All
of your benefits will continue with the same required faculty
or staff member deductions. In order for University contributions
to continue during periods that you do not receive pay,
you must pay any applicable cost.
Medical
and Dental Insurance
If you are enrolled in medical insurance, major medical
coverage, and/or dental coverage at the time your retirement
furlough or phased retirement begins, the coverage will
continue during periods without pay as well as periods with
pay. The University contributions toward that coverage will
also continue during both periods.
Medicare
Coverage
Because you are not fully retired, UM medical coverage
continues to be your primary medical coverage. You and/or
your spouse or other qualified adult (OQA) may enroll
in Medicare if you become eligible during phased retirement;
however, Medicare will be secondary to your UM coverage.
This means that Medicare will not cover any services your
UM medical plan will cover because your UM medical plan
is your primary policy. If you do enroll in Medicare, generally
you would not be able to you use your Medicare benefits
until you are fully retired. If you turn 65 during phased
retirement and don't enroll in Medicare, you can enroll
at the time you fully retire.
Travel
Accident Insurance
Travel accident insurance is in effect only when you
travel on University business.
Benefits
Affected by a Reduced Appointment
Some benefits such as group life insurance, long-term
disability, Retirement Plan contributions, and sick and
vacation pay accrue (accumulate) or are based on a pro-rated
basis according to your reduced appointment fraction.
- Group
Life Insurance
If you are enrolled in group life insurance at the time
of your retirement furlough or phased retirement begins,
life insurance coverage will continue for two years with
usual decreases based on age. After two years, your coverage
will be adjusted based upon your salary at that time,
coverage will be based on your base salary for the previous
year. University contributions continue during periods
without pay or with pay.
- Long-Term
Disability (LTD)
LTD insurance eligibility does not continue beyond
or in place of the furlough year. Contributions are based
on the actual salary received.
- Retirement
Plan
Your eventual retirement income is greatly dependent
upon contributions made to your Retirement Plan. Phased
retirement usually reduces contributions to TIAA-CREF
and Fidelity, thus reducing your retirement income. If
you elect to begin annuity payments (on more than 99%
of your accumulated contributions), your decision also
will affect your eventual retirement income.
- Sick
and Vacation Accrual
Sick and vacation accrual is based on the actual appointment
fraction during your phased retirement. For example, if
you have a 50% appointment during your phased retirement,
you will accrue 50% of you usual sick and vacation pay.
To accrue vacation and holiday pay, non-instructional
staff must have at least a 20% appointment. Trades and
IUOE need at least 50% appointment.
Retirement
Plan Income Options
If you are interested in drawing income from your Basic
Retirement Plan as a way to replace income that will be
lost during your reduced work schedule, you have four options.
- Take
an Interest Payment Retirement Option (IPRO)
Under this option, you draw the interest that normally
would be credited toward your TIAA Traditional account.
This method preserves your principal accumulation and
can be changed to an annuity at a later day. You must
be at least age 55 to start IPRO payments.
- Start
Annuity
All annuity options will pay you an income for your lifetime.
You may convert up to a maximum of 99% of your TIAA-CREF
account into a lifetime annuity. In addition, you can
include beneficiary provisions to pay income for the life
of your spouse or OQA in the event of your death as well
as fixed beneficiary periods of 10,15, and 20 years. Once
you begin an annuity program, however, you cannot stop
or change it to another income payment method.
- Take
a Minimum Distribution Option (MDO)
IRS rules generically require individuals to begin receiving
income from retirement plans at age 70½. You are generally
exempt from this requirement for your UM retirement accounts
while you still work at UM. However, you may draw income
based on IRS minimum distribution guidelines if you are
at least age 70 on a phased retirement. MDO income may
be larger than the annuity, but it offers the flexibility
to change to a different income program such as an annuity,
at a later date.
- Withdraw
Additional SRA Contributions
In addition, if you have made additional payroll contributions
to an SRA with either TIAA-CREF or Fidelity Investments,
you may withdraw those contributions at age 59½ without
penalty.
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