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roroUpdated November 2017Summary ofRetirement PlanBenefitsFull-Time Instructional(Teaching and Non-Teaching)and ExecutiveCompensation PlanMembersThe University Benefits OfficeOffice of Human Resources Management

Fall 2017Full-Time Instructional Staff (Teaching and NonTeaching) and Executive Compensation PlanMembersWelcome to the City University of New York (CUNY). We are pleased to introduce you tothe retirement plans provided by CUNY and the various New York City and New York StateRetirement Systems. CUNY strives to offer a comprehensive benefits package that meetsboth the present and future needs of our employees and their families. Please take time toreview this handbook carefully and take an active role in understanding your retirementbenefits and how they work.We hope you find this handbook both informative and helpful. Should you have questionsabout any of the programs, please do not hesitate to contact your College Human ResourcesOffice.Once again, welcome to The City University of New York.Please note:The University Benefits Office provides this Summary of Benefits solely for informational purposes.Although every effort has been made to assure its accuracy, the interpretations and rules of the benefitproviders and retirement systems are binding. This handbook does not create a contract, nor does itensure that particular benefits will be provided. If any discrepancies exist between the informationpresented herein and the information contained in the plan documents, the actual provisions of eachbenefit plan will govern. These benefits are subject to change at any time, with or without notice.2

Table of Contents:Retirement PlansA.) Mandatory Plans1.) The Teacher’s Retirement System of the City of New York (TRS)2.) Optional Retirement Plan (ORP) sponsored by TIAAComparison chart between TRS and TIAA44457B.) Transferring Membership into TRS (or becoming a transfer contributor with NYCERS) 8C.)1.)2.)3.)Additional Voluntary PlansVoluntary 403(b) planNew York State Deferred Compensation plan- 457(b) planNYC 401(k) plan (Community Colleges only)D.) Receiving Retirement Benefits991010113

RETIREMENT PLANSAs an employee of the City University of New York, you have various choices of retirement plans. CUNYemployees are eligible for multiple mandatory and/or voluntary retirement plans through either theTeachers’ Retirement System of the City of New York (TRS) or Teachers’ Insurance and AnnuityAssociation of America (TIAA); New York State 457(b) and New York City 401(k) plan (only available atCommunity Colleges).Also, depending on your previous position(s), where you may have been eligible for other retirementplans through such agencies as the New York City Employees’ Retirement System (NYCERS), you may beallowed to remain in those plans as a transfer contributor, which is discussed further in this document.A.) Mandatory Retirement Plan OptionsAs a member of the Instructional Staff (teaching and non-teaching) or the Executive Compensation Planyou must elect either the Teacher’s Retirement System of the City of New York (TRS) or the OptionalRetirement Plan (ORP) administered by TIAA within 30 days of your initial appointment to a full timeregular Instructional Staff position (those appointed to a substitute line may elect to participate in a planbut must do so within 30 days of their initial or subsequent substitute position appointment). Theelection decision is irrevocable as long as the employee remains continuously employed in any CUNYposition. If the employee does not make an election, he or she will be forced into the TRS system andwill not be able to move into the ORP at any point in his or her employment if he or she remainscontinuously employed in any position within CUNY. These rules are established by New York StateEducation Law Section 6253 and cannot be waived or modified.Important: If you have secondary or multiple lines of employment at CUNY they are all pensionable.You must inform the college where you have the secondary or multiple line that you havemembership so any required employee contributions can be initiated from your paycheck. Failure todisclose this will result in monies owed plus interest for missed contributions.1.) Option 1: The Teachers’ Retirement System of the City of New York (TRS)TRS is a Qualified Public Pension Plan (QPP) public pension fund, which his funded by both pre-taxemployee and employer contributions. The plan provides New York City educators with retirement,disability, and death benefits. Employer contributions are paid to the fund based on the total actuarialvalue assessed by the City of New York and are not specific to an employee’s account.Currently, upon completing a ten-year vesting period, members are eligible for a monthly benefit uponretirement. As a defined Benefit plan, the amount an employee receives in retirement is not affected byinvestment performance but is instead determined by use of a formula that takes into account age, finalaverage salary, and total service credit.For more information, please view the TRS Membership Guide for CUNY employees .4

How much an employee has to contribute depends upon their tier, which is as follows:Tier III and Tier IV (employees joined after July 26, 1976 but before September 1, 1983 (Tier III) oremployees joined on or after August 31, 1983 but before April 1, 2012(Tier IV) – these employees mustcontribute 3% of their eligible compensation unless they have 10 years of membership/credited service.Those employees with 10 years or more of membership/credited service are not required to contribute,however, employer contributions are paid to the fund based on the total actuarial value assessed by theCity of New York and are not specific to an employee’s account.Tier VI (employees joined after March 31, 2012) **Note – Tier V does not apply to CUNY employees**- these employees must contribute between 3% and 6% of their eligible compensation based on thefollowing wage scale: 5,000 or less – 3% 45,001 to 55,000 – 3.5% 55,001 to 75,000 – 4.5% 75,001 to 100,000 – 5.75% 100,001 to 179,000 – 6%For information on Tier I and II or more information on tiers please view the section on membershipstatus in TRS FAQ's.2. Option 2: Optional Retirement Plan (ORP) sponsored by Teachers’ Insurance and AnnuityAssociation of America (TIAA)TIAA is a Fortune 100 financial services organization that provides CUNY employees with retirement,disability, and death benefits. For more information visit TIAA at the CUNY dedicated website ptional Retirement Plan (ORP)The ORP is a 401(a) defined contribution plan, which is funded by both pre-tax employee and employercontributions. Upon completing a 366 day vesting period, members are eligible for a monthly benefitupon retirement. The 366-day vesting period is waived if the employee can provide proof that theyhave an existing vested TIAA annuity account through a prior employer. Please discuss with yourCampus Benefits Officer the proof that is required to have the 366 day vesting period waived. During the366 day vesting period both employee and employer contributions are held in escrow and will earn 4%per annum in interest while in the escrow account. Upon the completion of the vesting period, themonies will be released from escrow into the employee’s contract that they have established with TIAAand will be subject to the performance based on the investment elections chosen by the employee. Ifthe employee does not make an investment choice, he or she will be automatically placed in the lifecycle fund most closely tied to when they will turn 65 years of age. The benefit available in retirement isbased on the total value of the participant’s account, which is determined, by employee contributions,employer contributions, and investment performance.5

How much an employee has to contribute depends on their Tier, please see below for Tier V and Tier VI(detailed information on all Tiers can be found at https://www.tiaa.org/public/land/cunysystem).Tier V (employees joined after July 16, 1992 but before April 1, 2012) – Members with less than 10years of plan participation must contribute 3%. Members with 10 or more years of service as of March31, 2010 do not need to make contributions.Tier VI (employees joined after March 31, 2012) – Members must contribute 3% until April 1, 2013 afterwhich the contribution will be based on the following wage scale: 45,00 per year or less – 3%More than 45,000 per year to 55,000 per year – 3.5%More than 55,000 per year to 75,000 per year – 4.5%More than 75,000 per year to 100,000 per year – 5.75%More than 100,000 – 6%How much the employer contributes to the employee also depends upon their tier: Tier V (employees joined after July 16, 1992 but before April 1, 2012) – Members with less than7 years of plan participation will receive 8% of employee compensation. Members with 7 ormore years of plan participation will receive 10% of employee compensation. Effective April 1,2010 Tier V members with 10 or more years of participation will receive an additional 3% ofemployee compensation and their 3% employee contribution ceases.Tier VI (employees joined after March 31, 2012) – Members with less than 7 years of planparticipation will receive 8% of employee compensation. Members with 7 or more years of planparticipation will receive 10% of employee compensation.6

Comparison chart between TRS and TIAA mandatory plansPlan TypeVesting PeriodTRSQualified Pension Plan (definedbenefit plan)10 years of Total Service Credit(TSC)Age Requirements63 for full retirement; 55-62 forreduced retirement benefitContribution RatesEmployee: Graduated scalebased on tier and contractualsalary (Tier 6 only)Employer: Actuarially determinedamount to fund benefits for allplan membersRetirement BenefitsPost-Retirement HealthBenefitsSeparating from ServicePortabilitySecondary (multiple)positionsDetermined by formula includinga pension factor, total servicecredit and Final Average SalaryNYC Health Benefits coveragecontingent on minimum of 10years’ service credit and full-timeCUNY employment immediatelybefore retirementIf not vested (less than 10 yearsmembership) Employee’scontribution (with interest) maybe withdrawn/rolled over. Ifmembership expires (after sevenschool years),withdrawal/rollover is mandatoryVested: Eligible to receive amonthly benefit on reachingretirement ageMembership may be transferredto certain NYS/NYC publicretirement systems; or fundsmay be rolled over to eligibleIRAs or successor plansIf you have secondary or multiplelines of employment at CUNYthey are all pensionable. Youmust inform the school whereyou have the secondary line thatTIAARetirement annuity contracts (defined contributionplan)366 days of continuous employment (if no preexisting vested TIAA retirement plan contract fromanother organization)None to collect retirement income (although taxesand penalties may be assessed if taken prior to age 59½). Also a minimum retirement age may affecteligibility for other benefits.Employee: Same as TRSEmployer (for Tier VI) : 8% of base salary during firstseven years of employment; 10% of base salary afterseven years of employmentFor other tiers please visit TIAA website s based on your annuity accumulations,retirement age, and income optionFor Instructional Staff: If 62 or over, NYC HealthBenefits coverage contingent on retirement afterminimum 15 years’ continuous full time CUNY service.Must maintain 50,000 reserve with TIAA to fundpremiumsFor members of ECP: If age 55 or over, NYC HealthBenefits coverage contingent on retirement afterminimum 10 years’ continuous full time CUNY service.Must maintain 50,000 reserve with TIAA to fundpremiumsNot vested: Refund of employee contributionsreflecting investment returnVested: Rules vary based on investment choices.Please call TIAA at 800-842-2252For vested minimum reserves may be required tofund retiree health insurance premiums.TIAA accounts may be maintained if you join anotherInstitution or employer that offers TIAASame as TRS7

you have membership so anyrequired employee contributionscan be initiated from yourpaycheck.B. Transferring Membership into TRS (or becoming a transfer contributor withTRS)If you are a member of one of the following retirement systems, you may transfer your membership toTRS if you become employed in a TRS-membership eligible position: NYC Employees’ Retirement System (NYCERS)*NYC Board of Education Retirement System (BERS)NYC Fire Department Pension FundNYC Police Pension FundNYS and Local Employees’ Retirement SystemsNYS and Local Police and Fire Retirement SystemNYS Teachers’ Retirement SystemNote: You must notify your previous retirement system if you choose to transfer your eligiblemembership to TRS. Your previous system will transfer your service credit and accumulated pensionfunds to TRS. In this instance you would not be required to resign the underlying NYCERS title.*Remaining a transfer contributor with NYCERS*Under Section 13-188 of the Administrative Code of the City of New York a member of the NYCERS whoresigns his or her position in city service to accept and who within 60 days thereafter, does accept anotherposition in City service entitling him or her to membership in TRS or BERS is eligible to become aTransferred Contributor and may remain in NYCERS.For those NYCERS’ members who do accept a TRS eligible position (such as an Instructional Staff title inCUNY) within the time frames noted above who are NYCERS’ members have thirty (30) days to: 1) electto remain in NYCERS as a “Transferred Contributor” and must resign the underlying title; 2) transfer toTRS with no need to resign the underlying title; or 3) elect membership in the ORP with no need to resignthe underlying title.1) Remain a NYCERS member, you must resign your NYCERS-eligible position andcomplete a Transferred Contributor Affidavit (download from www.nycers.org). Youmust notify your Human Resource officer of your resignation in writing then send theaffidavit, along with proof of resignation to your Benefits Officer. They will sendverification of your resignation along with other documents to NYCERS. Choosing“Transferred Contributor” status means that you will be renouncing any present orprospective benefit from any other New York City public employee retirement system.2) Join TRS and then transfer your NYCERS membership, complete a TRS membershipapplication (download from www.trsnyc.org) and submit it to TRS. To transfer yourNYCERS membership, complete NYCERS’ Transfer Form #321 (download from8

www.nycers.org) and submit it to your Benefits Officer. Please be advised that you arenot required to resign your NYCERS eligible position if you choose this option.3) Join ORP, if you choose TIAA-CREF and are transferring from a NYCERS eligible title,there is no need to resign your underlying position.C. Additional Voluntary Retirement Plans:While CUNY provides a mandatory retirement and pension plan, many employees chose to supplementthe mandatory plan with participation in one of the voluntary plans that is offered to CUNY employees.This allows for employees to grow their retirement savings as well as enjoy some current tax savingswhere applicable.1.)Voluntary 403(b) plan:a.) The TDA (Tax Deferred Annuity) Plan: The TDA is an optional 403(b) defined contribution planthat may be elected in addition to the mandatory retirement plan (TRS QPP or the ORP). It is notmandatory and can be started or stopped at any time. It is completely funded by employeecontributions and not employer contributions. The money is pre-tax and is invested in differentinvestment options of your choosing. The earnings are tax deferred until withdrawn. The amountthat can be contributed is subject to IRS limits. In addition, if you are 50 years of age you maycontribute “catch-up contributions” and contribute amounts over the annual IRS limit.Both TRS and TIAA have TDA plans, however in order to participate in the TRS TDA you must have anunderlying TRS pension account, therefore ORP members may only contribute to the TDA sponsoredby TIAA. Please note that you cannot participate in both the TRS TDA and TIAA TDA at the sametime.More information on the TDA plans for both TRS and TIAA can be found at:TRS membership ) Roth 403(b) option for TIAA plan members: The Roth (post-tax) contribution provides you theoption to make post-tax contributions to your retirement savings. These savings and anyearnings are not taxed when qualified withdrawals are made. The major difference between aRoth contribution option and a traditional 403(b) TDA plan when you pay income taxes. With atraditional TDA your contribution is “pretax” as the money comes out of your paycheck before itis taxed. Pretax contributions lower your taxable income in the year of your contribution, andyour contributions and earnings are tax-deferred until you take them out of your TDA Planaccount. With the Roth contribution option, your contribution is taken out of your paycheckafter taxes are paid. Roth contributions do not lower your current taxable income. Your Rothcontributions, and the earnings on them, are tax-free upon withdrawal. Since you have alreadypaid taxes on the amount you contributed, these assets may be passed along to your heirs,income tax free.9

Currently the Roth 403(b) is only available to TIAA 403(b) members who work at CUNY seniorcolleges, CUNY central office employees on state payroll and graduate schools.Annual IRS limits for 403(b) plans: In 2018, the annual limit is 18,500 if you are under age 50,and 24,500 if you are age 50 and above. Please note you are eligible for the age 50 and overlimit at any point in the year you are turning 50. For example, if you turn 50 on December 31,2018 you are still eligible for the 24,500 from January 1, 2018 forward.Please note that the annual limit for both the traditional TDA and the Roth are combined. Meaning ifyou do a combination of Roth and traditional TDA contributions in 2018 your total contributions maynot go above 18,500 (if under age 50) or 24,500 (if age 50 and above).The annual limit is subject to change based on IRS guidelines.2.) New York State Deferred Compensation Plan (NYSDCP) 457(b) planThe NYSDCP is an optional 457(b) deferred compensation plan sponsored by the State of New Yorkthat may be elected in addition to any of the above retirement plans. It is completely funded byemployee contributions and not employer contributions. The money is pre-tax and is invested indifferent investment options of your choosing. The earnings are tax deferred until withdrawn,unless you elect the Roth option in which case the contributions will be post tax. The amount thatcan be contributed is subject to IRS limits. The maximum annual contribution for 2018 is 18,500(for those under age 50) and 24,500 (for those age 50 and above). This limit is in addition to thelimits on the 403(b) plan described above. For example, an employee (below age 50) can contribute 18,500 to a 403(b) plan and 18,500 to the 457(b) plan for a total of 37,000 for the year. Similarly,an employee (age 50 and over) can contribute 24,500 to a 403(b) and 24,500 to a 457(b) for atotal of 49,000 for the year.You may be able to make additional contributions during the Retirement Catch-Up period, which isthe three consecutive calendar years prior to your retirement catch-up age.However only one of these catch-up provision may be used at a time. For more information, visitwww.nysdcp.com for more details.3.) New York City 401(k) plan (Community College Employees only):CUNY employees who are employed at the two year community colleges also have access to NewYork City’s 401(k) plan. This plan is an alternative to the CUNY 403(b) discussed above. Please notethat any contributions to both a 403(b) and the 401(k) plan would be coordinated and cannot goover the annual IRS limit (in 2018, 18,500 for those under age 50; and 24,500 for those age 50 andabove).You may find further information on the 401(k) plan by visiting the New York City webpage at NewYork City deferred compensation plans.10

D. Receiving Retirement Plan BenefitsEach retirement plan, offers the opportunity to save monies that will be a distributed at a later date.Monies are generally distributed upon retirement, however under certain circumstances examples of inservice distributions may be allowed: Examples of in service distributions may include: Loans against the participant’s account repaid through pre-tax payroll deductions (for TRSmembers) and directly to TIAA via an employee’s personal savings/checking account for theterm of the loan. Please note for the TIAA ORP and TDA plans, there is a limit of five loansoutstanding at one time and if a participant is in default of a previous loan they may not borrowagain until they repay the loan and clear the default. These rules are in addition to the IRSmaximum loan cap of 50,000 at any given point.Withdrawals due to unforeseen financial hardship. Rules for unforeseen financial hardship aregoverned by the IRS and are only available on voluntary plans. All plan loan options must beexhausted before a hardship distribution is approved. Criteria for hardship withdrawals can befound at www.irs.gov. Those who have a hardship withdrawal are suspended from makingemployee contributions for a period of 6 months following the hardship withdrawal.Withdrawals allowed due to the attainment of age 59 ½ from the voluntary 403(b) planExamples of distributions after employment termination may include: Loans against the participant’s account repaid through manual checks for the term of the loan.Withdrawals mandated by the IRS after turning age 70 ½ and no longer working for CUNY.Commencement of normal retirement benefits either in a lump sum, periodic withdrawals,scheduled withdrawals, or an annuity payment.Distributions allowed due to the participant’s total and permanent disability.Distributions to a beneficiary due to the death of the participant.As the types of distributions available for each plan may differ please refer to your provider’s website orto your University Benefits Officer for further information.11

existing vested TIAA retirement plan contract from another organization) Age Requirements 63 for full retirement; 55-62 for reduced retirement benefit None to collect retirement income (although taxes and penalties may be assessed if taken prior to age 59 ½). Also a minimum retiremen