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Retirement Plans - C&T

Clerical & Technical (C&T) employees in benefit eligible positions have several retirement plan options.

Yale University Retirement Plan for Staff Employees

A "Defined Benefit Plan" (the amount of pension payment is determined for each participant by a formula that gives weight to salary, length of service and age at retirement.)

A "Non-Contributory Plan" (Eligible employees are enrolled at hire date without any action on their part or any requirement to contribute).

Employees are eligible for "normal retirement" at age 65 or hereafter with 5 years of service. They may retire at any time after age 55 when the sum of age and years of service equals or exceeds 75. Such "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). Pensions for employees who retire with at least 30 years of service are discounted 2% per year. Pensions for employees who retire at age 60 or later with at least 25 years of service are not discounted for early retirement.

Participants in the Plan "vest" after five years of service. Vesting gives a participant the right to a pension at age 65 (or when the sum of age and service equal 75) even if he or she leaves Yale employment.

Effective January 2008, the formula for calculating pension payments 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 $37,000 by 1.4% for $37,001 to $67,000, by 1.3% for over $67,000. Multiply the sum of these factors by the number of years (whole and fractional) of Yale service. Divide the product by 12 to establish monthly pension.

The costs to Yale for the Plan are determined by an annual actuarial review (the "valuation") which considers such factors as number of participants, salary levels and their probable growth, earnings on Plan assets, probable ages at retirement and mortality expectations for retirees.

Yale's Plan has at least three highly unusual features: (1) The highest annual rate of pay in the computation, is at the rate of pay on the date of retirement. (2) Because salary increments below $37,000 are weighted a higher multipliers than increments above $37,000, the Plan provides a kind of "safety-net" for retirees at lower salary levels. (3) Terminated vested employees are eligible to "cash out" their pension benefit if the present value of their account balance is less than $18,000.

Matching Retirement Plan (A Defined Contribution Plan)

In a 403(b) Defined Contribution Plan, both employer and employee know how much will be contributed to the Plan. Eligibility for the plan is to be a benefit level employee of Yale University for two consecutive years. There are many advantages to participating in the Plan: employee contributions are tax-sheltered from federal and state taxes, earnings are not taxed until withdrawn and there is a loan option available from the GSRA TIAA contract.

For employees with at least two years of service at benefit level, a dollar for dollar match of employee contributions will be made up to 2% of the base annual salary.

For employees age 45 or older with at least 5 years of continuous service at benefit level, there will be a dollar for dollar match by the University of the employee contributions up to 4% of the base annual salary.

Participants in the Plan are immediately vested with respect to both their own contributions and University contributions. In this case, vesting means that the total accumulation follows the participant despite employment termination.

Withdrawals from your retirement account, however, must meet Federal Regulations, such as: age 59-1/2, termination from employment, death, disability, financial hardship as determined by the IRS.

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:

Both vendors have customized websites designed specifically for Yale staff. These sites offer detailed fund information, retirement planning calculators and all the necessary forms to enroll.

You have four options available to you when deciding on the amount to contribute:

  1. You can either elect a specific percentage or dollar amount.
  2. You can check off the maximum box and this will allow you to contribute the IRS maximum of $15,500.
  3. 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.
  4. 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.

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.