MSU Human Resources >> News >> Updated Retirement Contributions - FAQs


FAQS - university one-time payment

On April 29, 2022, President Stanley sent a message announcing plans to provide a one-time financial payment to eligible faculty, academic staff and executive management, to offset some of the financial implications of lost retirement contributions that took place last year as a result of COVID-19 and its impact on the university. The one-time payment will occur in August 2022.

Those support staff who are subject to the retirement match reduction will only experience the reduction for six (6) months.

The Frequently Asked Questions (FAQs) below have been updated to address topics like eligibility criteria and timing of payment.  More information will follow in the coming weeks, including instructions on how to direct the payment, if you choose, to your retirement account on a pre-tax basis.

Faculty, Academic Staff and Executive Management

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Eligibility

Faculty, academic staff, and executive managers who meet both criteria* below are eligible to receive the one-time payment.

  • Were employed by the university on the date the announcement was made by the President (April 29, 2022), and
  • Were eligible to participate in the university 403(b) Base Retirement Program in calendar year 2021.

*Note: There are a few exclusions to these criteria. See the answer to “Is anyone excluded from receiving the one-time payment?” for these exclusions.

Yes. The exclusion criteria are:

  1. Faculty, academic staff, or executive managers who separated (e.g., resigned, retired) from the university prior to April 29, 2022.
  2. Faculty, academic staff, or executive managers on a leave to retirement on or before April 29, 2022.
  3. Faculty, academic staff, or executive managers on long-term disability on or after April 29, 2022.
  4. Faculty, academic staff, or executive managers who were not affected by the university’s reduction in employer retirement contributions in calendar year 2021, such as employees who were: 
    • 100% UNTF
    • Research Associate / Senior Research Associate
    • On Long Term Disability

Yes. Individuals eligible to receive the one-time payment will receive the one-time payment regardless of their participation in the University’s 403(b) Base Retirement Program. 

It depends on the type of leave of absence. Individuals who meet the eligibility criteria and were on leave (paid or unpaid) on April 29, 2022, are eligible to receive the payment, unless the leave reason was:

  1. Leave to retirement: Individuals on a leave to retirement on or before April 29, 2022, will not receive the one-time payment.
  2. Long-term disability: Individuals on long-term disability on or after April 29, 2022, will not receive the one-time payment, because the payment would be treated as an offset against the long-term disability payments.

Payment Specifics

The one-time payment will equal five percent (5%) of an individual’s non-UNTF retirement program eligible salary earnings for 2021.

The one-time payments will be distributed in paychecks as part of the normal pay cycle.

Yes. The one-time payment will be subject to applicable tax withholding, but see the answer to the question “If payments are being disbursed into paychecks, how may I contribute to my retirement accounts on a pre-tax basis?”

Your one-time payment will be included in your paycheck and will be eligible for contribution to the university's retirement plans, just as your ordinary pay is eligible for contribution to the retirement plans. Your contributions to the university’s retirement plans are deducted from your pay before taxes are taken out.

You may adjust your pre-tax contributions to the university's retirement plans. Instructions for making these adjustments will be forthcoming.

Note, however, that your contributions to the university's retirement plans are governed by applicable IRS limits as explained here:  https://hr.msu.edu/benefits/retirement/irs-limits.html     

If you do not contribute your wages and one-time payment to MSU's retirement plans, applicable withholding taxes will apply.

Timing

Eligible employees who are paid monthly will receive the one-time payment on August 31, 2022. Eligible employees who are paid biweekly will receive the one-time payment on August 26, 2022. This corresponds with normal payroll cycles and will also include individuals that would not typically receive a payment due to being separated or on a leave of absence.

Support Staff

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The reduction in the university’s contribution to the 403 (b) Base Retirement Program took effect at different times based upon when certain union agreements were finalized, the payroll dates for the affected unions, and the time needed to amend relevant retirement plan documents. As a result, the reduced retirement contributions are anticipated to end in June for APA, APSA, 274 and non-union salary support staff, July for CT, 1585 and non-union bi-weekly support staff, and October for SSTU and 324. POAM is not impacted as their agreement does not include a reduction in the university’s contribution to the 403(b) Base Retirement Program.
Those support staff who are subject to the retirement match reduction will only experience the reduction for six (6) months. Faculty, academic staff, and executive management experienced an 18-month reduction. The one-time payment is to offset some of the impacts to faculty, academic staff, and executive management for twelve (12) months of the retirement match reduction.
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