Online calculator shows effect of total compensation rebalancing
A calculator is now available to show faculty and staff how their individual total compensation will be affected by the Reduce, Rebalance, Require (3 Rs) changes to Purdue's defined contribution retirement plan. The changes were adopted by the Board of Trustees on April 9 and will become effective in January.
Employees may access the calculator at
Any pay changes the employee experiences before the first of the year will be taken into account when rebalancing is processed.
The 3Rs apply only to faculty and staff covered by the defined contribution retirement plan, and not to employees covered under the PERF retirement plan.
Major components of the 3Rs are:
1. Reduce: Purdue will reduce its retirement contribution to 10 percent of the employee's budgeted pay, plus summer pay for academic-year faculty.
2. Require: Employees will contribute a mandatory 4 percent of pay to retirement savings, which will be deducted automatically from employee paychecks. The mandatory contribution will go into a new 401(a) retirement savings account.
3. Rebalance: In conjunction with this change, the University will be increasing the employee's salary to offset the mandatory employee retirement contribution. Because Purdue currently has a split contribution rate, paying 11 percent on the first $9,000 of salary and 15 percent on salary over $9,000, the level of salary adjustment will vary, but it will be no less than needed to ensure the employee's net salary is not reduced.
Current employees who are serving the three-year waiting period for defined contribution plan participation will be eligible at the completion of their waiting period. At that time, their salaries will be adjusted, and they will begin the 10 percent University contribution and the mandatory 4 percent employee contribution.
This fall, eligible employees will be able to select investment funds for their 401(a) accounts from Purdue's new retirement plan investment lineup. More information will be coming during the week of Sept. 20.
For questions, contact Staff Benefits at 49-41680 or 49-41691.