Purdue retirement and savings plan changed for new non-exempt hires
May 10, 2013
WEST LAFAYETTE, Ind. - Purdue's Board of Trustees on Friday (May 10) approved placing future non-exempt employees in a defined contribution retirement and savings plan, providing a competitive retirement savings program while reducing costs for the university.
New non-exempt employees, which are essentially those on hourly pay, hired on or after Sept. 9 will be enrolled in the new Retirement and Savings Plan. According to estimates, Purdue could reduce costs by more than $2 million annually by the plan's fourth year.
The move is designed to remain competitive, to enact best practices such as using a defined contribution plan to reduce expenses by providing for matching employer contributions that encourage employee savings, and to leverage Purdue's existing retirement plan infrastructure with Fidelity, said Luis E. Lewin, vice president for human resources. Current non-exempt employees will remain in the state's defined benefit plan through PERF, the Public Employees' Retirement Fund.
For employees in the new plan, Purdue will make an employer base contribution of 4 percent of earnings, and the employee will be automatically enrolled in a 403(b) voluntary contribution plan at a rate of 5 percent. Purdue will match that voluntary contribution up to an additional 4 percent.
The plan will apply to benefits-eligible clerical, service, and operations and technical employees hired or rehired on or after Sept. 9.
In other business, trustees also approved a change to the Purdue president's retirement plan.
Purdue presidents previously participated in an independent retirement plan structured by the university. Trustees, at the request of President Mitch Daniels, have eliminated that plan and changed the policy to permit the president to participate in the standard university plan.
The changes to the president's plan are retroactively effective to Jan. 13, 2013.
Writer: Dan Howell, 765-494-2028, firstname.lastname@example.orgSource: Luis E. Lewin, 765-494-7395, email@example.com