The University Record, June 5, 1995
The Regents, at their May meeting, approved a change to offer more flexibility in the retirement plan for employees.
After July 1, retirement plan participants can receive up to 100 percent of their retirement accumulations as a lump sum at retirement (or, for former employees, at age 55).
"Nationally, the trend has been to make retirement funds more available to participants," Executive Vice President Farris W. Womack noted. "TIAA (Teachers' Insurance Annuity Association) reports that of the 5,500 institutions that offer TIAA and CREF (College Retirement Equities Fund), over 50 percent offer 100 percent cashouts.
"This trend is also consistent with the move the U-M is making toward flexible benefits. For both cashouts and flexible benefits, the objective is to give informed employees the opportunity to have more control over their own benefits.
"This change in policy has been discussed with the Committee on the Economic Status of the Faculty and the Senate Assembly Advisory Committee on Financial Affairs. All parties agree that employees will be provided general information as to the consequences of taking lump sum cashouts. They will also be advised to consult with their tax and investment advisers."
Currently, U-M employees can take up to 50 percent of their retirement accumulations as a lump sum at retirement.