Retirement Plan Revisions
March 7, 2017
Dear Colleagues,
I am writing to update you on our continued progress in reviewing Boston University’s employee benefits programs. This initiative began in 2014 when Senior Vice President, Senior Counsel, and Secretary of the Board of Trustees Todd Klipp and I convened a task force of faculty and staff to review our plans, benchmark them against those of our peers, and offer recommendations that would help us meet three objectives:
- to offer benefits that help ensure that the University continues to attract and retain excellent faculty and staff
- to use our financial resources prudently
- to comply with applicable state and federal regulations
In 2015, we shared the task force recommendations with you, gathered your feedback, and implemented changes to the health plan effective January 1, 2016. We also made minor changes to the long-term disability (LTD) plan and introduced a 457(b) Savings Plan for those whose earnings exceed certain IRS limits.
During the 2015 feedback period, we also asked for your input on proposed changes to the Boston University Retirement Plan. As a result of that feedback, we decided to defer making changes to the retirement plan so that we could explore alternative approaches.
Revised Retirement Plan
I am writing to announce a revised approach for the Boston University Retirement Plan. This new approach addresses challenges we face with the current plan by:
- encouraging faculty and staff to begin saving for retirement as early as possible in their careers
- distributing the University’s contribution more equitably across all age groups and salary levels
- ensuring that the Boston University Retirement Plan passes IRS non-discrimination tests so that BU’s annual retirement contribution for highly compensated faculty and staff is not partially distributed and taxed as ordinary income
The revised approach is described in this Guide to Revised Retirement Plan.
Your Input Is Needed
Once again, we are requesting your input. During the month of March, we will be conducting meetings at which Human Resources representatives will review the retirement plan recommendations and how the revised changes might affect faculty and staff. We welcome your feedback at these meetings or via email.
We request that you take the following steps:
- Visit the Retirement Benefits in Transition website, your central source of information about the recommended changes.
- Mark your calendar and attend a meeting where you’ll have an opportunity to learn about the recommendations in detail, review examples, and get answers to your questions. The meeting calendar will be posted on the website.
- Before the meeting, please review the Guide to Revised Retirement Plan, noting your questions and comments; bring those notes to the meeting.
We will review the feedback we receive from you before reaching decisions about the final revisions to the plan design.
Questions?
We want you to understand the rationale for undertaking this process, the changes that are being recommended, and how those changes might affect you. All these topics and more will be addressed in the meetings and posted on the Retirement Benefits in Transition website. We hope you will engage in the process as, together, we ensure that our benefits remain competitive and valuable to all BU faculty and staff.
Sincerely,
Robert A. Brown
President