================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2005. or [ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ___________ to ___________. Commission File Number: 0-16284 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: TECHTEAM GLOBAL RETIREMENT SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: TechTeam Global, Inc. 27335 W. 11 Mile Road Southfield, MI 48034 ================================================================================ TechTeam Global Retirement Savings Plan Audited Financial Statements and Supplemental Schedule CONTENTS Report of Independent Registered Public Accounting Firm............ 3 Audited Financial Statements Statements of Net Assets Available for Benefits.................... 4 Statement of Changes in Net Assets Available for Benefits.......... 5 Notes to Financial Statements...................................... 6 Supplemental Schedule Schedule H, Line 4i--Schedule of Assets (Held at End of Year)...... 11 2 Report of Independent Registered Public Accounting Firm Plan Administrator TechTeam Global Retirement Savings Plan We have audited the accompanying statements of net assets available for benefits of the TechTeam Global Retirement Savings Plan as of December 31, 2005 and 2004, and the related statement of changes in net assets available for benefits for the year ended December 31, 2005. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2005 and 2004, and the changes in its net assets available for benefits for the year ended December 31, 2005, in conformity with U.S. generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2005 is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP Detroit, MI June 26, 2006 3 TechTeam Global Retirement Savings Plan Statements of Net Assets Available for Benefits DECEMBER 31 ------------------------- 2005 2004 ----------- ----------- ASSETS Investments, at fair value: Pooled separate accounts $10,878,411 $ 9,691,845 TechTeam Global, Inc. common stock 4,950,807 5,155,148 Participant loans 463,592 389,823 ----------- ----------- Total investments 16,292,810 15,236,816 ----------- ----------- Contributions receivable: Participants 96,366 86,991 Employer 45,086 18,514 ----------- ----------- Total contributions receivable 141,452 105,505 ----------- ----------- Total assets 16,434,262 15,342,321 LIABILITY Employer contributions to be distributed 50,530 -- ----------- ----------- Net assets available for benefits $16,383,732 $15,342,321 =========== =========== See accompanying notes. 4 TechTeam Global Retirement Savings Plan Statement of Changes in Net Assets Available for Benefits Year ended December 31, 2005 ADDITIONS Investment income: Net appreciation in fair value of investments $ 813,810 Dividend and interest 25,918 ----------- Total investment income 839,728 ----------- Contributions: Participants 1,640,100 Employer 255,351 Rollover 8,023 ----------- Total contributions 1,903,474 ----------- Total additions 2,743,202 DEDUCTIONS Benefits paid to participants 1,667,593 Administrative fees 34,198 ----------- Total deductions 1,701,791 ----------- Net increase in net assets available for benefits 1,041,411 Net assets available for benefits at beginning of year 15,342,321 ----------- Net assets available for benefits at end of year $16,383,732 =========== See accompanying notes. 5 TechTeam Global Retirement Savings Plan Notes to the Financial Statements December 31, 2005 1. DESCRIPTION OF THE PLAN The following description of the TechTeam Global Retirement Savings Plan (the "Plan") provides only general information. Participants should refer to the Plan agreement for a complete description of the Plan's provisions. GENERAL The Plan is a defined contribution plan covering eligible, full-time employees of TechTeam Global, Inc. (the "Company") and TechTeam Cyntergy, LLC, a domestic subsidiary of the Company. Employees of other domestic subsidiaries of the Company are covered under separate plans. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Employees become eligible to participate in the Plan on the first day of the month following three months from their date of hire. CONTRIBUTIONS Participants may contribute up to 75% of pretax annual compensation, as defined in the Plan document, subject to the legislated limitations. Participants may also contribute amounts representing distributions from other qualified plans. A participant may direct their contributions to any of the Plan's fund options. The Company may make discretionary matching contributions to the Plan, which are contributed into the TechTeam Global Stock Fund. Participants cannot redirect Company contributions to other fund options. During 2005, the Company elected to make matching contributions up to 35% of the first 4% of a participant's base compensation. The Plan is required to distribute Company contributions made during 2005 to certain participants in order to remain in compliance with certain nondiscrimination requirements under the Internal Revenue Code (the "Code"). At December 31, 2005, the Plan has recorded a liability of $50,530 for these distributions. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions and allocations of the Company's contributions, investment earnings, and Plan expenses. Allocations are based on participant earnings or account balances, as defined. 6 TechTeam Global Retirement Savings Plan Notes to the Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) VESTING Participants are immediately vested in their contributions. Participants become fully vested in Company contributions upon completion of one year of service. Participants also become fully vested upon death, disability, or retirement at designated ages. FORFEITURES The Company is permitted to use forfeited balances to reduce future employer contributions. During 2005, the Company used forfeitures totaling $81,879 to reduce the Company's cash contribution to the Plan in 2005. At December 31, 2005 and 2004, forfeited account balances totaled $25,077 and $102,591, respectively. LOANS TO PARTICIPANTS Participants may borrow from their fund accounts a minimum of $1,000 and up to a maximum of the lesser of $50,000 or 50% of their vested account balance. Loan terms range from 1-5 years or up to 25 years for the purchase of a primary residence. The loans are secured by the participant's account balance and bear interest at a rate commensurate with local prevailing rates as determined quarterly by the Plan administrator. Principal and interest are paid ratably through monthly payroll deductions. PAYMENT OF BENEFITS A participant will receive a lump-sum distribution equal to the value of his or her account upon termination of service, death, disability, or retirement. The benefit to which a participant is entitled is the benefit that can be provided from the vested value of the participant's account. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to terminate the Plan subject to the provisions of ERISA. In the event of termination, the amount in each participant's account would become 100% vested and would be distributed to each participant in accordance with distribution policies set forth in the Plan. FEES AND EXPENSES All expenses incurred by the Plan, consisting primarily of administrative costs, are paid by the Plan. The cost of the annual audit of the Plan's financial statements is paid by the Company. 7 TechTeam Global Retirement Savings Plan Notes to the Financial Statements (continued) 2. SUMMARY OF ACCOUNTING POLICIES USE OF ESTIMATES The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates that affect the amounts reported and disclosed in the financial statements and accompanying notes. Actual results could differ from those estimates. INVESTMENTS Investments consist of pooled separate accounts and TechTeam Global, Inc. common stock and are stated at fair value. The fair value of participation units owned by the Plan in pooled separate accounts is based on quoted redemption values on the last business day of the Plan year. Participant loans are stated at the amount of their outstanding balance, which approximates fair value. The TechTeam Global Stock Fund is administered as a pooled separate account. Purchases and sales of securities are recorded on a trade-date basis. Interest and dividend income are recorded on the accrual basis. Dividends are recorded on the ex-dividend date. 3. NONPARTICIPANT-DIRECTED INVESTMENTS Information about the significant components of changes in assets relating to the TechTeam Global Stock Fund (a nonparticipant-directed investment) is as follows: Balance at December 31, 2004 $5,155,148 Employer contributions 278,695 Participant contributions 149,066 Depreciation in fair value of investment (16,454) Benefits paid to participants (627,047) Transfers in 26,390 Administrative fees (14,991) ---------- Balance at December 31, 2005 $4,950,807 ========== 8 TechTeam Global Retirement Savings Plan Notes to the Financial Statements (continued) 4. INVESTMENTS Investments that represent 5% or more of fair value of the Plan's net assets available for benefits are as follows: DECEMBER 31 ----------------------- 2005 2004 ---------- ---------- TechTeam Global Stock Fund * $4,950,807 $5,155,148 Lord Abbett MidCap Value Fund 1,429,102 1,524,973 SEI Stable Asset Fund 1,403,844 1,471,978 Growth Fund of America 1,162,535 1,000,711 Investment Company of America 1,088,138 1,083,864 Hartford MidCap HLS Fund 1,083,718 844,163 Hartford Index HLS Fund 950,496 892,363 Janus Advisor Capital Appreciation Fund 837,965 723,984 * Denotes nonparticipant-directed investment During 2005, the Plan's investments appreciated (depreciated) in fair value, as determined by quoted market prices, as follows: TechTeam Global Stock Fund $(16,454) Pooled separate accounts 830,264 -------- $813,810 ======== 5. RISKS AND UNCERTAINTIES The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits. 9 TechTeam Global Retirement Savings Plan Notes to the Financial Statements (continued) 6. TAX STATUS The Plan has received a tax determination letter from the Internal Revenue Service dated September 6, 2005, stating that the Plan is qualified under Section 401(a) of the Code and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes the Plan is qualified and the related trust is tax exempt. 10 Supplemental Schedule TechTeam Global Retirement Savings Plan EIN: 38-2774613 Plan: 001 Schedule H, Line 4i--Schedule of Assets (Held at End of Year) December 31, 2005 DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, IDENTITY OF ISSUE, BORROWER RATE OF INTEREST, COLLATERAL, CURRENT OR SIMILAR PARTY PAR OR MATURITY VALUE COST VALUE --------------------------- ----------------------------------------------- ---------- ------------ The Hartford Group Lord Abbett MidCap Value Fund *** $ 1,429,102 The Hartford Group SEI Stable Asset Fund *** 1,403,844 The Hartford Group Growth Fund of America *** 1,162,535 The Hartford Group Investment Company of America *** 1,088,138 The Hartford Group Hartford MidCap HLS Fund *** 1,083,718 The Hartford Group Hartford Index HLS Fund *** 950,496 The Hartford Group Janus Advisor Capital Appreciation Fund *** 837,965 The Hartford Group American Europacific Growth Fund *** 783,797 The Hartford Group PIMCO Total Return Fund *** 517,075 The Hartford Group Goldman Sachs Small Cap Value Fund *** 375,529 The Hartford Group American Balanced Fund *** 344,121 The Hartford Group Washington Mutual Investment Fund *** 310,429 The Hartford Group AIM Small Cap Growth Fund *** 242,952 The Hartford Group Franklin Templeton Foreign Fund *** 119,840 The Hartford Group Franklin Templeton Moderate Target Fund *** 96,985 The Hartford Group Franklin Templeton Growth Target Fund *** 81,098 The Hartford Group Franklin Templeton Cons Target Fund *** 50,787 * Participants Loans to participants at interest rates ranging from 6% to 10.5%, with various maturity dates n/a 463,592 ** TechTeam Global, Inc. TechTeam Global Stock Fund $3,555,987 4,950,807 ----------- $16,292,810 =========== * Party-in-interest ** Party-in-interest, nonparticipant-directed fund *** Cost is not required for participant-directed investments 11 SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Trustee of the TechTeam Global Retirement Savings Plan has duly caused this Annual Report to be signed on its behalf by the undersigned hereunto duly authorized. June 29, 2006 TechTeam Global Retirement Savings Plan By: /s/ Heidi K. Hagle ------------------------------------ Heidi K. Hagle Vice President, Human Resources EXHIBIT INDEX Exhibit No. Description ----------- ----------- 23.1 Consent of Independent Registered Public Accounting Firm