Benefits Plans - waiting period for university retirement plan contributions
What is the waiting period?
The waiting period means a new hire or newly eligible faculty or staff member must complete 12 consecutive months of eligible service in order to become eligible for the U-M 10% contribution to the Basic Retirement Savings Plan.
Does the waiting period apply to individuals who belong to a union or bargaining unit?
Check with the terms of the collective bargaining agreement to see if you are subject to the waiting period.
How is the waiting period measured?
You must complete 12 consecutive months of service in a job title eligible to enroll in the plan. The waiting period is measured from the date you are first eligible to enroll in the plan, which is typically your date of hire. If you were hired into a job not eligible for the plan (ex. temp, House Officer, Research Fellow, etc.) but later become eligible due to a change in effort or job title, the waiting period is measured from the effective date of your job change.
Can I get credit toward meeting the waiting period based on time I worked at my previous employer?
No, the waiting period is based solely on eligible service completed at the University of Michigan.
Do I have to fulfill the waiting period if I lose eligibility for the plan or am rehired?
- If your gap in employment or eligibility is one year or greater, you will need to complete the waiting period to become eligible to receive university contributions.
- If your gap in employment or eligibility was less than one year, and you were eligible for university contributions prior to the gap, you do not need to fulfill the waiting period and you will receive university contributions upon enrollment.
- If your gap in employment or eligibility was less than one year, but you were not eligible for university contributions prior to the gap, you will need to complete the waiting period.
- University retirees who are rehired into a title eligible for the Basic Retirement Savings Plan do not need to complete the waiting period again and will receive university contributions upon enrollment.
Does the waiting period mean I cannot enroll until after I complete 12 months of service?
No. You may enroll in the plan and contribute 5%, however, university contribution begins after you have completed the 12-month waiting period. The waiting period refers to becoming eligible for university contributions, not whether you may enroll.
When will the 10% U-M contribution begin?
The 10% university contribution will be provided once you have completed the 12-month waiting period and you are enrolled in the Basic Retirement Savings Plan. If you are not enrolled after completing the waiting period, you must affirmatively enroll in order to receive the 10% university contribution. Enrollment in the Basic Retirement Savings Plan and university contributions do not automatically begin due to completing the waiting period.
Can I simply wait until after completing the waiting period to enroll in the Basic Retirement Savings Plan?
Yes, participation is optional and you may enroll any time throughout the year.
Can I contribute less than 5% to the Basic Retirement Savings Plan until I complete the waiting period?
You must contribute 5% to enroll in the Basic Retirement Savings Plan regardless of your eligibility to receive the university contribution. You may enroll in the 403(b) Supplemental Retirement Account (SRA) and/or the 457(b) Deferred Compensation Plan if you wish to save for retirement by contributing less than 5%.
The 403(b) SRA and 457(b) programs allow you to contribute a fixed dollar amount per pay period that is tax-deferred. There is no university contribution to these programs. Once you fulfill the waiting period you will need to enroll in the Basic Retirement Savings Plan if you want to receive the 10% university contribution.
Basic Retirement Savings Plan Contribution Rate
How do I lose eligibility for plan participation?
You become ineligible for plan participation if any of the following apply to you:
- You have a 0% appointment effort.
- You terminate employment.
- You change jobs to one that is not eligible to participate in the plan. This includes temporary hourly staff, LEO Lecturers I and Supplemental Instructional Staff (Adjunct, Visiting I/II, Clinical I titles) with a 49% appointment effort or less, House Officers, Research Fellows, Graduate Students (Staff Assistant, Research Assistant, and Instructor), and Professional Specialists.
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.