UNIVERSITY OF PITTSBURGH POLICY 07-13-01
EFFECTIVE DATE: July 1, 1994 (Published December 22, 1995)
The information provided in this policy is a general discussion of pension plans.
Additional information on retirement may be obtained from the Benefits Section of the
Office of Human Resources, or the Office of the Provost.
The University of Pittsburgh Retirement Program, established under the Internal
Revenue Code, provides an opportunity for eligible employees to elect from two pension
plans: a Contributory Tax-Deferred Annuity Plan (TIAA-CREF/Vanguard) and a
Noncontributory Defined Benefit Pension Plan. After the initial enrollment election, a
participant may terminate participation in one plan and become a participant in the
other plan if s/he is eligible for that plan. Due to plan restrictions, as governed by IRS
regulations, a participant may change plans only once during his/her career at the
University of Pittsburgh.
Faculty, faculty librarians, and research associates, according to their appointments,
and all regular full- and part-time staff are eligible to participate. The noncontributory
defined benefit pension plan is available to part-time and temporary employees who
fulfill hours and years of service vesting requirements. Employees covered by separate
collective bargaining agreements participate in the plans specified in their respective
Contributory Tax-Deferred Annuity Plan
To participate in the Contributory Tax-Deferred Annuity Plan, an employee must enroll and
make an election within the first month of eligibility. Participation will be effective the first
of the month following one full month of employment. According to how an employee
enrolls, TIAA-CREF and The Vanguard Group send directly to each participant quarterly
reports and other statements, which identify both the University and employee contributions.
The retirement benefit to be received under the Contributory Tax- Deferred Annuity Plan
depends on a number of factors, such as: the amount of funds contributed, the investment
return on the funds contributed over time, and the distribution option selected at the time
of retirement. There are annuity and other options of cashability and transferability.
Payments normally begin upon official retirement. The amount of monthly or other
payments depends on:
- The premiums that the individual and the University have placed into the retirement
account during the employment period, including the past and projected earnings from
the accumulated premiums.
- The amount of the lump sum payment elected by the retiree in accordance with the
terms of the annuity contract.
- The particular payout option elected by the individual faculty member for the retirement
The Contributory Tax-Deferred Annuity Plan permits an eligible employee to elect to
contribute a percentage of his or her salary base. The University then "matches" the
employee's contribution according to a schedule specified in the Plan, but only up to a
maximum contribution specified in the Plan. The percentage of the University match
varies depending on when the employee became a participant. For employees who
became participants after March 1, 1995, University contributions are subject to a
three-year vesting schedule. Employees may also make additional contributions which
are not matched by the University. Such additional contributions may be deposited in the
Basic Plan or in an account designated as a Supplemental Retirement Account. The
amount of employee contributions and the tax deferral amount elected cannot be changed
for the balance of the plan year, and only once in each subsequent plan year (unless the
change would be prohibited by the contribution limits under the Internal Revenue Code
and regulations). See EXHIBITS A and B.
There is also an Accelerated Plan available for eligible vested employees upon reaching
52, 53, 54, or 55 years of age; these individuals make the maximum employee contribution
and the University makes an increased matching contribution, which may continue for up
to 120 months, after which all University contributions cease.
The combined vested contributions of the University and the employee may be allocated
among: the Teacher's Insurance and Annuity Association (TIAA), available funds within the
College Retirement Equities Fund (CREF), and/or specified funds within The Vanguard
Group. Employees may adjust their allocation of University and employee contributions
to either TIAA-CREF or The Vanguard Group through the University at any time.
Employees should communicate their allocation of funds between TIAA and CREF, and
their allocation among the specific fund(s) with CREF or within The Vanguard Group, and
subsequent changes in these allocations, directly to the carriers.
Employees may defer Federal Income Taxes on the amount of their employee
contributions until the time of receipt of retirement benefits by requesting that the amount
of their contribution be converted to a salary reduction, subject to certain tax-deferral and
contribution limits imposed by the Internal Revenue Code and regulations. An agreement
for contributing through salary reduction may not be made for salary already earned.
When a tax deferral option is exercised, contributions to the Contributory Tax-Deferred
Annuity Plan are withheld before Federal Income Tax but after Social Security Tax is
withheld, so tax-deferred contributions to the Contributory Tax-Deferred Annuity Plan will
not affect Social Security benefits. In addition, the basis for Long-Term Disability benefits
continues to be the stated regular salary, as if the tax deferral option had not been elected.
The Internal Revenue Code and regulations impose limits on the amount that may be
contributed on a tax-deferred basis to the Contributory Tax-Deferred Annuity Plan on
behalf of an employee, on the compensation that the Contributory Tax-Deferred Annuity
Plan may take into account, and on the total contributions that may be made to the
Contributory Tax-Deferred Annuity Plan on behalf of an employee.
In most circumstances where tax deferral is limited, an employee will be able to make
after-tax contributions in order to obtain a particular University matching contribution. If
the contribution rate selected by an employee would result in an annual, combined
University/employee contribution that exceeds the total contribution permitted by the
Internal Revenue Code and regulations, the amount of the contribution will be reduced to
an amount that complies with the applicable limits, while maintaining the same ratio of the
University/employee contributions. Any employee affected by these limitations will be
notified and will have the opportunity to meet with a Benefits Section Analyst who can
assist in reviewing the employee's options.
Booklets and other documents issued by TIAA-CREF and The Vanguard Group explain in
detail the investment, annuity, or benefits provisions of the Contributory Tax-Deferred
Annuity Plan. Information pertaining to participation by eligible employees of the University
is available from the Benefits Section of the Office of Human Resources.
Noncontributory Defined Benefit Pension Plan
If an employee is eligible for the Contributory Tax-Deferred Annuity Plan and does not
make an election to contribute, he or she is covered under the terms of the Noncontributory
Defined Benefit Pension Plan. Further, part-time and temporary employees who are not
eligible for the Contributory Tax-Deferred Annuity Plan are covered by the Noncontributory
Defined Benefit Pension Plan if they fulfill the hours of service requirement specified in the
The Noncontributory Defined Benefit Pension Plan does not require employee
contributions and specifies the benefit a participant will receive upon retirement. The plan
is totally funded by University contributions to a trust fund. The retirement benefit to be
received is based on salary and years of service while a participant in the plan.
Participants in the Noncontributory Defined Benefit Pension Plan also have the opportunity
to make pre-Federal tax contributions, designated as a Supplemental Retirement Account,
to TIAA-CREF and/or The Vanguard Group. Such contributions are not part of the
Contributory Tax-Deferred Annuity Plan and will not be matched by the University, but are
subject to the same tax regulations and administrative policies and procedures as are
applicable to the Contributory Tax-Deferred Annuity Plan.
Exhibit A, Retirement Program
Exhibit B, Retirement Program (Delayed Vesting)
Policy 02-08-01, Preparation for Retirement (Faculty)
Policy 02-08-02, Benefits and Privileges of Retired Faculty