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Kenyon CollegeHuman Resources

5.13 RETIREMENT PLANS

(revised July 2000)

The College's retirement program is underwritten by the Teacher's Insurance and Annuity Association (TIAA) and the College Retirement Equities Fund (CREF). With more than $150 billion in assets under management, TIAA/CREF is the largest retirement system in the United States, offering an array of high-quality financial products and retirement planning services. The TIAA traditional account invests almost exclusively in a broadly diversified group of direct loans to business and industry, mortgages, and bonds. TIAA also offers a Real-Estate Account which has ownership interests in income-producing office, industrial, retail, and multi-family residential properties. CREF currently offers eight different types of investment accounts: Stock, Money Market, Bond Market, Social Choice, Global Equities, Growth, Equity Index, and Inflation-Linked Bond Accounts. College and employee contributions are used to purchase shares in these funds. Participants have the right to determine how all contributions are allocated between these funds. Ownership of the annuities, including all College and employee contributions plus accumulated earnings, is fully and immediately vested in the employee.

The following information is designed to be an overview of the retirement plan. A more detailed explanation can be obtained by calling the Office of Human Resources at PBX 5173 or TIAA/CREF at 1-800-842-2733, or by reading the summary plan description, a copy of which can be obtained from the Office of Human Resources.

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The minimum employee contribution is 5 percent of gross earnings (excluding overtime).

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The College contribution for faculty, administrators, and non-union, non-exempt staff members is 9.5 percent of the employee's gross earnings (excluding overtime).

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Employees can opt to contribute more than the required minimum contributions. The Internal Revenue Code limits the amount each employee can tax defer under a salary reduction agreement. Individuals can determine the maximum they can contribute by calling TIAA/CREF at 1-800-842-2733, ext. 2929. Additional contributions can be made to either the regular retirement annuities or to the Supplemental Retirement Annuities (SRA).

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Employees have their contributions deducted from their pay under a salary reduction agreement. Under this salary reduction agreement, the gross pay is reduced by the employee's retirement contribution amount and the remaining pay is taxed. Taxes on the annuity are deferred until the employee begins receiving benefits.

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When employees leave Kenyon, they can choose to either continue paying into the plan or withdraw their funds. Withdrawals are possible as follows: The TIAA annuities can be withdrawn over a ten-year period, 10 percentage per year. Monies invested in CREF accounts can be withdrawn in a lump sum. Early withdrawal (prior to age 59 ½) will be subject to a mandatory 20-percent tax. This will be withheld by TIAA/CREF before the monies are disbursed. There are some exceptions to this ruling; for more information please call TIAA/CREF at 1-800-842-2733.

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Eligibility to receive the College's contributions occurs after one year of eligible employment. The one-year waiting period is waived if the employee met the one year of eligible employment in another institution of higher education in the year immediately preceding the date he or she joined Kenyon College. Enrollment is mandatory for exempt administrators and faculty and optional for non-exempt employees.

Employees who must wait for one year before receiving the College's contributions may opt to enroll on their own during that first year of employment. If that option is taken, the employee should understand that the College's contribution will begin after the employee has worked a full year.

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Retirement benefits can begin any time after the date of retirement (but no sooner than age 59 ½), which may be before or after the normal retirement age of 65. In most instances retirement benefits must begin no later than April 1 of the calendar year following the year in which the participant reaches age 70 ½. There are many retirement options available to participants. Single life annuities pay benefits for the life of the annuitant. A survivor annuity pays lifetime benefits to the participant, and if the spouse or second annuitant survives the participant, he or she receives an income for life. Ten-, fifteen-, and twenty-year guaranteed payment periods are also available. For more information about retirement income options, call TIAA/CREF at 1-800-842-2777.

The spouse of an employee who is participating in the TIAA/CREF Retirement Annuity program has, by law, a claim on a portion of those annuities. Benefits may be paid to married participants only after the spouse has signed a consent form.

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Supplemental Retirement Annuities or SRAs are annuities that are purchased in addition to regular retirement annuities. They provide a choice of lifetime income, a fixed-period payout, a partial withdrawal of the accumulated cash value, or a full surrender of their total accumulated value in cash. Such payouts or partial withdrawals may be subject to both the 10-percent penalty for early withdrawals and federal regulations that define spousal rights to retirement benefits. They can be purchased only through a salary reduction agreement. They are fully vested in the owner and portable among institutions making them available to employees. The College does not make contributions to SRA. Please contact the Office of Human Resources for a listing of organizations offering these annuities through Kenyon.

TIAA/CREF mutual funds and IRAs may be purchased on an after-tax individual basis. Contributions to the TIAA/CREF mutual fund may be automatically made through payroll deduction, or individuals may initiate direct withdrawals from their personal bank account. These investments may also be purchased by the spouse of an employee. Please contact the Office of Human Resources for a prospectus and information on these investments, or contact TIAA/CREF directly at 1-800-842-2733.

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As a participant in the Kenyon College Employees' Retirement Plan, you are entitled to examine the plan documents, the annual report, and the summary plan description filed with the U.S. Department of Labor. This inspection may be made during normal business hours; please contact the Office of Human Resources.

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