Life Events - Retiring from the University of Michigan:
accrual of service to retire

Determination of Years of Service

Years of eligible service to retire with health, dental and life insurance benefits are determined by counting the continuous years employed in a status that was eligible for participation in both the Basic Retirement Savings Plan and health plan benefits.  This is a 50% or greater appointment as a regular or supplemental faculty or staff member.  Each appointment must be at least four continuous months in duration with university funding.

Consult with the Benefits Office, SPG 203.3, and SPG 203.5 for more information on eligibility for benefit plans.  Staff members subject to collective bargaining agreements should consult the specific provisions in their current agreements regarding eligibility for these plans.

Accrual Rate for Part-time Staff

Eligible part-time regular and supplemental faculty and staff (appointments of 50% - 79.9%) will accrue 0.8 years of credit toward retirement eligibility per entire calendar year worked starting on January 1, 2013.  This accrual rate more accurately aligns the credit toward retirement with the percentage of effort.

Example

  • Mary was hired on 1-1-2003 and continually works at a 50% effort as a regular staff member. 
  • She will have accrued 10 years of service credit to retire with benefits by 12-31-2012 even though she worked part time.
  • Starting 1-1-2013 she will accrue 0.8 years of credit to retire each year.
  • She will accrue 8 more years of service credit to retire by 12-31-2022 (10 x 0.8 = 8) for a total of 18 years of service.

Faculty and staff with appointments of 80% or greater will receive the same credit toward retirement as individuals with a 100% appointment.   In addition, faculty and staff who work part-time for a portion of the calendar year and full-time for a portion will receive the same credit toward retirement as individuals with a 100% appointment.  This is because the part-time accrual rate applies to those who work part-time for the entire calendar year.

Service Must Be Continuous

Accrual of years of service to retire with benefits must be continuous and without interruption.  A break in service results from:

  1. Termination of employment.
  2. Reduction in appointment effort below 50%.
  3. Change in job title to one that is not eligible to accrue service to retire (see Ineligible Service).
  4. Failure to return to an active appointment following a leave of absence, layoff (RIF), or period of non-appointment.

A break in service results in the loss of years of service to retire with benefits that were accrued prior to the break.  A subsequent appointment that is eligible to accrue service to retire with benefits will restart the service accrual over at zero.  Recovery of previously accrued service when rehired may be possible under Standard Practice Guide 201.49 – Reinstatement and Prior Service Credit.  Recovery of previously accrued service when there is a reduction in effort below 50% may be possible under Bridging Service Periods if certain criteria are met.  See Recovering Service to Retire.

Ineligible Service to Retire

The following titles do not accrue years of service to retire:

  • Supplemental, Adjunct, and LEO I tiles with appointment effort below 50%
  • House Officer
  • Research Fellow
  • Professional Specialist
  • Graduate Student
  • Temporary hourly

Example: House Officer
Sue is hired 7-1-2009 as a House Officer and completes her residency on 6-30-2013.  She becomes a full-time assistant professor 7-1-2013.  Her accrual of years of service to retire with benefits begins on 7-1-2013.

Example: LEO I Below 50%
Brian is hired 9-1-2009 as a LEO Lecturer I at 25% effort.  His appointment effort increases to 50% on 9-1-2011.  His accrual of years of service to retire with benefits begins on 9-1-2011 because his previous service was at an appointment effort less than 50%.

Leaves, Layoff (RIF), Non-Appointment

Periods of non-appointment for instructional faculty, and approved leaves of absence without salary, and layoff (reduction-in-force) are counted as active service and maintain continuity of service provided the individual returns to an appointment eligible for service accrual to retire with benefits.

Next: Retiring During a Leave or Layoff (RIF)

Limitations
The University of Michigan in its sole discretion may modify, amend, or terminate the benefits provided with respect to any individual receiving benefits, including active employees, retirees, and their dependents. Although the university has elected to provide these benefits this year, no individual has a vested right to any of the benefits provided. Nothing in these materials gives any individual the right to continued benefits beyond the time the university modifies, amends, or terminates the benefit. Anyone seeking or accepting any of the benefits provided will be deemed to have accepted the terms of the benefits programs and the university's right to modify, amend or terminate them.