Benefits Plans - Retirement Savings Plans:
Do You Need to Change Your Retirement Savings Plan Contribution?
If You Receive a Salary Increase
It Does Not Raise Your Limit
The annual limit on 403(b) contributions is not based on your salary, so your limit does not go up if your salary increases. However, you may choose to increase your SRA contribution at any time.
You Do Not Need to Lower Your SRA
If you make an extra or SRA contribution to the retirement plan, you do not need to lower it due to a salary increase. The M-Pathways payroll system will monitor your contributions and suspend them for the rest of the calendar year if you reach the IRS limit.
If your SRA and 5% Basic Plan contributions are suspended to keep you within limit, the 10% University contribution will continue. Both your 5% contribution as well as the SRA will resume the following January if you have a continuous appointment.
Note: This process only tracks your retirement contributions at U-M; it does not track those you make to a retirement plan outside of the University. Consult with a tax adviser for questions on aggregating elective deferrals to multiple retirement plans.
If you are making extra or SRA contributions, you will receive a mailing in late November notifying you of your contribution limit. A pre-printed Salary or Annuity Option Plan Agreement will be included if you want to change your contribution amount.
If You Plan to Retire or Terminate
To Contribute the Maximum
Vacation time or PTO accumulation that is not used by the time of your retirement or termination will be paid out to you. This payment will only have the Basic Retirement Plan contributions provided if you are enrolled in the plan; any SRA contributions in effect will not be deducted.
If you want to contribute up to the maximum allowable by the IRS, simply increase your extra or SRA contribution in the months prior to your retirement or termination in order to contribute more to the retirement plan.
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.