I. Retirement, Insurance, and Other Group Benefits
The Benefits Office maintains current information concerning policies of all benefit programs. It is essential for new faculty members to arrange a conference with someone from the Benefits Office as soon as possible after arriving on campus. Some of the benefit programs are either optional or require decisions among options; some decisions must be made during the first 30 days that one is on the University’s payroll.
Retirement programs for faculty and professional staff members include the Teachers’ Retirement System of Alabama (TRSA), the Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF), and Social Security. The cost of participation in these programs is shared by the individual, the University, and the State. Requirements for these programs vary, as does the distribution of costs. The Benefits Office can provide current information on all aspects of retirement benefits.
1. Teachers’ Retirement System of Alabama (TRSA)
Most full-time and part-time faculty are required by state law to participate in TRSA. Faculty members contribute five percent of their total compensation to TRSA; the State of Alabama contributes funds calculated by a formula. The contributions of those who participate are on a tax-deferred basis for federal income tax. The system has a 10 year vesting period.* Faculty members may retire and begin to receive benefits at age 60 if they have participated in the system for at least 10 years. Individuals who have participated for at least 25 years may retire and begin to receive benefits at any age. Retirement begins officially on the first day of a month, regardless of the day on which employment ended.
Individuals who resign from employment with the State of Alabama before vesting in the program, or before qualifying to receive benefits are entitled to a refund of their contributions; those who have participated in TRSA for at least three years are also entitled to receive a portion of the accrued interest on their contributions. Withdrawn contributions are taxable income, and there may be federal tax penalties for early withdrawal. Applications for refunds can be obtained from the Benefits Office.
Full-time tenured or probationary faculty members have the option of participating in TIAA-CREF. They may elect to participate by contributing one, two, three, four, or five percent of their salary, and the University will match that contribution; contributions above five percent are not matched by the University. Individuals may make their contributions on a tax deferred basis for federal and state tax purposes; in this case, the percentage contributed cannot be changed more frequently than once each year, and the Internal Revenue Service places limitations on the amount which can be tax deferred. Consult the Benefits Office for additional information.
3. Social Security
All faculty and staff members must comply with federal statutes requiring participation in Social Security programs.
4. Annuity Contracts
Tax regulations may permit faculty members to defer federal and state tax on part of their salaries by purchasing a Supplemental Retirement Annuity (SRA) through what is called a salary reduction agreement. There are constraints on the amount that can be contributed on a tax deferred basis, as well as on when a salary reduction agreement can be initiated or changed, and on eligible SRA providers. Consult the Benefits Office for more information.
B. Life Insurance
All full-time probationary and tenured faculty, and temporary full-time faculty members who have been employed for at least one year, are covered by the University’s group term life insurance and by accidental death and dismemberment insurance. This benefit, which is provided without cost to the individual, is not available to part-time employees. Faculty members covered by these policies (as well as temporary full-time faculty members who have not yet been employed for a year) may purchase additional coverage through the University’s group insurance policies; no medical examination is required for such additional insurance if it is purchased during the first 30 days one is on the University’s payroll.
Faculty members must go to the Benefits Office to declare the names of their beneficiaries. Personnel in the Benefits Office can furnish information about the coverage provided by the University and the cost of additional coverage.
C. Long-term Disability Insurance
Long term disability insurance is provided without cost to all probationary or tenured faculty members under seventy (70) years of age. Temporary, full-time employees are eligible when they enter their 13th month of employment.
Upon approval, benefits begin on the 91st day of “total disability.” Benefits of 66 2/3% of wages are then paid each month during total disability. Total disability is defined during the ninety (90) day waiting period and the first twenty-four (24) months of paid disability as the inability to perform duties of the insured’s occupation. Following the 24th month of benefits, total disability is considered the inability to engage in any gainful occupation for which a faculty member may be qualified.
D. Medical Insurance
All full-time faculty, and part-time faculty with non-temporary appointments of at least .50 FTE, are eligible to participate in the University’s group-sponsored medical insurance program. Participation does not require proof of insurability, but there is a six-month waiting period for pre-existing conditions. The premium cost for individual or family coverage is shared by the employee and the University, where the employee’s share is based on the employee’s annual salary. Current information about rates is available from the Benefits Office. A special Double Offset premium rate for family coverage is available when a husband and wife are both employees and are both eligible for coverage. Applications for this premium arrangement are available in the Benefits Office.
Eligible faculty members may enroll in the University’s medical insurance program. Those who want family coverage, and those who choose not to participate in the University’s coverage, must sign the appropriate forms at the Benefits Office during their first 30 days on the University’s payroll. Decisions not to have family coverage, or not to participate, can be changed in any subsequent November or December and the change will be effective on the following January 1. Also, family coverage can be added within 30 days of any event specified by the plan description booklet.
The University’s group medical insurance program specifies that coverage for faculty members ends when they are no longer eligible or when they begin coverage by Medicare. However, persons who are no longer eligible (except for those who commence Medicare coverage or whose employment is terminated for adequate cause**) may elect to continue to participate temporarily if they pay all costs of participation (including the portion previously paid by the University); these costs will be no more than two percent higher than the combined cost to the individual and the University for regular participation.
The family coverage for a person in the group insurance program excludes coverage for divorced spouses, for children who are married, and for all children over the age of 19 except for those between the ages of 19-24 who are full-time students.
Detailed information about the medical insurance program can be obtained from the Benefits Office. Personnel in that office will provide forms for insurance claims, but filing claims is the responsibility of each employee or of the health care provider.
E. Dental Insurance
All full-time faculty and regular part-time faculty (.50 FTE or greater) who participate in the University’s medical plan are eligible to purchase optional dental insurance. The premium for individual or family coverage is paid by the employee. Those who choose to enroll in this program must do so during the first 30 days that they are on the University’s payroll or during open enrollment periods set by Blue Cross/Blue Shield and announced by the Benefits Office. Persons enrolled in the program must stay in the program until they remove themselves during a subsequent open enrollment period.
F. Flexible Spending Accounts for Health and Dependent Care
Flexible health care and dependent care spending accounts may offer tax advantages for full-time probationary and tenured faculty members. Details of plans currently available can be obtained from the Benefits Office. Enrollment in these plans must occur in the first 30 days on the University’s payroll or during the open enrollment period announced each year.
G. Drug Abuse Prevention Program
The University complies with federal statutes by maintaining a Drug Abuse Prevention Program. Information concerning this program can be obtained from departmental offices, dean’s offices, the Office for Academic Affairs, and the Benefits Office.
*A sabbatical leave of two semesters with one-half pay is credited by the TRSA as one-half academic year of service. Leaves of absence without pay from the University earn no credit in the TRSA.
**See Section XIV. of Chapter Two.