Benefits Plans - Retirement Savings Plans: Glossary of Retirement Terms and Acronyms
A qualified tax-deferred retirement plan.
A tax-deferred retirement plan for employees of tax-exempt education and research organizations.
The value of all of an individual's participation in annuities or other funds until income payments begin.
This refers to additional funds you may elect to contribute to your TIAA-CREF basic plan account.
Refers to net salary remaining after taxes are deducted from your paycheck.
All tax-deferred funds are added together in calculating the amounts that can be tax deferred.
A contract by which an insurance company agrees to make regular payments to someone for life or for a fixed period of time.
The primary retirement plan for U-M faculty and staff members, which provides a matching contribution of 10% if the faculty or staff members puts in 5% of eligible gross salary.
A fund that holds mainly municipal, cooperate, and/or government bonds.
A contractual provision that permits participants to withdraw some or all of an accumulation from their account.
Interest credited daily, monthly, quarterly, semiannually, or annually on both principal and previously credited interest.
Employees who must enroll in University of Michigan retirement plan because they have met all of the following requirements: (1) are age 35 or older, (2) have completed two years of employment in a job/career family that is eligible to participate in the basic retirement plan, and (3) have a 100% appointment (faculty or staff).
Investments made to a retirement plan through payroll deduction.
College Retirement Equities Fund. In 1952, CREF was established as a companion nonprofit organization to TIAA to provide the world's first variable annuity. CREF offers several investment accounts including equity funds, a balanced fund, a bond market account and a money market account.
An annuity not yet paying income because it is still in the accumulating or preretirement stage, which means money is accumulating on a tax-deferred basis.
A retirement plan that usually provides a benefit based on a percentage of salary times years of service.
A retirement plan that specifies a rate of employer and/or costs usually defined as a percentage of salary. The amount of income a participant receives in retirement will depend on several factors, including salary level, duration of contributions, investment earnings, and age at retirement.
To move some or all of an accumulation of retirement funds from one University-approved investment company to another. Also referred to as a "transfer."
The act of withdrawing retirement funds from your accounts.
To spread out investments so they are in more than one kind of investment vehicle, such as stocks, bonds, money markets, etc.
The increase in your account value due to the capital appreciation of your investments.
The Employee Retirement Income Security Act of 1974. The U-M Defined Contribution Retirement Plan is not subject to ERISA.
An investment company that manages many investment funds.
A sales charge or commission paid for an investment at the time of purchase.
An investment fund with holdings in worldwide (U.S. and foreign) investments, mainly common stocks. Global bond funds, with holdings in international bonds, are also available.
An individual's income before taxes, benefit costs, and other expenses are deducted.
Stocks believed to have a strong potential for better-than-average capital appreciation. Because of expected higher earnings and faster expansion of the underlying company, growth stocks almost always involve greater risk.
Choices for receiving retirement income from a retirement plan or annuity.
A savings device that permits individuals to set aside up to $3,000 per year, with earnings tax-deferred until withdrawals begin. Your income level and eligibility for another qualified retirement plan affect whether or not any part of your original contribution is tax deductible.
Internal Revenue Code
Internal Revenue Service
An annuity contract designed to provide a lifetime income for the participant (contract holder).
The one-time payment of part or all of the entire value of a profit-sharing plan, pension plan or other investment.
A fund which pools contributions from individuals and other sources, then uses them to buy stocks, bonds, or other securities chosen to meet specific criteria and goals.
An individual's income after taxes, benefit costs, and other expenses are deducted.
Regular, active staff
A letter sent to SRA participants in November of each year indicating their allowable limit for making additional or supplemental contributions for the upcoming year.
An individual who is having or has had contributions made to a retirement or tax-deferred annuity plan.
The way in which you want to receive your University of Michigan retirement funds (annuity, rollover, transfer, cash withdrawal, etc.).
A plan set up by a corporation, government, institution, labor union or other group to pay retirement benefits to employees.
Certain types of tax sheltered investments, such as 403(b) annuities and Keogh Plans, where it is possible to invest income before it has been subjected to taxes.
A document outlining the terms of an investment offering.
A Qualified Domestic Relations Order is a court order resulting from a divorce decree which specifies participation in or division of retirement plan benefits.
An investment fund that seeks a favorable rate of return by investing in a portfolio of real estate.
If you are a compulsory retirement plan participant, you may elect this option. You contribute nothing to the plan, and the University's contribution is 5% of your eligible gross salary.
Non-temporary, active staff.
Someone who has met the U-M age and years of service requirements. See Standard Practice Guide 201.83.
When you have met the age and years of service requirements and have retired from the University. See Standard Practice Guide 201.83.
A comprehensive design for managing finances and meeting living standards after an individual stops working.
To move retirement funds from the U-M retirement plan to another plan of the same kind or to an IRA, without incurring a tax liability.
An annuity that provides income benefits for one person only.
Social Security Wage Base (SSWB)
Maximum dollar amount of wages that is subject to Social Security taxes.
An investment fund that seeks a favorable rate of return through investments in the stocks of various corporations.
Supplemental contributions are funds that contributed to a Supplemental Retirement Account (SRA), which is a separate account available from TIAA-CREF or Fidelity that has slightly different provisions than basic plan accounts. Additional contributions may also be made to a basic plan TIAA-CREF account.
Includes adjunct professors, visiting professors, visiting lecturers, clinical associate professors, clinical instructors, clinical lecturers.
Retirement Account (SRA)
A separate account available through TIAA-CREF or Fidelity for accumulating contributions beyond 5% and 10%. SRAs have slightly different provisions than the basic plan accounts.
A cash withdrawal option where participants can tailor payments to their specific needs while also electing to stop, restart and change their payment schedules and amounts whenever they choose.
Postpone taxes due on an amount invested and/or its earnings until they are withdrawn from the investment.
Faculty and staff who have left their employment at the University to retire or to take a position elsewhere.
Teacher's Insurance and Annuity Association. A nonprofit organization established in 1918 by the Carnegie Foundation for the Advancement of Teaching to provide retirement benefits for colleges, universities, and other nonprofit organizations.
To move some or all of an accumulation, within or between funds, from CREF to TIAA or Fidelity, or among CREF, TIAA and Fidelity variable accounts. Transfers can also be made from the TIAA Traditional Annuity to the TIAA-CREF variable accounts. Also referred to as "direct transfer."
An exception to the 10% IRS withdrawal penalty tax (such as separation from service, death, disability, or financial hardship).
An employee's right to receive retirement benefits whether or not the individual remains with the employer.
Years of service
The cumulative number of years a faculty or staff member has worked at the University of Michigan in a benefits-eligible job/career family. Time spent as a temporary employee is not included.
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.