1. The Basic Retirement Savings Plan

The Basic Retirement Savings Plan is a defined contribution (DC) plan, which means that your contribution goes into your own account and is credited with actual earnings. The University automatically contributes three and a half percent (3.5%) of contract or base salary rate for all eligible faculty or staff up to the tenth anniversary of service, and five percent (5%) to employees with more than ten years of service. The University will also match percent-to-percent the first five percent of pay contributed by you into the account each year.
 

All eligible employees who began work after May 31, 1999 will be covered automatically under the Basic Retirement Savings Plan. New tenure track faculty and staff are eligible to join at age 21 or older, but are required to serve a one-year waiting period before participating in the plan. Employees who are active participants in a matching 403(b) plan from another 501(c) (3) non-profit institution may have the waiting period waived. Once you participate, you are fully (100%) and immediately vested for all University contributions as well as your own.
 
Currently, there are over 70 investment funds from which to choose, offered by Vanguard and TIAA-CREF, two leaders in retirement plan investment fund management. You choose the amount of money you wish to invest, subject to limits imposed by federal law, and select the funds in which you want your money invested.
 
Your contributions are made via salary reductions before they are subject to federal income tax. You pay no current income tax on these deferred dollars or their investment income as it accumulates. Accumulated dollars are taxable when withdrawn. In-service withdrawals from this plan are not permitted prior to attainment of age 70½.

2. The Retirement Income Plan

While all new faculty and staff will enroll in the Basic Retirement Savings Plan, there is another plan that is still in effect for certain employees. The Retirement Income Plan is a defined benefit (DB) plan which means that the employee’s final average pay level and his/her length of service determines the amount of the retirement benefit. The entire cost of this plan is paid by the University; participants are not required to contribute any of their salary.
 
A special open enrollment took place in fall, 1999. Effective January 2000, non-exempt staff employees covered by the Retirement Income Plan had a one-time opportunity to freeze the value of the accrued benefit in that plan and switch to the Basic Retirement Savings Plan, the defined contribution plan offered to faculty and exempt staff. For employees who elected to switch, their accrued benefit under the DB plan will cover the period from their initial participation in the DB plan to the point of the switch. The Basic Retirement Savings plan then became the primary University retirement plan for their future service, so that they would ultimately be eligible for retirement benefits under both plans.
 
The formula which determines the annual pension amount (stated as a single life annuity at the “normal retirement date”) for plan participants who remained members of the plan as of January 1, 2000 is:

3. Supplemental Retirement Savings Plan

The Supplemental Retirement Savings Plan provides an additional way to save for retirement. As the name suggests, the Supplemental Plan “supplements” your contribution to the Basic Retirement Savings Plan and/or your participation in the Retirement Income Plan, depending on your elections. These accounts provide additional flexibility for your retirement savings.
 
Your contributions are made via salary reductions before they are subject to federal income tax. You pay no current income tax on these deferred dollars or their investment income as it accumulates. Accumulated dollars are taxable when withdrawn. Unlike the Basic Retirement Savings Plan, the Supplemental Plan provides greater flexibility in allowing for qualified hardship withdrawals, age 59½ withdrawals and loan provisions (TIAA-CREF).
 
Further information about the University’s retirement plans is available at New Employee Orientation, and at any other time, through the Human Resources office.