A. Employee Benefits

7.1   Social Security

7.1.1   Description. A basic part of the University System's retirement program is the federal Social Security program for which the University System and its faculty/staff members contribute a legally defined percentage of the faculty/staff member's salary. Full benefits are available at age 65, but may begin on a reduced basis as early as age 62.

7.1.2   Eligibility. To qualify for Social Security benefits a faculty/staff member must have contributed for a minimum number of covered years as defined by the Social Security Administration. Faculty/staff members should contact a local Social Security Office at least three months prior to retirement to discuss benefits and make arrangements to receive them.

7.2   Voluntary Defined Contribution Benefit Plan

7.2.1   Description. The University System of New Hampshire offers its faculty and staff members the opportunity to participate in a defined contribution retirement plan with a variety of investment opportunities that permit employees to take greater personal control of their retirement program. All benefits-eligible faculty and staff members may participate in the University System's sponsored retirement plan immediately upon employment.

7.2.2   Eligibility. In addition to the social security program, the USNH offers faculty/staff members the opportunity to participate with one or both of its defined contribution providers, TIAA/CREF or Fidelity Investment Corporation.

7.2.3   Contributions. Both the University System and the faculty/staff member contribute a fixed percentage of regular budgeted salary into the retirement plan on a biweekly basis. Plan participation and contributions, including changes in contribution level, begin the first pay period of the month following enrollment in the USNH Retirement Plan. Enrollment requires the completion of the Salary Reduction Agreement/Vendor Application forms and receipt of these materials by your campus Human Resource Office.

7.2.3.1   Initial Contribution Level. The first year of participation in the USNH Retirement Plan provides for the University System to contribute 5% plus ARC (see USY V.A.7.2.3.5) and the faculty/staff member to contribute 6%. After one full year of participation at the Initial Contribution Level, the University System contribution will increase to the Standard Contribution Level of 10% (plus ARC).

7.2.3.2   Standard Contribution Level. The standard contribution level provides for the University System to contribute 10% (plus ARC) and the faculty/staff member to contribute 6%.

7.2.3.3   Alternate Contribution Level. The alternate contribution level provides for the University System to contribute 4% (plus ARC) and the faculty/staff member to contribute 2.5%.

7.2.3.4   Contribution based on Salary over the IRS Permitted Level. The USNH does not consider regular budgeted salary in excess of the IRS prescribed limit (in 2002 this is $200,000), the limit is indexed for inflation per IRS Section 401(a)(17)B for the purpose of calculating contributions to the USNH's defined contribution retirement plan. The difference between the amount contributed based on the salary maximum above and the amount the employee is eligible for based on their regular budgeted salary will be contributed into a personal annuity account.

7.2.3.5   Additional Retirement Contribution (ARC)

7.2.3.5.1   Description. The USNH will contribute 1% of an eligible faculty/staff member's regular budgeted earnings to the individual's TIAA/CREF or Fidelity retirement account. In order to receive the additional 1% contribution, the faculty/staff member is required to be a participant in a USNH retirement plan at either contribution level. (This program is effective 1/1/95).

7.2.3.5.2   All benefits eligible faculty/staff members including flex year appointments hired after 6/30/94 are eligible for ARC. All benefits eligible faculty/staff members including flex year appointments hired prior to 7/1/94 are eligible for the Transition Plan described in USY V.A.7.4.

7.2.3.6   Annual limits. Employee and employer contributions are limited only by IRC Sections 415 and the 402(g) Elective Deferral Limit. Faculty/staff age fifty (50) or over may elect to make supplemental contributions in accordance with Section 3.02(e).

7.2.4   Tax Deferment Agreement. Through a signed agreement with the University System of New Hampshire, faculty and staff may request a reduction of their salary for federal tax purposes, equal to the staff member's contribution (contributions are not subject to current federal income tax) to the USNH retirement plan. The University System's contribution is automatically tax deferred.

7.2.5   Portability of retirement savings. Effective January 1, 2002, rollovers from other qualified plans may be permitted.

7.2.6   Vesting of contributions. You are fully and immediately vested in the accrued benefits arising from your contributions. The vesting of accrued benefits attributable to contributions made on your behalf by the USNH is in accordance with the following schedule:

Completed Years              Vested          Forfeitable
of Participation/Service     Percentage      Percentage

Less than 3 years            0%              100%
3 years or more              100%            0%

For purposes of determining whether you will be credited with a year of service for vesting purposes, the 12-month computation period starts with your date of retirement plan participation while employed.

7.2.6.1   Break in Service Prior to Contributions Being Vested. If you have a break in service before you are vested, accrued benefits derived from employer contributions will be forfeited.

7.2.6.2   Break in Service of Less than Three Years and Re-employed by USNH. If your break is less than three years, you will be credited with your past service and any accrued benefits derived from USNH contributions will be restored, subject to your satisfying the vesting requirements.

7.2.6.3   Break in Service of More than Three Years and Re-employed by USNH. If the break is more than three years, you will not be entitled to the forfeited benefits, and your past service will not be counted toward the vesting of benefits attributable to service after reemployment.

7.2.6.4   The designated beneficiary of a faculty/staff member who dies before termination or retirement will be entitled to the accrued benefits in the account at the time of death.

7.2.7   Withdrawal of Contributions

7.2.7.1   Less than Three Years Participation. If a faculty/staff member terminates his/her employment before completing three years of participation in the plan, withdrawal of the accrued benefits derived from employee contributions may occur. Accrued benefits derived from USNH contributions will be forfeited. Certain tax payments or penalties may apply.

7.2.7.1.1   Exceptions:

7.2.7.1.1.1   If hired at age 60 or older the accrued benefit derived from USNH contributions are fully vested.

7.2.7.1.1.2   If the faculty/staff member is at least age 60 at time of termination, the three years of participation rule does not apply.

7.2.7.2   More than Three Years Participation. If the faculty/staff member terminates or retires after three years of plan participation while employed at USNH, he/she may withdraw a partial or the full amount of the accrued benefit derived from employee and USNH contributions in the retirement account in cash, or transfer these funds into another investment vehicle. Certain tax payments or penalties may apply.

7.2.8   Non-Status Retirement Plan Participation (Employee Contribution Only)

7.2.8.1   Standard Contribution Level. The standard contribution level provides for the employee to contribute 6%.

7.2.8.2   Alternate Contribution Level. The alternate contribution level provides for the employee to contribute 2.5%.

7.2.9   Retirement Income. Retirement income benefits are subject to IRS regulations.

7.2.9.1   Benefits may begin any time after the faculty/staff member fully retires or terminates his/her employment or as described in USY V.A.7.2.9.2.

7.2.9.2   A faculty/staff member age 59½ or older who wishes to begin payment from his/her regular USNH retirement income funds while continuing to be employed on a reduced basis in a status position may do so only with appropriate departmental dean/director and institutional approval under the conditions described below. Unless otherwise defined by campus policy, institutional approval shall mean approval by the appropriate Vice President (or equivalent) for the area.

Benefit contributions during the reduced appointment time are based on the percentage of the reduced appointment. For appointments reduced below 75% time, see USY V.A.2.3 and 2.4. The faculty/staff member remains subject to USNH policies, including performance requirements and reduction in force policies. Campus policies may also apply.

7.2.9.3   Reduction in service (of any amount) and selected retirement date up to two years in the future.

A faculty/staff member may reduce his/her appointment to any percent time, for up to two and one-half years, and submit a retirement date no more than two and one-half years after the date of the reduced appointment.

7.2.9.3.1   Reduction to 50% time or less service and selected retirement date up to five years in the future.

A faculty/staff member who wishes to reduce his/her appointment to 50% time or less may submit a request for a retirement date no more than five years from the beginning date of the reduced appointment.

7.3   Defined Benefit Plan. The University System of New Hampshire maintains a defined benefit plan called the Operating Staff Retirement Plan for those staff members who joined the plan prior to January 1, 1987.

7.4   Transition Plan

7.4.1   Description. Eligible faculty/staff members hired prior to 6/30/94 will have a choice of either the ARC program or the Medicare Supplemental Plan. Faculty/staff members who select the Medicare Supplemental Plan must meet the plan's eligibility requirements, (see section USY V.A.7.4.3) to receive this benefit.

7.4.2   For those faculty/staff hired prior to 6/30/94 who select ARC, the 1% contribution will be made by USNH regardless of enrollment in a retirement program.

7.4.2.1   Minimum Guarantee. Faculty/staff members who select ARC under the transition plan will be eligible for a minimum guarantee of $10,000 in USNH contributions upon attainment of age 62 with 20 years of creditable service. In order to be eligible for the minimum guarantee, the faculty/staff member must be retiring from USNH. The minimum guarantee will be increased by $l,000 for each full year of creditable service in excess of 20 years.

7.4.2.1.1   Faculty/staff members who are at least age 62 with 10 or more years of service as of 6/30/94 will be eligible for the minimum guarantee after 10 years of creditable service; however, the additional $1,000 per year will not apply until the faculty/staff member has completed 20 years of service.

7.4.2.1.2   Faculty/staff members selecting ARC under the transition plan will have a guarantee that his/her spouse will receive $10,000, or the fund accumulation, whichever is greater, in case of the death of the employee before retirement.

7.4.2.1.3   A flex year employee's creditable service will be prorated, i.e. based on actual time worked, when calculating eligibility for the minimum guaranteed benefit.

7.4.2.1.4   For the purpose of calculating years of creditable service towards the minimum guarantee, the current USNH policy on employment breaks (USY V.C.10) will apply.

7.4.2.1.5   The minimum contribution guarantee will be reviewed by USNH every three years.

7.4.3   Medicare Supplemental Plan

7.4.3.1   Eligibility. Employees begin accumulating years of service toward this benefit starting at age 52. Employees must meet all of the above criteria as defined in USY V.C.9.2 and prior to retirement be participating in a USNH medical program.

7.4.3.2   Spouse or domestic partner (as defined by USNH) and/or dependent coverage. If the faculty/staff member is covering a spouse or domestic partner under her/his medical plan who is age 65 or older, s/he will be transitioned to the USNH Medicare Complementary Plan.

If the faculty/staff member is covering a spouse, domestic partner under age 65 and/or dependents under her/his active employee medical plan, s/he will continue under that plan into the faculty/staff member's retirement. Dependents may remain under the plan until they no longer meet the plan's eligibility requirements. A spouse or domestic partner may remain under the plan until eligible for Medicare; normally the first [day] of the month the spouse or domestic partner attains age 65. At age 65, the spouse or domestic partner will be transitioned to the Medicare Complementary Plan. Effective January 1, 2006, retiree premium contributions to cover a spouse, domestic partner, and/or dependents will be the same as active employees up to a maximum period of three years. Contributions required to be paid by the retiree for coverage beyond three years will be fifty percent (50%) of the cost of the coverage until the dependent no longer meets the plan's eligibility requirements or the spouse or domestic partner is eligible for the Medicare Complementary Plan. Any faculty or staff member who retires on or before December 31, 2006, will not be subject to the increase in contribution rate but will continue to pay the normal active employee rates.

7.4.3.2.1   7.4.3.2.1 In the event the retiree dies, the spouse or domestic partner may continue in the Medicare Complementary Plan for the rest of her/his life or until remarriage or the establishment of a new USNH-defined domestic partnership.

7.4.3.2.2   If the faculty/staff member who chose the Medicare Complementary Plan is over age 52 and has at least 10 years of service and dies either while on active service or while on an approved early retirement plan, long-term disability, or chronic worker’s compensation, her/his spouse or domestic partner is still eligible for the Medicare Complementary Plan unless made ineligible by remarriage or the establishment of a new domestic partnership. The spouse or domestic partner will not be required or eligible to be a participant in a USNH medical program, as required in USY V.A.7.4.3.1, prior to being eligible for the Medicare Complementary Plan.

7.4.3.3   In the event a spouse or domestic partner of a retiree covered by the Medicare Complementary Plan dies, the retiree is not permitted to add a new spouse or domestic partner to the plan.

7.5   Normal Retirement Age. The USNH considers age 65 as the "normal retirement age" in accordance with the retention of this age by the Social Security Administration as the age for retirement. Its only purpose is to provide a reference point for faculty and staff in their retirement considerations. USNH faculty and staff may be considered to be "retirees" as defined in employment policy (USY V.C.9.2). In addition any police officer who retires at age 45 or older with 20 years of service as a full-time certified law enforcement officer or at age 60 or older with three years of such service will be considered a "retiree."

7.6   Notification of Intent to Retire. In order to provide a smooth transition from active employment to retirement status, faculty and PAT staff members are expected to provide a minimum of 120 days, and Operating Staff members are expected to provide 60 days written notice to their department, campus Human Resources Office and the USNH Benefits Office indicating the date on which they plan to retire.

7.7   Medical Coverage for Retirees Age 62 through age 65 and for full-time certified police officers

7.7.1   All faculty/staff members who meet the qualifications of a USNH definition of retiree (see section USY V.C.9.2 for definition), and wish to retire, may continue coverage per University System guidelines until they are eligible for Medicare coverage at age 65. Coverage may be continued whether or not the retiree had previously selected ARC or the Medicare Complementary Plan.

7.7.2   In order to maintain medical coverage per University System guidelines, effective 1/1/06, retiring faculty/staff members will pay the same premium contributions as active employees up to a maximum period of three years. Spouses, USNH defined domestic partners, and/or dependents of retirees eligible for coverage beyond the three years will contribute 50% of the cost of the coverage. An employee with the ARC plan has no option for USNH coverage, except for those subject to COBRA provisions after s/he is retired and eligible for Medicare; normally the first of the month in which the retiree attains age 65. An eligible faculty or staff member who retires on or before December 31, 2006, will not be subject to the increase in contribution but instead will pay the normal active employee rate of contribution.

Coverage for family members ends on the same date as coverage for an employee ends as described above.

7.7.3   USNH police officers may be eligible for medical coverage between the ages of 45 and 62 as defined and approved by the Board of Trustees. Officers retiring at age 62 or after will be eligible to select either the same medical plan, coverage and contributions as all other employees retiring at age 62 or later, or the USNH police officer medical retirement plan.