MSU Employee Retirement Planning Options

 

 

The question isn't at what age I want to retire,

it's at what income.  ~George Foreman

Planning for retirement income can be a challenging task. At retirement, your income may be limited. You may wonder if you will have enough income to carry you through your retirement years.

Planning ahead is important and gives you more control over where and how you will live in retirement.

This page provides basic information on MSU's retirement plans and savings options available to benefits-eligible employees, as well as links to useful resources, calculators, and retirement income planning tools.

 

Specific details of the services and benefits covered in this resource are included in the official plan documents that regulate operations of the plans. If there are any differences between this page and the plan documents, the plan documents are controlling. Mississippi State University intends to continue the benefits described within this page, but reserves the right to end or amend any plan at any time for any reason. If you have questions about your benefit options, please contact Human Resources Management at 662-325-3713.

The Human Resources Management staff are prohibited from providing tax or investment advice or making recommendations regarding investment plans They can only provide information that will enable you to make an educated decision regarding supplemental retirement savings.

150 McArthur Hall

Phone 662.325.3713

 

Public Employees' Retirement System of Mississippi (PERS)

Benefits-eligible MSU employees participate in one of two retirement plans – the Public Employees' Retirement System of Mississippi, PERS, or the Optional Retirement Plan, which is available to designated employees, and is referred to as the ORP. Both plans are administered by the Public Employees' Retirement System of Mississippi.

PERS is a 401(a) governmental defined-benefit plan, which means that retirement benefits depend on a formula that includes length of service and average earnings for designated years (four highest years of earnings for PERS). Employees have the advantage of knowing the amount of their retirement benefits ahead of time.

See also PERS Frequently Asked Questions
QUESTION ANSWER
Who is eligible to participate? All benefits-eligible MSU employees.

Resource: PERS Frequently Asked Questions
Is participation required? If you are employed one-half time or more, you are required to participate in PERS, with the exception of:
  • Temporary employees, and
  • Employees who are eligible for, and chose to participate in, the Optional Retirement Plan (ORP).
How do I participate? Participation is automatic, unless you are eligible for, and choose to participate in the ORP.
What paperwork is required? Complete and submit the PERS Enrollment Form and PERS Beneficiary Nomination within 31 days of your date of hire. Completed forms should be returned to Human Resources Management, Mail Stop 9603, 150 McArthur Hall.
What are the individual and university contributions? Employees contribute 7.25% of their total earnings, and the University contributes 11.85% on total earnings up to a maximum of $150,000 annually.
When will I be vested?

Vesting refers to the right to specified benefits granted to eligible employees after a fixed period of employment and membership in the pension system.

 

 

Entered PERS-Covered Service Before

July 1, 2007

Entered PERS-Covered Service On or After

July 1, 2007
Vesting 4 years of service as a contributing member 8 years of service as a contributing member
  A member who entered the System prior to July 1, 2007, is subject to the 4-year vesting period provided that he or she does not subsequently refund his or her account balance.

If you are vested, benefits will be available to you or your legal beneficiary at some point, provided that you do not take a refund of your contributions.
Can I get PERS credit for military service or for work I did in a different state? PERS members are be eligible to receive credit for active duty military service at no cost, provided their service meets certain PERS requirements. There are also provisions for military service credit under USERRA. Details are included in the PERS Member Handbook.

Any member who has at least four years of membership service credit may purchase up to five years credit for qualifying public, non-federal service performed in another state or for foreign service rendered as a teacher in American overseas schools conducted by the U.S. Armed Forces for dependents of U.S. citizens. See details in the PERS Member Handbook.
When will I be eligible to retire?

 

 

Entered PERS-Covered Service Before

July 1, 2007

Entered PERS-Covered Service On or After

July 1, 2007
Service Retirement Eligibility
  • Age 60 with 4 or more years of membership service, OR
  • Any age with 25 or more years of creditable service.
  • Age 60 with 8 or more years of membership service, OR
  • Any age with 25 or more years of creditable service
Do I pay federal or state income tax on my PERS contributions? You do not pay federal or state income taxes on your contributions to PERS. At the time you are drawing a retirement benefit, you pay federal tax on your PERS income; however, you do not pay Mississippi state income tax on your PERS retirement income.
What happens to my PERS contributions when I terminate employment? There are several options to consider and evaluate when terminating covered employment. You may, (1) leave your contributions with the Plan, or (2) take a refund of your contributions. If you leave your contributions with the Plan, you may qualify for a future benefit if you are already vested, i.e. you have four (4) years of membership service credit in PERS or SLRP, or 5 years of membership service credit in MHSPRS. If vested, your spouse and dependent children may be entitled to valuable survivor benefits in the event of your death before retirement. Even if you do not have the minimum number of years to be vested, you can still leave your money and add to those years of service credit if you once again become employed by a covered agency.

Alternatively, you may take a refund of your contributions and either receive the entire amount or rollover the funds to an eligible retirement plan or a traditional IRA. If you take a refund, all rights to future benefits are forfeited.
How much credit will I get for unused leave?
Combined Personal And Sick Leave
Credit Equivalent
Combined Personal And Sick Leave
Credit Equivalent
15 to 77 days
0.25 years
267 to 329 days
1.25 years
78 to 140 days
0.50 years
330 to 392 days
1.50 years
141 to 203 days
0.75 years
393 to 455 days
1.75 years
204 to 266 days
1.00 years
456 to 518 days
2.00 years
Add one-quarter (0.25) year for each additional 63 days
How are retirement benefits calculated?

The PERS benefit formula is equal to:

  • 2.0% of the average compensation for each year of service up to and including 25 years, and

  • 2.5% for each year in excess of 25 years.

  • Benefits are based on the four (4) highest years of salary.

Resource: PERS Benefits Calculator: Allows you to enter data to calculate an unofficial projection of your retirement benefit.
Do I have any control over how my account is invested? No. The PERS web site includes the annual financial report and investment information.
Can PERS give me my account balance? Active and inactive members for whom PERS has a valid mailing address are issued an annual statement after the close of each fiscal year. Members may also request this information from PERS by phone or letter. Call PERS toll free at 1-800-444-7377 or locally at 601-359-3589 with your Social Security number and current mailing address. If your address is current with PERS, an Information Center analyst can provide a “Balance Letter” to you by mail. To have the information faxed, PERS require a written request to be faxed or mailed to us – the request should include your name, Social Security number, signature, specific instructions directing PERS to fax the information, and the fax number to which you need the information faxed.
Can I check my account balance online? No. PERS does not currently offer online access to individual account information. Call (1-800-444-7377) or fax to request a “Balance Letter.”
When will I get my annual PERS statement? Annual Member Statements are normally mailed between August and October of the following state fiscal year. The state fiscal year is July 1 through June 30. PERS will attempt to mail your statement to the most recent mailing address that you have provided. If your address information is not current in the PERS records, your statement will most likely be returned to PERS by the post office. Please be sure to let PERS know any time your address changes.

Form: PERS 1C, Change of Address Form
Can I borrow against my employee contribution account? There are no provisions in the laws of any of the Retirement Benefit Plans administered by PERS for loans, partial refunds or hardship withdrawals on your defined benefit employee accumulation account. To obtain your contributions, you must terminate your employment from all covered positions. Upon termination of your employment, you may apply for a refund of your contributions.

If you voluntarily participate in the Mississippi Deferred Compensation Plan, there is a provision for hardship withdrawal from that account provided that you meet certain conditions set forth by the Internal Revenue Service. Please contact MDCP by phone at 1-800-846-4551, or visit their website.
If I leave state service, can I rollover my contributions into a traditional IRA? PERS members are allowed to rollover their contributions and interest to an eligible retirement plan or to a traditional IRA after termination of covered service with a correctly completed PERS Form 5; (Refund of Accumulated Contributions) and a PERS Form 5C (Agreement of Trustee/Custodian). Distributions are made no earlier than 45 days after termination of employment.
Does unused personal and major medical leave count toward retirement? Upon terminating your employment with MSU, you will be paid for up to 240 hours of accumulated personal leave. The remaining personal leave balance, as well as accrued major medical leave, is credited to your state retirement.
Can retirees be reemployed? Individuals who have retired from the University (or other State of Mississippi service) may be reemployed in accordance with state law and the Public Employees' Retirement System of Mississippi's (PERS) Regulation 34. See Reemployment of Retirees: Information for Hiring Departments.

 

Optional Retirement Plan (ORP)

The Optional Retirement Plan is available to designated employees, and is referred to as the ORP. This alternative plan was established in recognition of the fact that many university level faculty members transfer from state to state a number of times prior to retirement and that such mobility in employment severely limits the ability to build a meaningful retirement benefit under a defined benefit plan such as PERS.

The ORP is a defined contribution plan, which means that contributions are made at a fixed rate to an account established for the employee. Benefits are a function of contributions plus gains (or losses) as a result of interest, dividends, or capital gains. The ORP is administered by the Board of Trustees of the Public Employees' Retirement System of Mississippi.
QUESTION ANSWER
Who is eligible to participate?

  • teaching and administrative faculty

  • librarians with academic rank

  • intercollegiate coaches (with or without academic rank)

  • administrators with budgetary authority

  • employees hired on or after July 1, 2001, as (a) an intern or resident in training at the MSU College of Veterinary Medicine under a teaching program, or (b) as a post doctoral assistant or post doctoral fellow, or (c) as a research scientist without academic rank.

If you have participated in PERS within the past year with any agency or institution of the state of Mississippi, you may not be eligible to participate in the Optional Retirement Plan.
Is participation required? An eligible employee has the option to participate in either the Optional Retirement Plan or PERS.
  • This option is only available during the first 30 days of employment.
  • If no election is made during that period of time, the employee automatically becomes a member of PERS. The decision is then irrevocable.
What do I do to participate? Choose from one of the three approved investment vehicles:

Note: Information on the three approved ORP companies is included in the new employee orientation packet. It is also available from Human Resources Management (662 325-3713). One or more of the ORP vendor representatives may contact you within the first 30 days of your employment to discuss their company's options. CLICK HERE to access vendor contacts.
What are the individual and university contributions?

Contributions to the Optional Retirement Plan are the same as those required for PERS participation, except that the University’s contribution is split between the ORP and PERS. Participating employees contribute 7.25% on total earnings up to a maximum of $150,000, and the University contributes 9.35% to the ORP and 2.50% to PERS. Both the University’s and your contributions, which vest immediately, are portable.

University payments to PERS on behalf of ORP participants are applied to the accrued liability fund to offset losses resulting from nonparticipation but do not earn employees participating in the Optional Retirement Plan any additional retirement benefits from PERS.
When will I be vested? Immediately in both the employee and university contributions.
When can I draw retirement benefits? Upon termination of employment, an ORP participant may draw retirement benefits immediately. An ORP participant chooses the investment vehicles in which his or her contributions are deposited for investment and can make limited transfers of his or her account based on contract provisions.
Do I pay federal or state income tax on my contributions? Your contributions and any earnings that accumulate over the years are not taxed until you receive them.
Do I have any control over how my investments? Yes.
How do I find out the status of my account? Each of the vendors provide account access via the web, as well as regular statements by mail.
How are my retirement benefits calculated? If an employee elects to participate in the ORP, retirement benefits will be determined by the value of the member's account at the time of retirement which can be used to purchase an annuity.
Can I transfer my ORP account balance to another employer's plan? If an ORP participant relocates to another state which has a similar plan, the participant may be eligible to transfer his or her account balance to the new employer's plan.
What happens to my ORP contributions when I terminate employment? Upon termination of employment, an ORP participant may draw retirement benefits immediately. An ORP participant chooses the investment vehicles in which his or her contributions are deposited for investment and can make limited transfers of his or her account based on contract provisions. Plan benefits are a liability of the company with which the funds are invested. Currently, TIAA-CREF, VALIC and ING serve as annuity carriers under the plan.
Advantages of ORP versus PERS

ORP

PERS

  1. Immediate vesting

  2. Portability

  3. Retirement at any age

  4. Control over investment

  5. Access to contributions of 16.60%

  1. Disability income protection

  2. Survivor income protection

  3. Unused leave credit

  4. Death benefits in line of duty

  5. Cost of living increase (13th check)

  6. Stability of system

  7. Can purchase professional leave credit

  8. Can purchase out-of-state service

  9. Minimum monthly payments after 4 years' service upon qualification for retirement

  10. Spousal and dependent child benefits available after four years of service
Disadvantages of ORP versus PERS

ORP

PERS

  1. Disability benefits based on account value*

  2. Survivor benefits based on account value*

  3. No additional credit for unused or military leave

  4. No cost of living increase

  5. Employee does not have access to 2.5% of employer contribution.

  1. Limited portability

  2. 4-year vesting

  3. Employee does not have access to employer contributions at termination prior to retirement
*This means that if a person has recently begun participating the ORP and has a small account balance, benefits are based solely on the value of the account with no minimum guarantee.
Investment Vehicle

Contact:

Christina Williams

Six Concourse Parkway, Suite 2700

Atlanta, GA 30328-5346
1-800-842-2003 voice (Steve Gold) or

1-770-512-3512

Mark Tusa

ING Financial Advisers, LLC

4621 West Napoleon Ave., Suite 201

Metaire, LA 70001

1-713-881-8800 voice

 

Marcus Kincaid

ING Financial Advisors

P.O. Box 1241

Louisville, MS 39339

1-601-624-5108 voice

Elton Thomas

AIG Valic

1308 3rd Avenue North

Columbus, MS 39701

1-662-574-4029 voice

 

Roger Day

AIG Valic

P.O. Box 6154

Mississippi State, MS 39762

1-662-312-2326 voice
 

OPTION

 Mississippi Deferred Compensation Plan & Trust
What is the Deferred Compensation Plan?

The Mississippi Deferred Compensation Plan & Trust (MDCPT), offered through the Mississippi Public Employees' Retirement System (PERS), is a supplemental retirement savings plan authorized under Section 457 of the Internal Revenue Code and enacted by the Mississippi State Legislature.

It is a supplemental retirement savings plan offered by the Public Employees` Retirement System (PERS) and authorized under Section 457 of the Internal Revenue Code. You decide if you want to join and the amount, within permissible limits, that you want to save. It is a tax-deferred savings plan that offers two tax advantages:

  1. Your current income taxes are reduced immediately because you set aside or "defer" part of your salary or "compensation." You pay no Federal or State income taxes on your contributions until you withdraw your funds, usually at retirement when you may be in a lower tax bracket.

  2. Your interest and/or earnings are also tax deferred until withdrawal.
How does the Deferred Compensation Plan work?

  • You decide how much of your income you want to invest. Through payroll deduction you may defer as little as $25.00 per month, or up to the maximum deferral allowed under I.R.C. Section 457, which is 100% of includible compensation not to exceed $15,500.00 annually (for 2007). Or, if you are within four years of retirement eligibility, you may qualify for the plan’s retirement "catch-up", or 50+ catch-up provision and be able to contribute a larger amount.

  • Several investment options are offered by the Plan. Your contributions are invested in any one or more of the investment options, selected by you, the participant.

  • Your contributions and any earnings that accumulate over the years are not taxed until you receive them. Normally this is upon separation from service or retirement (when you may be in a lower tax bracket). At that time you select from a variety of payment options, an option that best suits your retirement needs.

  • The MDCPT will not affect your Social Security Benefits. Your Social Security contribution and benefits will be based on your gross pay before your contributions are deducted.

How do I enroll in the plan?

Simply complete a Participation Agreement and submit it to SBA at PO Box 105, Jackson, MS 39205. The Participation Agreement is available online. Please read the Enrollment Instructions before completing a Participation Agreement.
What are the investment options?

Several investment options are offered. Your money is invested in the investment option(s) you select. We encourage you to carefully review the material on the investments offered, talk with a Registered Representative of the Plan, and choose the option(s) which help meet your own needs and goals.

When will I be able to withdraw my money?

You are eligible to receive payment(s) from the Plan when you retire, leave state employment or have an unforeseeable emergency (hardship withdrawal) or take a De Minimis Distribution (small account distribution).

Upon your death your beneficiary, or, if none is designated, your Estate will receive benefit payments.

Where can I find additional information on the MDCPT?

The Mississippi Deferred Compensation Plan and Trust web site includes information on:

  • Plan Highlights

  • Investments (investment options, changing investments, fund performance, account access)

  • Service Options

  • Education (including financial calculators to discover what type of investor you may be, determine retirement needs, reach investment objectives, determine your net worth, calculate how much college will cost, and more.)

  • Enrollment
How do I get information on my account?

Self-service features are available to provide account inquiry and transaction capabilities:

AccessLine - The toll-free phone system provides you with access to account information 24 hours a day. This feature is password protected and allows you to check balances and execute certain transactions. You can reach their automated phone system at 1-800-892-4352. You must have established a password to access this service.

Online Account Access - The internet account access system provides you with online access to your account information 24* hours a day. State-of-the-art security and password protection allows you to check balances and execute certain transactions. This service is available by selecting "Online Account Access" from the menu options.

Web site: Mississippi Deferred Compensation Plan and Trust
I have one or more retirement accounts from previous employment. Can I rollover that account to Deferred Compensation? Yes. Contact Mississippi Deferred Compensation to discuss rollover options.

Phone: 1-800-846-4551

 
Resources IRS Publication: Plan Comparison, 403(b) and 457

Note: Mississippi Deferred Compensation is a 455 plan; Tax-deferred Annuities are a 403(b) plan.
 

OPTION

 Tax-Deferred Annuity, 403(b)
What is a tax-deferred annuity, or 403(b)? A 403(b) plan, also known as a tax-sheltered annuity (TSA) plan, is a retirement plan for certain employees of public schools, employees of certain tax-exempt organizations, and certain ministers.

Individual accounts in a 403(b) plan can be any of the following types.

  • An annuity contract, which is a contract provided through an insurance company,

  • A custodial account, which is an account invested in mutual funds, or

  • A retirement income account set up for church employees. Generally, retirement income accounts can invest in either annuities or mutual funds.

What are the benefits of contributing to a 403(b)? There are three benefits to contributing to a 403(b) plan.

  • The first benefit is that you do not pay tax on allowable contributions in the year they are made. You do not pay tax on allowable contributions until you begin making withdrawals from the plan, usually after you retire. Allowable contributions to a 403(b) plan are either excluded or deducted from your income.

  • The second benefit is that earnings and gains on amounts in your 403(b) account are not taxed until you withdraw them. Earnings and gains on amounts in a Roth contribution program are not taxed if your withdrawals are qualified distributions. Otherwise, they are taxed when you withdraw them.

  • The third benefit is that you may be eligible to take a credit for elective deferrals contributed to your 403(b) account.

Who are the approved MSU vendors and agents?

Contacts for MSU's Tax-Deferred Annuity Companies.
How do I begin a tax-deferred annuity?

You may begin a 403(b) plan at any time by following these steps:

  • Contact the vendors to find the plan that best fit your retirement income strategies. You may select multiple vendors; however, the maximum contribution per year remains the same.

  • Once you have selected the plan in which you wish to participate, establish a contract with the vendor.

  • In order for MSU to withhold money from your paycheck for your 403(b) contribution, complete a Salary Reduction Agreement for Tax-deferred Annuities, which both you and your vendor sign.

Resources IRS Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations

IRS Publication Plan Comparison, 403(b) and 457 (such as Mississippi Deferred Compensation)

MSU Tax-deferred Annuity Companies, including contact information
   

INFORMATION

 Social Security
How can I get a Social Security statement showing personal earnings and benefits estimates?

The Social Security Statement is a valuable document that estimates your future Social Security benefits and tells you how to qualify for those benefits.

 

Each year, workers who are age 25 or older and not already receiving benefits based on their own earnings record, will receive a Social Security Statement about three months before their birthday.

 

The Statement lists the worker's earnings and the amounts of Social Security taxes he or she has paid over the years and provides estimates of the Social Security benefits the worker (and dependent family members) may be eligible to receive now and in the future. The Statement is intended to help workers plan for their financial future.

 

Your Social Security Statement will include:

  • A record of your earnings history and an estimate of how much you and your employer paid in Social Security taxes; and

  • Estimates of benefits you (and your family) may be eligible for now and in the future.

To request your Social Security Statement, you will need:

  • Your name as shown on your Social Security Card

  • Your Social Security Number

  • Your date of birth

  • Your place of birth

  • Your mother's maiden name - last name only (to help identify you)

You may also request a statement using an online form. Your Statement will be sent to you by U.S. mail in 2-4 weeks. Request a Social Security Statement.

 
Resources Social Security Online
  • Calculate your benefits
  • Medicare Prescription Drug Program

Social Security Retirement Planner

Technical problems, contact the Help Desk.

Last modified June 18, 2007.