Employee Retirement Plan Will Change Beginning July 1

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FAYETTEVILLE, Ark. – The University of Arkansas Board of Trustees has approved a change to the campus retirement plan. The change was approved in November, 2015, and will take effect beginning July 1.

All U of A employees, like all state employees, are required to take part in a retirement fund. The change now requires U of A employees to make a contribution to their retirement plan.

Previously the university contributed five percent of each employee’s salary to a retirement fund – either TIAA-CREF or Fidelity Investments -- selected by the employee. Employees were not required to contribute anything to their fund.

Beginning July 1 all employees who are not currently contributing to their fund will be required to contribute one percent of their salary. This will be done automatically. No action is required by the employee.

Each year the employee contribution will be increased by one percentage point, until it reaches five percent of the employee’s salary in 2020.

“The retirement plan is a major benefit for anyone working at the University of Arkansas and this change is intended to continue making it a prime benefit,” said Richard Ray, benefits director. “The fact is that the university’s contribution alone is not enough to provide for an adequate retirement benefit for many of our employees. At the same time, the University is already contributing nearly $90 million to the retirement funds, and raising that amount would mean cutting other benefits, most notably health insurance.”

Also, for employees who become eligible for benefits on or after July 1, 2016, the vesting schedule for university contributions will change from one year to two years. Employee’s contributions remain immediately 100% vested.

Employees still have the option of contributing more than 5 percent of their salaries to either retirement fund, with the U of A matching those contributions up to 10 percent.

The Human Resources office has sent three emails to all campus employees explaining the changes, answering frequently asked questions, and announcing the times for informational workshops and counselling sessions.

Additional information about the change is available online or by contacting hrbenf@uark.edu  or call 479-575-5351.