MSU Human Resources >> Documents >> Supportstaffpolproc >> Policy & Procedure for Retirement from the University

Policy & Procedure for Retirement from the University

(Revised 03/11)

Policy

Employees meeting the minimum retirement requirements become "official" MSU retirees upon cessation of active service.

Eligibility: Regular full-time and part-time (50 - 89.9%) faculty, academic staff, executive management, and University support staff.

Effective date of retirement: Retirement is optional for employees effective with the first day of the month in which they meet the minimum University retirement requirements. Retirement or termination is required the first of July following the 70th birthday for police officers only.

Minimum Retirement Requirements: The minimum retirement requirements specify that you may be an official MSU retiree upon attainment of one of the following:

  • Fifteen years of service and at least age 62, OR
  • Twenty-five years of service at any age.

Note: If you are in an executive-management position, contact MSU Human Resources Benefits for minimum retirement requirements.

"Official" retirement status entitles individuals to certain retirement benefits:

  • Retirement income is paid by the 403(b) Base Retirement Program, 403(b) Supplemental Retirement Program, 457(b) Deferred Compensation Plan and/or UNCRP plans as described in the plan documents, policies, or other documentation for those programs, and as elected by the retiree.
  • Depending on your hire date, group health care and dental coverage may be maintained for eligible retirees, with a University contribution based on the full-time equivalent (FTE) service months at the time of retirement. When an individual is actively employed, the University contribution level is determined based on employment percent, i.e., an employee is considered half-time if they work 50 - 64.9%;three-quarter time if they work 65-89.9%; full-time if they work 90-100%. In retirement, the contribution level is based on accrued FTE service months. The charts below indicate the number of FTE service months required to receive the various University contribution levels.
  • Support staff hired on or after July 1, 2002 and prior to July 1, 2010, who subsequently meet the minimum retirement requirements will receive a University contribution toward health care and dental coverage for the retiree only. The retiree may pay the applicable premium to cover eligible dependents.
  • For faculty and academic staff hired on or after July 1, 2005 and prior to July 1, 2010, the University will contribute* to the lowest cost health plan's single rate for which the employee/retiree is eligible. At retirement, the employee must designate whether the employee receives the University contribution or whether the contribution is to be split 50/50 between the employee and his/her spouse. This designation is irrevocable regardless of circumstance, including returning to work or death. The designation of the 50/50 contribution is also non-transferable to future spouses.
  • For faculty, academic staff, and support staff hired on or after July 1, 2010, who subsequently meet the minimum retirement requirements may elect to continue coverage for the retiree, spouse, and eligible dependents by paying the applicable premium.
  • Please review Other Eligible Individuals (OEI) for applicability to the items listed above. 

*The contribution is based on the full-time equivalent (FTE) service months at the time of retirement.

If an employee retires with a minimum of 15 years of service and is at least 62 years of age, the following FTE service month* ranges determine the University health care and dental contribution during retirement.
FTE Service Months University Contribution Level
90 - 116.99 Half-time
117 - 161.99 Three-quarter time
162 - 999.99 Full-time
 
If an employee retires with 25 years of service at any age, the following FTE service month* ranges determine the University health care and dental contribution during retirement.
FTE Service Months University Contribution Level
150 - 194.99 Half-time
195 - 269.99 Three-quarter time
270 - 999.99 Full-time
 
  • A University contribution may continue for the surviving spouse. Please review the Policy & Procedure for Health and Dental Benefits for Surviving Spouses and Surviving Other Eligible Individuals for further detail.
  • Retirees and dependents over age 65 are required to be covered under Medicare Part A and Medicare Part B, if eligible.
  • Dental coverage can be maintained at 100% (50% by the deceased retiree's dental plan and 50% as the surviving spouse's plan). Employee-Paid Life coverage for the employee and eligible dependent(s) may be maintained until the retiree reaches age 70. To maintain this coverage, retirees must make payments to MSU Human Resources Benefits.
  • A University-paid life benefit is provided for individuals who participated in the Employee-Paid Life program prior to July 1, 1976 (July 1, 1977 for AFSCME 1585 and 999), and continued to participate until age 65 or retirement, whichever occurs first.
  • Retiring University support staff may be eligible for a payoff of unused sick leave and a prorated longevity payment in the year of retirement, as described in the policies for those programs.
  • Other miscellaneous benefits (e.g. parking permit) detail can be found at Retirement Information & Helpful Hints.
  • Contributions to Flexible Spending Accounts cease at retirement.
  • Please review Other Eligible Individuals (OEI) for applicability to the items listed above.

Creditable service toward retirement:
The following points clarify how additional creditable service is determined in special circumstances.

An employee who returns to the University more than 12 months after terminating may apply to receive credit for past service after working for five continuous years at half time or more. Prior service credit will only be applied toward retirement vesting requirements and has no impact on pension benefits, vacation accrual, longevity, etc.
Leaves of absence will be considered continuous service and not breaks in employment.
Breaks in employment of up to one year will be bridged. Creditable service will then go back to the prior date of employment.
Employment as a student, graduate assistant, or post doc does not count toward retirement eligibility.
Note: University support staff should contact MSU Human Resources Benefits regarding computation of creditable service and faculty, academic staff and executive management should contact Academic Human Resources.

Procedure

Application for retirement:
Employee:

  • All eligible employees should submit a University Retirement Request Form from the EBS Portal at least 90 days before their retirement date.  On the ESS (Employee Self Service) tab in the EBS Portal, select Benefits, then under the Retirement Information section at the bottom of the page select the University Retirement Request Form.  Complete the Form and submit. 
  • A response is sent to the employee once the Form has been reviewed.
  • Contact your Investment Vendor directly to inquire about retirement income forms and options.

Note: Employees will receive a letter from MSU Human Resources Benefits confirming the employee's retirement date and a summary of their retirement benefits.

Department: Notification is sent to the employee's supervisor.

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


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