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Home > Benefits > IU Retirement Plan Vesting

IU Retirement Plan Vesting

IU Retirement Plan Participants on or after September 1, 2010, are subject to a three-year cliff vesting requirement.

All Account Balances and future Contributions and earnings of Participants in the Plan prior to September 1, 2010 are fully Vested.

Vesting Q and A

What does vesting mean?

Vesting is when a participant’s right to her or his accrued IU contributions and earnings in the Plan become non-forfeitable.

What does cliff vesting mean?

Cliff vesting refers to being fully vested at a certain point of time rather than becoming partially vested over time until becoming fully vested.

Does vesting apply if a position is offered and accepted before September 1, 2010, but the hire date is on or after September  1, 2010?

Yes, vesting applies if the participation eligibility date is on or after September 1, 2010 regardless of when the offer and acceptance occurred.

Does vesting apply to someone who is an IU employee receiving contributions under the Plan before  September 1, 2010?

No, all account balances and future contributions and earnings of participants in the Plan prior to September 1, 2010 are fully vested.

Does vesting apply to an employee who is not eligible for contributions under the Plan on September 1, 2010, but was a participant in the Plan prior to September 1, 2010?

No, anyone who was a participant in the Plan before September 1, 2010 remains fully vested in existing account balances and is not subject to vesting should he or she become eligible for contributions once again after September 1, 2010.

Does vesting apply to an employee who has not been a participant in the Plan before September 1, 2010 (not eligible for an IU retirement plan or in PERF), and becomes a participant in the Plan on or after September 1, 2010?

Yes, new participants in the Plan on or after September 1, 2010 are subject to vesting. However, IU PERF service counts toward the vesting requirement (see Q & A 7).

Does IU PERF service count toward vesting service?

Yes, years of IU employment as a PERF participant count toward vesting service in the Plan.

Does service at an IU affiliated entity count toward vesting service?

No, only years of IU employment as a Plan or PERF participant count toward vesting service in the Plan.

Do leaves of absence or pay status matter for calculating years of IU employment for vesting?

No, all years of IU employment as a Plan or PERF participant count for vesting regardless of leave or pay status.

Does it matter if an employee’s position is less than full time or the employee is on a 10-pay arrangement for purposes of calculating years of IU employment for vesting?

No, all years of IU employment as a Plan or PERF participant count toward vesting regardless of FTE or pay period status.

What happens to forfeited contributions?

Forfeited contributions are removed from the participant’s Plan accounts, but remain assets of the Plan that will be used by IU to offset future contributions for other participants.

What if an employee dies, is disabled as defined by social security, or reaches age 65 before attaining three years of IU employment as a Plan or PERF participant?

An employee subject to vesting will be fully vested upon the occurrence of death, disability as defined by social security, or age 65, even if he or she has not yet attained three years of IU employment as a Plan or PERF participant.

If a participant who has forfeited prior Plan contributions returns to IU employment as a Plan participant, can he or she regain the forfeited contributions? Will prior years of qualifying participation count toward vesting service?

Yes, if the employee returns to IU employment as a Plan participant within six months of termination, the forfeited account balance on the date of termination will be reinstated as soon as administratively possible upon re-employment. The returning employee must still meet the vesting requirement, with prior years of vesting service counting toward the three-year cliff vesting requirement.

 

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Page updated: 12 March 2010
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