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RETIREMENT SAVINGS CHARGE

Committee Committee to Study Vesting Options for the Retirement Savings Plan
Sponsorship Robert Kelch, Executive Vice President for Medical Affairs

Tim Slottow, Executive Vice President and Chief Financial Officer

Teresa Sullivan, Provost and Executive Vice President for Academic Affairs

Laurita Thomas, Associate Vice President for Human Resources
Charge of the Committee

The University provides employees with a source of retirement income through the U-M Retirement Savings Plan. In calendar year 2007, almost 90% of the eligible faculty and staff employees were enrolled in the retirement savings plan receiving approximately $191 million in University of Michigan’s contributions towards their retirement. To receive the 10% university retirement contribution, plan participants must contribute 5% of their eligible gross salary.

Enrollment in the retirement savings plan is compulsory for employees at age 35, who have completed two years of service and who are working a 100% appointment. If an employee who meets the compulsory criteria does not voluntarily contribute a 5% match, the U-M employer contribution is reduced to 5%. Over 1,100 employees are enrolled and receiving this reduced contribution.

The university contributions to the retirement savings plan are vested immediately. Vesting refers to the years of service or waiting period an employee must complete in order to have the right to the university contribution.

Currently, U-M’s 10% retirement saving plan contribution is slightly above market average when compared with peers in higher education and much higher when compared with health system peer markets.

The charge of this committee is to study and evaluate the potential cost savings of vesting options and/or waiting periods for the U-M Retirement Savings program, to assess the impact of proposed alternatives, and to make a recommendation for sponsor consideration. For more information, click here to download Stewardship of Benefits: The Case for Change (pdf).

Objectives

The primary objectives of the Committee to Study Vesting Options for Retirement is to provide advice, guidance, and recommendations with regard to multiple options for vesting including waiting periods and different levels of contributions. The options to be studied include but are not limited to:

  • 5-year cliff vesting

  • 6-month wait on enrollment

  • 1-year wait to enroll

(Employees would be eligible to make their own contributions toward a retirement savings plan during a waiting period, but would not receive University contributions during that time.)

Scope and Boundaries

The primary focus of the committee is on the impact and implications of changes in the approaches or models of vesting/waiting periods as noted above in order to ensure that the University has identified possible outcomes and consequences for faculty and staff.

Membership

Robert Willis, Chair: Professor of Economics, LS&A; Research Professor, Survey Research Center and Population Studies Center, Institute for Social Research

Charlie Brown: Professor of Economics, LS&A; Research Professor, Survey Research Center, Institute for Social Research

Tony Burger: Director of Financial Analysis

Mary Cardwell: Registered Nurse, UMH 7B/C Cardiology

Regine Caruthers: Clinical Pharmacist, UMH Inpatient Pharmacy Services; Adjunct Clinical Instructor in Pharmacy, College of Pharmacy

Jeff Frumkin: Associate Vice Provost and Sr. Director, Academic Human Resources

Margaret Gyetko: Professor of Internal Medicine and Associate Dean for Faculty Affairs

Rich Holcomb: Director of Compensation, UMHS Human Resources

Matthew Shapiro: Lawrence R. Klein Collegiate Professor of Economics, Professor of Economics LS&A, Research Professor, Survey Research Center, Institute for Social Research

Pamela Smock: Professor of Sociology, and Professor of Women's Studies; LS&A, Research Professor, Population Studies Center, Institute for Social Research

Steve Sindlinger: Benefits Manager, Retirement Savings/Deferred Compensation Plan, Benefits Administration Office

Content experts will attend meetings as needed.

Staff Support

Mike Duell: Analyst, Benefits Administration Office

Gail Gentes: Project Manager, HR Records & Information Services

Kathy Hutchison: Administrative Support, Benefits Administration Office

Brian Watson: Analyst, Benefits Administration Office

Timeline

September-October 2008: Committee meetings 
December 2008: Committee Recommendations to sponsors

Progress Reports
  • Agendas and Meeting Notes

  • Status Reports
    • BLT October 30
    • EVPs Nov 11

  • Final report December 2008