Faculty Handbook
Retirement PlansChange to Employer Match Contribution 7/2020
All faculty/academic staff members appointed in a benefits eligible position at 50 percent time or more for a period of nine months or more are eligible to make contributions to the 403(b) Base Retirement Program as well as the 457(b) Deferred Compensation Plan. Most faculty/academic staff members, whether in a benefits eligible position or not, are eligible to make contributions to the 403(b) Supplemental Retirement Program. Please see the 403(b) Retirement Plan Policy or 457(b) Deferred Compensation Plan Policy for more detail.
Eligibility
Participation in the 403(b) Base Retirement Program, with the University contribution, is initially voluntary and required for faculty/academic staff when certain service and age requirements are met. More information is available at 403(b) Base Retirement Program. The general rules follow:
Faculty appointed 50 percent time or more for nine months or more with the rank of assistant professor, associate professor, professor or senior research associate may elect immediate participation, with University contribution, or may defer participation until completing 24 FTE service months and attaining age 35, at which time participation is mandatory for faculty/academic staff.
A specialist with a probationary or continuing appointment of 50 percent time or more may elect immediate participation, with University contribution. A specialist who does not have a probationary or continuing appointment will become eligible for the University contribution 24 FTE service months from the date of initial appointment. Participation for all specialist appointments may be deferred until completing 24 FTE service months and attaining age 35.
Faculty/academic staff appointed 50 percent time or more for nine months or more as instructors, lecturers, or assistant instructors become eligible for the University contribution 24 FTE service months from the date of initial appointment to an eligible status. (See below for change in eligibility for research associates). Participation is required for instructors, lecturers and assistant instructors upon completion of 24 FTE service months and attainment of age 35. Instructor/residents and instructor/interns are never required to participate.
Effective October 1, 2006, faculty/academic staff appointed 50 percent time or more for nine months or more as a research associate become eligible for the University contribution 36 FTE service months from the date of initial appointment to an eligible status. Participation is required for research associates upon completion of 36 FTE service months and attainment of age 35.
Once required participation commences for faculty/academic staff appointed for nine months or more, the faculty/academic staff member must continue contributing to the 403(b) Base Retirement Program while employed at the University.
Faculty/academic staff members appointed 50 percent time or more for nine months or more previously enrolled in a contributory retirement program before appointment at MSU or are age 55 or older upon appointment, may elect immediate participation regardless of rank, with the University contribution.
Faculty/academic staff may complete the enrollment process in the 403(b) Base Retirement Program online through the EBS Portal.
Coverage
The 403(b) Base Retirement Program provides retirement income based upon the total amount accumulated from the employee's contribution, the University's contribution, and any earnings on those amounts over the period of the working years.
A faculty/academic staff member may commence to draw his/her accumulation under a variety of payment options after leaving the University; however, to be considered a retiree from the University, faculty/academic staff must meet the minimum University retirement requirements.
The 403(b) Base Retirement Program is fully vested indicating that both the faculty/academic staff member's and the University's contributions are placed directly in the faculty/academic staff member's account each month. In the event the faculty/academic staff member leaves the University, ownership of the total accumulation is retained by the faculty/academic staff member. The faculty/academic staff member may elect to receive an immediate retirement income or may defer the receipt of his/her retirement income until a later date.
Cost
The 403(b) Base Retirement Program is financed by a reduction of 5% from the faculty/academic staff member's eligible compensation and, effective July 1, 2020:
For these purposes, “unionized” means the terms of employment of the faculty/academic staff member are covered by a collective bargaining agreement. For those faculty and academic staff members with hybrid UNTF / non-UNTF appointments, the 10% University matching contribution applies to the UNTF portion of their appointment, and the 5% matching contribution applies to the non-UNTF portion of their appointment.
Faculty/academic staff members appointed at 50% time or more for a period of at least nine (9) months may make additional tax-deferred contributions to the 457(b) Deferred Compensation Plan subject to IRS limitations. More detail is available at 457(b) Deferred Compensation Plan.
Most faculty/academic staff members are eligible to make additional tax-deferred contributions to the 403(b) Supplemental Retirement Program subject to IRS limitations. More detail is available at 403(b) Supplemental Retirement Program.
Participation in the 403(b) Supplemental Retirement Program and/or 457 (b) Deferred Compensation Plan is never required, and no matching contribution is made by MSU.
1 For benefit purposes only, half-time is defined as 50.0-64.9 percent time; three-quarter time is defined as 65.0-89.9 percent time; full-time is 90.0-100.0 percent time.