Policies, Union Contracts, Handbooks > Support Staff Policies and Procedures

Deferred Compensation Plan

Policy

(Originated 02/05)

The University provides a voluntary Deferred Compensation Plan for eligible employees.

Eligibility:

An eligible employee working half-time (50%) or more for nine months or longer.

Effective date of benefit:

Eligible employees may elect participation upon employment or any time during employment.

Summary of benefits:

1. The benefit provides income during retirement and benefit payments to the beneficiary in the event of death prior to retirement, subject to vendor, contract or Internal Revenue Service (IRS) restrictions.
2. Pursuant to Section 457(b) of the Internal Revenue Code of 1954 as amended and at the specific request of an employee of MSU, the University will purchase an annuity contract on behalf of that employee from available fund sponsors:

·        AIG VALIC

·        AXA Equitable

·        TIAA-CREF

3. The employee assumes sole responsibility for the selection of a vendor and any investment results and tax consequences of such a selection.
4. Withdrawals are allowed on or after retirement, termination or resignation, regardless of age or length of service.
5. In-service withdrawals are subject to IRS guidelines and are permitted due to “unforeseen emergency”
6. Loan options may be available.  Contact the fund sponsor of your choice for specific information on loans.

Premium contribution:

1. The employee designates the amount of salary to be deferred.
2. The maximum contribution level by the employee must be in accordance with Section 457 of the IRS Code.
3. The employee's contribution is made on a tax-deferred basis.  The deferred portion is not reported as earned income on the Employer's Statement of Earnings form (W-2) to the IRS.
4. Deferred compensation contributions may be remitted to only one vendor at any given time.
5. The level of contribution may be changed as often as once a month, effective the first of the following month.

Termination date of benefit:

1. The employee's contribution ceases with the last day of paid employment, change to an ineligible employment status, or designation by the employee to stop future contributions, whichever occurs first.
2. Employees on an unpaid leave of absence may not continue deferred compensation contributions. Upon return from leave, the employee will automatically be reinstated in the program.
3. Employees receiving benefits under the University's Long-Term Disability plan may not continue deferred compensation contributions.

Procedure

Application for enrollment:

1. Employees may enroll at any time after becoming eligible.  Enroll online at www.hr.msu.edu; click on eHR Services Login link; enter your MSU NetID and password.  Click on Retirement Enrollment/Changes and proceed through the enrollment process.
2. The enrollment process must be completed by the end of the month to be effective the first of the following month.
3. Employees may change their contribution amount and/or investment sponsor as often as once a month.
4. Retroactive enrollment is not permitted.

Changes in coverage or personal information:

1. Employees may make changes by accessing www.hr.msu.edu; click on eHR Services Login link, enter your MSU NetID and password.  To make the following changes, click on Retirement Enrollment/Changes:
   • change in premium contributions (one per month)
   • change in investment sponsor selection (one per month)
   • cancellation of plan.
2. Employees may make the following changes by contacting the investment sponsor:
   • beneficiary change or
   • selection or allocation of funds.

Refer questions to:  MSU Human Resources Benefits (telephone 517-353-4434 or e-mail benefitsinto@hr.msu.edu)