Your eligible years of service toward retirement with benefits (including health, prescription drug, dental, vision, legal, and life insurance coverage, if eligible) are determined by counting the years that you have been continuously employed at the University of Michigan as a regular or supplemental faculty or staff member with a 50% or greater appointment without interruption or a break in service. You must have been eligible to enroll in the Basic Retirement Plan and health benefits during all the years of continuous service needed to retire. Each appointment must be at least four continuous months with university funding. U-M Medical School faculty physicians who have an appointment with the VA Ann Arbor Healthcare System accrue service time to retire at the same rate as a faculty physician who has a 100% U-M appointment regardless of the actual appointment ratio of the affiliation (i.e., it is not pro-rated). Service at another employer (including another university or the State of Michigan) does not count as service to retire from U-M.
Temporary Furlough and Temporary Reduction in Hours
Temporary Staff Furlough
Eligible individuals who take the temporary staff furlough continue to accrue service credit to retire during the furlough. You may retire during the furlough if you are eligible to retire prior to beginning the furlough. Age and service requirements to retire must be met during a period of pay. Therefore, if you do not have enough points to retire prior to beginning the furlough you need to return to an active appointment until you have accumulated enough points to retire.
Temporary Reduction in Hours
Your appointment effort must be at 50% or greater to accrue service to retire. See Accrual Rate for Part-Time Employees regarding the rate of accrual if you appointment if less than 80% effort. If you have a temporary reduction in hours below 50% you may still receive service credit to retire depending on the duration of the reduction. See Bridging Eligible Service Periods After Reduction in Effort.
Accrual Rate for Part-Time Employees
Effective January 1, 2013, part-time benefits-eligible employees (appointments of 50% - 79.9%) accrue 0.8 years of credit toward retirement eligibility per entire calendar year worked. This does not affect credits accrued before 2013. Employees with appointments of 80% or greater receive the same credit toward retirement as full-time employees. If you work part-time for a portion of the calendar year and full-time for the remainder of the year you will receive the same credit toward retirement as individuals with a 100% appointment. Employees subject to a collective bargaining agreement should refer to the terms of the agreement.
Part-time benefits-eligible appointments also accrue years of service that determine the university contribution for retiree health care at the lower rate of 0.8 years of service. Part-time service may result in a discrepancy in the calculated estimated date of retirement and the university contribution displayed on the Estimated Retirement Eligibility Date panel in Wolverine Access. Contact Shared Services – HR Customer Care at (866) 647-7657 to confirm your service accrual and the applicable university contribution for retiree health care that apply to you if you are engaging in retirement planning or are approaching an expected retirement date.
Breaks in Service
Accrual of years of service to retire with benefits must be continuous and without interruption. A break in service results from:
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Termination of employment.
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Reduction in appointment effort below 50%.
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Change in job title to one that is not eligible to accrue service to retire.
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Failure to return to an active appointment following a leave of absence, layoff/reduction in force (RIF), or period of non-appointment.
A break in service results in the loss of years of service to retire with benefits that were accrued prior to the break. A subsequent appointment that is eligible to accrue service to retire with benefits will restart the service accrual over at zero. Recovery of previously accrued service when rehired may be possible under Standard Practice Guide 201.49 – Reinstatement and Prior Service Credit. Recovery of previously accrued service when there is a reduction in effort below 50% may be possible under Bridging Service Periods if certain criteria are met.
Ineligible Service to Retire
Service in the following job titles does not accrue towards retirement:
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Supplemental, Adjunct, and LEO I titles with appointment effort below 50%
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House Officer
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Research Fellow
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Professional Specialist
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Graduate Student
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Temporary hourly
Example: House Officer
Sue is hired 7/1/2009 as a House Officer and completes her residency on 6/30/2013. She becomes a full-time assistant professor 7/1/2013. Her accrual of years of service to retire with benefits begins on 7/1/2013.
Example: LEO I Below 50%
Brian is hired 9/1/2009 as a LEO Lecturer I at 25% effort. His appointment effort increases to 50% on 9/1/2011. His accrual of years of service to retire with benefits begins on 9/1/2011 because his previous service was at an appointment effort less than 50%.
Leaves, Layoff/Reduction in Force (RIF), Non-Appointment Periods
Periods of non-appointment for instructional faculty, approved leaves of absence without salary, and layoffs/reductions in force (RIF) are counted as active service and maintain continuity of service as long as the individual returns to an appointment eligible for accrue service to retire with benefits after the leave or layoff.
If you were eligible to retire prior to beginning a leave of absence or layoff (RIF), you may retire during or at the end of the leave or layoff (RIF). Age and service requirements to retire must be met during a period of pay. Benefits available to retirees that are not continued during the leave or layoff will be reinstated as of the date of retirement.
If you were not eligible to retire prior to beginning a leave of absence or layoff (RIF), you cannot retire during the leave of absence or RIF. You must return to an appointment as a regular or supplemental faculty or staff member at 50% or greater effort lasting 4 months or longer following the leave or RIF in order to continue accruing service to retire with benefits.
Example: Eligible to Retire Prior to Leave
Mary has met the age and years of service requirements of 77 points to retire with benefits prior to beginning a leave of absence in March 2015. She elects not to pay the premiums to continue her benefits while on leave. At the end of her leave in October 2015, Mary decides to retire. Her benefits that were in effect prior to beginning the leave of absence are reinstated as of her date of retirement.
Example: Not Eligible to Retire Prior to Leave
Robert is 50 years old and has 26 years of service at the beginning of his leave of absence in April 2015. He is not eligible to retire when the leave begins because he only has 76 points.
During the leave Robert turns 51. Although he appears to have 77 points required for retirement in 2015, he cannot retire because the age and service requirements were met during a period of non-pay.
Robert must return from the leave of absence to an appointment as a regular or supplemental faculty or staff member at 50% or greater effort lasting 4 months or longer to have his benefits reinstated and to continue accruing service to retire with benefits. He may then retire at a later date.
Recovering Previous Service Toward Retirement
You may recover previously accrued eligible service to retire if you meet certain criteria under the Bridging Service Periods policy and under Standard Practice Guide 201.49, Reinstatement and Prior Service Credit.
Reinstatement After Termination
When rehired less than one year after termination of employment, the original hire date is reinstated and continuity of service from the original date of hire is maintained toward retirement eligibility. May be applied for after completing three years of service from rehire.
Example: Reinstatement
Toni was hired 4/19/1997 and serves as a full-time secretary until she terminates employment on 7/29/2004. She is rehired on 5/27/2005 as a full-time administrative assistant. She meets the criteria for reinstatement of her previous service. Since the gap in employment is less than one year, her date of hire is changed to 4/19/1997. She does not lose any accrued service to retire with benefits since the original date of hire.
When rehired one year or more after termination of employment, the most recent hire date is maintained; the original hire date is not reinstated. May be applied for after completing 10 years of service after rehire. Eligible service prior to termination is added to current service to determine eligibility to retire.
Example: Prior Service Credit
Rick was hired on 2/9/2000 and serves as a full-time systems analyst until he terminates employment on 8/2/2006. He is rehired on 10/7/2007 as a full-time systems analyst. He may apply for Prior Service Credit since the gap in employment is more than one year once he completes 10 years of service after rehire. If granted, his date of hire will remain 10/7/2007 and his eligible service accrued prior to termination will be added to his eligible service accruing after rehire.
Bridging Eligible Service Periods After Reduction in Effort
A reduction in a regular or supplemental appointment effort below 50% will be counted as eligible for service accrual to retire with benefits and maintain continuity of service accrual provided that:
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The individual had an appointment eligible for service accrual to retire with benefits prior to the reduction in effort;
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The reduced appointment effort is less than 50% but greater than 0%;
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The duration of the reduction in appointment is less than 12 months;
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The individual returns to an appointment eligible for service accrual to retire with benefits following the reduction.
If the duration of the reduction is 12 months or longer, the service during the reduction below 50% will not be credited as service accrual toward meeting the eligibility to retire with benefits. Eligible service accrued prior to the reduction will be added to an eligible service period that follows the reduction period provided that:
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The individual had an appointment eligible for service accrual to retire with benefits prior to the reduction in effort;
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The reduced appointment effort is less than 50% but greater than 0%;
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The duration of the reduction in appointment is less than 5 years;
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The individual returns to an appointment eligible for service accrual to retire with benefits following the reduction.
An individual is permitted to bridge service in addition to, and in conjunction with, Prior Service Credit and Reinstatement under SPG 201.49. There is no limit to the number of times an individual may elect to bridge eligible service periods. Since the service date is not changed, bridging service will have no effect on any other university benefit.
An appointment eligible for service accrual to retire with benefits is as a regular or supplemental staff with an appointment of 50% effort or greater, lasting four continuous months or longer.
Example: Reduction in Effort Less than 12 Months
Larry works at a 100% appointment as a secretary. His appointment is reduced to 40% on 4/1/2007 but returns to 100% on 12/1/2007. Since the reduction in effort below 50% as a regular staff member was less than 12 months, he does not lose any accrued service to retire with benefits.
Example: Reduction in Effort 12 Months or Longer but Less than 5 Years
Hank is hired 3/1/2002 at a 100% appointment as an accountant. His appointment is reduced to 25% on 9/1/2004 but returns to 100% on 11/1/2005. He does not lose the 2.5 years of service to retire with benefits that accrued prior to the reduction below 50%. Since the reduction was more than 12 months but less than 5 years, the 2.5 years of service is simply added to the service he accumulates after returning to a 50% or greater appointment as a regular staff member that began on 11/1/2005. Service below 50% from 9/1/2004 until 10/31/2005 does not count as service to retire with benefits.
Example: Reduction in Effort Greater than 5 Years
Gerald is hired 2/1/2001 at a 100% appointment as an office manager. His appointment is reduced to 30% on 9/1/2003 but returns to 100% on 8/1/2009. The service to retire accrued from 2/1/2001 until 8/31/2003 is lost since the reduction in effort below 50% was more than 5 years in duration. Gerald’s accrual of service to retire with benefits begins 8/1/2009.
U-M Service as Credit to Retire from the State of Michigan
If you used to work at the University of Michigan and now work for the state of Michigan, you can receive credit for the time you worked at U-M for your eligibility to retire from the state. However, service with the State of Michigan does not count as service to retire from U-M.
For eligibility requirements and forms, contact:
Michigan Department of Management and Budget
Office of Retirement Services
P.O. Box 30171
Lansing , MI 48909-7671
(517) 322-5103
If you work for a state other than Michigan, check with your current employer to determine if they will allow you to receive credit to retire based on your time worked at the university and what information they require to confirm employment.
Send the following to the University of Michigan Payroll Office:
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A letter requesting verification of your employment and the approximate dates when you worked for the university.
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The State of Michigan form to be completed. If you are applying for credit to retire from another state’s retirement system, include their form or a letter stating the information they are requesting.
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The Payroll Office charges $15 to research your records and provide verification of your employment. Make your $15 check payable to “The University of Michigan” and include it with your letter and form.
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Mail everything to:
The University of Michigan
Payroll Office
G395 Wolverine Tower
3003 S. State Street
Ann Arbor, MI 48109-1279
The Payroll Office will confirm that you were employed at the University of Michigan based on any time periods when you received a paycheck from the university. Payroll will also confirm whether any deductions were taken for the retirement plan. Allow three to four weeks for processing.