1. What is the Supplemental Retirement Plan (SRP) benefit?
The goal of the Supplemental Retirement Plan (SRP) benefit is to provide a defined base income to ensure that participants achieve at least a basic level of income upon retirement. This “supplemental” payment will be paid to a WSURP retiree if their assumed TIAA-CREF retirement benefit does not
equate to 20% – 50% (depending on years of service) of the average of the retiree’s highest two year salary.
2. Who is eligible?
Active WSURP participants (i.e. TIAA-CREF) who are at least age 62, who have at least 10 years of retirement service at a Washington Higher Education institution. As of July 1, 2011, the SRP benefit will not be eligible to newly hired employees, as defined by the plan document.
3. What is the calculation to determine if I am eligible for the SRP benefit?
SRP Benefit = Goal Income minus Assumed Income. Participants will receive a SRP benefit payment if the calculated Goal Income is greater than the amount of the calculated Assumed Income. The calculation is also adjusted by any of the following: Retiring at or after 62, but before 65 (see No.11); Not participating at the 10% contribution level after age 50 (see No.12); PERS/DRS retirement benefit due to work in higher education (see No.15). Survivor Benefit option (see No. 18) See “Sample Equations”.
4. What is the “Goal Income”?
“Assumed Income” is a theoretical amount of monthly income from a TIAA-CREF annuity that the retirement contributions would have generated if they had been allocated equally between TIAA (50%) and CREF Stock (50%). Professional actuaries, not University employees, perform this part of the calculation.
If applicable, DRS retirement plan income will also be included in the assumed income.
5. How is the highest two year average salary calculated?
The employee’s entire earnings are reviewed to identify the 24 consecutive month period in which the highest earnings were received. Regular appointments, summer appointments, as well as stipends are eligible earnings. Hourly, faculty time card, and piece work are not included in this review.
6. The calculation refers to a “Service Factor” – what is that?
The “Service Factor” used in the calculation is 2% if at age 50 you chose to increase your WSURP retirement plan contribution to the optional 10% rate. The service credit factor is 1.5% for any years of service in which you were at least age 50 and did not elect to participate at the 10% contribution rate.
7. What if I reduced my FTE at the end of my career?
As mentioned in question, No. 6, the highest 24 consecutive month salary will be identified for the calculation. Therefore, if you have reduced your salary at the end of your career, more likely than not, the highest two year period will be tied to the period of employment in which you were working with a higher FTE.
8. What years will count when determining the Years of Service?
Any year in which there is one semester of full-time service, or equivalent, will be counted as a year of service.
9. If I have more than 25 years of service, will it count in the calculation?
No, the maximum target goal income is 50% of the average of the highest two year salary, which is determined by taking a maximum of 25 years of service multiplied by 2%.
10. I’m at least age 62, but not 65. How does this impact the SRP benefit calculation if I were to retire prior to age 65?
The benefit would be reduced by one-half of 1 percent (.005) for every month prior to age 65. The maximum reduction would be 18% for someone retiring at age 62 (36 months multiplied by .005). See “Sample Equations”.
11. What if I didn’t contribute at the 10% level after age 50?
For any year after age 50 that a participant chose not to participate at the 10%, and stayed the 7.5% contribution rate, that portion of time will be multiplied by 1.5% instead of 2%. See “Sample Equations”.
12. How is the TIAA-CREF assumed income benefit determined when running this
The assumed income benefit is a theoretical amount of monthly income based on the assumption that your retirement contributions had been allocated/invested 50% TIAA and 50% CREF Stock throughout your years of participation. It also assumes that the draw from the account would be as a 10-year guaranteed annuity, with a two-thirds to survivor benefit option. TIAA professional actuaries perform this part of the calculation.
13. If it is found I am eligible for SRP benefit, do I have to be drawing my TIAA-CREF? And if so, do I have to draw it based on the assumed income benefit that is used in the calculation?
No, you do not have to draw any benefit from TIAA-CREF if it is found you are eligible for the SRP benefit. If you decide to draw a benefit, you can access however you wish — it does not need to drawn under the criteria used for the assumed income benefit.
14. How does my PERS/DRS service affect this benefit?
Years in which a WSURP participant was in a PERS/DRS plan with a higher education employer will count towards years of service in the SRP benefit calculation. Similarly, applicable PERS/DRS retirement plan income will also be included with the TIAA assumed income. Former PERS/DRS plan participants will be required to provide written authorization allowing WSU to request the PERS/DRS benefit calculation before WSU can finalize the SRP benefit calculation. If an employee does not provide this authorization, WSU will run the calculation based only on WSURP service time (i.e. the years of participation in PERS/DRS will not count towards years of service).
15. What if I withdrew by PERS/DRS contributions?
If an employee with prior PERS/DRS service in higher education withdrew those funds, WSU will run the calculation based only on WSURP service time.
16. I am on a nine-month academic appointment. If I am eligible for the SRP benefit, will I get paid 9 or 12 months of the year?The SRP benefit is paid over 12 months. A nine-month salary is converted to an equivalent 12 month salary through the calculation.
Receiving the SRP benefit does not forego your ability to return to work. Retiring WSURP employees are only able to return to work in a WSURP position for no more than a 40% appointment. Additionally, if you are retiring under VERI, there is a 5 year window where return to work at WSU is prohibited, unless approved by the Provost and Executive Vice President. All retire-rehires must be approved by the Provost and Executive Vice President before returning to work. Please contact HRS before returning to work to ensure proper approval has been received.
You are able to have income taxes taken from your SRP benefit payment. However, no Social Security taxes are taken from the SRP benefit payment.
20. Is there a COLA increase?
There is not an established COLA for the SRP benefit.