Retirement Program - HR Policy 310

Abstract:
This policy describes the retirement program, the Teacher's Retirement System of Alabama, available to UAB full-time and regular part-time employees.
Effective Date:
12/1/2012
Responsible Party:
Contacts:
Benefits
Administrative Category:
Applies To:
Faculty, Staff
Material Original Source:

Policy 310 – Retirement Program

Date Issued: 10/80
Date Revised: 12/12

All regular full-time and regular part-time employees of UAB are required by state law to participate in the Teachers' Retirement System of Alabama.  Employees of the UAB Hospital Management, LLC do not participate in Teachers' Retirement System of Alabama.
Eligible employees who were a member of Teachers' Retirement prior to January 1, 2013 (Tier 1) must contribute 7.5% monthly tax sheltered contributions up to the IRS 401a annual earnable compensation maximum. Eligible employees who were a member of Teachers' Retirement January 1, 2013 or later (Tier 2) must contribute 6% monthly tax sheltered contributions up to the IRS 401a annual earnable compensation maximum. The salary cap only applies to employees hired on or after July 1, 1996.
This employee contribution is tax sheltered for the purpose of Federal income taxes. Federal taxes will not be paid on this contribution until termination and withdrawal of contributions or until retirement. Annual federal taxable income will be reflected properly on W-2 forms.

Teachers' Retirement provides Tier 1 members retirement income at age 60 with 10 years or more of participating Teachers' Retirement service, or at any age with 25 years of participating Teachers' Retirement service. Tier 2 members are provided retirement income beginning at age 62 with 10 years or more of participating service. Should you terminate your service before qualifying for retirement benefits, contact the Benefits Office for counseling and/or to apply for a refund of your accumulated contributions.
Eligible persons who choose to apply for retirement should contact the Benefits Office at least 90 days before their anticipated retirement date so that necessary information can be compiled and prepared to avoid a delay in retirement income.

At the time of enrollment in the Teachers' Retirement System (TRS), the member designates a primary and a contingent beneficiary to receive the accumulated contributions in case of death before retirement. Beneficiaries may be changed at any time by filling out the proper form in the Benefits Office.

Employees who terminate before qualifying for retirement may apply to receive the return of their accumulated contributions. Application for refund is filed in the Benefits Office.

State law allows unused accrued sick leave to be converted to creditable service for service retirement purposes under Tier 1. Teachers’ Retirement will certify no more than a maximum of twelve sick leave days per year. Since excess, unused vacation can be converted to sick leave under UAB policy at the end of each calendar year rather than being forfeited, it is possible for UAB employees to receive such service for more than the ten days of annual sick leave currently provided by UAB policy to eligible employees. The following chart is used by the TRS to convert accumulated sick leave to creditable months of service upon service retirement for TRS members who are public education employees.
Accumulated Sick Leave Days
Months of Service Credit
Accumulated Sick Leave Days
Months of Service Credit
0-7
0
218-232
15
8-22
1
233-247
16
23-37
2
248-262
17
38-52
3
263-277
18
53-67
4
278-292
19
68-82
5
293-307
20
83-97
6
308-322
21
98-112
7
323-337
22
113-127
8
338-352
23
128-142
9
353-367
24
143-157
10
368-382
25
158-172
11
383-397
26
173-187
12
393-412
27
188-202
13
413-427
28
203-217
14
428-442
29
Unused accrued sick leave information for bi-weekly paid employees will be provided by the HR Administrative System.


POLICY 310.A Normal Retirement
Subject to the exceptions discussed below, there is no mandatory retirement age. Under Tier 1, an employee with at least ten years participating service in the Teachers' Retirement System may retire as early as age 60 or at any later age, or the employee may retire at any age with 25 years participating service. Under Tier 2 an employee with at least ten years participating serive in Teachers' Retirement System may retire as early as age 62 or any later age.

Faculty members are expected to give one year's written notice of retirement. Nonacademic employees should give at least one month's written notice. Anyone contemplating retirement should contact the Benefits Office at least 90 days prior to expected retirement date so that there will be no delay in the beginning of retirement compensation.

Following retirement, a faculty member's name is retained in the University's records at the rank held at the time of retirement.

Retirement benefits available through UAB depend upon the individual's participation in the retirement programs. Information on these matters may be obtained from the Benefits Office.  There are no service retirement benefits available for UAB LLC employees.


POLICY 310.B Refund of Contributions to the Teachers' Retirement System


An employee who leaves the employment of the University before qualifying for retirement benefits may apply for the return of all contributions. An application for refund must be completed in the Benefits office. The refund is not made automatically.

The contributions of an employee with ten or more years of service are vested; therefore, careful consideration should be given prior to a refund request.


POLICY 310.C Retirement Due to Disability


“Retired Due to Disability" is a status that means that an employee's disability has been examined and approved either by qualifying for the University's Long Term Disability Insurance Program or by qualifying for disability either for the Teachers' Retirement Plan of Alabama and/or the Social Security Program offered by the federal government.

Regular full-time and regular part-time employees who have been approved for disability retirement benefits under one of the University retirement programs as indicated above will be eligible to continue the following benefits:
1.     Health insurance program sponsored by the University,
2.     Group Life Insurance Program (only regular full-time employees are eligible),
3.     Group Accidental Death & Disability Insurance Program (only regular full-time employees are eligible),
4.     Any personal life insurance program that had been previously paid by the employee through payroll deduction, and
5.     Educational Assistance Program (part-time regular employees).
To be eligible for any of the benefits above, the disabled employee should contact the Benefits Office to arrange to pay for the employee portion of the group health insurance.

The remaining benefits, with the exception of the personal insurance program, are provided at the University-matched rate until the disabled employee qualifies for retirement due to service. At that time, the employee's retired status normally is converted from "disability retirement" to "normal retirement" if the employee has not returned to work (does not apply for UAB LLC employees). Eligibility to return to work continues provided the employee is physically qualified to return to work and the individual goes through the normal employment process.

Disabled employees may have their disability retirement status terminated under four conditions:
1.     The insurance company which underwrites the University's group long term disability insurance program determines that the employee is no longer eligible to receive benefits,
2.     The employee attains the age limitation as outlined in the long term disability agreement with the insurance carrier,
3.     Death of the employee, or
4.     Acceptance of other employment either within or outside the University.
Employees should notify their departments and the Office of Human Resources of their impending change in status from "retired due to disability" to "eligible for work" and provide a written release from the attending physician to return to regular employment without limitation. This should be done at least 30 days prior to the date the employee expects to be physically qualified to return to full employment.

Departments will make reasonable efforts to reinstate the employee into a position which is comparable in salary and job content to the one previously held. Because many positions are discontinued with the passing of time, it is not always possible for the department to guarantee re-employment. Also, the University cannot always be assured of having positions available in other departments that might be acceptable to both the institution and to the employee. For these reasons, it is impossible to guarantee that employees will be reinstated.

Eligibility for the benefits enumerated above will continue while the re-employment effort is in progress for a maximum of 60 calendar days following the date that the employee's physician indicates ability to return to work. If employment has not been reinstated within 60 days, eligibility for University benefits will terminate. The employee will be given written notice of this termination and advice as to conversion privileges under the various University group insurance programs.

Employees should be advised that should they accept outside employment at any time during the "retired due to disability" status, they will forego their status as employees of the University and will not be entitled to reinstatement, nor will they be eligible to continue to participate in the benefits program.

Former employees who have previously been classified as being retired due to disability will be eligible for re-employment at the University for a position for which they qualify. These former employees will compete for positions on the same basis as other applicants for employment.

Questions regarding this "Retirement Due to Disability" program should be addressed to Benefits Office of Human Resources.
A pre-retirement program for all interested faculty and staff aged 40 and over is conducted periodically by the HR Benefits Office. For additional information regarding the Pre-Retirement Program, contact the Benefits Office, Administration Building Room 264, ext. 4-3458.