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Base Retirement Plan (Faculty Handbook)

VII. FACULTY AND ACADEMIC STAFF RETIREMENT AND BENEFIT PROGRAMS (Cont.)

RETIREMENT PLANS (Cont.)¹

BASE RETIREMENT PLAN

Eligibility

Participation in the Base Retirement Plan, with the University contribution, is initially optional and required for faculty/academic staff when certain service and age requirements are met. The general rules follow:

1. Faculty appointed 50 percent time or more for nine months or more with the rank of assistant professor, associate professor, professor or senior research associate may elect immediate participation, with University contribution, or may defer participation until completing 24 FTE service months and attaining age 35, at which time participation is mandatory for faculty/academic staff.
    
2. A specialist with a probationary or continuing appointment of 50 percent time or more may elect immediate participation, with University contribution.  A specialist who does not have a probationary or continuing appointment will become eligible for the University contribution 24 FTE service months from the date of initial appointment.  Participation for all specialist appointments may be deferred until completing 24 FTE service months and attaining age 35.
    
3. Faculty/academic staff appointed 50 percent time or more for nine months or more as instructors, research associates, lecturers, or assistant instructors become eligible for the University contribution 24 FTE service months from the date of initial appointment to an eligible status. (See #4, below, for change in eligibility for research associates). Participation is required for instructors, research associates, lecturers and assistant instructors upon completion of 24 FTE service months and attainment of age 35.  Instructor/residents and instructor/interns are never required to participate.
    
4. Effective October 1, 2006, faculty/academic staff appointed 50 percent time or more for nine months or more as a research associate become eligible for the University contribution 36 FTE service months from the date of initial appointment to an eligible status.  Participation is required for research associates upon completion of 36 FTE service months and attainment of age 35.
   
   
5. Once required participation commences for faculty/academic staff appointed for nine months or more, it is not possible to withdraw from the Base Retirement Plan while employed at the University.
    
6. Faculty/academic staff members appointed 50 percent time or more previously enrolled in a contributory retirement program before appointment at MSU or are age 55 or older upon appointment, may elect immediate participation regardless of rank, with the University contribution.
    
7. Participation in the Base Retirement Plan is possible at any time without University contribution.
    
8. Faculty/academic staff must enroll in the Base Retirement Plan by completing an investment sponsor application and a salary deferral election prior to the first of the month the application is to be effective.  Failure to apply prior to the first of the month in which faculty/academic staff are eligible for the University contribution will result in lost contribution without retroactive recovery.

The Base Retirement Plan provides retirement income based upon the total amount accumulated from the employee's contribution, the University's contribution, and any earnings on those amounts over the period of the working years.

A faculty/academic staff member may commence to draw his/her accumulation under a variety of payment options after leaving the University; however, to be considered a retiree from the University, faculty/academic staff must meet the minimum University retirement requirements (see Other Retirement Information). The earlier retirement income begins, the smaller the payment.

The Base Retirement Plan is fully vested indicating that both the faculty/academic staff member's and the University's contributions are placed directly in the faculty/academic staff member's account each month.  In the event the faculty/academic staff member leaves the University, ownership of the total accumulation is retained by the faculty/academic staff member.  The faculty/academic staff member may elect to receive an immediate retirement income or may defer the receipt of his/her retirement income until a later date.  Cash withdrawal options are available if age 55 or older, and terminated or retired.

Cost

The Base Retirement Plan is financed by a reduction of 5% from the faculty/academic staff member’s base salary and a matching University contribution of 10%².

¹For benefit purposes only, half-time is defined as 50.0-64.9 percent time; three-quarter time is defined as 65.0-89.9 percent time; full-time is 90.0-100.0 percent time.

² If enrolled after January 1, 1996, the University 10% contribution is restricted to a maximum of base salary/wage ($200,000) due to the Omnibus Budget Reconciliation Act (OBRA) 1993.  There is an indexing component on the dollar maximum amount; MSU Human Resources Benefits  may be contacted for the current maximum.

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