|A Retirement Plan Change for New Faculty and Staff
December 22, 2009,
Volume 56, No. 16
Penn is committed to offering a retirement program that’s competitive and helps the University attract and retain the best faculty and staff. In today’s economy, we’re also doing what we can to contain costs while maintaining Penn’s position as a top workplace. With all of this in mind, we’re announcing a change to the Tax-Deferred Retirement (TDR) Plan that will affect faculty and staff hired on or after January 1, 2010.
Those hired on or after January 1, 2010 will become vested in Penn’s contributions to the TDR Plan after three years of employment. Being vested means that the individuals own the money in their accounts completely, even if they leave the University. Employee contributions (the funds the faculty or staff member contributes) will continue to be immediately vested.
University contributions will still start being credited to the faculty or staff member’s account once the TDR’s one-year waiting period is completed (or immediately if a prior service credit waiver is granted). However, if the individual leaves Penn before completing three years of service, any contributions Penn has made to the TDR account will be forfeited.
It’s important to note that Penn’s retirement benefits remain competitive—the benefits themselves aren’t changing. Penn contributes to the TDR account even if the faculty or staff member doesn’t put in any of his/her own money; if the individual does contribute, Penn also matches the contributions dollar-for-dollar up to 5%. Therefore, faculty and staff who contribute the full 5% will get a total of 6.5–9% of base salary from Penn, depending on their age.
For more information on the new vesting rule or if you have questions about Penn’s retirement plans, contact the Penn Retirement Center at 877-PENN-RET (877-736-6738).
Related: Reach Your Retirement Goals with Pre-Tax Contributions