Penn Faculty Benefits News: February 19, 2019
A life event such as a marriage, divorce, remarriage, or birth of a child mean major changes in your household. These changes mean it’s time for you to update your Penn retirement plan and life insurance beneficiary designations.
Properly designating beneficiaries give you the peace of mind that the people, organizations, and causes you care about most will receive the money you want them to have with minimal difficulty.
If you don’t designate beneficiaries, the money you intend to leave to your loved ones could instead go to your estate and be distributed as part of probate proceedings, and not necessarily as you would like.
Review Your Designations Now
It takes just a few minutes to make sure that your retirement plan and life insurance beneficiary designations are up to date. The “Life Insurance and Retirement Plan Beneficiary Checklist” provides user-friendly instructions for getting started.
Remember that for your retirement plan accounts you must make beneficiary designations for each of the three plans – Basic, Matching and Supplemental. Also, designations for your retirement plans and life insurance do not apply to each other.
Making beneficiary updates is particularly important if you have experienced a major life event in your family in the last year. Qualifying events include the birth or adoption of a child, marriage or domestic partnership, divorce or separation, death of a dependent, and change in your dependent’s eligibility for benefits. Keep in mind that the IRS limits the types of changes you can make for such events. For detailed information, refer to the Guide to Managing Life Events.
Need More Information?
For additional information about updating beneficiaries for your retirement plans, visit the Designating Your Beneficiaries web page. For questions about life insurance, contact the Penn Benefits Center at 1-888-PENNBEN (1-888-736-6236), Monday through Friday, 8am to 6pm EST, and Saturday 8am to 5pm EST.
You can also receive free financial and legal counseling through Penn’s Employee Assistance Program (EAP). EAP is available 24 hours a day, 7 days a week at 866-799-2329.
Have you taken on the responsibility of caring for aging parents who can no longer care for themselves? Are you trying to identify the right types of providers who can meet the changing needs of older loved ones? Whatever the issue, caring for seniors can be a challenge, especially when trying to juggle your own personal and professional activities. Penn’s adult and senior care services provided through Care.com can help.
This benefit offers eligible faculty and staff the support and guidance of a Senior Care Advisor, who shares caregiving strategies such as finding the appropriate level of care, proactively planning and paying for care, and assisting adult children whose parents do not want to accept care. The Senior Care Advisor also walks you through a written customized action plan that includes a complete summary of your needs, recommended next steps, information on providers, and additional resources.
Through senior care planning you also receive free in-depth telephonic consultations with a Geriatric Social Worker, who can help you navigate questions and concerns such as:
- How do we talk about our family’s needs?
- How do we get all of our family members on the same page and come up with a plan?
- How do we manage health, legal and financial challenges?
- How do we find and pay for the necessary resources?
To access senior care planning services, call Care.com at 855-781-1303 ext. 3, visit penn.care.com or email email@example.com to set up a consultation with a Geriatric Social Worker. Senior Care Advisors are available Monday through Friday, 9 am to 6 pm EST.
When creating your senior care planning strategies, you may also want to sign up for one of the following webinars and workshop, all presented by Care.com. Click on the links to register.
Webinar: Important Resources for Family Caregivers
May 7, 2019
How to Help Your Parents Live at Home as They Age
June 11, 2019
Webinar: Alzheimer’s Disease and Dementia: Caregiving Challenges and Strategies
August 6, 2019
Webinar: Maximizing Quality of Life as You Age
November 5, 2019
Penn recognizes the invaluable service provided by Tenured Standing Faculty members and Clinician Educators. As part of this recognition, the University’s Faculty Income Allowance Plan (FIAP) offers a financially secure pathway to retirement for senior faculty members.
FIAP provides supplemental income for eligible senior faculty members when they choose to participate in the program.
Senior faculty members will be eligible to receive FIAP benefits if they meet one of the following age and service requirements at the time their employment ends:
a) Ages 60-69: Senior faculty members who have 10 or more years of full-time continuous service (as standing faculty members) and who terminate employment on or after age 60, but before June 30 of the academic year in which they reach age 69, are eligible to receive FIAP benefits if they satisfy a “rule of 75” requirement (that is, the combined age and years of full-time service of the faculty member equals or exceeds 75).
b) Age 69 or later: Senior faculty members who satisfy the 10 years of full-time continuous service and “rule of 75” requirements on or after age 69 may also receive FIAP benefits. Such senior faculty members generally must terminate employment as of the academic year-end (June 30) immediately following the satisfaction of the eligibility requirements.
The Retirement Income Allowance
FIAP provides cash benefits that are equal to the greater of:
165% of a faculty member’s “academic base salary”* in effect on the termination date
165% of the “average academic base salary”* for full professors in a faculty member’s school during the academic year preceding retirement.
Note that service must be full-time and continuous and cash benefits may not be greater than 200% of the participants’ actual annual compensation for the year preceding the year of their termination of employment. Annual compensation generally includes all pay for the preceding year.
Cash benefits are paid in 24 equal installments following a faculty member’s termination of employment. These payments are separate from any retirement plan distributions faculty members may elect to receive, and are subject to federal, state and local income taxes and to Social Security and Medicare taxes.
During the two-year FIAP period, Penn provides, basic life insurance, dental and vision coverage at no cost to the participant. Other benefits such as medical and prescription coverage, supplemental life insurance, and long-term care insurance can be continued as well for the same cost as offered to the retirees. Finally participants can continue to participate in the tuition benefit for themselves and their eligible dependents. Since FIAP participants are considered retirees, certain tax-advantaged benefits such as health care spending accounts are not available.
Please consult a financial advisor who can inform you about FIAP’s tax or social security implications for your household.
The Next Steps
If you’re considering taking advantage of FIAP in the near future, contact Hilary Lopez in Benefits or send an email to HRbenefits@upenn.edu to discuss your eligibility for the income allowance and benefits package.
The next step is to speak with your school’s administrative representative, such as the chair or dean of your department, and document your specific FIAP agreement.
For details, please review the Faculty Income Allowance Plan Guide.