MnSCU Retirement Plans Basic Training for Campus HR Administrators

Planned Modules: Module 1: Retirement Plan Concepts Module 2: Eligibility for Primary Plans Module 3: Reporting in SCUPPS Module 4: SRP: Eligibility and Coding Module 5: Forms Completion & Processing Module 6: Phased Retirement Programs Module 7: Voluntary Retirement Programs Module 8: Retirement Plan Distributions

Programs Available in MnSCU Statutory/contractual phased retirement Annuitant Employment Program (AEP) Link to Phased Retirement/AEP Matrix: http://www.hr.mnscu.edu/retirement/campus_resources/documents/Phased_AEP_Matrix.pdf

Phased Retirement Programs Phased retirement programs are reduced workload assignments that assist an individual to gradually transition into full retirement: While earning full retirement credit Receive full employer insurance contribution Earn pro-rated leave Continue to earn seniority Eligible for tuition waiver benefit Link to Phased Retirement Program Tips & Tools: http://www.hr.mnscu.edu/retirement/campus_resources/phasedRetirement.html

Statutory phased retirement Minnesota Statutes § § 354A.094, 354B.31 and 354.66 are legislative basis for phased retirement (“qualified part-time teachers”) Participation is normally based on a full fiscal year TRA General allows MnSCU faculty to retire after the first semester in a year, but must work pro-rata in that semester Eligibility: Unclassified (non-”rule 10”) faculty and staff who are covered by TRA and IRAP, and 1st class cities TRA 3 or more years of allowable service credit in the fund During participation, may not be covered by any other retirement fund

Statutory phased retirement Part-time definition under statute: “….is employed for at least 50 full days or a fractional equivalent….for which the faculty member is compensated in an amount not exceeding 80 percent of the compensation…for a full-time faculty member….” Employer and Employee pay into the appropriate retirement fund so that employee receives full service credit

Statutory phased retirement Must be on the program for at least one year but no more than 10 years May return to full-time employment at the end of participation Statutory provisions are available to all eligible unclassified employees where their union contracts or salary plans do not contain additional restrictions Link to Statutory provisions page: http://www.hr.mnscu.edu/retirement/campus_resources/documents/Phased%20Retire%20Stat%20Provisions.pdf

Contractual Phased Retirement Additional restrictions and provisions are included in following contracts: IFO MSCF

Contractual Phased Retirement Eligibility IFO: 55 + 10 FTE years of service in State Universities MSCF: 55 + 10 FTE years of service in State Colleges IFO & MSCF must retire at the end of program participation

Contractual Phased Retirement Under IFO Contract, approval is discretionary Under MSCF Contract, approval “shall be granted…subject to [contractual] provisions” Subject to 7% of UFT limit Subject to 50% department limit

Statutory/contractual phased retirement Insurance Benefits: Eligible for insurance as if employed full-time Separation Incentive: If otherwise eligible, benefit is paid based on age and other contract provisions at time of termination Deadlines to apply for participation in statute and in contracts Summer session work counts towards the following year (Change in FY10 & after)

IFO phased retirement Special features: If eligible for ESI, cannot receive designation for 100% of base salary if over age 55 Can withdraw up to 25% of SRP yearly during phased program Faculty are expected to perform full range of duties on a pro-rata basis Annual workload must be between .33 and .67 FTE Earn pro-rated seniority Gary presents thru here – Mary start the next screen

MSCF Phased Retirement Special features: Must be a full-time unlimited faculty Length of participation and period of workload should be mutually agreed upon. If unable to agree, the faculty member’s request is granted unless college can show it would “pose a unique and undue burden on the institution”. Link to Phased Retirement Guideline: http://www.hr.mnscu.edu/guide_interpretations/documents/RET0001.pdf

MSCF Phased Retirement Special features: A copy of the phased retirement agreement is forwarded to OOC and MSCF Annual workload must be between .40 and .80 FTE. Special provisions for base year overload. Earn seniority as if full-time Faculty are expected to perform full range of duties on a pro-rata basis

Phased Retirement – Purchase of Retirement Service Credit/Contributions All faculty/staff other than MSCF: Buy up to 1.0 FTE from reduced workload All work counts towards FTE limits MSCF Faculty: Base year determines overload $ limit All work counts as regular workload or goes to $ limit ER pays only to 1.0 FTE

Find these forms at: www.tra.state.mn.us Phased Retirement – Purchase of Retirement Service Credit/Contributions TRA Part-Time Teacher Forms: Conditions & Form Worksheet Find these forms at: www.tra.state.mn.us

Phased Retirement – Purchase of Retirement Service Credit/Contributions IRAP Form On MnSCU Retirement Site: Phased & Sabbatical Contributions

Annuitant Employment Program (AEP)—Statutory Provisions Link to AEP Tips & Tools: http://www.hr.mnscu.edu/retirement/campus_resources/aep.html MnSCU-specific legislation (M.S. § § 136F.48, 354.445, 352.1155 and 354A.31) Covers unclassified (non-”rule 10”) faculty and staff who are in TRA, MSRS General or Unclassified Plans, IRAP, or first class cities TRA. Allows colleges/universities/OOC to continue to employ faculty and unclassified staff who begin drawing a retirement annuity or benefit.

Annuitant Employment Program (AEP)—Statutory Provisions Eligibility: Link to AEP Guidelines: http://www.hr.mnscu.edu/guide_interpretations/documents/RET0005.pdf Retires and has at least 10 YOS (can be a combination of college/university/OOC) Employed on a full-time basis immediately preceding retirement in a qualified position Begins drawing a retirement benefit/annuity; no additional retirement deductions are taken Returns to work between .33 and .67 time basis Summer session belongs to the following year

Annuitant Employment Program (AEP)—Statutory Provisions Eligibility: No break in service, retained at same college / university / OOC Insurance provided at full-time rate Other benefits are provided pro-rata All separation incentives and severance payments are made at the end of participation in the AEP Program, increase in age reduction applies.

AEP - IFO and MSCF Differences IFO faculty on the AEP retain tenure status MSCF faculty on the AEP must have the appointment status of temporary part time (TPT)

Phased Retirement vs. AEP Phased Retirement Program Annuitant Employment Program Basic Premise: Employee works part time before actually retiring so that the employee can ease into or “phase into” retirement. Employee initiates request. Request may change to a lesser percent time worked each year to help the employee transition to full retirement. Basic Premise: Employee works part time following retirement so that there can be a transition period of responsibilities, training time for a replacement, search, etc. Designed to be an employer initiated request – helps management retain a highly skilled worker to retain needed skills Sometimes employees call either one of these programs phased retirement or annuitant employment. Make sure that employees know which program they are actually on

Phased Retirement vs. AEP Phased Retirement Program Annuitant Employment Program Retirement: Employee and employer both pay into the retirement fund as if the employee is still working full time so that the employee gets additional service credit time or additional contributions in order to have a larger pension or fund at the time of retirement. Retirement: Employee is already retired so there are no employee or employer contributions to retirement. Employee may draw a retirement annuity or begin a distribution of retirement funds. Insurance: Employee receives full employer contribution. Think of phased retirement as more a way to reach rule of 90, or to up the high-5 average salary. Employees keep earning retirement credit. Employees on phased have less of an income from employment that those on the AEP. Sometimes employees use the phased retirement program where there are medical issues or other situations that limit their ability to work full time. The AEP program occurs after retirement annuity accrues – the retirement benefits are now frozen. Employees actually have more income from employment – their part time salary as well as their pension fund payments. Employees could also potentially receive their social security benefits while on this program. Sometimes the employees ask for this program as they want to keep involved in the campus life. There is no requirement that any requests from employees to participate in the AEP need to be approved. This program is discretionary.

Module 6: Phased/AEP Retirement Questions?