Pension Plan for Staff Employees (SEPP)
Regular staff employees age 21 or older, who work at least 1,000 hours annually, earn benefits under the following two mandatory retirement plans beginning on their one-year anniversary of employment:
- Retirement Income Plan for Employees (ERIP)
- Pension Plan for Staff Employees (SEPP)
ERIP is a 403(b) defined contribution retirement plan. SEPP is a tax-qualified 401(a) defined benefit pension plan. To learn more about the ERIP defined contribution plan, please visit ERIP.
Your SEPP participation automatically begins when you enroll in ERIP and continues from one year to the next. You do not need to complete any enrollment forms or make any investment decisions under SEPP.
SEPP provides eligible employees with a retirement benefit based on their final average earnings and years of SEPP participation. Your annual SEPP benefit is calculated using the following formula:
|(||1% of your Final Average Pay||+||0.5% of your Final Average Pay that exceeds your Social Security Covered Compensation||)||x||Years of Participation (up to 35)||=||Annual Accrued Benefit|
Terms to Know
- Final Average Pay: The average of your five highest consecutive years of compensation during your final 10 Years of Participation.
- Social Security Covered Compensation: An average of the Social Security taxable wage bases, changing annually. SEPP provides an additional benefit if your Final Average Pay exceeds your Social Security Covered Compensation to ensure that your total retirement income (including Social Security) is comparable at all pay levels.
- Years of Participation: One-twelfth of the aggregate number of months in which you actively participate in SEPP. Special rules apply for breaks in service and disability.
Your SEPP benefit is funded by the University. The University’s contributions are calculated by independent actuaries in accordance with federal regulations. You do not contribute anything to SEPP.
The University bears the risk of investment loss under SEPP. Your SEPP benefit is determined by the formula without regard to the plan’s investment performance.
You become fully vested in your SEPP benefit upon completing three years of service. If you leave the University before you are vested, you will forfeit your entire SEPP benefit.
For an estimate of the benefit you already have earned under SEPP, your projected benefit if you continue working at the University until age 65, and your vesting status, active employees should refer to the annual defined benefit plan statement that is mailed to their home annually.
For more information, download the Pension Plan for Staff Employees Summary Plan Description.