As a participant in the plan hired before 7/2/2012, what happens if I leave MIT after 7/1/2012 and do not return? Is my benefit affected?
No, your benefit remains under the current terms of the pension and retiree medical plans.
How will rehires be handled?
In general, employees rehired on or after July 2, 2012 will earn benefits under the terms of the new plan. When you retire, your total plan benefit will be the based on the benefits you earned before (your "old" benefits) and after (your "new" benefits) you rehired. The same menu of payment options will be available for your "old" and "new" benefits. For example, if the rehired employee would like to elect a 50% joint and survivor benefit with 10 years of payments guaranteed for his or her "old" benefit, the same form will be available for his or her "new" benefit. Thus, rehires with benefits under both the old plan and the new plan would have two accounts.
How will benefits be paid under the new plan?
Benefits will generally be paid as lifetime pensions to the retiree, with continued benefits to a spouse/partner or other beneficiary depending on the election made.
As under the current plan, the employee will be able to receive a single lump sum in lieu of a lifetime pension under certain circumstances. After July 1, 2012, lump sums will be available if your cash balance account is $75,000 or less OR if you have fewer than 15 years of service when you leave MIT.
How will the cost-of-living adjustment (COLA) option work?
The COLA will no longer be automatic, but you can choose the same type of inflation protection as is available under the current plan. The current plan provides a COLA of 75% of the increase in the CPI every three years after normal retirement date. Participants in the new plan will be able to buy this inflation protection through a reduction in their starting pension. For example, if the employee's regular pension without COLA is $1,000 per month, his or her pension with COLA may be about $750 or $800 per month, depending on age, due to a built-in cost of living adjustment.
Will prior MIT temporary service count toward meeting the one-year wait and/or three-year vesting requirement?
If you were a MIT temporary employee prior to the date you were hired at MIT, your MIT temporary employment service may count toward the one year plan eligibility period and the three year vested service requirement provided that you ended your MIT temporary employment immediately before you joined MIT and meet other plan specific requirements. Please follow the instructions on the "Application for Benefits-Eligible Credit for Prior Temporary MIT Employment" form (get this form). Applications must be submitted before the one year plan eligibility period expires and not more than one year after MIT hire date.
You have one year from your initial MIT employment date to complete and submit your MIT temporary service application to the MIT Benefits Office. If your application is submitted in a timely manner and your temporary service qualifies and is approved, you may not have to wait one year to start accruing your benefit. In addition, you may not have to wait three years until you are vested in your benefit. The MIT Benefits Office will notify you by email after your completed application has been processed.
*Employees represented by a union: Application of these benefits changes is subject to bargaining with union representatives.