Policy A-15

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INDIANA UNIVERSITY SUPPLEMENTAL EARLY RETIREMENT PLAN (IUSERP)

(Approved: BFC 12/4/90; UFC, 4/23/91; Trustees 5/3/91)*

IUSERP (referred to as FERP before its implementation) is intended to provide plan participants with financial resources to supplement other retirement assets, giving participants an opportunity to initiate retirement earlier than other assets would by themselves allow.

Eligibility

Full-time Appointed Faculty/Academic employees and Staff employees Grade 16 or above hired January 1, 1989 or later are participants in the IU Retirement Plan 12 and are also eligible for benefits under IUSERP.

Plan Benefit

IUSERP benefits are determined by the participant's account accumulations at the time of distribution. These account accumulations are based on Indiana University's contribution of 2.4% of the participant's actual base salary, which is deposited into the participant's chosen investment fund immediately following each pay period. Investment fund options are TIAA-CREF and Fidelity, each of which includes many fund options. University contributions under this Plan will be directed initially to either TIAA-CREF or Fidelity, whichever selection the participant made for the IU Retirement Plan 12.

IRS regulations dictate that employees with initial plan participation after December 31, 1996 are limited to a set annual compensation considered for IUSERP contributions. For current limit, contact the University Benefits office.

IRS regulations also dictate that annual contributions for both employer and employee to all retirement plans (such as IUSERP, IU Retirement Plan and Tax Deferred Annuity Plan) are limited to the lesser of $30,000 or 25% of compensation for the year.

Upon obtaining vesting rights and termination from Indiana University, plan benefits will be distributed to the participant in the form of a cash withdrawal, a "rollover" into a personal IRA, or in the case of TIAA-CREF, converted to an individual contract.

Vesting Criteria

Participants are 100% vested in their account accumulations upon obtaining age 55 in an active employee status before terminating from the University. Termination of employment prior to age 55, for any reason other than total disability, will result in forfeiture of all IUSERP account accumulations. A participant who becomes totally disabled prior to age 55 shall be 100% vested upon reaching age 55 if he/she remains totally disabled through that date. Participants who begin employment following age 55 shall be 100% vested in their account accumulations upon termination from Indiana University. In the event of a participant's death after having obtained age 55, account accumulations will be distributed to the designated beneficiary.

During a paid leave of absence, Plan contributions will continue to be made for a Participant on the basis of actual base salary then being paid by the University. No Plan contributions will be made during an unpaid leave of absence.

If a participant is on unpaid leave at the time of the 55th birthday, then he/she would not become vested until after having returned to active employment for a period of at least 9 months before termination from employment. Participants who take unpaid leaves from the University prior to age 55 should be sure to check with the Office of the Vice Chancellor/Vice Provost for Faculty and Academic Affairs or equivalent before extending the leave beyond 12 consecutive months. This is to ensure that they avoid being considered terminated for the purpose of determining vesting under this plan. Prior approval and the existence of special circumstances may allow for the extension (for a total of 60 consecutive months of unpaid leave) beyond the usual limit of 12 months.

If a former participant whose benefits were forfeited due to non-vestiture is reemployed as an Eligible employee within six months of termination from IU, his/her forfeited account accumulation will be restored to its value at the time of termination.

*[NOTE: The Trustees of Indiana University discontinued the IUSERP (IU Supplemental Retirement Plan), a qualified IRC Section 401(a) plan, for new hires and newly promoted individuals, effective July 1, 1999] (Approved: Trustees, 10/30/98)

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