Office of the Provost

The University of Michigan Faculty Handbook

19.B Retirement Plan/Contributions

The University retirement plan is a contributory plan, with contributions from both the University and the faculty member. New faculty may voluntarily join the University’s retirement plan and begin contributing at any time.   Eligible faculty who enroll in the University’s retirement plan and who contribute 5% of their gross salary each month receive a matching 10% contribution from the University.  Faculty whose appointments begin on or after January 1, 2010, or who become newly eligible for the University’s retirement plan on or after this date, must complete a 12-month waiting period before becoming eligible to receive the University’s 10% contribution.

When an eligible faculty member who has elected not to participate in the retirement plan has completed two years of service and reaches the age of 35, participation in the retirement plan becomes compulsory. The terms of compulsory participation are available on the Benefits website.

Faculty members’ retirement contributions vest immediately. This means that all contributions, both the faculty member’s and the University’s, are invested in an account in the faculty member’s name and will be paid out ultimately to the faculty member, even if he or she leaves the University before retiring. Faculty who retire from the U-M may choose from a number of payment options upon retirement. Faculty who leave the University before retirement and who have contributed to the University retirement plan can elect to start receiving payments from an annuity at any age, although cash withdrawals and rollovers are not available to them until age 55. (SPG 203.05 ) Faculty members who terminate their employment with the University can access, regardless of their age, the dollars they have contributed through payroll deduction for their base contribution (5% of salary) to their retirement savings account. The matching funds contributed by the University (10% of salary) cannot be withdrawn until the faculty member reaches age 55.

Faculty members may invest their retirement funds with TIAA-CREF or Fidelity Investments or both, and may choose among a number of investment options.

Eligible faculty may also contribute a portion of their monthly salary above the required 5% contribution to a tax-deferred Supplemental Retirement Account (SRA). The maximum amount permitted for these contributions is defined by federal law. Stipend money may not be contributed to a retirement account.

In addition, faculty members who already contribute the maximum allowable amount to a Supplemental Retirement Account (SRA) and who want to save more may be interested in the option of contributing to a 457(b) Deferred Compensation Plan.   More information is available on the Benefits Office website
<benefits.umich.edu/plans/retire/457b/index.html>.

Faculty Handbook: Retirement, Emeritus/Emerita Status: