> Hybrid Plan Summary Description
SEBAC 2011 created a new Hybrid retirement plan option for professional employees of Higher Education institutions. The plan was created by Paragraph II.C. 7 of the Agreement, which reads:
Hybrid Defined Benefit/Defined Contribution Plan for Employees in Higher Education: Individuals hired on or after July 1, 2011 otherwise eligible for the Alternate Retirement Plan (hereinafter referred to as “ARP”) shall be eligible to be members of the new Hybrid Plan in addition to their existing choices. Individuals who are currently members of the ARP shall be eligible to join the Hybrid Plan on a one time option at the full actuarial cost. The Hybrid plan shall have defined benefits identical to Tier II/IIA and Tier III for individuals hired on or after July 1, 2011, but shall require employee contributions three percent (3%) higher than the contribution required from the Applicable Tier ll/IIA/lll Plan. An employee shall have the option, upon leaving state service, of accepting the defined benefit amount, or electing to receive a return of his/her contributions to the Hybrid Plan, plus a five percent (5%) employer match, plus four percent (4%) interest (hereinafter referred to as the “cash out option” . In the event the employee elects the cash out option, he/she shall permanently waive any entitlement they may have to health insurance as a retired state employee unless they convert the cash out option to a periodic payment as would be required under the current ARP plan.
Several issues have been raised about implementing the new Hybrid plan. The most prominent outstanding issue which has delayed the full implementation of the Hybrid Plan is how to handle the substantial sums of money that many ARP participants have in TIAA Traditional Accounts.
The parties are working to resolve all outstanding issues. We will keep members informed of progress as it occurs.
