Retirement Plans - M&P
Useful Brochures
Managerial and Professional (M&P) employees in benefit eligible positions have two retirement plan options supported by University contributions:
- The Yale University Retirement Plan for Staff Employees (YRP) is a defined benefit plan where the employees are automatically enrolled on the first day of employment.
- The Yale University Retirement Annuity Plan (YURAP) is a defined contribution plan available to M&P employees who are 35 years of age, or have completed two years of service. M&P employees may elect to enroll in this Plan as an alternative to the Yale University Staff Retirement Plan. Enrollment in YURAP will be effective the first date of the month following receipt of the application.
Note: Employees can be active in only one of the two retirement plans at any given time. Once an employee elects participation in the YURAP he/she gives up the right to enroll in, or continue receiving benefit credit, in the Yale University Retirement Plan for Staff Employees. Any prior service credit in the Staff Retirement Plan will be retained.
- Group Supplemental Retirement Annuity (GSRA) M&P employees may also join the Supplemental Retirement Annuity Plan, a 403b Tax-Sheltered Savings Program, at any time during the year and change the contribution amount up to four times per year.
Yale University Retirement Plan for Staff Employees (YRP)
The Yale Retirement Plan for Staff Employees (YRP) is a "Defined Benefit, Non-Contributory Plan" where the amount of pension payment for each participant is determined by a formula that gives weight to salary, length of service and age at retirement.
M&P employees are eligible for "normal retirement" at age 65 or thereafter with 5 years of service. They may elect early retirement at any time between age 55 and 64 when the sum of age and years of service equals or exceeds 75.
Early Retirement
"Early retirement" may require a 4% "discount" of payment for each year before age 65 to offset the actuarially extended life expectancy during which benefits will be paid unless:
- Pensions for M&P employees who retire with at least 30 years of service are discounted by half the normal discount, 2% per year.
- Pensions for M&P employees who retire at age 60 or later with at least 25 years of service are not discounted for early retirement.
Vesting with Pension Benefits
Participants in the Plan "vest" after five years of service. Vesting gives a participant the right to a pension at age 65 (or as early as age 55, when the sum of age and years of service equals 75) even if he or she leaves Yale employment. Terminated vested M&P employees are eligible to "cash out" if the present value of their account balance is less than $18,000.
Pension Formula
The current formula for calculating a monthly pension payment is as follows:
Determine the highest annual rate of pay during the final five years of employment. Multiply such rate by 1.5% for up to $35,000, by 1.4% for $35,001-$64,000, by 1.3% for over $64,000. Multiply the sum of these factors by the number of years (whole and fractional) of Yale service. Divide the product by 12 to establish a monthly pension benefit payment.
Significant beneficial features of the Plan are:
- The highest annual rate of pay in the computation is the highest annual rate of earnings in the last five (5) years of employment. For active employees this is most often the rate of pay on the date of retirement.
- Salary increments below $35,000 are weighted for higher multipliers than increments above $35,000. The Plan provides a "safety-net" for retirees at lower salary levels.
- Terminated vested employees are eligible to “cash out” their pension benefit if the present value of their account balance is less than $18,000.
Yale University Retirement Annuity Plan
(YURAP -- A Defined Contribution Plan)
In Yale’s 403(b) Defined Contribution Plan both employer and employee 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, which is based on the participant’s investment choices.
To be eligible, employees must be either age 35 or have completed two years of service.
Both the employee and employer contributions in the plan are immediately vested, meaning that the total accumulation belongs to the participant even if the employee terminates employment.
The YURAP is a contributory plan and eligible employees who elect to enroll must contribute at the following rate.
(Plan Base FY 2008/2009 - $54,200)
Under age 35: |
||
|---|---|---|
| On salary below Plan base: | Employee 2.5% |
Yale 5.0% |
| On salary above Plan base: | Employee 5.0% |
Yale 10.0% |
Over age 35: |
||
| On salary below Plan base: | Employee 2.5% |
Yale 7.5% |
| On salary above Plan base: | Employee 5.0% |
Yale 12.5% |
The monthly contribution is based on the employee's fiscal base salary and year-to-date base earnings.
Contributions by the participant and the University may not exceed the limitations imposed by the Internal Revenue Code and applicable Treasury Regulations. The FY2008/2009 salary limitation is $230,000.
Employee and University contributions may be invested with either one of the following University Plan vendors:
- TIAA-CREF or The Vanguard Group.
Retirement and Distribution Benefits (YURAP):
Participants who leave Yale may start receiving annuity payments at almost any age. Under present tax rules participants may be required to begin receiving annuity payments at age 70 and 1/2.
After termination or retirement, cash withdrawals from the plan are allowed under any one of the following conditions:
- Less than five years of participation
- Account value of less than $50,000
- At least ten years of separation regardless of service
- Age 55 and separated from service at Yale
Group Supplemental Retirement Annuity (GSRA)
In addition to the retirement plan options, eligible employees may choose to contribute to the Yale University 403(b) tax-sheltered savings plan.
Yale University 403 (b) tax-sheltered savings plan or Group Supplemental Retirement Annuity (GSRA) allows you to invest contributions from your pay in a wide range of investment options. The monthly contributions and earnings are sheltered from state and federal income taxes until withdrawn at or before retirement.
Employees may enroll in the GSRA at any time during the year and make up to four changes in the dollar amount or percentage deducted from their paycheck each calendar year. There is no waiting period for new hires.
Additional benefits of the plan:
- Low monthly investment minimum of $25/month
- Earnings are tax deferred until withdrawn
- Flexibility of investment options
- Decreases your taxable income
The University currently offers two different companies through which you may invest your tax-sheltered contributions:
- TIAA/CREF (Teachers' Insurance Annuity Association/ College Retirement Equities Fund)
- The Vanguard Group
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.
- TIAA-CREF: www.tiaa-cref.org/yale
- VANGUARD: http://yale.vanguard-education.com
You have four options available to you when deciding on the amount to contribute:
- You can either elect a specific percentage or dollar amount.
- You can check off the maximum box and this will allow you to contribute the IRS maximum of $15,000.
- If you are or will be over the age of 50 during 2008, you can also check off the box to do an additional $5,000 catch up.
- If you have been employed by Yale University for greater than 15 years then you have the opportunity if you have not already done so to contribute up to an additional amount of $3,000 annually to a lifetime maximum of $15,000. Select any of the options that apply to you specifically during the tax year 2008.
Select any of the options that apply to you specifically during the tax year 2008.
You have four options available to you when deciding on the amount to contribute:
- You can either elect a specific percentage or dollar amount.
- You can check off the maximum box and this will allow you to contribute the IRS maximum of $15,500.
- If you are or will be over the age of 50 during 2007, you can also check off the box to do an additional $5,000 catch up.
- If you have been employed by Yale University for greater than 15 years then you have the opportunity if you have not already done so to contribute up to an additional amount of $3,000 annually to a lifetime maximum of $15,000. Select any of the options that apply to you specifically during the tax year 2008.
Select any of the options that apply to you specifically during the tax year 2008.
If you are interested in participating in either of these programs, please call the Benefits Office at 432-5550 to obtain information on the plans or to meet with a Benefits Counselor. The election form can be found online here. Once completed, mail or fax the form to the Benefits Office. Fax number: 2-7575 Mail: 155 Whitney Ave., Rm 130.
