BASIC RETIREMENT PLAN – WESLEYAN FUNDED
Faculty members may participate in the basic retirement plan if appointed for at least half time on a non-temporary basis.
Non-temporary employment is defined as employment that is expected to last more than one year.
Enrolling in the benefit
Eligible Faculty members may enroll in the basic retirement plan by contacting firstname.lastname@example.org
Wesleyan makes basic retirement plan contributions on behalf of a plan participant equal to seven percent of base salary up to the salary breakpoint and ten percent of base salary over the breakpoint. The salary breakpoint changes each year and currently is $80,500. Contributions to the basic retirement plan are tax deferred until paid as retirement income.
Wesleyan makes contributions to the basic retirement plan on behalf of a participant from the first day of employment but contributions and the earnings on them do not “vest” (are not owned by the participant) until the participant completes three years of vesting service. Vesting service includes comparable prior service at other U. S. colleges and universities. Contributions and earnings on them are forfeited if the participant does not complete three years of vesting service. Matching contributions made to the basic retirement plan follow the same vesting schedule as basic contributions.
A year of vesting service is any consecutive twelve-month period during which an eligible faculty or staff member has an appointment, or is regularly scheduled, to work half-time or more, or actually works 975 hours or more, for Wesleyan. Some periods during which a participant does not perform any work for Wesleyan may also count as vesting service (e.g., paid vacation, paid holidays, paid sick leave, and jury duty) up to a maximum of 501 hours for any single continuous period during which the participant performs no work for the university.
Retirement Date and Retirement Income Options
The "normal" retirement date used by Wesleyan to project a participant’s retirement income under the basic retirement plan is the last day of the academic year (June 30) during which a faculty member reaches age 68, or a professional librarian or an administrative staff member reaches age 65. A participant may, however, retire and begin to receive retirement income before or after the normal retirement date. A participant is not eligible to receive retirement income from the basic retirement plan while actively employed by Wesleyan unless permitted to do so under the terms of a partial or phased early retirement agreement or plan.
Retirement income options are those offered by the investment organizations and are described on the investment organizations’ web sites and in documents available in Human Resources. Any lump sum distribution option permitted by the investment vehicle, however, is subject to the following limitations:
A participant may receive all of part of his or her basic retirement plan accumulations as a lump sum, provided the participant is at least age 59 ½ and the participant’s Wesleyan employment has ended, or provided the participant has partially retired pursuant to a partial or phased early retirement agreement or plan, or provided the participant’s employment terminates on or after age 55.
Unless the participant has reached age 59 ½ or unless the participant’s employment has terminated on or after age 55, a lump sum withdrawal may be subject to tax penalty.
The Internal Revenue Code requires retired participants to begin receiving a specified amount of retirement income from the plan no later than April 1 following the calendar year in which the participant reaches age 70 ½.
Benefits may be payable to a participant’s spouse or designated beneficiary when the participant dies. (Special laws protect the rights of a participant’s spouse. See “Spousal Rights” section below.) The form and amount of these benefits depend on whether the participant has begun to receive an annuity from the basic retirement plan and what form of annuity was elected. These benefits are described in documents available in Human Resources.
A married participant must obtain advanced written consent from his or her spouse prior to certain transactions, including lump sum withdrawals. Also, subject to limited exceptions, a participant must choose an income distribution option that provides a survivor’s annuity to his or her spouse unless the spouse waives this right in writing.
Under federal law, if a participant is married at the time of death, the participant’s surviving spouse is automatically deemed to be his or her beneficiary for fifty percent of the accumulation (subject to certain limited exceptions), unless prior to the participant’s death the spouse consented in writing to the designation of another beneficiary in the manner required by the law. The beneficiary for the other fifty percent is deemed to be the participant’s estate.
A participant may obtain additional information, invest in one or more investment options, and may change options--with some restrictions—by accessing TIAA/CREF’s web site at http://www.tiaa-cref.org (or calling 1-800-842-2252 for TIAA/CREF) or accessing Fidelity’s web site at https://www.mysavingsatwork.com/atwork.htm (or calling 1-800-343-0860 for Fidelity).
Documents containing detailed information about the TIAA/CREF and Fidelity investment options and more complete information about the basic retirement plan are available from Human Resources. In addition, retirement planning seminars are conducted from time to time at which information about investments, distributions, and retirement income options is provided.