Since the first set of questions and answers about the MIT Special Retirement Incentive Program appeared in Tech Talk on January 24, the Benefits Office has received a number of additional inquiries about the program. Many of these questions are answered here.
More information about the program may be obtained in a number of different ways. For example, the Benefits Office has an e-mail box on their World Wide Web page through which questions may be submitted; the URL is <http://web.mit.edu/benefits/www>.
In addition, two all-day informational sessions are scheduled for Tuesday, Feb. 20, in the Stratton Student Center, and Tuesday, March 12, at the Faculty Club. They will feature topics including Social Security and Medicare, retiree health insurance options, the MIT Retirement Plan and the TIAA-CREF income options.
A special hotline will be available later this month; it will offer a series of recorded messages describing various aspects of the program. Employees will also be able to leave a message or set up an individual consultation.
The statement of benefits that eligible employees will receive later this month will include an invitation to a meeting during which questions about the statement will be addressed.
REHIRE POLICY
Q: If I have not reached Normal Retirement Date (NRD is the July 1 following age 65) and I elect to take the retirement incentive, may I continue to work at MIT in some capacity?
A: The Institute's general policy for pre-NRD employees is that acceptance of the incentive precludes you from working at MIT in any capacity. There are two reasons: the object of the incentive is to reduce overall staffing levels, and IRS regulations prevent employees from continuing to work at MIT before NRD while receiving their MIT pension.
There may be extraordinary circumstances in which MIT will allow an employee who has accepted the incentive to return to work. For example, an employee elects the retirement incentive and leaves the Institute at age 58. Three years later the lab at which he worked receives a major appropriation, so positions at the lab become available. He may apply for and accept a position. However, if the employee returns to MIT:
- in any time status, the Social Security bridge payment will be forfeited permanently,
- in a benefits-eligible position (50 percent or greater time), payment of the 10 percent incentive will cease and be offset by additional accrued pension benefits during the period worked, and payment of the MIT pension will cease.
- in a position that is not benefits-eligible, payment of the 10 percent incentive will continue but payment of the MIT pension will cease.
Q: Can I work at the Sterling Temporary Agency for MIT?
A: You may work for MIT through Sterling because Sterling would be your employer, not MIT.
Q: Can I consult to the Institute?
A: Consulting to MIT may be possible; however, under Massachusetts law, a consultant must meet each of the following requirements:
- the individual has been and will continue to be free from the employing party's control and direction in connection with the performance of the service,
- the service performed by the individual is either outside the usual course of the employer's business or, if not, is performed outside of the employer's place of business,
- the individual performing the service is customarily engaged in an independently established occupation, profession or business of the same nature as that involved in the service performed.
Q: What are my options for continued employment if I have reached NRD?
If you have reached NRD and accept the incentive, you may continue to work at MIT for no more than 49 percent time, and you must have the agreement of your department. You will continue to receive the 10 percent incentive and your pension if it has begun.
INCENTIVE AND PENSION
Q: Is the 7.5 percent annuity purchase rate guarantee available beyond the special incentive period if I decide to defer taking the MIT pension?
A: No, the guarantee is available only through October 1, 1996; if you decide to defer your pension until later, your benefit will be calculated using the interest rate in effect at that time.
Q: What payment options are available for the 10 percent incentive?
A: The 10 percent incentive is payable in the same forms as the basic benefit; it is not available as a lump sum. See pages 8-9 and 19-20 of the Highlights Brochure for information on payment options.
Q: Will the Social Security bridge be paid until I am 62 or until the July 1 following my 62nd birthday?
A: You will be paid the $500 per month bridge until you are 62, not the July 1 following. The object of the bridge payment is to provide you with additional income until you are eligible for Social Security, which is currently age 62.
Q: Can you give me an example of prorating the bridge payment?
A: If you are working 50 percent time, you would receive $250 (50 percent of $500) per month until you are 62.
Q: I've decided to elect the incentive and defer taking the MIT pension. Do I have to choose my payment option now?
A: No, you can wait until you actually decide to take the pension to decide what form of payment you want.
Q: Can I elect a contingent annuitant other than my spouse?
A: Yes, generally the choice of contingent annuitant is up to you. However, by law your spouse is entitled to at least a 50 percent contingent annuity, and must give written consent to your choice of any form of payment other than that.
Q: Once my pension payments have started, can I change my contingent annuitant?
A: No. The annuity payment is based on a calculation determined by your joint life expectancy, so you may not change after payments have begun.
Q: How is a contingent annuitant different from a beneficiary?
A: An annuity payment with a contingent annuitant option is based on the life expectancy of two lives. If you predecease your contingent annuitant, s/he will continue to receive payments until his/her death.
A beneficiary may receive a benefit when you die, but the payment amount you receive is based only on your life expectancy. For example, if you elect a 10-year certain and continuous option, you will be paid an annuity for your life. If you die before the end of the 10-year period, your beneficiary will receive the same monthly payments for the balance of the period. If you live beyond the 10 year guaranteed period, you will continue to receive payments, but your beneficiary will receive nothing when you die. You may change your beneficiary at any time after you begin payments.
FACULTY INCENTIVE
Q: How will the faculty incentive (1 or 1.5 times salary) be paid?
A: Since the entire amount is taxable in 1996, the Institute will pay the faculty incentive as a lump sum rather than in installments.
Q: Assuming I am past NRD and have my department's consent to return to teaching, what can 49 percent time represent?
A: A 49 percent appointment would include teaching during the academic year as well as summer session if you have been teaching during the summer on an ongoing basis.
Q: If I retire from MIT before NRD, are there any circumstances under which I may return to teach?
A: Barring special circumstances, you may not take the incentive and return to MIT.
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Retirement seminars
Employees, retirees and their guests are invited to attend one of the Retiree Medical Benefits Seminars offered by the Benefits Office. The seminars will provide information on Medicare, Medex and some of the new senior plans now available. Plan representatives will be available for individual consultation. All sessions will be held in the Bartos Theater (Building E15).
Five sessions are scheduled: 9:30am-12:30pm on Monday, Tuesday and Wednesday, March 4, 5 and 6, and 1:30-4:30pm on Monday and Tuesday, March 4 and 5. Because of space limitations, reservations are required. To reserve a space in one of the sessions, call x3-5000 and press 2-7-3 when the recording begins.
Similar presentations are being scheduled for mid-March at Lincoln Laboratory. Details will be published in the Lincoln Bulletin.
