Pension Plan for Staff Employees (SEPP)
Effective July 1, 2016, the Pension Plan for Staff Employees (SEPP) closed to new hires and currently enrolled employees earn no additional benefits. The benefits earned in the SEPP as of June 30, 2016 will remain in the plan until you retire from or leave the University.
Staff employees will continue to participate in the Retirement Income Plan for Employees (ERIP), and this benefit has been enhanced by increasing the University's base contribution and providing a University match on voluntary employee contributions. To learn more about the ERIP defined contribution plan, please visit ERIP.
The SEPP is a tax-qualified 401(a) defined benefit pension plan and provided 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 and your vesting status, active employees should contact the Benefits Office. Benefits Specialists can be reached Monday through Friday from 8:30 a.m. to 4:30 p.m. by phone at 773.702.9634 or email at firstname.lastname@example.org.
For more information, download the Pension Plan for Staff Employees Summary Plan Description.