Effective Jan. 1, 2000, the University of St. Thomas Retirement and Annuity Plan will become a more valuable benefit. This retirement plan is commonly referred to as a 403(b) plan. Several amendments to this plan will become effective that day, enhancing this employee benefit.
In the past, St. Thomas started making contributions to employees’ retirement accounts when they reached age 25 and had completed one year of service. As of Jan. 1, 2000, the age for eligibility will be lowered to 21. The one-year service requirement still will apply. This change will give the university’s young employees an opportunity to have a retirement fund started for them four years earlier. With the “magic of compounding interest,” those extra four years of investing, over a 40-year career, will make a difference of thousands of dollars at retirement time.
During December and/or January, the St. Thomas Human Resources Department plans to schedule several Basic Retirement Workshops for newly eligible employees. Watch your mail and the Bulletin Today for more information on those workshops.
During 1999, hourly employees were receiving a St. Thomas contribution to the 403(b) plan of 7.5 percent and a St. Thomas contribution to the Age-Weighted Deferred Compensation (AWDC) Plan. The actual amount of each participant’s AWDC contribution has been based on the age of the participant at the time of the contribution. The AWDC plan will be terminated on Dec. 31, 1999. On Jan. 1, 2000, the university will begin making all UST retirement contributions for eligible hourly employees to their 403(b) plan accounts. The contribution rate will be 10.4 percent for all eligible employees, including hourly employees. Please note: New employees who are at least 40 when they are hired, will continue to be eligible to receive UST contributions as of the first month following their hire date.
Due to the termination of the AWDC plan, all participants in that plan will eventually need to transfer their assets, via a direct rollover, to an Individual Retirement Account (IRA). Another alternative will be to take a cash distribution; if you do this, however, you can lose about half of the account balance due to taxes and penalties. Human Resources will post a “Notice to Interested Parties” in mid-December, and informational meetings will be held in January or February.
Rollovers and distributions are anticipated by midsummer 2000. There is no need to take any action now, but you may want to start thinking about getting an IRA set up and ready to receive your rollover.
“We are very pleased to be able to offer UST employees this enhanced retirement plan. We continue to review all of our benefit plans to make sure they are meeting the needs of our most valuable assets — faculty and staff," said Roxanne Kainz, benefits administrator. If you have questions about St. Thomas benefit plans, please call Kainz, (651) 962-6521.
Benefits Administrator Roxanne Kainz joined the university Aug. 17. She comes to St. Thomas from Doherty, Rumble & Butler law firm in St. Paul and has been in benefits administration for 20 years. She has an employee benefit specialist certification through the University of Minnesota and the Wharton School of Business at the University of Pennsylvania. If you have benefit questions, please feel free to contact Kainz at firstname.lastname@example.org or visit her office, Room 217, Aquinas Hall. She looks forward to meeting you.