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Retirement Plans

 Social Security

Covers: All University employees

Contribution: Social Security OASDI-Employee 6.2%; Employer 6.2% for 2013

                       Social Security Medicare - Employee 1.45%; Employer 1.45%

Maximum Social Security OASDI Earnings - $113,700 for Calendar year 2013 (Subject to annual change)

Maximum Medicare Contribution Earnings - No limited on earnings


Kentucky Employees Retirement System (KERS)

Covers: All regular, full-time employees and regular, part-time staff employees who work in a position that does not require a degree and who work an average of 100 hours or more per month.

Contributions effective July 1, 2013: Employees who began participating prior to September 1, 2008:

        Non-hazardous position - Employee Contribution 5%; Employer Match Rate  26.79% 

        Hazardous Position - Employee Contribution  8%; Employer Match Rate 32.21%

Employees who began participating on or after September 1, 2008:

        Non-hazardous position - Employee Contribution 6%; Employer Match Rate 26.79%

        Hazardous position - Employee Contribution 9%; Employer Match Rate 32.21%

Vesting: An employee must normally have five years of service to have a vested account.

Defined Benefit Plan: The Kentucky Employees Retirement System (KERS) is a qualified defined benefit plan. A defined benefit plan pays benefits based on a formula.

Retirement Eligibility: Retirement eligibility is dependent upon the member's age, service credit, participation date and type of service (non-hazardous or hazardous). For members participating prior to August 1, 2004, the amount of service credit used to determine retirement eligibility includes current service and sick leave service but does not include purchased service, with the exception of Recontribution of Refunded Service and Omitted Service.

Medical Insurance Benefits at Retirement: KERS provides group rates on medical insurance and other managed care coverage for retired members based on participation date and years of service. Participation in the insurance program is optional and requires the completion of the proper forms at the time of retirement in order to obtain the insurance coverage.

KERS provides access to group health insurance coverage through Kentucky Employees Health Plan for recipients until they reach age 65 and/or become Medicare eligible.  After a retired member becomes eligible for Medicare, coverage is available through a Medicare eligible plan offered by KERS. If a member becomes eligible for Medicare due to disability, the member has the option of taking insurance through the Kentucky Employee Group Health Plan or a Medicare eligible plan until reaching age 65. A retired member's spouse and/or eligible dependents may also be covered on health insurance through KERS by paying the applicable premium.

Sick Leave Service Credit at Retirement:  Most members of KERS with a participation date prior to September 1, 2008, receive service credit for all unused accumulated sick leave at the time of retirement. Members with a participation date on or after September 1, 2008, may receive a maximum of 9 months of service credit for unused sick time.

$5,000 Death Benefit for Retirees: In addition to a retirement benefit and health insurance, a retired member's beneficiary may be eligible for a death benefit. If a retired member is receiving a monthly benefit, KERS will pay a $5,000 death benefit payment to the beneficiary designated  by the member specifically for this benefit. The $5,000 death benefit is subject to federal income tax, but may be eligible for a direct rollover to avoid taxation.

Additional information may be obtained from the KERS website which is www.kyret.ky.gov.

KERS: Cash Distribution Plan for those hired after 1/1/14


Kentucky Teachers Retirement System (KTRS) and Optional Retirement Plan (ORP)

Covers: Mandatory for full-time employees and certain part-time employees who work in a position that requires a four-year degree.

KTRS Contribution: Faculty and Professional Staff (whose position requires a four-year degree or higher degree) employed on or after July 1, 1996, are eligible for membership in either the Kentucky Teachers' Retirement System and/or Optional Retirement Program provided by Fidelity, ING, TIAA-CREF, and VALIC. Effective July 1, 2013 an employee electing membership with KTRS will contribute 7.16%. The employer's match will be 14.84%. Additional information may be obtained from the KTRS website which is www.ktrs.ky.gov.  MSU is not responsible for the content on KTRS's website.

KTRS Retirement Benefits: Retirement under KTRS for retired employees is calculated as follows: Service Credit (years of service) x Retirement Factor (% multiplier) x Final Average Salary* = Annual Benefit.

 *Average your high 3 years if you are at least age 55 and have at least 27 years of Kentucky service; average your high 5 years if you do not meet the criteria for the average of high 3 years.

For employees hired prior to July 1, 2008, the Retirement Factor (% multiplier) is 2.0%.

For employees hired since July 1, 2008, the Retirement Factor (% multiplier) is based on years of service according to the schedule below:

1.5% of final average salary if retiring with 5-10 years of service.**

1.7% of final average salary if retiring with 10.01-20 years of service.

1.85% of final average salary if retiring with 20.01 to 26.99 years of service.

2.0% of final average salary if retiring with 27 or more years of service.

**Employees with years of service in another Kentucky retirement system should contact the HR Office @ 809-2146 for more information.

 For example:

1) An employee hired prior to July 1, 2008 with a 5-year average of $55,000 and retires at age 65 with 17 years of service will have the following benefit calculation:

17 years x 2% x $55,000 = $18,700 Annual Benefit

2) An employee hired on or after July 1, 2008 who retires at age 65 with 17 years of service and has a 5-year average of $55,000 will use the following benefit calculation:

17 years x 1.7% x $55,000 = $15,895 Annual Benefit

The amount of annual benefits which might apply can vary depending on available options. For additional information, Kentucky Teachers' Retirement System staff can be reached Monday through Friday, 8:00 AM to 5:00 PM, Eastern Time at 800-618-1687. Also, general questions and inquiries may be answered by email at ktrs.info@ky.gov.

KTRS Medical Program: The KTRS medical program is provided as an optional program and a service to KTRS retirees. This program is not part of the regular retirement program and is subject to change when necessary to contain expenses within the funds available to finance the program. Currently, retirees under age 65 are offered coverage through the State Group Health Plan (SGHP). A retiree age 65 or older is offered coverage through the KTRS self-insurance Medicare Eligible Health Plan (MEHP). An employee hired in a KTRS-covered position prior to July 1, 2002, who retires with twenty (20) or more years of service credit will receive the maximum supplemental payment toward medical insurance coverage.

KTRS Life Insurance Benefit: You are covered by a $2,000 life insurance benefit from the first day of employment in a full-time KTRS covered position. This coverage continues as long as you remain in active contributing status. Service and disability retirees are covered by a $5,000 life insurance benefit. Life insurance benefits are paid to the member's estate or designated beneficiary.

ORP Contribution: Employee contribution with the ORP plan is 6.16% of gross salary; employer's match is 8.74% to the ORP and 5.10% to KTRS. The University's contribution of 5.10% to KTRS does not earn KTRS benefits for the employee who contributes to an ORP.

ORP Sick Leave Buyback or KTRS Sick Leave Credit: When an eligible ORP participant retires, a payment will be made directly into their ORP account from the University for their eligible sick leave. In order to be eligible for a sick leave buyback (for ORP participants) or credit ( for KTRS participants) all of the following criteria must be met: (1) the employee must fully retire from the University with (a) no oral or written pre-arranged commitment to return to work can exist on the date of retirement and (b) the retiree will not return to work at MSU within six months after his or her retirement date; (2) the employee must qualify under KTRS rules for an unreduced KTRS annuity. (Unused sick leave cannot be used to meet the minimum years of service credit for an unreduced annuity); (3) the employee must have worked full-time at MSU as an exempt staff or faculty member for at least five years; (4) the employee must provide the completed KTRS retirement application to Human Resources more than two months prior to his or her retirement date; (5) all leave reports through the retirement date must be submitted by the retirement date; and (6) the employee must not have received a sick leave credit as a result of previously participating in any other MSU retirement plan.


Tax-Sheltered Supplemental Retirement Plans (Optional)

A 403(b) plan is a tax-deferred retirement plan available to employees of public educational institutions. A 403(b) plan allows you to make pretax contributions by convenient payroll reduction and save that money for your retirement. A salary reduction agreement form must be completed and submitted to Human Resources in addition to submitting an application with the chosen company prior to the month of the 403(b) election.

Also, the Kentucky Deferred Compensation Plan (Optional State Benefit) offers tax-sheltered supplemental retirement programs including 401(k), 457, Roth IRA or traditional IRA plans. You may make contributions to the pre-tax 401(k) or 457 through payroll reductions. Contributions to the after-tax Roth and Traditional IRA's can be made with a personal check. This State sponsored program is for employees of state and local governments, public school systems, and public universities. Kentucky Deferred Compensation provides supplemental retirement plans to over 75,000 public employees in Kentucky. The program is a long-term investment savings plan designed to help you meet future retirement goals. Kentucky's program lets you supplement your retirement with your own voluntary savings plan. You must contact the Kentucky Deferred Compensation Agency directly if you are interested in participating in this supplemental retirement plan. The Kentucky Deferred Compensation Agency will contact Murray State University to give the appropriate deduction amount you have selected.

Participants can change the 403(b) deferral amount monthly by completing a Salary Reduction Agreement and submitting it to the Human Resources Department. Participants in a 403(b) plan may choose to exchange funds from one MSU approved vendor to another MSU approved vendor quarterly. If desired, funds may be transferred into one of MSU's 403(b) plans from a former employer's 403(b) plan.


                 KTRS Sick Leave Credit Plan

    ORP Sick Leave Buyback Plan

ORP Rate History

Comparison of KTRS vs ORP 7-1-13

 Plan Contribution and Benefit Limits-2013

Retirement Choices for Professional Faculty & Staff

Tax-Sheltered Supplemental Retirement Companies

Hartford Announces Sale to MassMutual

MSU Plan Document for 403(b) Plans

MSU Adoption Agreement for 403(b) Plans

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