The Older Faculty Plan, a limited plan for faculty members in the 1920s and earlier, is still paying annuities to a few retirees and surviving spouses. The last active member retired under this plan in June of 1963.
In July of 1945 the Teachers Insurance and Annuity Association (TIAA) retirement plan for faculty was modified when the University increased its range of contributions to 10 percent from 5 percent, depending upon the vintage of contracts. In July of 1952 the College Retirement Equities Fund (CREF) was made available to University employees as a companion plan to TIAA that allowed purchase of stocks to serve as a better hedge against inflation. In July of 1955 salary limits for coverage under TIAA/CREF were eliminated. In January 1962 a salary/annuity option was offered for employees wishing to declare premiums tax-deferred up to 20 percent of salary. By November of 1972 all regular staff became eligible at any appointment fraction for TIAA/CREF participation. In addition to the significant changes listed above, other plan modifications have occurred from time to time.
A retirement plan for nonacademic employees became effective in July of 1942. This plan became the Employees Retirement Plan in 1952 and followed somewhat the same general principles governing the TIAA faculty plan, although differing some in rates and eligibility requirements. Moneys provided by employees and matched by the University were held by the University in a separate fund entitled the "Employee Retirement Fund," and this fund participated in the University's investment program.
Page 44The University contracted with the Connecticut General Corporation to pay out annuities in this fund beginning in October of 1952.
As actuarial reserves exceeded needs for retirement and death benefit requirements from time to time, dividends were distributed to plan members as additional pension benefits.
Compulsory participation at age thirty-five with no service requirement began in January of 1967.
On July 21, 1972, the Regents authorized the use of the Teachers Insurance and Annuity Association (TIAA) - College Retirement Equities Fund (CREF) to replace the Employees' Retirement Plan (ERP), including the transfer of past service benefits, to provide continuing retirement benefits for the members of the Employees' Retirement Plan.
Following that authorization, the members of ERP, consisting of 4,516 service-technical, clerical, and professional-administrative staff, were informed about the features of TIAA-CREF and the various alternatives which were available. The most significant features of TIAA-CREF are immediate vesting, portability, the variable annuity, the salary or annuity option, and the ability for a participant to add additional money to the retirement plan.
By the end of December 1972, the assets of ERP had been transferred and allocations were made to each participant. The total amount of transfer from ERP assets to the Teachers Insurance Annuity Association was $61,856,936. Each participant benefited from a significant increase in the value of common stocks as well as from a release of actuarial reserves based on common stock values which were applicable to the individual's account under the TIAA-CREF plan.
The Congress of the United States in 1954 amended the Federal Social Security Act to permit the inclusion of certain public employees previously excluded from coverage under the Act. This amendment extended the coverage of Federal Old-Age and Survivors Insurance to these employees as of January 1, 1955. Adoption of the program by the Page 45University was dependent upon a referendum scheduled for September 1955, through which all eligible employees would, by secret ballot, indicate whether they did or did not wish to secure the retirement benefits made available by the 1954 amendment to the Federal Social Security Act. The referendum was held on September 26 and 27, 1955, and 85 percent of the eligible University employees voted to participate, and the University entered the program effective January of 1955. Since that time, the cost of the annual tax has increased greatly, and employees in 1977 are paying 5.85 percent of a salary base of $16,500 which is matched by the University.
An early retirement program was instituted in August of 1974 in which a staff member could retire before the mandatory age of seventy with reduced annuity benefits but group life and health insurance benefits protected, depending upon length of service and age, beginning as low as age fifty-five.
In the fall of 1969, the Personnel Office and the Office of Staff Benefits began an orientation program for prospective retirees entitled "Planning for Retirement Program." Four seminars are held each year for 15 to 20 employees per seminar.