North Dakota Education AssociationMembership Doesn't Cost—It Pays!!

www.ndea.org 1-800-369-NDEA 701-223-0450

Why would I want to be part of the NDEA Dues Credit Trust Program?

NDEA Dues Credit Trust

• It is a unique investment program for members only.

• Members earn interest on their salary during the school year.*

• Personal budgeting is made easier through the “Summer Check Program”.

• Association dues are paid in advance.

*Not the school district

Together We Earn More!

• During 2009-2010 over $2,937,494 was invested for NDEA members.

• The effective rate of return for 2009-10 was 2.81%.

• The average member invested $639.15 per month and earned $82.70 in interest.

• While the interest rate for the future years is unknown at this time, it will be higher than the passbook savings rate at the Bank of North Dakota.

Dues Credit Trust is Flexible!

• Investments are withdrawn electronically from the member’s bank account on the first business day of the month; summer checks are deposited electronically on the 20th of the month.

• Three Summer “Check” Plans– 8 deposits (Oct. to May); 4 checks (May to August)

– 9 deposits (Oct. to June); 3 checks (June to August)

– 10 deposits (Oct. to July); 2 checks (July & August)

Dues Credit Trust is Flexible!

• Special Investor Program

– Any number of deposits by check or automatic withdrawal from October to August

– One summer check on August 20

• In the event of an emergency, the member may terminate participation, but interest will be paid at the Bank of North Dakota Passbook Savings rate.

Calculating the investment amountNine deposits -- three summer checks

• Determine the annual net payroll amount

• Your per-check take home pay times number of pay checks per year = annual take home pay.

Example: The amount of your pay check after taxes and any deductions is $2,000. You receive 12 pay checks per year: $2,000 x 12 = $24,000

Calculating the investment amountNine deposits -- three summer checks

• Calculate the nine-month take home pay

• Determine the amount of the monthly deposit

• Divide the annual net salary by 9.Example:$24,000/9 = $2,666.67

• Calculate the difference between 9-month and 12-month take home pay.

Example:$2,666.67 - $2,000.00 = $666.67

• Multiply the monthly deposit by 9, then divide by 3.

Example: $666.67 x 9 = $6,000.03 / 3 = $2,000.01

The same amount as the 12 month pay plan from the district, but the member earns the interest.

Calculating the investment amountNine deposits -- three summer checks

• Determine the amount of the summer checks

• June 20 = $2,000.01

• July 20 = $2,000.01

• August 20 = $2,000.01–Plus interest–Less dues for the following year–Less $10 service fee

Calculating the investment amountNine deposits -- three summer checks

• The summer check schedule

• Added Bonus:

No State or National Dues to pay in 2010-2011

• Determine the annual net payroll amount

Calculating the investment amountTen deposits -- two summer checks

• Your per-check take home pay times number of pay checks per year = annual take home pay.

• Example:The amount of your pay check after taxes and any deductions is $2,000. You receive 12 pay checks per year:$2,000 x 12 = $24,000

Calculating the investment amountTen deposits -- two summer checks

• Calculate the ten- month take home pay

• Determine the amount of the monthly deposit

• Divide the annual net salary by 10. Example: $24,000/10 = $2,400

• Calculate the difference between 10-month and 12-month take home pay. Example: $2,400.00 - $2,000.00 = $400.00

• Determine the amount of the summer checks

• Multiply the monthly deposit by 10, then divide by 2.

Example: $400.00 x 10 = $4,000.00 / 2 = $2,000.00

The same amount as the 12 month pay plan from the district, but the member earns the interest.

Calculating the investment amountTen deposits -- two summer checks

Calculating the investment amountTen deposits -- two summer checks

• The summer check schedule

• Added Bonus:

• July 20 = $2,000.00

• August 20 = $2,000.00– Plus interest

– Less dues for the following year

– Less $10 service fee

No State or National Dues to pay in 2010-2011

Do I have to follow the mathexactly? I need extra moneyduring the school yearto pay child careexpenses.

No, the DCT programis flexible. The memberdetermines the amount of the deposits.

Common DCT Myths

• The first year I have to pay my dues twice.

No, you pay dues for the first year through either payroll deduction or as a cash payer. In August your dues for the following year are paid in advance.

• If I lose my job, I lose the amount of my dues for the following year.

No, if you are not eligible for active membership, your dues will be refunded upon written request. This applies if you are not employed in a public school in North Dakota, move into an administrative position, or retire.

Common DCT Myths

• Participating in the Dues Credit Trust Program affects my TFFR contributions.

No, your TFFR contributions are based on your contract and not on the number of pay checks you receive.

Common DCT Myths

• As an ESP I cannot participate because the monthly contribution is too large for me to afford.

No, the minimum required contributions are based on the estimated dues amount for the following year. The minimums are:

Common DCT Myths

For Teachers– 9 months--$175– 10 months--$100

For ESP– 9 months--$87.50– 10 months--$50

• The safety of the investment is tied to the stock market.

No, allowable investments are the Bank of North Dakota, FDIC-insured CD’s or US Government issued or backed bonds. The interest will depend on the prevailing short-term interest rates, but never lower than the passbook rate at the Bank of North Dakota.

Common DCT Myths

How do I enroll?

1. Determine the summer check plan

2. Determine the amount of your deposit

3. Complete the enrollment form

4. Complete the ACH form, attach a voided check

5. Submit to NDEA by September 30

Where do I Obtain Enrollment Forms?

• Your Local Association

• Your UniServ Director

• Through the NDEA Headquarters. Contact Gary Rath, NDEA Business Manager at 1-800-369-6332, or by email at gary.rath@ndea.org

IRS Section 409A—Deferred Compensation

Requires the decision on the number of pay periods be made prior to doing any paid work for 2010-11

Districts may set deadlines prior to the start of the work period

NDEA advice as taken from a joint guidance document from NEA and NSBA—the decision should be made on a separate election form from the contract

*Effective for 2008-09 Contract Year

Effect on DCT

Because no changes are allowed in the number of pay checks school employees receive after the start of the work year, members should consider enrolling in the DCT program in the spring. While enrollment is possible through September 30, it will be more difficult to take full advantage of the program.