During their spare time throughout the workday, faculty and staff at the University of Miami may be found sipping a cup of coffee while enjoying a carefree and simple conversation with their fellow colleagues.
In the past several weeks, however, the topic of retirement plans has been slipping into these conversations more and more.
Announced in January, the new Retirement Savings Plan approved by the university’s Board of Trustees will become effective on June 1 for all faculty and staff. It will also be the only plan available to those employed by the university on or after that date.
Unlike the old plan, which was separated into two distinct plans for either faculty or employees, the RSP will be made available to everyone and will be based on contributions by both the university and the participant.
Margarita M. Acevedo, the director of retirement programs in the UM Benefits Administration, said that, every pay period, the university will contribute five percent of the employee’s salary to a retirement account for each eligible participant.
Acevedo said that the participant will have the opportunity to voluntarily contribute a portion of their salary to the plan. In return, the university will match those contributions up to five percent of their pay.
While Acevedo said the switch to RSP will provide more consistency with benefits among employees, the change is not required amongst faculty and staff.
“Everyone at the university has a choice: they can stay in the existing plan or they can transfer to the new plan,” she said. “We want everyone to choose a plan that will be better for them. We don’t want to disadvantage anybody.”
The old plan differs from the RSP in that it was separated into the Faculty Retirement Plan and the Employees Retirement Plan. FRP included monthly contributions to the company of the participant’s choice while the ERP used formulas to determine the monthly benefit at retirement.
Maria E. Hines, a staff associate at the Benefits Administration, plans to change to the new option.
“I think it’s fantastic because UM is going to contribute towards my retirement, while also matching up my own contributions,” she said. “It will also give me freedom, since I will be able to control my own investments.”
However, some faculty and staff members have chosen to remain in their current retirement plans, such as Barbro M. Vergara, the senior director of admissions, academic and alumni services at the School of Communication.
“[RSP is] probably a good idea for people who just started working here, since you could control it more. For people who have been here a while, it doesn’t really work. If you are close to retirement you have already built up a lot of assets,” Vergara said, adding “No matter how I do it, it comes out better to remain with the old plan.”
Eugene Clasby, a professor of English literature, plans on remaining with his current plan.
“One of the concerns I have is that some of our lesser paid employees will not have enough funds for the university to match,” he said. “So the choice people have to make is a serious one. Most do not want to change because it is not to their advantage.”
Faculty and staff will need to decide by April 6 whether or not they want to stay with their current retirement plan or make the switch to the RSP. Regardless of the plan employees decide on, they will be entitled to all of their benefits under their current plan as long as they have been employed by the university for a minimum of three years before they leave or retire.
For more information, email firstname.lastname@example.org or call the Benefits Administration at 305-284-6718.
Natalie Riera may be contacted at email@example.com.