The Hybrid Plan (a mixed pension and matching plan) is the core retirement plan for:
Active, benefit-eligible employees first hired on or after 10/01/2012 but before 10/01/2019,
Returning, benefit-eligible employees hired on or after 10/1/2012 but before 10/01/2019, who were not vested upon termination,
Returning, benefit-eligible employees hired on or after 10/01/2012 but before 10/01/2019, who were vested upon termination and took a full retirement plan distribution.
The Hybrid Plan has two components:
a defined benefit (DB) pension component;
a defined contribution (DC) matching component.
DB Component of the Hybrid Plan (pension)
| Summary of the Hybrid Plan defined benefit (DB) component | |
|---|---|
| Multiplier Formula | 1% of pay, average of 5 highest consecutive years of salary, service credits |
| Vesting | 5 years of creditable service |
The DB component of the Hybrid Plan is structured as a typical . You were automatically enrolled in this benefit as an eligible employee. Your benefit was determined by your age at retirement and your:
Creditable service
Average of highest five consecutive years of salary, including summer appointment salary
A 1% multiplier
You earned service credits by working as a benefit-eligible employee. To estimate your potential benefit, visit the Milliman pension benefits portal.
Vesting (in the DB Component)
In order to receive a benefit from the DB component of the Hybrid Plan, you must have completed five years of creditable service to be vested and a qualified member.
Employee Contributions
Employees contribute 1% of their first $50,000 of eligible salary. Once the employee reached a threshold of $50,000 in year-to-date earnings, the contribution increased to 2% of eligible salary. Contributions reset to 1% each January 1.
Retirement
You are eligible to retire as early as at least age 55 with at least 10 years of service credit, or at least age 60 with at least five years of service credit. If retiring early, a reduction in benefit may apply and one year of service credit must be achieved after age 54.
Accruals
If you are in a position which accrues paid time pursuant to HR-404, and HR-421 your unused accruals as of your retirement date are handled as follows:
Sick accruals: When you retire, you will receive day-for-day service credit for any unused banked sick leave in your final retirement benefit calculation.
PTO accruals: Up to a maximum of 80 hours of unused PTO accruals will be paid to you as a lump sum payment on the next available pay period, after your last day worked. Service and salary for the unused PTO time that is paid out in a lump sum (up to the maximum of 80 hours) is creditable when calculating the retirement benefit.
Rehire at the University after Retirement
If a retiree is at least 59 陆, there are no restrictions or waiting periods for rehire at the University. Retirees under age 59 陆 must have a bona fide retirement from the University, meaning you cannot be rehired pursuant to a discussion, understanding or agreement (written or oral) that occurred prior to termination from employment or commencement of the retirement benefit.
All employees who were hired or rehired on or after 10/01/19 are automatically enrolled in the Defined Contribution (DC) Plan, which does not have a pension component. Retirees who are rehired at the University are not eligible to resume participation in the same plan for which they are receiving a monthly benefit. Therefore, the benefit they are receiving will not and cannot be stopped as it is a lifetime benefit.
Survivor Benefit
If a vested member dies while actively employed, the plan provides a benefit that is usually no less than one time your regular annual salary as of the date of your death.
Beneficiary Designation
Naming a beneficiary ensures your benefit is handled according to your wishes. You should review your beneficiary designation periodically and update it as needed, especially after important life events such as marriage, divorce, or the birth or adoption of a child.
To designate a beneficiary under the DB component of the plan, complete a beneficiary form (PDF) and return to the UM System Office of Human Resources Service Center.
Defined Contribution (DC) Component of the Hybrid Plan (matching)
| Summary of the Hybrid Plan DC component | |
|---|---|
UM base contribution | 2% of pay |
UM match | 100% of up to 3% of eligible pay |
Vesting | 3 years of service |
The DC component of the Hybrid Plan is made up of employee and employer contributions. The University will make a base contribution of 2% of your eligible compensation to an employer contributions account. In addition, the University will provide a matching contribution to the employer contributions account, equal to your contribution rate to the 457(b) plan, up to 3% of your eligible salary.
Enrollment
To help ensure you receive the full University contribution, you are automatically enrolled in the Plan at a contribution rate designed to align with the maximum employer contribution available based on your plan eligibility. To receive the full University contribution, you must contribute at a rate sufficient to meet your plan鈥檚 matching requirements. You may change your contribution rate at any time.
Vesting (in the DC Component)
You are immediately 100% vested in your contributions to the 457(b) plan. The University鈥檚 matching contributions to the employer contributions account vest following three years of service. Please note that these years do not need to be consecutive.
The employer contributions to the employer contributions account, along with your contributions to the 457(b) plan and your investment earnings and/or losses, will equal the value of your benefit should you become vested. If you terminate employment with the University before vesting, you forfeit the University's base contributions and matching contributions made to the employer contributions account on your behalf.
Example: Basic hypothetical annual contribution illustration based on a salary of $50,000
| Contribution type | Percent of salary | Annual contribution |
|---|---|---|
| UM base defined contribution to the employer contributions account | 2% | $1,000 |
| Employee contribution to 457(b) | 3% | $1,500 |
| UM matching contribution to the employer contributions account | 3% | $1,500 |
| TOTAL | 8% | $4,000 |
Changing your Deferral
You may change your 457(b) elective deferral at any time by logging into your or by calling 1-800-343-0860. Any changes to your 457(b) elective deferral are effective in the next available payroll period. Allow one to two payroll cycles for changes to take effect.
Eligible Salary
Your 457(b) plan elective deferral is calculated using all compensation paid to you for services rendered to the University. It is important to note that the compensation definition for the University matching contributions is different.
Choosing your Investments
You select how to invest all contributions in the DC component of the Hybrid Plan. For information about your investment choices, please visit your and select the 鈥淎ccounts and Benefits鈥 tab, then 鈥淢anage investments鈥 and select the plan to view (457(b) or 401(a) ERIP).
It is important that you access your account so you can make your investment selection. If you do not make a selection, your investments will be placed in a University-selected default investment. You may make changes to your investment selections at any time online through your or by calling 1-800-343-0860. If you are unsure how to invest your contributions, Fidelity retirement representatives are available to meet one-on-one to assist you.
Beneficiary Designation
Naming a beneficiary ensures that your benefit is handled in the manner you intend. You should name a beneficiary when you first participate in the DC component of the Hybrid Plan. Whenever there are important changes in your life鈥 such as marriage, divorce or the birth or adoption of a child鈥 review your beneficiary designation and consider updating. You may update beneficiary information through .
Starting your Retirement Benefits
You should contact Fidelity at 1-800-343-0860 for more information on how to begin your benefits from the DC component of the Hybrid Plan.
Employee Resources
How you plan for retirement is personal. This information is intended to help answer commonly asked questions and is not meant to fully address all provisions of the plan. Additional resources are available:
Refer to the summary plan description (PDF) for more detailed information
If applicable, review your current UM Retirement Plan
Consult the retirement planning checklist for next steps
Schedule a one-on-one consultation with a Fidelity Workplace Financial Consultant