Pension Plan
- The SU Pension Plan is a defined benefit plan and is designed to provide a financial benefit to you at retirement.
- It is completely funded by the University. Employees make no contributions.
- If you are at least 21 years of age and have completed one year of membership service, you will participate in the SU Pension Plan.
- A year of membership service is defined as 1,000 hours worked in the 12 month period from the date of hire or in any calendar year.
- You become vested in the plan after 5 years of service.
- Normal retirement is the first day of the month on or following your 65th birthday.
- Early retirement is allowed at age 55 if you are vested.
- The options available for pension payment are as follows:
- Joint and 50% to contingent annuitant
- Joint and 75% to contingent annuitant
- Joint and 100% to contingent annuitant
- Straight life annuity
- The automatic form of payment for Single participants is the Single Life Annuity.
- The automatic form of payment for Married participants is the Joint and 50% to the contingent annuitant.
- Click here for a copy of the Summary Plan Description for the Pension Plan.
Pension Plan Frequently Asked Questions
- How is my pension calculated?
Your Normal Retirement Benefit depends on your Average Final compensation and your Credited Service. These two factors are used in the Plan's Basic Benefit Formula to determine the actual amount of your monthly benefit. Covered Compensation is also used to calculate your Normal Retirement Benefit under the Plan if you began working for Samford University after 2007. Your Covered Compensation is the monthly average of the social security taxable wage bases for the 35-year period ending with the year in which you reach your social security retirement age. If your employment is terminated prior to reaching your social security retirement age, the taxable wage base for future years is deemed to be the same as the taxable wage base for the current year in making this determination. The Plan bases its calculations on Covered Compensation tables updated annually by the IRS.
- What is the Plan's Basic Benefit Formula?
If you were hired prior to 1/1/2008 (and had worked for Samford University on or after January 1, 1989) the Basic Benefit Formula is: 1.83% of your Average Final Compensation plus 0.47% of your Average Final Compensation over $1,250 times your years of Credited Service, up to a maximum of 25. If you were hired on or after 1/1/2008 the Basic Benefit Formula is 1.83% of your Average Final Compensation plus 0.47% of your Average Final Compensation over the Covered Compensation amount times your years of Credited Service, up to a maximum of 25.
- What is meant by Average Final Compensation?
It is the average of your monthly compensation for the five full consecutive calendar years in the last ten full calendar years of Credited Service that produces the highest average.
- What is Credited Service?
It is a year in which you are a member of the Plan and complete at least 1,000 hours of service.
- I am a salaried employee. How are my hours worked during the year calculated?
Salaried employees will be credited with 45 Hours of Service for each week in which they perform at least one hour of service during employment.
- I understand that early retirement is age 55 with 5 years of service, however what if I would like to retire at age 62. Can I do that or can I only retire at ages 55 or 65?
Once you reach age 55 and have completed 5 years of service you may then retire from Samford at any time. However if you do retire prior to age 65, your monthly benefit payments will be reduced because the payments begin early and will be paid over a longer period of time.
- By how much will my benefit be reduced if I do decide to retire early?
The amount of reduction is 3.33% for each year that your early retirement date precedes your Normal Retirement Date.
- I have reached age 65 and would like to start the retirement process here at Samford. What is the first step I need to take?
Once you have determined the date you wish to retire, contact Human Resources and ask for a pension estimate calculation. This calculation must be completed before you can sign the pension application. The estimate will take about 7 -10 business days to arrive from the Annuity Board.
- I have called Human Resources and have received my estimate. What is the next step in the retirement process?
Call Human Resources and schedule an appointment to come in and sign the paperwork. Paperwork can be signed up to 90 days prior to your retirement date. It will take approximately 20 minutes to complete the application. Make sure you schedule enough time to complete the paperwork and ask any questions you may have.
- I have signed the application. When will my pension benefit begin?
Pension payments start on the first of the month following the retirement date.
- Is it possible to receive a lump sum payment?
Only if the amount of your calculated benefit is $5,000.00 or less.
- Will I be able to stay on the Samford Health Plan?
If you take early retirement (early retirement is age 55 – age 64) you will be able to stay on the Samford Health Plan as a retiree. You can remain in the Plan until you reach the age of 65 or gain other insurance.
- I am 65 but my spouse is not yet 65. Can he/she remain a member of the Samford Health Plan?
If your spouse was a dependent on your Health Contract prior to your retirement and is not 65 at the time of your retirement, he/she can stay on the Samford Health Plan until the time he/she turns age 65 or gains other insurance.
- How do I pay for my insurance premiums as a retiree?
You will be required to send a check for the amount of the premium at the first of each month. If the check becomes more than 30 days overdue, you will be cancelled from the Plan.
- Will I be charged the employee rate for coverage or some other rate?
You will be charged the retiree rate for coverage. The current rate will be given to you at the time you sign your pension application paperwork.
- I am 65 and know that I will not be able to stay on the Samford Health Plan. What do I need to do about insurance?
Contact social security as soon as possible to enroll in Medicare Parts A, B, and D. If you are interested, you may also contact BCBS for information regarding C+ coverage.
- What if I terminate my employment with Samford before I am eligible to start retirement? If your employment at Samford University stops before you are eligible for retirement, you will still be entitled to the benefit that you have earned up to the day your employment ended if you have earned at least five years of Vesting Service. Your benefit is computed in a manner similar to the Early Retirement Benefit, using the Basic Benefit Formula with your Average Final Compensation and Credited Service (and Covered Compensation, if applicable) that apply on the date your employment ends. You will begin receiving benefits at age 65, but you may instead elect to receive your benefit payments beginning at any time after you reach age 55, reduced in the same manner as Early Retirement Benefit payments beginning before age 65. However, if the present value of your benefit is $5,000 or less, you will receive your benefit in a lump sum as soon as practicable after you terminate employment after mandatory withholding of income tax. In the alternative, you may choose to have the lump sum payment rolled over directly into an IRA or to the qualified retirement plan of your new employer, provided the plan accepts rollovers.
- What happens if I die before I retire?
If you are married, a death benefit will be paid to your spouse if you have at least five years of Vesting Service and
You die while employed by Samford University or you terminate employment and die before your retirement benefits begin. How much will my spouse receive as a death benefit?
The amount of your spouse's monthly benefit will be equal to one-half of the benefit that you would have received under the automatic form of payment if your benefits had started on the earliest date that you could have elected to receive them.
- I am married and do not wish to receive the automatic form of payment. Can I choose one of the other options of payment?
Yes, however you must have your spouse's consent to do so. He/she will have to sign their consent at the time you fill out the pension application.
- I am single, but wish to have a portion of my benefit continue for a contingent annuitant. Is this possible?
Yes, however you must realize that the amount of your benefit will be reduced.
