Policy Number:         815 

Date Effective:          10/03/1980                                                 

Date Revised:           04/15/2002

References:              19-3-20-21, M.C.A.; HRS Procedures

POLICY

The University of Montana shall administer retirement programs for staff, faculty and administrators in accordance with applicable Federal and  State law and Montana University System policies.

PROCEDURE

Classified Staff

Classified staff at the University of Montana are subject to enrollment in the Public Employees Retirement System Defined Benefit plan (PERS DB) if scheduled to be employed for a period of at least 960 hours in a year; they would complete a PERS membership form. 

Employees working less than 960 hours must fill out the Public Employees Retirement System (PERS) Optional Membership Election form to either elect or decline enrollment in PERS. 

Staff who were active PERS participants on July 1, 2002 and staff newly-hired on or after July 1, 2002, if deemed eligible by MPERA, have the option to irrevocably elect either the PERS Defined Contribution plan (PERS DC) or the MUS Retirement Plan (MUS-RP) currently with TIAA.  Eligible staff hired on or after July 1, 2002 have one year from their date of hire to decide.  The PERS DB plan is the default retirement plan until the eligible employee elects one of alternatives by the one-year deadline, or if a decision is not submitted by the deadline.  Information and irrevocable election forms are available from the Montana Public Employees Retirement System (MPERA).

Temporary Employees

Temporary employees working less than 960 hours have the option of choosing to participate in the Public Employees Retirement System of the State of Montana.  These temporary employees must fill out the PERS Optional Membership Election form to either elect or decline enrollment in PERS.  If a temporary employee declines coverage but works over the 960 hours, membership becomes mandatory at that time.

Administrators, Faculty And Contract Professionals

Administrators, Faculty and contract professionals who are at least half time for two consecutive semesters (six months or greater), are subject to enrollment in the MUS RP currently with TIAA, unless they had prior participation in the Teachers Retirement System Defined Benefit Plan (TRS DB), or the MPERA system plan.  Prior TRS and PERS participants may elect to remain in the TRS and PERS plans. 

Contributions

The employer’s share of the retirement contribution is set by Montana state statute. The employee's share of the retirement contribution is deducted from salary pre-tax and sent to the applicable retirement system where it is credited to the employee's account.

For TRS and PERS DB plans, interest is paid on the account and rates are set by the PERS and TRS Retirement boards. 

For PERS DC and MUS RP plans currently with TIAA account accruals are determined by investment gains and losses.  All retirement plan contributions made after July 1, 1985 are tax-sheltered and deducted from gross earnings before federal and state income tax. 

Retirement Benefits

For TRS and PERS DB plans, the monthly annuity or retirement benefit is calculated by using a formula that includes highest annual compensation and years of creditable service. 

For PERS DC and MUS RP plans currently with TIAA, the benefit received at retirement will depend on the value of the account at retirement (based on the amount contributed, investment gains and losses, time span of investments), life expectancy, and the income option selected.

Termination

For TRS and PERS DB plans, employees who terminate employment prior to retirement can elect to withdraw or rollover their personal contributions plus interest or, if they have met the 5-year vesting requirement, may leave their contributions in the fund and take a retirement at a later date.  For PERS DC plan, vested employees (at least 5 years of membership service) may elect to withdraw or rollover the full value of the account (based on both employee and employer contributions) or leave the contributions in their account.  Employees who are not vested can elect to withdraw or rollover the value of the account based on their personal contributions.

For MUS RP currently with TIAA, employees who terminate may elect to rollover or withdraw the full value of the account (based on both employee and employer contributions) or leave the contributions in their account.

Withdrawal of retirement contributions is subject to IRS regulations.

Application for Retirement

Employees who plan to retire should contact their respective retirement company within three to six months prior to their retirement date.  A separation from employment form should be forwarded to Human Resource Services as soon as a retirement date is determined.  This separation from employment form allows for both the calculation and payment of qualified leave accruals on the employee’s final paycheck and the enrollment option for retiree insurance.  TRS and PERS Retirees who draw a state retirement benefit, and MUS RP Retirees who are age 50 with at least 5 years of service, have a one time only decision to enroll under the Retiree medical, Rx, dental and vision hardware plans.