Differences Between Retirement Plans
Defined Benefit Plan:
New York State Teachers Retirement
Vesting: ten years
Contribution: 3.5% of pay until employee separates from the college
Investment Decision: made by New York State Teachers Retirement System
Risk: Employee assumes no risk. Retirement benefit based on a guaranteed formula. Years of service, benefit factor and the three years of highest salary determine benefit.
Age: 62, reduction in benefit if under age 62
Retiree receives guaranteed lifetime pension payments.
Defined Contribution Plan
SUNY Optional Retirement Program
Members default to TIAA and after vesting period may elect a SUNY approved alternate carrier:
- AIG Retirement Services formerly known as VALIC
Vesting: 366 days
Contribution: Employee requirement - 3% of salary for ten years. Employer pays 8% for first seven years and 10% thereafter. After the 10 years of employee mandated contribution ceases the college will also pick that amount up.
Investment Decision: employee makes all investment allocation decision with the assistance of financial
advisors from the carrier they select
Employee sets up the account; therefore, they assume the risk.
Age: Anytime after age 55 without penalty.
Retiree has the risk that they may outlive their retirement account.