Section: Personnel
Policy Number: 4-12
Policy Name: University Programs for Retirement
Date: November 1997
Revisions: July 2005

  1. PURPOSE

    To outline the University programs providing retirement income benefits.

  2. POLICY

    1. Primary University Retirement Plans

      1. University 403(b) Retirements Plans

        The primary retirement program for eligible full and part-time faculty and professional staff is the University 403(b) Retirement Plan through Fidelity Investments and Teachers Insurance and Annuity Association (TIAA) - College Retirement Equities Fund (CREF). Although participation is optional for employees under age 35, faculty and professional employees are encouraged to join the plan upon hire or entry into an eligible position. Employees age 35 and older are required to participate in the Plan.

        The University contribution for this program is fixed at 11 percent of annual base salary for eligible employees who contribute a minimum of 4 percent of their annual salary. Employees may participate concurrently in both Fidelity Investments and TIAA-CREF. Contributions to Fidelity Investments and TIAA-CREF are on a tax-deferred basis. Both companies offer a variety of investment options. Details on these options may be obtained from the Office of Human Resources-Benefits.

        There are various income options at retirement, including lifetime annuity income, deferred income, systematic withdrawals, lump sum withdrawals, and interest-only payments.

      2. Delaware State Employees' Pension Plan

        Salaried and hourly (AFSCME) staff employees participate in the Delaware State Employees' Pension Plan. In accordance with the State Pension Statute, a mandatory pre-tax contribution is required - which is equivalent to 3 percent of salary in excess of $6,000/year plus 5 percent of salary in excess of the Social Security base. Benefits are based on average salary (3 years) and total service in accordance with the Statute.

        There is no mandatory retirement age under the State Pension Statute. Details on this program may be obtained from the University Office of Human Resource-Benefits.

    2. Voluntary Programs

      1. Voluntary 403(b) Retirement Plan

        Participation on a tax-deferred basis in the Voluntary 403(b) Retirement Plan through Fidelity Investments and Teachers Insurance and Annuity Association (TIAA) - College Retirement Equities Fund (CREF) is available to all eligible full and part-time employees. This plan is designed for individuals who wish to make additional contributions to their retirement savings. Participation in the Voluntary 403(b) Retirement Plan does not require a minimum contribution as does the standard University 403(b) Retirement Plan. The University makes no contribution to the Voluntary Retirement program.

        Individuals may not tax defer more than the IRS limits. Please see the 403(b) Retirement Plan Annual Contribution Limits for further information. Tax penalties may occur when individuals withdraw contributions from a tax-deferred plan. It is recommended that financial advice be obtained before doing so.

        Eligible employees may participate concurrently in both Fidelity Investments and TIAA-CREF. There are various income options at retirement, including lifetime annuity income, deferred income, systematic withdrawals, lump sum withdrawals, and interest-only payments.

      2. Voluntary 457(b) Deferred Compensation Plan

        Participation in the Voluntary 457(b) Deferred Compensation Plan is available to all regular full and part-time employees. This plan is designed for individuals who are already making the maximum allowable contribution (per IRS limits) to the Voluntary 403(b) Retirement Plan. Although there are no University contributions to the Plan, the tax benefits of participating in a 457(b) Plan make it very attractive for supplemental retirement savings. Please refer to the 457(b) Deferred Compensation Plan Annual Contribution Limits for further information.

        The Voluntary 457(b) Plan is very similar to the Voluntary 403(b) Plan, enabling employees to set aside a portion of their salary on a tax-deferred basis to augment their pension/retirement plans and Social Security benefits. Fidelity Investments and Teachers Insurance and Annuity Association (TIAA) - College Retirement Equities Fund (CREF) administer this program, which offers the same investment options as the Voluntary 403(b) Retirement Program.

    3. Agricultural Extension Retirement Plan

      Agricultural Extension staff members holding cooperative appointments with the U. S. Department of Agriculture participate in the Federal Retirement Plan as well as the University Retirement Plan. Details on Federal retirement are available from the Director of Cooperative Extension.

Submitted By: Office of Human Resources-Benefits