Alternative Retirement Plan FAQs
“What is an Alternative Retirement
Plan (ARP)?”
An ARP is a defined contribution plan. This plan allows an individual
to direct their contributions into their own fund through either AIG
VALIC or TIAA-CREF. The benefit received upon retirement is based on the
amount that has been contributed during the employee’s career by both
the employee and the employer. The contributions are affected by income,
expenses, and gains and losses of the investments selected by the
employee. There are no promises of a set monthly benefit at retirement.
This plan is similar to other defined contribution plans such as 401(k)
plans, 403(b) plans, employee stock ownership plans, and profit sharing
plans.
Return to Top
“Who is eligible to participate in
the ARP plan?”
The ARP plan is available to FACULTY and PROFESSIONALS who were
initially employed after July 1, 1991 at an appointment percentage
greater than 25%. The Education Retirement Board(ERB) is responsible for
approving the positions that are eligible to participate in the ARP.
FACULTY applies to all instructional or research
personnel who are classified as:
- Instructors or Lecturers
- Assistant Professors
- Associate Professors
- Professors (including Visiting Professors)
- Research Professors (including both Assistant and Associate
Research Professors)
PROFESSIONALS applies to:
- The President
- Vice Presidents
- The Provost or Campus Director
- Deans
- Assistant or Associate Vice Presidents
- Academic Department Chairs
- Directors or Managers who report directly to a Vice-President,
Provost, or a President
- Medical Doctors
- Intercollegiate Athletic Coaches
- Senior Institutional Developers
- Fund Raisers
Eligible research and development personnel are limited to employees
whose responsibilities are solely in engineering or scientific research
at the senior level positions. These include employees of an institution
working out-of-state under a research contract between the Institution
and the United States Government.
Return to Top
“How do I enroll in the ARP plan?”
Eligible employees must choose to participate in the ARP plan within
the first 90 days of employment. To participate in the ARP plan,
eligible employees must complete an ARP ELECTION FORM
and return it to the Human Resource Service Center for processing. All
UNM employees are automatically enrolled in the ERA defined benefit
retirement plan upon hire. Once the form is processed, all previous
contributions made under the ERA plan will be transferred to the ARP
plan on behalf of the employee.
Return to Top
“How much do I contribute to the ARP
plan? How much does UNM contribute to the ARP plan?”
Employees contribute 9.4% (effective July 1, 2009) of their gross income
on a pre-tax basis to their ARP plan. The employer contribution is
10.9% (effective July 1, 2009) of gross earnings. For employees with annual wage of $20,000 or less, employer contributions are 12.4% of gross earnings, and the employee’s tax-deferred contribution is 7.9% of gross earnings. For all employees in the ARP, three percent of the employer match goes to the ERA to help pay for the unfunded liability incurred by the plan.
Return to Top
“What investment companies can I
invest in under the ARP plan?”
Eligible employees may purchase annuities in either TIAA-CREF or AIG
VALIC. The benefit received upon retirement is based on the amount you
have contributed to your annuity during your career. Annually, you can
elect to move your investments from one vendor to another, but they
cannot be rolled out to any other form of retirement investment (i.e.
403b, IRA, etc.) or refunded to the employee in a lump sum payment.
Return to Top
“What if I missed my 90-day window to participate in the ARP, but I am hired for a different ARP-eligible job in the future? Can I contribute to ARP then?”
Eligible participants that fail to elect to participate in an ARP
within the first 90 days of becoming eligible at a qualifying state
educational institution may not choose to participate in an ARP at any
point in the future, even if they are subsequently hired by a different
qualifying state educational institution.
Return to Top
“Can I ever switch back to the ERB plan?”
Eligible participants who have contributed to an ARP for a cumulative
total of seven years or more are eligible to exercise a one-time option
within 120 days of becoming eligible to switch to the ERB plan. However,
funds on deposit in an ARP at the time the election is made remain with
the ARP contractor and any accumulated service DOES NOT transfer to the
ERB plan.
Return to Top
“When can I retire under the ARP
Plan?”
You can request retirement under the ARP plan once you separate from
employment with UNM. However, to retain UNM retiree benefits, you must
provide proof of your application to receive benefits from your ARP
provider to the UNM Human Resources office.
To receive UNM retiree benefits, you must be 59 ½ years of age, have
completed a minimum of 5 consecutive years of service with UNM
immediately prior to retirement, have been actively enrolled in health,
dental, and life insurance benefits by a local group health insurance
policy for at least 4 of those 5 years, and have been enrolled in one of
the UNM health insurance plans during the last 12 consecutive months of
employment at UNM.
Return to Top
“How do I get my retirement money out
of the ARP plan when I retire?”
The benefit available to employees who participate in this plan is a choice of a lifetime annuity distribution or a full or partial cash distribution of the balance invested with either AIG VALIC or TIAA-CREF. Participants may apply for the annuity or cash distribution upon separation of employment from UNM, or they may opt to defer the benefit to a later time. When employees opt to defer their distributions, they forfeits their rights to UNM retiree benefits, such as healthcare, dental, or life insurance benefits. For limitations on annuity deferment, please contact your ARP provider (AIG VALIC or TIAA-CREF).
Return to Top
