Benefits Plans - Retirement Savings Plans: Myths and Misconceptions
I will be automatically enrolled in the Basic Retirement Plan.
Enrollment is not automatic. You must submit the Salary or Annuity Option Plan Agreement to enroll. Use this form to authorize the payroll contributions and indicate how much you want to contribute to TIAA-CREF and/or Fidelity Investments.
There are no applications for you to complete to open your account with TIAA-CREF and/or Fidelity. The Benefits Office will send an enrollment notice to your chosen investment company to create your account once your properly completed and signed Salary or Annuity Option Plan Agreement has been received. TIAA-CREF and/or Fidelity will then mail you a packet listing all your investment options and a form to designate your beneficiary. Complete the beneficiary form and return it to the investment company as soon as possible.
The investment fund will automatically be an age-appropriate Lifecycle Fund if you select TIAA-CREF or a Freedom Fund if you select Fidelity. A TIAA-CREF Lifecycle or Fidelity Freedom Fund is a mutual fund that is a diversified portfolio of other mutual funds offered by that company. This includes domestic and international stock and bond funds, as well as money market funds. Each fund automatically selects the allocation of stock, bond, and money market funds that are appropriate for a target retirement date of approximately age 65.
The fund will adjusts its holdings periodically to maintain an asset allocation appropriate for its target retirement date to maximize returns and minimize risks. Both TIAA-CREF and Fidelity offer a wide selection of stock, bond, money market, and real estate mutual funds. If you do not want your investment fund to be a Lifecycle or Freedom Fund, you may change this by contacting TIAA-CREF or Fidelity.
I don’t have to enroll in the Basic Retirement Plan because I’ll receive a pension from U-M.
U-M does not have a traditional defined-benefit pension plan.
I will have to work several years before I get to keep the U-M contributions to the retirement plan.
Each monthly deposit of the University contribution into your account is immediately vested; you do not need to work a minimum number of years in order to keep them. However, you cannot cash out or rollover the University contribution until you have terminated employment and are at least age 55.
I can’t enroll unless I have a 50% or greater appointment.
Unlike medical, dental, and life insurance, you can participate in the retirement plan with as little as a 1% appointment lasting at least four continuous months as a regular faculty or staff member. Note that supplemental instructional staff, LEO Lecturer I, and adjunct titles need at least a 50% appointment to participate. House Officers, Research Fellows, Graduate Students and Professional Specialists are not eligible for the Basic Plan, but may contribute to an SRA.
I can only enroll within 60 days of hire.
You may enroll at any time.
I am a former U-M employee and participated in the retirement plan. I have been rehired and need to submit new TIAA-CREF and Fidelity account applications.
You do not need to submit forms to open an account with TIAA-CREF and/or Fidelity if your previous University of Michigan account is still open. You still need to submit the Salary or Annuity Option Plan Agreement to authorize the pre-tax deductions from your paycheck. In addition, you cannot change your choice of investment funds or beneficiary by submitting a new account application. Contact the investment company directly to make these changes.
My payroll contributions are deposited with TIAA-CREF and Fidelity the day they are deducted.
Contributions are deposited with TIAA-CREF on the first business day of the month after they are deducted from your paycheck. Contributions are deposited with Fidelity on the second business day of the month after they are deducted. This means your contributions are reported as being received by the investment companies the month after they are deducted from your paycheck.
- Your July 7th and July 21st bi-weekly paychecks will have retirement deductions if you are enrolled in the plan.
- These deductions will be sent to TIAA-CREF on August 1st and will be reported on your quarterly statement as being received on August 1st.
For a complete schedule of when your deductions are received and reflected on your quarterly statements, go to the Quarterly Statements page.
I can cash out my 5% contribution and the university 10% contribution on account of disability, hardship, layoff (RIF), leave of absence, at age 59 ½, or I can take a loan.
You may cash out your 5% contribution at any age once you have terminated your employment with the University, but not while you are an employee. A leave of absence, layoff, phased retirement, furlough, period of non-appointment, 0% appointment, or receiving disability benefits does not constitute a termination of employment.
In addition, there is no provision on the Basic Retirement Plan for a hardship, disability, or age 59 ½ withdrawal, and loans are not available. If you make extra contributions to an SRA (supplemental retirement account), you have options for cash withdrawals in the event of disability and financial hardship while you are still an employee. For more information, go to the Cash Withdrawals page.
I can cash out or rollover my 5% contribution and the University 10% contribution at any age once I no longer work for the University.
You may cash out your contributions and earnings at any age once you have terminated your employment with the University. However, the university contributions and earnings are not available until you have reached age 55.
See also Do I have a pension at U-M?
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.