Retirement Plans - Faculty
View the latest version of the Yale University Retirement Account Plan (YURAP) document for Faculty. See details on all of Yale’s retirement plans below.
- Eligibility to participate in the plan
- Yale University Retirement Account Plan (YURAP)
- Yale University Tax-deferred 403 (b) Savings Plan
- Yale University 457(b) Deferred Compensation Plan
- Faculty & M&P Retirement Documents - 1993
- Early Retirement Subsidy Plan
- Planned Retirement Program
- Phased Retirement Program
- Faculty Phased Retirement Plan
In a 403(b) Defined Contribution Plan both employer and participant know how much will be contributed to the Plan, but cannot know precisely the retirement benefit. Such benefit will be affected by the amount of accumulation at the point of retirement, the age of the participant at that time and the payout option elected. The most important basis for the payout will be the accumulation, and the most important factor in the accumulation will be the investment return on assets over the accumulation period.
Eligibility to participate in the plan
An eligible employee is an individual who has a faculty or senior research appointment of at least half-time or greater.
Upon hire, all faculty as defined by the Plan will be automatically enrolled in YURAP. Under YURAP’s automatic enrollment feature, Yale will automatically reduce your monthly salary by 5% and deposit that amount as a pre-tax employee contribution to YURAP. Yale will make a Core Contribution equal to 5% of your salary and a University Match equal to 5% of your salary to your YURAP account.
You may direct that your contributions and Yale’s match be invested with TIAA-CREF and/or Vanguard and for each investment company you select, you may specify the investment funds in which you want your contributions and Yale’s match invested.
Unless you direct otherwise, your contributions and Yale’s match will default to TIAA-CREF and will be invested in the age-based TIAA-CREF Lifecycle Fund that corresponds to your estimated date of retirement. While enrollment in YURAP will be automatic, you have the option to opt-out at any time.
Both the faculty member and employer contributions to the plan are immediately vested, meaning that the total accumulation belongs to the participant even if the employee terminates employment. Investment may be made with either one of the following Plan vendors: TIAA-CREF or The Vanguard Group.
Yale University Retirement Account Plan (YURAP)
The University provides a University Core contribution in addition to a University Match.
- For the first $110,100* of base salary you earn in a fiscal year (from July 1, 2012 through June 30, 2013), the University Core will consist of a plan contribution equal to 5% of your earnings plus a dollar-for-dollar match for up to the first 5% you contribute to the Plan.
- Once you earn over $110,100 in this fiscal year, the University Core contribution will increase to 7.5% of your earnings while you continue to receive a dollar-for-dollar match on your contributions up to 5%.
- There will now be an all-in-one 403(b) plan that consists of the University Core, Employee Contributions, and University Match. The Supplemental Retirement Account (SRA) will no longer be active.
*$110,100 is the Social Security Wage Base (SSWB). This dollar amount automatically changes each year to keep the Plan up to date with increases in price and wage levels.
The chart below illustrates the plan design mentioned above. (Please note: All amounts are annual.)
YURAP with University Core Only and with Core and Match:
|YURAP w/Core only*||YURAP w/Core only*||YURAP
w/ Core & Match**
|YURAP w/Core & Match**|
|Sample Salary||Your Contribution||University Contribution||Your Contribution||University Contribution|
*Based on 5% below SSWB and 7.5% above SSWB.
**Based on an employee savings rate of 5%
Employees can choose the amount they wish to contribute to YURAP and set the amount between zero and 75% of their eligible earnings, not to exceed the annual IRS limit, currently $17,000 ($17,500 in 2013). If you are age 50 or older, you can choose to contribute up to an additional $5,500 at any time during or after the calendar year in which you reach the age of 50. Contributions by the employee and the University may not exceed the limitations imposed by the Internal Revenue Code and applicable Treasury Regulations. The FY2012/2013 salary limitation is $250,000.
The University Core contribution will be credited to the employees account independently of whether they contribute to YURAP. However, if the employee does not contribute to YURAP, they will not receive the 100% University Match.
Each July, the University will increase your employee contribution by 1% to a maximum of 10%. If you are contributing between zero and 4%, the University will reset your contribution to 5% with the option to reduce or waive. This began July 1, 2010.
Employee and University contributions may be invested with either TIAA-CREF or Vanguard.
Employees have the option to direct their Core contributions to one vendor and direct their contributions and the University Match to the other vendor. Employee contributions and the University Match must remain bundled together.
Both vendors have customized websites designed specifically for Yale employees. These sites offer detailed fund information, retirement planning calculators and all the forms you need to enroll.
Can I change my contributions whenever I want?
You can always change the amount of your contribution to YURAP and set the amount between zero and 75% of your eligible earnings, not to exceed the annual IRS limit, currently $17,000 ($17,500 in 2013). If you are age 50 or older, you can choose to contribute an additional $5,500 at any time during or after the calendar year in which you reach the age of 50. You can change your contribution percentage at any time by logging into the University portal (www.yale.edu/portal) and clicking "My Benefits".
Can I reduce my contribution to zero dollars and still get the University Core?
Yes. The University Core is credited to your account independently of whether you contribute to YURAP. However, if you do not contribute to YURAP, you will not receive the 100% University Match.
Can I have the University Core contributions invested separately from my savings and University Match account?
Yes. You have the option to have the Core go to either TIAA-CREF or Vanguard. Your contributions and the University Match must remain bundled together and can also be directed to either vendor; these monies cannot be split.
Can I opt out of the automatic savings feature of this plan?
Yes. You can opt out at anytime for future contributions. To opt out, you must complete a YURAP Election/Change Form or contact the Benefits Office.
How much do I need to contribute to get the maximum University Match?
In order to maximize the University Match, you will need to save at a rate of at least 5% of base pay.
When will my Plan account be vested?
You will be fully vested automatically in all contributions you and the University make to your account.
Additional Design Features
- TIAA-CREF participants will be eligible to take a loan on employee contributions only. There is not a loan feature available for Vanguard at this time.
- The number of loans is limited to three general purpose loans.
Full distribution rights at termination and retirement
- The University will allow you to take your retirement account balance with you upon termination or retirement.
In-service distributions at age 59½
- During active employment at age 59½, you will be able to take a distribution from the Plan. This is limited to employee contributions only.
Ability to direct University Core and Match to different vendors (TIAA-CREF or Vanguard)
- You may select different vendors for the University Core and Match. There is a requirement that employee contributions and the University Match remain bundled with one vendor.
Automatic escalation of savings rate of 1% per year to a maximum of 10% each July unless you provide direction to the contrary
- Each July, the University will increase your employee contribution by 1% to a maximum of 10%. If you are contributing between zero and 4%, the University will reset your contribution to 5% with the option to reduce or waive. This began July 1, 2010.
Supplemental Retirement Account (SRA) is replaced by an all-in-one 403(b) plan
- If you were contributing to an SRA in addition to YURAP, your SRA contributions will continue and now be included as part of your YURAP account.
Yale University Tax-deferred 403 (b) Savings Plan
Faculty who are below the benefit level, or are not enrolled in YURAP, may choose to save for retirement by contributing a portion of their pay on a pre-tax basis to the Yale University Tax-deferred 403 (b) Savings Plan. There is not a University Match.
Employees can contribute a percentage of pay ranging from 1 to 75% or the IRS maximum of $17,000 ($17,500 in 2013). If you are age 50 or older, you can choose to contribute up to an additional $5,500 at any time during or after the calendar year in which you reach the age of 50. Employee contributions may not exceed the limitations imposed by the Internal Revenue Code and applicable Treasury Regulations. The FY2012/2013 salary limitation is $250,000.
Employee and University contributions may be invested with either TIAA-CREF or Vanguard.
Both vendors have customized websites designed specifically for Yale employees. These sites offer detailed fund information and retirement planning calculators.
You can enroll in a retirement plan online via the My Benefits website by logging into the University portal (www.yale.edu/portal) and clicking "My Benefits." The My Benefits website also enables you to estimate your retirement savings to reach your goals. If you have any questions, contact Employee Services at 203-432-5552.
Yale University 457 (b) Deferred Compensation Plan
The Yale University 457(b) Deferred Compensation Plan provides a vehicle for employees meeting specific criteria to accumulate additional tax-deferred savings beyond the limits of the 403(b) plans. The plan is available to professors, professors on continuing appointments in the School of Medicine and employees whose salary equals or exceeds 1.5 times the Social Security Wage Base (in 2012, the eligible salary is $165,150; in 2013, the eligible salary is $170,550) and have elected to contribute the IRS maximum to their Yale 403(b) plan.
Benefits-eligible faculty and staff can contribute a percentage of pay ranging from 1 to 75% or the IRS maximum of $17,000 ($17,500 in 2013). The contribution made to the plan are exempt from federal and state taxes. There are no employer contributions to this plan.
This type of plan is unfunded by the University; however, the account balance is credited with investment earnings based on the performance of funds selected and is always fully vested.
TIAA-CREF or Vanguard may be chosen as record keepers and the investment funds available are the same as with the 403(b) plan.
Early Retirement Subsidy Plan
In order to make early retirement financially feasible and attractive to tenured faculty who choose that option, the University has adopted an Early Retirement Subsidy Plan for Tenured Faculty. Under this plan, faculty with tenure (and in the School of Medicine, professors in the clinical track with continuing appointments) who retire at age 62 or over with at least 15 years of University service and before the Normal Retirement Age of 70, will be eligible to receive a cash benefit. The benefit supplements the reduced retirement annuity under the YURAP which an individual who retires early would receive if his or her retirement income commenced at that time rather than at normal retirement. The benefit equals 60% of the participant's three-year final average salary plus 2% for each year of service with the University over 15, or, if less, the amount that would be required to purchase an annuity that would bridge the difference between the annuity which could be purchased with the participant's YURAP account balance at the date of early retirement and the annuity which could be purchased with that account balance projected (at 4%) to Normal Retirement Age*. For purposes of the foregoing, amounts in the account balance in excess of six times salary will be excluded from the calculations.
Benefits will be paid in annual installments over a period of three years. Under the Internal Revenue Service's interpretation of applicable tax law, the present value of the entire benefit will be taxable in the year of first receipt of any portion of the benefit. Therefore, in order to accommodate the tax burden on participants, one-half of the total benefit will be paid in the first year, and one quarter in each of the second and third years.
Early in the period of eligibility for an Early Retirement Subsidy Plan benefit, an individual's benefit typically will increase as a result of salary increases and additional service. However, as the individual approaches Normal Retirement Age, the amount that would be required to supplement the early retirement annuity as described above to bridge the difference between the early and normal retirement annuity decreases and at Normal Retirement Age becomes zero. Thus, while the Early Retirement Subsidy Plan benefit will reflect each individual profile, for most people the combination of these two factors will produce the greatest level of subsidy benefit toward the late sixties.
*Specifically, the annuity limitation is calculated as follows: The annuity that could be purchased with the account balance at the chosen early retirement age is first calculated, using the CREF 4% annuity purchase rate table. The account balance is then projected at 4% growth to age 70, and a similar calculation of amount of annuity that could be purchased at age 70 is made. The difference between these two annuities is taken, and the amount of premium required to purchase an annuity to cover the difference commencing at the chosen retirement age is figured by multiplying the difference by the annuity purchase rate at early retirement.
The Early Retirement Subsidy Plan is not a funded plan (that is, it does not require assets to be set aside in a trust or other funding vehicle), and all benefits will be paid from the general assets of the University, which will administer the plan.
Planned Retirement Program
In many departments effective planning may be considerably enhanced if the retirement date of individual faculty is known in advance (e.g., planning for coverage of specific sub-disciplines and for changes in the availability of and need for research space in the laboratory sciences). The University therefore has designed a Planned Retirement Program for tenured faculty to encourage individuals to fix a retirement date in advance.
The Planned Retirement Program is available to tenured faculty in FAS and to certain ranks in the professional schools (as designated by their respective Deans and the Provost) beginning at age 59 or over, without upper age limit. To be eligible, a faculty member must have 15 years of service with the University at the time of entry into the Planned Retirement Program. An individual faculty member who chooses to enter the program will be required to set irrevocably a specific date within 1 to 3 years by which he or she will fully retire.
The Planned Retirement Program permits an orderly reduction in certain responsibilities of participants, with appropriate approval. These may include dissertation supervision and major departmental administrative responsibilities which require multi-year commitments, as mutually agreed by the faculty member and the departmental chair and approved, where appropriate, by the professional school dean and by the Provost. (These arrangements must take due regard for the potential burden on other faculty, especially in small departments. Reduced classroom teaching responsibilities will not be offered to individuals electing Planned Retirement)
In addition, participants in the Planned Retirement Program may elect to start receiving their YURAP retirement annuities and to cash out a portion of their retirement accumulation as provided by the revised YURAP, as described below.
Finally, participants in the Planned Retirement Program may elect to accelerate the receipt of any Early Retirement Subsidy Plan benefit to which they will become entitled upon full retirement up to three years before actual retirement, beginning July 1, 1994. For purposes of determining the initial benefit amount, the accumulation at retirement will be calculated by projecting forward the acculmulation balance at the time early retirement benefits begin, with a 4% growth rate, to a date of planned retirement. The three-year average salary at the time benefit payments begin will be used as a basis for determining that initial amount Upon actual retirement, the benefit will be recalculated based on actual salary for the three final pre-retirement years, and a corresponding adjustment to the benefit will be made.
Phased Retirement Program
The new Phased Retirement Program available to tenured faculty in FAS and to certain ranks in the professional schools (as designated by their respective Deans and the Provost), replaces the current Phased Retirement Program in order to increase its attractiveness to faculty. It provides for half-time rather than quarter-time appointment and salary, links to the new Early Retirement Subsidy Plan and Planned Retirement Program, and enhances certain other features of the program.
The revised Phased Retirement Program can be elected by tenured faculty (and those in certain other designated ranks in the professional schools) with 15 years of University service, beginning at age 59 or over, without upper age limit. Phased Retirement may continue for a maximum of 3 years. An individual on Planned Retirement may convert to Phased Retirement during the Planned Retirement interval.
During Phased Retirement, the faculty member's appointment is half-time, and he or she draws half of normal salary. University TIAA/CREF retirement contributions for individuals on Phased Retirement are half of the amount contributed on full-time equivalent salary. Health benefits for individuals on Phased Retirement are those provided to full-time faculty.
In the School of Medicine, certain special rules will apply. Variable percentages of Phased Retirement between 10% and 80% will be permitted in that school, as determined by the Dean, according to the sources of funding that contribute to the individual's salary. Salary for participants in Phased Retirement in the School of Medicine will be scaled in proportion to the percentage of their appointments. Retirement plan contributions will be scaled based upon same percentage. Finally, a period of Phased Retirement longer than 3 years may be permitted in the School of Medicine when it allows Phased Retirement to be coterminous with a grant that pays the individual's salary.
In addition, participants in the Phased Retirement Program may elect to start receiving their YURAP retirement annuities and to cash out a portion of their retirement accumulation as provided by the revised YURAP as described below.
Upon entry into the Phased Retirement Program, a faculty member may elect to receive one-half of the amount of any Early Retirement Subsidy Plan benefit to which he or she would be entitled if he or she then retired fully, or, alternatively if the value is greater, may elect to receive, on an accelerated basis if requested, the Early Retirement Subsidy benefit, if any, calculated on the basis of age and full?time equivalent salary as of the date of full retirement, in accordance with the Planned Retirement Program. (In the School of Medicine, the foregoing will pertain to any appointment on Phased Retirement of half-time or less. Appointments of more than half-time will be eligible only for an accelerated Early Retirement Subsidy benefit based on the date of full retirement as provided in the Planned Retirement Program) To the extent permitted by law, the individual may contribute all or part of the benefit to a tax-deferred retirement annuity account.
A faculty member on Phased Retirement may accept outside support for up to the remaining portion of full salary, subject to the policies of his or her school that may require the use of external funding to support a portion of regular salary. Any outside academic activities undertaken by a participant in Phased Retirement must acknowledge Yale as the primary academic appointment. A Phased Retirement appointment cannot be combined with either a full-time or tenured part-time appointment at another university. A faculty member on half-time Phased Retirement retains the voting privileges of a full-time faculty member.
The space occupied by the faculty member on Phased Retirement, particularly in the laboratory sciences, must be reduced, in an orderly manner as agreed to by the department chair, to about half or less of the amount occupied when the individual was full-time.
Individuals who are currently on Phased Retirement will be permitted to continue in the existing plan or may choose to complete their time (up to three years) under the revised Plan, without eligibility for any Early Retirement Subsidy Plan benefit.