Retirement Plans - Faculty
- Yale University Retirement Account Plan
- Yale University Tax-Deferred 403(b) Savings Plan
- Yale University 457(b) Deferred Compensation Plan
- Roth 403(b) Contribution Option
- How to enroll in a retirement plan and make changes to your investments
- Yale Retirement Plan documents
In a 403(b) Defined Contribution Plan both employer and participant know how much will be contributed to the Plan, but cannot know precisely the retirement benefit. Such benefit will be affected by the amount of accumulation at the point of retirement, the age of the participant at that time and the payout option elected. The most important basis for the payout will be the accumulation, and the most important factor in the accumulation will be the investment return on assets over the accumulation period.
Eligibility to participate in YURAP
An eligible employee is an individual who has a faculty or senior research appointment of at least half-time or greater.
- Upon hire, all faculty as defined by the Plan will be automatically enrolled in YURAP. Under YURAP’s automatic enrollment feature, Yale will automatically reduce your monthly eligible salary by 5% and deposit that amount as a pre-tax employee contribution to YURAP. Yale will make a Core Contribution equal to 5% of your eligible salary and a University Match equal to 5% of your eligible salary to your YURAP account. You may change the amount you contribute to YURAP at any time.
- Your contributions as well as the University Core and Match contributions are automatically invested in the appropriate model portfolio selected for you by the Yale Target-Date Plus Service. The Plan’s Qualified Default Investment Alternative (QDIA), as described in Section 404(c)(5) of ERISA. The model portfolio selected for you is based on a predetermined projected retirement age and a moderate investment style, and also takes into account or considers any account balances you may have invested in any of the legacy TIAA and/or CREF annuity contracts. The Service uses these three parameters to create a model portfolio that invests your account and future contributions in age-appropriate investments while maintaining diversified, risk-managed exposure across a wide range of asset classes.
- You can personalize your Target-Date Plus model portfolio, or opt out of the Yale Target-Date Plus Service and select your own investments among one or more of the funds offered under the Plan’s investment lineup. You can personalize your model portfolio by changing your projected retirement age or investing style, or by adjusting “considered” legacy annuity assets.
- Both the faculty member and employer contributions to the plan are immediately vested, meaning that the total accumulation belongs to the participants even if they terminate employment.
The University provides a University Core Contribution in addition to a University Match.
- Your University Core Contribution will equal 5% of your eligible earnings below the Social Security Wage Base (SSWB) plus 7.5% of eligible earnings at or above the SSWB, up to the Annual Compensation Limit as defined by the IRS.
- The university will match 100% of your contributions, up to 5% of your eligible earnings.
The Social Security Wage Base and the Annual Compensation Limit for the Plan Year will be adjusted in accordance with IRS guidelines each January 1, and will be applied to your eligible earnings on a calendar-year basis.
Employees can choose the amount they wish to contribute to YURAP and set the amount to a flat-dollar amount or a percentage between zero and 75% of their eligible earnings, not to exceed the annual IRS limit. If you are age 50 or older, you can make an additional IRS Catch-up Contribution at any time during or after the calendar year in which you reach the age of 50.
Contributions by the employee and the University may not exceed the limitations imposed by the Internal Revenue Code and applicable Treasury Regulations.
The University Core contribution will be credited to the faculty members’ accounts independently of whether they contribute to YURAP. However, if faculty members do not contribute to YURAP, they will not receive the University Match.
For participants who are contributing less than 10%, each July, the University will increase faculty members’ contribution amounts by 1% to a maximum of 10%. If the contribution rate is between zero and 4%, the University will reset the contribution to 5% with the option to reduce or waive. The automatic escalation feature began July 1, 2010.
Employee and university contributions may be invested in a wide range of Vanguard and TIAA investment fund options through TIAA (Teachers’ Insurance Annuity Association).
Can I change my contributions whenever I want?
You can always change the amount of your contribution to YURAP and set the amount between zero and 75% of your eligible earnings, not to exceed the annual IRS limit. If you are age 50 or older, you can make an additional IRS Catch-up Contribution at any time during or after the calendar year in which you reach the age of 50. You can change your contribution percentage at any time by logging on to the TIAA website.
Can I reduce my contribution to zero dollars and still get the University Core?
Yes. The University Core is credited to your account independently of whether you contribute to YURAP. However, if you do not contribute to YURAP, you will not receive the University Match.
Can I opt out of the automatic savings feature of this plan?
How much do I need to contribute to get the maximum University Match?
In order to maximize the University Match, you will need to save at a rate of at least 5% of base pay.
When will my Plan account be vested?
You will be fully vested automatically in all contributions you and the University make to your account.
Additional Design Features
- Contributions can be made on a pre-tax basis, after-tax basis through the Roth 403(b) option, or both. You can elect to contribute a flat dollar amount, a percentage of your salary, or the IRS annual maximum amount.
- TIAA participants will be eligible to take a loan on employee contributions only. Plan loans are administered by TIAA and are subject to the terms of the TIAA loan program. For further information, please contact TIAA.
- The number of loans is limited to three general purpose loans.
In-service distributions at age 59-½
- During active employment at age 59-½, you will be able to take a distribution from the Plan. This is limited to employee contributions only.
Automatic escalation of savings rate of 1% per year to a maximum of 10% each July unless you provide direction to the contrary
- Each July, the University will increase your employee contribution by 1% to a maximum of 10%. If you are contributing between zero and 4%, the University will reset your contribution to 5% with the option to reduce or waive.
Faculty who are below the benefit level, or are not enrolled in YURAP, may choose to save for retirement by contributing a portion of their pay on a pre-tax or Roth 403(b) after-tax basis* to the Yale University Tax-Deferred 403(b) Savings Plan. There is not a University Match.
Employees can contribute a percentage of pay up to 75% or the IRS annual maximum amount. If you are age 50 or older, you can make an additional IRS Catch-up Contribution at any time during or after the calendar year in which you reach the age of 50. Employee contributions may not exceed the limitations imposed by the Internal Revenue Code and applicable Treasury Regulations.
Employee contributions may be invested in a wide range of Vanguard and TIAA investment options through TIAA.
The Yale University 457(b) Deferred Compensation Plan provides a vehicle for employees meeting specific criteria to accumulate additional tax-deferred savings beyond the limits of the 403(b) plans. The plan is available to tenured professors, professors on continuing appointments in the School of Medicine and employees whose salary equals or exceeds 1.5 times the current year Social Security Wage Base.
Eligible faculty and staff can contribute a percentage of eligible pay up to 75% or the IRS annual maximum amount. The contributions made to the plan are exempt from federal and state taxes. There are no employer contributions to this plan.
This type of plan is unfunded by the University; however, the account balance is credited with investment earnings based on the performance of funds selected and is always fully vested.
Contributions may be invested in a range of Vanguard mutual funds and TIAA investment options through TIAA website, and the investment funds available are the same as with the 403(b) plans.
Although it is not required, it is recommended that you also contribute the maximum annual IRS amount to your 403(b) plan if you decide to contribute to the 457(b) Deferred Compensation Plan. Contributing to both the 403(b) and 457(b) plans can increase your tax-advantaged retirement savings but you should be aware that there are key differences between these plans when it comes to withdrawals, rollovers and transfer of funds. If you are considering contributing to the 457(b) plan you should consult with your personal financial advisor, or a TIAA financial consultant or advisor to review your options.
TIAA provides a customized website designed specifically for Yale participants where you can view and manage your Yale University retirement program contributions and investment options in one place. The site offers detailed fund information with Vanguard and TIAA investment fund options and retirement planning calculators.
To enroll in a retirement plan, update your beneficiary information, and view or change your investment options, go to the TIAA website. Log in instructions are provided on the website. First-time users will need to register for secure online access.
For assistance navigating the TIAA website, please contact TIAA at 855-250-5424, Monday – Friday, 8 a.m. to 10 p.m., or Saturday, 9 a.m. to 6 p.m.
If you have any questions regarding your retirement benefits, contact Employee Services at 203-432-5552.