The phase-in period of Lehigh’s new retirement plan, which began in 2014, will be complete as of January 1, 2017.
When we began designing a retirement plan that rewards employees for contributing toward their own retirement, we listened to feedback from faculty and staff on the Benefits Allocation Review committee. They encouraged us to take several years to complete the process. The three year phase-in period allowed employees to adjust to a new way of thinking about their retirement planning. The results speak for themselves: voluntary retirement saving participation among Lehigh employees has soared from 42 percent to 77 percent as the current year began.
What the Final Plan Looks Like
Base Contribution
Beginning in 2017, the University’s base retirement plan contribution for all employees who began their work at Lehigh prior to the new plan, as well as those who have attained five years of service, will be set at 8%.
Employees who began working at Lehigh on January 1, 2014 or later will continue to receive an increase in Lehigh’s base contribution to their retirement savings based on their length of employment as shown in this chart:
|
Years of Service |
Lehigh Base Contribution |
|---|---|
|
Fewer than 3 years |
4.0% |
|
3 to 5 years |
6.0% |
|
5+ years |
8.0% |
The Matching Incentive
At the heart of the new plan is the matching incentive. When employees who are at the eight (8) percent base contribution level maximize the match, they will realize a ten percent greater contribution from Lehigh than they had received in the previous retirement plan (11 percent total versus the 10 percent base contribution in the old plan).
As of January 1, 2017, Lehigh matches 50 percent (or 50 cents per dollar) of your voluntary contribution to your retirement savings up to a limit of six percent of your contributions.
In other words, for every one (1) percent of your income you save in the Lehigh Retirement Plan up to six (6) percent, Lehigh will put in an addition one-half percent.
Maximizing The Match
Here’s what it looks like if you maximize the match.
| You contribute: | 6.0% |
| Lehigh matches: | 3.0% |
| Total Saved through matching incentive: | 9.0% |
You can direct more than six percent of your income into the retirement plan if you wish, however, Lehigh’s match ends at six percent. Keep in mind there are IRS designated upper limits to how much an individual can save in tax-advantaged accounts for retirement in a given year (read more about IRS limits here).
Adding It Up
When you add the match to Lehigh’s base contribution, you can see how your retirement savings will be greatly strengthened by your participation:
|
Service Status |
Your Contribution |
Lehigh Matching Contribution |
Lehigh Base |
Total Saved |
|---|---|---|---|---|
|
Fewer than 3 years |
6% |
3% |
4% |
13% |
|
3-5 years |
6% |
3% |
6% |
15% |
|
5+ years or began service prior to 1/1/14 |
6% |
3% |
8% |
17% |
It’s Not All Or Nothing
Even if you aren’t able to set aside the maximum voluntary contribution for the match at this point in your career, you should consider saving the most you possibly can to receive the largest match you can. Every dollar up to six percent of your income that you put away will be matched at 50 percent. Over time the savings you see will be significant. When you reach retirement age, you will thank yourself!
Starting or Increasing Your Contribution
It’s easy to start or change the amount of your voluntary contribution to your retirement savings. And you can do it at any time.
- Visit TIAA on the web.
- Log in and select My Account from the top menu
- Select Change My Contribution from the Retirement Plans and IRA section
- Choose the Manage Contributions button
- Complete and submit your change.
If you prefer, you can call TIAA at 1-800-842-2252 and have a representative assist you in making a change to your contribution level.
To Learn More
- Visit the Human Resources website
- Schedule an on-campus one-on-one counseling session. TIAA’s counselor is available at Lehigh twice a month. Appointments can be made by calling 1-800-732-8353.