Retirement
1. PURPOSE
Brigham Young University–Hawaii ("BYU–Hawaii" or "university") derives substantial benefit from the extraordinary service, loyalty, and engagement of long-term employees and includes a variety of retirement benefits in its total compensation program to entice workers to maximize their commitment to the institution. Accordingly, it is in the university’s interests to assure as much operational or programmatic continuity as possible when an employee approaches the end of her/his career and leaves a hole to be filled. Moreover, the university has a responsibility to acknowledge and respect the contributions that retiring employees have made to the school’s success and to facilitate a dignified transition from work to the next chapter of its retirees’ lives. For these reasons, it is the purpose of this policy to outline the components of the university’s retirement benefits and to establish rules governing a retiring employee’s rights and responsibilities.
2. POLICY
Brigham Young University–Hawaii will provide counseling and support to employees who are approaching eligibility for retirement benefits to help them understand their entitlements and make decisions about the timing of their departure from service that will maximize the university’s opportunity to effect a smooth transition.
3. DEFINITIONS
3.1 Definitions
The following terms, capitalized wherever they appear in this policy statement, will have the meanings given:
3.1.1 Bridge
A payment, based on the calculation of the difference between Normal Retirement Income and Early Retirement Income, that the university makes to employees who elect to participate in this early retirement incentive program. The period for which a Bridge is paid, cannot exceed 48 months.
3.1.2 DMBA
The Deseret Mutual Benefit Association (DMBA), a legal entity established by the Church of Jesus Christ of Latter-day Saints ("Church") for the purpose of administering health insurance, retirement, and other welfare benefit programs for employees of the Church and its subsidiary entities.
3.1.3 Early Retirement Income
The actuarial reduction in Normal Retirement Income required by the longer period over which retirement income payments will be made.
3.1.4 Full Retirement Age
The age at which an employee becomes eligible for full retirement benefits under the Social Security Act of 1935, as amended.
3.1.5 Master Retirement Plan
The non-contributory defined benefit retirement plan, administered by DMBA, provided by the university for its employees.
3.1.6 Normal Retirement Income
The retirement income benefit provided at Full Retirement Age by the Social Security Administration or DMBA, based on the contributions that an employee makes during her/his working life with covered employers.
3.2 Full Retirement benefits
Eligibility for retirement benefits is a function of an employee’s age and period of service with the university. The package of benefits includes income security programs, continuing campus privileges, and personal/family tuition benefits at CES Institutions:
3.2.1 Income security benefits
The university provides a variety of income security benefit options, the specific terms and conditions of which are contained in the plan documents defining each program. The actual benefit available to a retiring employee will reflect the contributions that the university makes on her/his behalf, the contributions she/he makes to supplement university payments, and the length of the employee’s participation in these programs. These options include:
- Master Retirement Plan
- Retirement Plus Plan
- Retirement Savings
- Retiree medical insurance
- Retire group life insurance
Staff at the university HR department and/or the campus DMBA representative are available to answer individual questions.
3.2.2 Continuing campus privileges
A retired university employee maintains access to the university library, fitness center, swimming pool, and recreational facilities.
3.2.3 Tuition benefits
A retired employee and her/his dependents have the same tuition benefits as are available to regular full-time employees and their dependents. (Please refer to the Employee Development and Performance Management Policy Section 3.2.2 and the Compensation Policy Section 3.3.8)
3.3 Retirement election
Retiring from active university employment is solely at the discretion of the employee.
3.3.1 Counseling
Staff in the HR department and the campus DMBA representative are available to explain available retirement benefits and assist an employee to determine if and when a decision to retire from university employment will serve the employee’s interests.
3.3.2 Retirement dates
Out of consideration for maintaining continuity of university programs and services, an employee who is eligible for and chooses to receive retirement benefits must elect a retirement date within the following parameters:
a Faculty
A faculty member must select a retirement date as of January 1st, May 1st, or September 1stfollowing the month in which the faculty member becomes eligible for retirement benefits. Sufficient notice should be given to Human Resources so that retirement payments coincide with the termination date.
b Other employees
Non faculty employees may select a retirement date at the end of any payroll period following the end of the month in which the employee becomes eligible for retirement benefits. Sufficient notice should be given to Human Resources so that retirement payments coincide with the termination date.
3.4 Retirement recognition
Departments may recognize and honor retiring employees, at university expense, within the following guidelines.
3.4.1 Gift
The Department may present the retiree with a gift, the value of which would depend on the length of the employee’s service at the university.
3.4.2 Retirement event
The Department may host a reception/dinner in the retiree’s honor. The amount of the university’s financial participation in the cost of any such event will be a function of the retiree’s length of service with the university.
3.4.3 Cash payout
If a retiree wishes to forego receipt of a gift and participation in a retirement event, the funds allowed for these purposes may be paid out to the employee (with applicable taxes).
Summary of Retirement Recognition Allowances
| Years Of Service | Allowance for Retirement Event | Allowance for Retirement Gift | Allowance for Cash Payout |
| At least 2 but less than 5 years | $ 250 | - | - |
| 5 or more but less than 10 years | $ 400 | $ 130 | $ 530 |
| 10 or more but less than 15 years | $ 550 | $ 175 | $ 725 |
| 15 or more but less than 20 years | $ 650 | $ 220 | $ 870 |
| 20 or more but less than 25 years | $ 750 | $ 265 | $ 1015 |
| 25 or more but less than 30 years | $ 900 | $ 315 | $ 1215 |
| 30 or more years | $ 1050 | $ 380 | $ 1430 |
3.5 Separation / Vacation Buyout
The last day worked is the last day of employment. At the time of separation, a retiree will be paid for accrued but unused vacation time up to 176 hours. All other separation actions—tools and equipment return, keys turn in, systems access termination, etc.—is the same for a retiree as for any other employee leaving university employment.
3.6 Post retirement employment
No person who is receiving retirement benefits from any Church-controlled entity may be hired into a BYU–Hawaii full-time, part-time, or temporary position. Exceptions require approval from the Office of the Commissioner of Church Education.
3.7 Early retirement incentive
Note: The President’s Council discontinued the Early Retirement Incentive effective January 1, 2019. The policy language remains here to preserve the Board approved program in case the program is ever reinstated.
3.7.1 Purpose
Consistent with university’s mission to send its members forth to serve the larger world, the university offers an early retirement incentive to enable employees who choose this option to pursue post-employment service opportunities while they remain in reasonable good health. The university desires to reward the consistent commitment of employees who demonstrate long term loyalty to the university by offering an Early Retirement Incentive, in the form of a financial Bridge, up to four years in length, to cover the difference between Normal Retirement Income at Full Retirement Age and retirement income at an earlier age to qualifying income.
3.7.2 Eligibility
Participation in the early retirement incentive program is entirely voluntary. To be eligible for the program, in the year preceding an election to participate, an employee must have a) 20 years of continuous full-time DMBA Retirement Credits, and b) reach an age no more than 48 months less than Full Social Security Retirement Age.
3.7.3 Early Retirement Incentive
Retiring before reaching Full Retirement Age reduces the value of monthly retirement benefits paid under the DMBA Master Retirement Plan and Social Security. The BYU-Hawaii early retirement incentive helps to make up for this reduction. Persons electing to participate in the program receive as many of the following benefits as they qualify for:
3.7.4 A Master Retirement Plan Bridge
An early retiree will receive a one-time lump sum Bridge equivalent to the present value of the difference between Early Retirement Income and Normal Retirement Income. DMBA calculates this difference based upon certain actuarial assumptions and the Master Retirement Plan’s normal form of benefit for a single person (a life annuity with a 10-year period certain). This amount is paid on the second pay day of the month in which the employee retires.
Payments cannot be deferred or accelerated due to restrictions in Section 409A of the Internal Revenue Code as amended by the American Jobs Creation Act of 2004.
3.7.5 Social Security Bridge
The amount of the monthly Social Security benefit depends upon earnings history and age at which Social Security benefits begin. Inasmuch as an early retiree will not have reached full retirement age, there will be a reduction in the monthly Social Security benefit that the university will help to minimize by making monthly payments equal to the lesser of (a) 25% of the current monthly salary or (b) the monthly single full Social Security benefit that would be paid at Full Retirement Age. The monthly benefit is divided into 2 equal payments and paid each regular pay period, beginning the second payday of the month in which retirement begins. The Social Security Bridge ends in the month at which the early retiree reaches Full Retirement Age.
Payments cannot be deferred or accelerated due to restrictions in Section 409A of the Internal Revenue Code as amended by the American Jobs Creation Act of 2004
3.7.6 Health Insurance
Early retirees may continue to participate in university-subsidized health insurance coverage until they become eligible for Medicare. The university’s share of early retiree health insurance is defined in the plan documents.
3.8 EXCEPTIONS
The president’s council may approve exceptions to the provisions of this policy in writing supported by documented evidence that doing so is in the university’s best interests.