferred until you begin taking withdrawals later on.

No taxes are due on pre-tax contributions and earnings made until the money is withdrawn, but because these plans are intended primarily for retirement, you can generally withdraw funds only after termination of employment or age 59 ½ (subject to plan rules). If you withdraw funds before age 59 ½, they may be subject to an additional 10% early-withdrawal penalty.

For additional information and guidance, contact your tax advisor.


Loans are available from a minimum of $1,000 to a maximum of $50,000 from each employer. How much you can borrow depends on the amount you currently have in the plan and whether you have other outstanding loans. If you have accumulations in other employers' plans, you may be able to transfer or roll them over to this plan to increase your maximum loan amount if this plan accepts rollovers.

1 The availability of certain distributions may depend on the type of contract underlying your plan. Also, if you're married, your right to choose an option may be subject to your spouse's right to survivor benefits. Talk to your benefits office for details.