Retirement plan altered

Vanderbilt's mandatory retirement plan, designed to help employees provide for their after-work years, has been restated in a policy that went into effect last July.

This is the first time that Vanderbilt has had a written retirement policy. It incorporates the mandatory retirement plan that went into effect July 1998. Under that plan, Vanderbilt requires participation in the plan for all employees who are at least 21 years old and have worked at the University for one year. Before July 1998, employees had the option of participating in the retirement plan, but their participation was not required.

Excluded from participation in the retirement plan are staff who normally work fewer than 20 hours a week as well as teaching and research assistants, students, post-doctoral fellows and trainees performing services which are exempt from social security taxes.

Employees must begin contributing at least 3 percent of their salary to the retirement plan after they have been with the University for 12 months. The University will match the employee's contribution at the 3 percent or 5 percent level depending on the employees level of contribution. Employees have the option of contributing at a higher level, but will not receive a University match of those contributions. Employees questions regarding the level of contribution available to them are encouraged to contact Barbara Holten at 343-8171.

Although University contributions do not begin until after employees have been with the University for 12 months, employees can elect to begin contributing one month after the date they were hired. Employees who elect these voluntary contributions are immediately vested in the retirement plan and they will receive their contributions when they leave the University. After the University's contributions begin, employees are immediately vested in them as well.

"We are excited that our employees have responded so well to this program and are now realizing the value of saving a portion of their income in securing a better future for themselves when they are ready to retire," Lewis said.

Employees who leave the University after completing one year of service and are subsequently rehired by the University are eligible to receive matched contributions for their mandatory participation level immediately upon reemployment. The employee is required to contact the Benefits Office of Human Resource Services to ensure proper processing and contribution level.

Although the University does not have a mandatory retirement age, retirement benefits must be paid for participating employees -- whether or not the employee has retired -- no later than the April after the calendar year in which an employee turns 70-and-a-half years old.

Employees who intend to retire are encouraged to contact the Benefits Office to discuss benefit-related issues and obtain the necessary notification form for retirement. Because the benefit plan application may vary depending on the plan, employees should submit the completed form at least two months before the expected retirement date.