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Retirement Plans - Managerial & Professional

5/31/12 - Important information for Yale University Retirement Account Plan (YURAP) participants.

View the latest version of the Yale University Retirement Account Plan (YURAP) document for Managerial and Professional staff. See details on all of Yale’s retirement plans below.

Yale University Offers Three Retirement Plans for M&Ps

Yale University offers three retirement plans for Managerial and Professional (M&P) employees in benefit eligible positions.

  1. The Yale University Retirement Plan for Staff Employees (YRPSE) is a defined benefit plan where the employees are automatically enrolled on the first day of employment.
  2. The Yale University Retirement Account Plan (YURAP) is a defined contribution plan available to M&P employees. If you choose to enroll in YURAP, you will no longer accrue benefits under YRPSE, as this decision is irrevocable, and benefit accrual in the Staff Pension Plan will freeze.

    Note: Employees can be active in only one of the two retirement plans at any given time. Once an employee enrolls in YURAP, the benefit years in YRPSE prior to YURAP enrollment will freeze and be used later to calculate the benefit upon retirement from the University.

  3. Yale University Tax-deferred 403 (b) Savings Plan
    M&P employees not enrolled in YURAP may join the Yale University Tax-deferred 403 (b) Savings Plan at any time during the year.

Yale University Retirement Plan for Staff Employees (YRPSE)

The Yale Retirement Plan for Staff Employees (YRPSE) is a "defined benefit, non-contributory Plan" in which the amount of pension payment for each participant is determined by a formula that gives weight to salary, length of service and age at retirement.

M&P employees are eligible for "normal retirement" at age 65 or thereafter with 5 years of service. If an employee retires at their Normal Retirement Age (age 65 with 5 years of service), they will receive their full pension without reduction for early retirement. An employee is eligible for Early Retirement upon the attainment of 55 provided their age and service equals 75.

If you retire prior to your normal retirement date (generally, age 65), your pension payment may be discounted by 4% for each year before age 65 to offset the actuarially extended life expectancy during which benefits will be paid. The early retirement reduction for an employee who retires on or after age 55 with 30 years of service is 2% per year. If an employee retires on or after attaining age 60 with at least 25 years of service there will be no reduction in the pension benefit.

Vesting with Pension Benefits

Participants in the Plan "vest" after five years of service. Vesting gives a participant the right to a pension at age 65 (or as early as age 55, when the sum of age and years of service equals 75) even if he or she leaves Yale employment. Terminated vested M&P employees are eligible to receive their pension in the form of a one-time lump sum payment if the present value of their account balance is less than $19,000.

Pension Formula

The current formula for calculating a monthly pension payment 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 $41,000, by 1.4% for $41,001-$75,000, by 1.3% for over $75,000. Multiply the sum of these factors by the number of years (whole and fractional) of Yale service. Divide the product by 12 to establish a monthly pension benefit payment.

Significant beneficial features of the Plan are:

  1. The highest annual rate of pay in the computation is the highest annual rate of earnings in the last five (5) years of employment. For active employees this is most often the rate of pay on the date of retirement.
  2. Salary increments below $41,000 are weighted for higher multipliers than increments above $41,000. The Plan provides a "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 $19,000.

Yale University Retirement Account Plan (YURAP)

YURAP is a 403(b), defined contribution plan in which both employee and employer make pre-tax contributions to the employee’s retirement plan according to the investment direction of the employee. In YURAP both employer and employee know how much will be contributed to the Plan, but cannot know precisely the retirement benefit. Such benefit will be affected by the amount of accumulation at the point of retirement, the age of the participant at that time and the payout option elected. The most important basis for the payout will be the accumulation, and the most important factor in the accumulation will be the investment return on assets over the accumulation period, which is based on the participant’s investment choices.

The plan consists of a University Core contribution made by Yale to the employees retirement account. If the employee chooses to contribute a portion of their own salary, Yale will provide a dollar for dollar University Match up to the first 5% of the employees’ contribution.

Both the employee and employer contributions in the plan are immediately vested, meaning that the total accumulation belongs to the participant even if the employee terminates employment.

For the first $110,100* of base salary you earn in a fiscal year (from July 1 through June 30), the University Core will consist of a plan contribution equal to 5% of your earnings plus a dollar-for-dollar match for up to the first 5% you contribute to the Plan.

Once you earn over $110,100 in a fiscal year, the University Core contribution will increase to 7.5% of your earnings while you continue to receive a dollar-for-dollar match on your contributions up to 5%.

*$110,100 is the Social Security Wage Base (SSWB). This dollar amount automatically changes each year to keep the Plan up to date with increases in price and wage levels.
The chart below illustrates the plan design mentioned above. (Please note: All amounts are annual.)

The chart below illustrates the plan design mentioned above. (Please note: All amounts
are annual.)

  YURAP w/Core only* YURAP w/Core only* YURAP
w/ Core & Match**
YURAP w/Core & Match**
Sample Salary Your Contribution University Contribution Your Contribution University Contribution
$50,000
0
$2,500
$2,500
$5,000
$75,000
0
$3,750
$3,750
$7,500
$120,000
0
$6,247
$6,000
$12,247
$175,000
0
$10,372
$8,750
$19,122

*Based on 5% below SSWB and 7.5% above SSWB.
**Based on an employee savings rate of 5%

Employees can choose the amount they wish to contribute to YURAP and set the amount between zero and 75% of their eligible earnings, not to exceed the annual IRS limit, currently $17,500. If you are age 50 or older, you can choose to contribute up to an additional $5,500 at any time during or after the calendar year in which you reach the age of 50. Contributions by the employee and the University may not exceed the limitations imposed by the Internal Revenue Code and applicable Treasury Regulations. The FY2012/2013 salary limitation is $250,000.

The University Core contribution will be credited to the employees account independently of whether they contribute to YURAP. However, if the employee does not contribute to YURAP, they will not receive the 100% University Match.

Each July, the University will increase your employee contribution by 1% to a maximum of 10%. If you are contributing between zero and 4%, the University will reset your contribution to 5% with the option to reduce or waive. This began July 1, 2010.

Employee and University contributions may be invested with either TIAA-CREF or Vanguard.

Employees have the option to direct their Core contributions to one vendor and direct their contributions and the University Match to the other vendor. Employee contributions and the University Match must remain bundled together.

Both vendors have customized websites designed specifically for Yale employees. These sites offer detailed fund information and retirement planning calculators.

Frequently-Asked Questions

Can I change my contributions whenever I want?
You can always change the amount of your contribution to YURAP and set the amount between zero and 75% of your eligible earnings, not to exceed the annual IRS limit. You can change your contribution percentage at any time by logging into the University portal (www.yale.edu/portal) and clicking "My Benefits".

Can I reduce my contribution to zero dollars and still get the University Core?
Yes. The University Core is credited to your account independently of whether you contribute to YURAP. However, if you do not contribute to YURAP, you will not receive the 100% University Match.

Can I have the University Core contributions invested separately from my savings and University Match account?
Yes. Your savings and the University Match must be sent to the same vendor of your choice --TIAA-CREF or Vanguard. You have the option to allocate the University Core to the alternate vendor of choice, TIAA-CREF or Vanguard.

How much do I need to contribute to get the maximum University Match?
In order to maximize the University Match, you will need to save at a rate of at least 5% of base pay.

When will my Plan account be vested?
You will be fully vested automatically in all contributions you and the University make to your account.

Additional Design Features

Loans

  • TIAA-CREF participants will be eligible to take a loan on employee contributions only. There is not a loan feature available for Vanguard at this time.
  • The number of loans is limited to three general purpose loans.

Full distribution rights at termination and retirement

  • The University will allow you to take your retirement account balance with you upon termination or retirement.

In-service distributions at age 59½

  • During active employment at age 59½, you will be able to take a distribution from the Plan. This is limited to employee contributions only.

Ability to direct University Core and Match to different vendors (TIAA-CREF or Vanguard)

  • You may select different vendors for the University Core and Match. There is a requirement that employee contributions and the University Match remain bundled with one vendor.

Automatic escalation of savings rate of 1% per year to a maximum of 10% each July unless you provide direction to the contrary

  • Each July, the University will increase your employee contribution by 1% to a maximum of 10%. If you are contributing between zero and 4%, the University will reset your contribution to 5% with the option to reduce or waive. This began July 1, 2010.

Yale University Tax Deferred 403(b) Savings Plan

M&P employees, below benefit level or are not enrolled in YURAP, may choose to contribute a portion of their pay on a pre-tax basis to the Yale University Tax Deferred 403(b) Savings Plan

Employees can contribute a percentage of pay ranging from 1 to 75%, or the IRS maximum of $17,500. If you are age 50 or older, you can choose to contribute up to an additional $5,500 at any time during or after the calendar year in which you reach the age of 50. Employee contributions may not exceed the limitations imposed by the Internal Revenue Code and applicable Treasury Regulations. The FY2012/2013 salary limitation is $250,000.

Employee and University contributions may be invested with either TIAA-CREF or Vanguard.

Both vendors have customized websites designed specifically for Yale employees. These sites offer detailed fund information and retirement planning calculators.

You can enroll in a retirement plan online via the My Benefits website by logging into the University portal (www.yale.edu/portal) and clicking "My Benefits." The My Benefits website also enables you to estimate your retirement savings to reach your goals. If you have any questions, contact Employee Services at 203-432-5552.

Yale University 457(b) Deferred Compensation Plan

The Yale University 457(b) Deferred Compensation Plan provides a vehicle for employees meeting specific criteria to accumulate additional tax-deferred savings beyond the limits of the 403(b) plans. The plan is available to professors, professors on continuing appointments in the School of Medicine and employees whose salary equals or exceeds 1.5 times the Social Security Wage Base (in 2013, the eligible salary is $170,550) and have elected to contribute the IRS maximum to their Yale 403(b) plan.

Eligible participants can contribute a percentage of pay ranging from 1 to 75% or the IRS maximum of $17,500. The contribution made to the plan are exempt from federal and state taxes. There are no employer contributions to this plan.

This type of plan is unfunded by the University; however, the account balance is credited with investment earnings based on the performance of funds selected and is always fully vested.

TIAA-CREF or Vanguard may be chosen as record keepers and the investment funds available are the same as with the 403(b) plan.