Academic Specialist Manual

8.3 Retirement Plans

Academic specialists appointed in a benefits eligible position at 50 percent time or more for a period of nine months or more are eligible to make contributions to the 403(b) Base Retirement Program as well as the 403(b) Supplemental Retirement Program or the 457(b) Deferred Compensation Plan.

403(b) Base Retirement Program

Eligibility
Participation in the 403(b) Base Retirement Program, with University contribution, generally is initially voluntary and required for academic specialists when certain service and/or age requirements are met. More information is available at 403(b) Base Retirement Program. The general rules follow:

  1. Academic specialists with probationary or continuing appointments 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 specialists is required after 24 FTE service months and attaining age 35.
  2. Academic Specialists appointed 50 percent time or more for nine months or more who are not immediately eligible to participate may enroll if the specialist participated in a 403(b), 401(a), 401(k) or other retirement plan at a previous employer that made employer contributions.
  3. Once required participation commences for academic specialists appointed for nine months or more, the academic specialist must continue contributing to the 403(b) Base Retirement Program while employed at the University.
  4. Academic specialists may complete the enrollment process in the 403(b) Base Retirement Program online through the EBS Portal.

Coverage
The 403(b) Base Retirement program provides a retirement income based upon the total amount accumulated from the employee's contribution, the University's contribution, and the earnings on those amounts over the period of the working years.

The 403(b) Base Retirement Program is fully vested indicating that both the academic specialist's and the University's contributions are placed directly in the academic specialist's account each month. In the event the academic specialist leaves the University, ownership of the total accumulation is retained by the academic specialist. An academic specialist may commence to draw his/her accumulation under a variety of payment options after leaving the University. The academic specialist may elect to receive an immediate retirement income or may defer the receipt of his/her retirement income until a later date.

Cost
The 403(b) Base Retirement Program is financed by a reduction of 5% from the academic specialist's base salary and a matching University contribution of 10%.1

403(b) Supplemental Retirement Program and 457(b) Deferred Compensation Plan

Academic specialists appointed at 50% time or more for a period of at least nine (9) months may make additional tax-deferred contributions to the 457(b) Deferred Compensation Plan subject to IRS limitations. More detail is available at 457(b) Deferred Compensation Plan.

All academic specialists are eligible to make additional tax-deferred contributions to the 403(b) Supplemental Retirement Program subject to IRS limitations. More detail is available online at 403(b) Supplemental Retirement Program

Participation in the 403(b) Supplemental Retirement Program and/or the 457(b) Deferred Compensation Plan is never required, and no matching contribution is made by MSU.

Other Retirement Information

  1. To be considered an "official" retiree from Michigan State University (see the Retiring from the University Policy for more detail), academic specialists must meet one of the following minimum University retirement requirements: 
    • Be at least 62 years of age and have completed 15 years of service, or
    • Have completed 25 years of service at any age.
  2. Academic specialists meeting the minimum University retirement requirements will remain eligible to maintain health and dental coverage and receive a University contribution toward the premiums based on the number of full-time equivalent (FTE) service months at retirement (see the Retiree Benefits Policy for more detail). Retirees (their spouse or other eligible individual) age 65 and over are required to enroll for Medicare Parts A & B at which time MSU's health plan coverage is adjusted to a Medicare supplement policy. Medicare Part B requires a monthly premium that is not reimbursed by MSU. Individuals may contact their local Social Security office for information on the monthly premium cost for Medicare Part B.

    Access to retiree health coverage is based on employment date:

    Faculty and academic staff with a Retirement Calculation Date prior to July 1, 2005 and meeting the minimum University retirement requirements will remain eligible to maintain health and dental coverage and receive a University contribution toward the premiums based on the number of full-time equivalent (FTE) service months at retirement.

    For faculty and academic staff with a Retirement Calculation Date on or after July 1, 2005 and before July 1, 2010, the University will contribute to the lowest cost health plan's single rate for which the employee/retiree is eligible. (The contribution is based on the full-time equivalent (FTE) service months at the time of retirement). 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 or other eligible individual. 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 or other eligible individuals.

    Faculty and academic staff with a Retirement Calculation Date on or after July 1, 2010 are not eligible for a University contribution to health care benefits. Retiree health coverage is available through the university at cost.

  3. Academic specialists meeting the minimum University retirement requirements may continue participation in the employee-paid life program after retirement until age 70.
  4. Academic specialists participating in the employee-paid life plan at the time of retirement and who were enrolled prior to July 1, 1976 will receive a $2,000 life benefit fully paid by the University.

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