Core Benefit Coverages

Core benefits are offered to employees at the beginning of employment, and there is no annual option to change coverage. Employees are encouraged to make decisions carefully for these programs when enrolling, especially those related to life insurance since making changes is more involved and may require showing proof of insurability to make changes at a later date. Available core benefits include term life insurance and accidental death and dismemberment, long-term disability, and the retirement plans.

Term Life Insurance/Accidental Death and Dismemberment

All employees hired into benefit-eligible positions are provided coverage under the group term life insurance/accidental death and dismemberment (AD&D) program. Term life insurance provides basic life insurance protection during the time an employee is actively working for the University and while receiving benefits under the long-term disability program.

Employees are automatically provided term life coverage at one times their budgeted annual salary. The University pays the cost of this coverage. Additionally, the University provides $15,000 of AD&D coverage which is paid in addition to the term life benefit for accidental death or dismemberment.

Staff members may choose to increase their term life insurance coverage by sharing in the cost of the coverage with the University. Options are available based on age, up to three times salary. Employees are encouraged to choose their option carefully since increasing the amount of coverage is based on the individual's health status at the time the change is requested.

Imputed Income — Internal Revenue Service regulations require that the imputed value of term life insurance in excess of $50,000 be reported on the employee's W-2 form as taxable income. Imputed value is determined by an IRS table based on age. Premiums paid by the employee are subtracted from imputed income.

Long-Term Disability

Long-term disability becomes effective for employees in benefit-eligible positions upon hire. Employees pay half the cost of this coverage, and Purdue pays the other half. LTD provides a monthly income for those who are totally disabled for an extended period as a result of illness or injury and require the ongoing care of a physician. LTD covers both occupational and non-occupational disabilities and provides 65 percent of the employee's budgeted annual salary at the time of disability.

From the time an employee is unable to work, there is a waiting period before benefits are payable. During the waiting period, employees use accumulated sick leave and may also use vacation benefits.

For clerical and service staff members, the waiting period is three months of continuous disability (see section on short-term disability).

For faculty, administrative and professional staff, and operations and technical assistants, the waiting period is six months of continuous disability.

Dependent Life Insurance

Several levels of Dependent life are available to choose from: dependent life insurance provides a term life insurance benefit for a spouse and/or each dependent child. Participation is optional, and the employee pays the full cost.

Retirement

The University provides two primary retirement plans in addition to coverage under Social Security for individuals in benefit-eligible positions.

Faculty, Administrative, and Professional Staff — Individuals in faculty and administrative and professional positions with the exception of operations and technical assistant classifications (see following section regarding operations and technical assistant retirement plans) participate in a defined contribution plan through TIAA-CREF. The plan offers several choices for staff to allocate their retirement contributions.

For those in tenure-track faculty, instructor, or senior management positions, participation begins immediately upon employment.

Generally, administrative, and continuous lecturer positions begin participation after three years of continuous service. However, individuals who have fully vested, employer-funded contracts from higher education institutions participate immediately. The staff benefits office can help to determine if an individual qualifies for immediate participation.

Employees classified as postdoctoral research associate or postdoctoral research assistant are not eligible to participate.

Employees classified an exchange alien (J-1 visa) or nonimmigrant student (F-1 visa) under the Mutual Education and Cultural Exchange Act of 1961 are not eligible to participate.

Contributions to the plan are paid in full by the University and are immediately vested for retirement. The contribution made is 11 percent of the first $9,000 of budgeted annual pay and 15 percent of budgeted annual pay in excess of $9,000. For academic-year faculty and staff, the University contributes 15 percent of salary received during the summer.

For individuals hired on or after January 1, 1996, contributions are made on salaries up to $220,000 (for calendar year 2007), as designated by IRS limits.

Clerical, Service Operations Assistant, and Technical Assistant Staff — Individuals in clerical, service, operations assistant, and technical assistant positions participate in the Public Employees Retirement Fund (PERF), which is a defined benefit plan through the state of Indiana.

Participation begins immediately upon hire, and the University pays the full contribution. Contributions are made based on all pay received, including overtime. An employee must have at least 10 years of service under the PERF pension program in order to be vested and therefore eligible for a pension benefit.

The PERF plan is comprised of two components:

a.) The pension component provides a monthly benefit upon retirement. The benefit is based on age, years of service, and the individual's high five years of salary.
b.) The annuity savings account component. Three percent of the contribution made by Purdue is contributed to the annuity savings account. The employee chooses how to allocate this portion of the contribution among funds offered by PERF. The funds in the annuity savings account will earn interest until the individual receives a retirement benefit or chooses to take a refund of the contributions and accumulated interest. Although an individual is eligible for a refund of this portion upon termination of employment, taking a refund means forfeiting the individual's rights to a pension. There are also tax implications for taking the refund early.

Voluntary Tax Deferred Retirement Savings. Two programs are offered to enable employees to accumulate additional retirement savings to supplement retirement benefits provided by the University and Social Security. Employees make contributions to a Voluntary Savings plan on a tax-deferred basis, meaning the contributions are not taxed until withdrawn. Additionally, the earnings compound on a tax-deferred basis until withdrawn, allowing potentially greater returns.

All employees who receive regular paychecks are eligible to participate in a tax-deferred arrangement immediately upon employment, and contributions may be adjusted at any time. There are two programs to choose from: a 403(b) plan and a 457(b) plan. Employees may participate in one or both plans. Contributions to these programs reduce current taxable income, and, therefore, federal, state, and county tax liability. Although the programs are similar, there are differences between them with regard to withdrawal of funds. More information on these programs is available through Staff Benefits and regional campus human resources offices.

Federal Civil Service Retirement. Employees who hold federal cooperative appointments from the administrator of the Federal Extension Service, United States Department of Agriculture, participate in the Civil Service Retirement program. For those who qualify for these benefits, the Federal Extension Service pays 8.25 percent of the total base salary and the employee pays seven percent of his or her total base salary. Contributions are paid to the Civil Service Commission. For more information regarding this program, contact the office of the director of the Cooperative Extension Service.

Coverage is provided as outlined in the Worker's Compensation and Occupational Disease Act of Indiana. Protection is provided for all University employees (including student employees) who are injured while carrying out assigned duties both on the University premises and while traveling on University business.

As stipulated by the Act, the University pays for approved medical expenses and provides compensation for lost time, subject to limits established by the state legislature.

The University sponsors programs that allow employees to purchase benefit products through outside vendors on a payroll deduction basis. The advantage of these types of programs is based on the number of employees at the University and the value that can be obtained by purchasing for a large group.

Dental. A voluntary dental plan is offered through Delta Dental. There are varying plan choices available for you and your eligible dependents. The enrollment for the dental plan is separate from your enrollment for other benefit programs, but is included in your benefit enrollment kit. If you wish to enroll in the dental plan, you should complete the enrollment materials and return them directly to Future Planning Associates.

For more information on the dental program enrollment process and/or premium information, contact Future Planning Associates toll-free at (866) 787-3838. Ask for the Purdue dental plan coordinator.

For more information related to specific coverage under the plans and/or to file claims, contact Delta Dental at (800) 292-0626.

Universal Life. A universal life plan is offered through Transamerica. This program requires individuals to work individually with a representative to enroll. For more information, contact Future Planning Associates at (866) 787-3838.

Auto/Homeowner’s Insurance. Purdue’s Voluntary Benefits Program now offers home, auto, and other property casualty insurance through the Liberty Mutual Insurance Company.

As an employee or retiree of Purdue, you can possibly save substantial amounts on your insurance premiums by insuring your auto and/or property with Liberty. For active staff, premiums may be paid by payroll deduction.

For a free coverage evaluation and no-obligation rate quote, call Liberty Mutual at (800) 340-3529.

Prepaid Legal Services Plan. Eligible Purdue University employees, retirees, and disabled staff have the opportunity to enroll in a voluntary legal services plan. Your enrollment covers your spouse or same-sex domestic partner and eligible dependents at no extra cost.

The ARAG Group of Des Moines, Iowa, is the chosen provider for this coverage. ARAG has been offering legal plans for 69 years.

Similar to the aforementioned dental plan, there is an open enrollment period each fall. If you enroll, your coverage begins at the start of the next calendar year. The materials you need for enrolling will be included in your annual benefit enrollment kit.

For additional information regarding the coverage offered by the legal plan, please call ARAG toll-free at (800) 247-4184.