Retirement Plans
HPP Retirement Plan
Announcing Important Changes To The University Of Utah Retirement Program for University Health Care Employees Enrolled in the HPP Benefit Program
Dear University Health Care Employee:
The University of Utah is committed to offering you a retirement program that is competitive in the industry, meets the changing needs of employees, and attracts and retains the best employees. As part of that commitment to our employees we are enhancing the retirement benefits for University Health Care employees enrolled in the HPP Benefit Program ("HPP Benefit Program"). The HPP Benefit Program includes all University employees hired at the hospitals and clinics on or after January 1, 2001, and some employees hired prior to January 1, 2001.
Beginning July 1, 2008, employees enrolled in the HPP Benefit Program will see modifications to the 401(a) Defined Contribution Retirement Plan and to the 403(b) Supplemental Retirement Savings Plan. This letter outlines the changes and how they impact you.
401(a) Defined Contribution Retirement Plan - "401(a) Plan"
UUHC Contributions - The UUHC contribution to the 401(a) Plan will increase from 3% to an amount equal to 6% of your compensation. Instead of being deposited into your account annually, contributions will be made to your account following each pay period.
Waiting Period - There will no longer be a waiting period to participate in the 401(a) Plan. If you were hired after July 1, 2007, the balance of your waiting period will be waived and you will begin participating in the 401(a) Plan on July 1, 2008. Employees hired after July 1, 2008, will begin participating on their date of hire.
Vesting Period - UUHC contributions made to your account are vested based upon your Years of Service in an eligible position.
- Earnings Through June 30, 2008: Contributions on compensation earned through June 30, 2008, will be fully vested after 6 Years of Service.
- Earnings July 1, 2008 and After: Contributions on compensation earned on or after July 1, 2008, will be 50% vested after 4 Years of Service and 100% vested after 6 Years of Service.
403(b) Supplemental Retirement Savings Plan - "403(b) Plan"
Matching Contributions - A new 403(b) Plan employer matching program will be implemented in the HPP Benefit Program. Beginning with your July 22nd paycheck, UUHC will match the amount you defer to the 403(b) Plan up to 3% of your salary (subject to IRS compensation maximum limits). The vesting rules for UUHC's matching contribution will be the same as the new vesting rules in the 401(a) Plan.
QUESTIONS AND ANSWERS
Where will my 401(a) Plan contributions be sent?
Investment Providers for the University's retirement plans are Fidelity Investments, TIAA-CREF, and Vanguard. If you already have a 401(a) Plan account, future contributions will be sent following each pay period to your current investment provider(s). If you are not yet participating in the 401(a) Plan, an account will be opened for you at Fidelity Investments. You may change your investment provider(s) at any time. If you would like contributions sent to a different provider or divided between two or all three providers, complete an Investment Provider Change Form.
I am already participating in the 401(a) Plan. When will I receive the UUHC contribution on earnings through June 30, 2008?
- The UUHC contribution on 2007 compensation earned January 1, 2007, through December 31, 2007, will be made in one lump sum by mid-May, 2008. You must have been employed and enrolled in the HPP Benefit Program on December 31, 2007, in order to receive this contribution. The contribution will be subject to the original vesting rules (100% vested after 6 Years of Service).
- The UUHC contribution on 2008 compensation earned January 1, 2008, through June 30, 2008, will be made in one lump sum by mid-May, 2009. You must be employed and enrolled in the HPP Benefit Program on December 31, 2008, in order to receive this contribution. The contribution will be subject to the original vesting rules (100% vested after 6 Years of Service).
- The UUHC contribution on 2008 compensation earned July 1, 2008 and after will be made following each pay period. These contributions will be subject to the new vesting rules (50% vested after 4 Years of Service and 100% vested after 6 Years of Service).
How do the vesting rules work for contributions on compensation earned through June 30, 2008 and compensation earned July 1, 2008 and after?
| 3% Contributions on Compensation Earned Through June 30, 2008 | 6% Contributions on Compensation Earned July 1, 2008 and After, and Employer 403(b) Matching Contributions | |
| Vesting Rules | 100% Vested after 6 Years of Service | 50% Vested after 4 Years of Service and 100% Vested after 6 Years of Service |
| Example: Susan was hired June 1, 2003 | Susan began participation in the 401(a) Plan on July 1, 2004. As of July 1, 2008, she has 5.08 Years of Service. She will be 100% vested in the 3% contributions on earnings through June 30, 2008, on May 31, 2009. | On July 1, 2008, Susan will already have 5.08 Years of Service and immediately be 50% vested in future University 6% contributions to the 401(a) Plan and matching contributions to the 403(b) Plan. She will be 100% vested in the 6% contributions to the 401(a) Plan and matching contributions to the 403(b) Plan on May 31, 2009. |
How are Years of Service calculated?
A Year of Service is any 365 calendar days of service in a benefit-eligible position with the University. A period of termination of employment (or employment in a position not eligible for the HPP Benefit Program) of less than 32 consecutive days will be ignored. If your period of termination of employment (or employment in a position not eligible for the HPP Benefit Program) is greater than 31 days, you will not be credited with a Year of Service until your pre-break and post-break periods of employment equal one year (i.e., 365 days). Years of Service in a University position eligible for the Standard Benefit Program may be credited following rehire into a position eligible for the HPP Benefit Program.
How do I start receiving UUHC matching contributions in the 403(b)Plan?
If you are already contributing to the 403(b) Plan, matching contributions up to 3% of your salary will begin automatically with the amount deferred from your July 22nd paycheck. If you begin participating at a later date, the UUHC matching contribution will begin when your first deferral to the 403(b) Plan is made. If you would like to (i) begin participating in the 403(b) Plan, (ii) increase or decrease your deferral amount, or (iii) change your investment provider(s) for future deferrals and matching contributions, fill out a 403(b) Plan Salary Reduction Form. You may start, stop, or change your participation in the 403(b) Plan at any time. The HPP Benefit Program vesting period on matching contributions will be calculated using your Years of Service, regardless of when you begin deferrals to the 403(b) Plan.
Will UUHC match my Roth after-tax deferrals to the 403(b) Plan?
The University will match both pre-tax and Roth after-tax deferrals. The matching contribution will always be pre-tax (meaning you will pay taxes on the vested matching contribution dollars and earnings when you withdraw them from your account at retirement).
Can I have the UUHC 403(b) Plan matching contribution sent to a different investment provider?
The UUHC matching contribution allocation will mirror your elective deferral allocation. For example if you are deferring 6% of your salary and dividing it 33% to Fidelity, 33% to TIAA-CREF, and 34% to Vanguard, the UUHC's 3% match will be divided 33% to Fidelity, 33% to TIAA-CREF, and 34% to Vanguard.
I am a University Health Care employee, but am enrolled in the Standard Benefit Program. Am I eligible for the UUHC 3% match to the 403(b) Plan?
The matching contribution will only be made for hospitals and clinics employees enrolled in the HPP Benefit Program.
If I terminate my employment with University Health Care before I am 100% vested in the UUHC contributions, what will happen to the non-vested money in my 401(a) and 403(b) accounts?
If your employment is terminated or you transfer to a position not eligible for the HPP Benefit Program before you are vested in the UUHC contributions, the entire amount of funds in your accounts will be forfeited. If you are 50% vested at the time of your termination or transfer, one-half of the total amount in your account will be forfeited. (Your deferrals to the 403(b) Plan and earnings on those deferrals are tracked separately by the Investment Providers. You are always 100% vested in those amounts.)
I am currently enrolled in the University's Long Term Disability Insurance. Will the changes to the 401(a) Plan affect my LTD Coverage?
The retirement contribution benefit in the LTD Policy will increase from 3% to 6% effective July 1, 2008. Employees who become disabled July 1, 2008 or later will receive the increased benefit. As a result, premiums for LTD coverage will increase from .01066 times your covered monthly salary to .01137 times your covered monthly salary. (If you are enrolled in the Physician Option, your premium will increase from .01390 times your covered monthly salary to .0148.) The increase will be effective on your July 22, 2008, paycheck.
Where can I get additional information?
Contact the University Benefits Department at (801) 581-7447 or schedule an individual, confidential counseling session with one, two or all three of the investment providers. See the Benefits Department's Retirement Plans website at www.hr.utah.edu/ben/retirement for additional information, forms, and links to the investment providers' websites.
| University of Utah Retirement Plan Investment Providers | ||
| Fidelity Investments P.O. Box 770002 Cincinnati, OH 45277-0090 Phone: 1-800-343-0860 www.mysavingsatwork.com/uofu |
TIAA-CREF 420 Wakara Way, Suite 200 Salt Lake City, Utah 84108 Phone: 1-800-842-2776 883-5100 (Salt Lake City) www.tiaa-cref.org/uofu |
Vanguard PO Box 1110 Valley Forge, PA 19482-1110 Phone: 1-800-523-1188 http://utah.vanguard-education.com/ekit |
| To schedule a free confidential individual consultation | ||
| 1-800-642-7131 www.mysavingsatwork.com/uofu |
1-800-842-2776 or 883-5100 (in Salt Lake City) www.tiaa-cref.org/moc |
1-800-662-0106 ext. 14500 www.meetvanguard.com |