Primary Retirement Plans
Eligibility
Most employees who are employed at least 20 hours a week for at least 20 weeks in a fiscal year are required to participate in a primary retirement plan.
Exception
Postdoctoral scholars and some international employees are not eligible for participation in the primary retirement plan.
Understanding Your Options
Employees are required to enroll in one of the following primary retirement plans:
Click here to make your primary retirement plan election
ASRS Accordion Open
Arizona State Retirement System (ASRS)
- Employer code 104160
- Enrollment code 4UQ00059
Required for all classified staff employees, and an option for faculty, appointed staff and service professionals as an alternative to the ORP.
ASRS is a defined benefit plan qualified under Internal Revenue Code 401(a) that provides a monthly benefit at normal or early retirement.
Eligibility
- Classified Staff- You must participate in ASRS if you work 20 or more hours per week for at least 20 weeks during the fiscal year
- Appointed Staff and Faculty – You may elect to participate in either the Arizona State Retirement System (ASRS) plan or the Optional Retirement Plan (ORP). Your election must be made within 30 calendar days of eligibility, or you will be enrolled in ASRS.
Effective Date
You will be enrolled and your contributions will begin effective:
- New Members: the first day of the pay period following 183 days of continuous service.
- Current Members: at your date of hire if you have an active retirement account.
- Forfeited Members: at your date of hire if you forfeited your account less than two years ago.
Contributions
Both you and NAU contribute to ASRS. Contributions cover the ASRS defined benefit plan, health insurance supplement and long term disability plan.
- 2020 – 2021 Fiscal Year: Total 12.22%
- Retirement Pension & Health Insurance Benefit 12.04%
- Long Term disability Income Plan 0.18%
- 2019 – 2020 Fiscal Year: Total 12.11%
- Retirement Pension & Health Insurance Benefit 11.94%
- Long Term disability Income Plan 0.17%
Note: Contribution amounts are actuarially determined and set by the ASRS Board of Trustees each year.
Vesting
Vesting refers to the requirement of service before “owning” all funds in your account. In the case of pre-retirement separation from NAU employment you may withdraw or transfer vested contributions
- Your Contributions: You are always 100% vested in your own employee contributions.
- If you were hired prior to 07/01/2011: You will become partially vested after 5 years of service and fully vested after 10 years of service.
- If you were hired after 07/01/2011: NAU’s employer contributions to do vest unless you separate due to involuntary reductions in force or position elimination.
If you leave before retirement
In the case of pre-retirement separation from employment, your contributions that are vested may be rolled over to another qualified plan or refunded subject to tax laws. You also may leave your contributions on deposit for a future benefit.
Normal retirement
Normal retirement is the earliest you can retire with a full benefit. The requirements for normal retirement are based on your hire date:
Hired prior to 07/01/2011
- Age 65
- Age 62 & 10 years of service
- 80 points (age + service)
Hired after 07/01/2011
- Age 65
- Age 62 & 10 years of service
- Age 60 & 25 years of service
- Age 55 & 30 years of service
Early Retirement
In some cases, you may retire early and with a reduced benefit as early as age 50 with 5 years of service.
ORP Accordion Closed
Optional Retirement Plan
Enrollment Codes:
- Fidelity 67444
- TIAA AZQ193
Option for faculty, appointed staff and service professionals as an alternative to the ASRS.
The ORP is a defined contribution plan offered to faculty, appointed staff and service professionals as an alternative to state-sponsored defined benefit plans like ASRS. Retirement benefits are based on the total accumulation of funds, including any investment gains or losses.
Effective date
If you elect the ORP within 30 days of eligibility, your contributions will begin on the first day of the pay period following your completed election. A completed election includes:
- electing the ORP as your primary retirement plan
- selecting an investment provider (TIAA CREF or Fidelity)
- making your investment elections
Contributions
You contribute 7% of your gross salary through payroll deduction. NAU matches at 7%. NAU pays for long-term disability coverage.
Contribution Limits
The following retirement plan limits apply to Optional Retirement Plan and contributions must stop once the employee reaches either of these fiscal year limits.
Maximum Compensation
Employee and employer contributions can only be made on eligible compensation up to the annual IRS limits. When an employee meets the limit in the fiscal year, contributions stop. Compensation limits may change each fiscal year.
- If you entered the plan on or before June 30, 1996 your limit:
- 2021 – $430,000
- 2020 – $425,000
- 2019 – $415,000
- If you entered the plan after June 30, 1996 your limit:
- 2021 – $290,000
- 2020 – $285,000
- 2019 – $280,000
Contribution Amount
The maximum contribution for an employee in a fiscal year cannot exceed the IRS limit. Contributions include both employee and employer contributions:
- 2021 – $58,000
- 2020 – $57,000
- 2019 – $56,000
Vesting
Vesting refers to the requirement of service before “owning” all funds in your account. In the case of pre-retirement separation from university employment you may withdraw or transfer vested contribution upon separation from employment.
- Your Contribution – You are always 100% vested in your own contributions
- University Contributions – You are 100% vested in the university’s contributions after 5 years of service or at age 65, whichever is earlier. Exception: For an academic year employee you are 100% vested at the end of the fifth full academic year.
If you leave the university before you meet vesting qualifications, you relinquish the employer contributions.
Immediate vesting
Immediate vesting may be available to qualifying new employees. For example, if a new employee already has an active retirement account (funds on deposit) through another institution of higher education, that employee is immediately vested at Northern Arizona University. Contact Human Resources for more information.
University Contributions
The university contributions are held in trust until vesting qualifications are met.
- Employer contributions (plus interest, calculated at the rate of interest earned by the university’s general fund) are sent to your provider in a lump sum as soon as possible, but no later than 30 days following the vesting date.
- Afterwards, the employer contribution is credited to the employee’s account each payday, at the same time as the employee contribution.
Investing
You select one of the plan’s investment managers. Each investment manager offers a broad array of investment options from which you can choose. Contact the investment manager’s representative for more information of the funds and services offered or go to the investment manager website to learn more.
Benefits at retirement
Your retirement benefit is based on the performance of the investments you select. The ultimate account balance is a result of the amount of contributions deposited to the ORP account and the performance of your chosen investments.
PSPRS Accordion Closed
Public Safety Personnel Retirement System
Eligible law enforcement and public safety personnel are required to enroll in PSPRS. For more information visit the Public Safety Personnel Retirement System website www.psprs.com.
ACR – ASRS Retiree Accordion Closed
ASRS Contribution Rate Change
General Information
Legislation passed in 2011 under Senate Bill 1609 authorizes the ASRS to implement an Alternate Contribution Rate (ACR) to employers who hire ASRS retirees who return to work. The rate will be charged to and remitted to the ASRS by the employer. The purpose of the legislation is to mitigate the potential actuarial impact that retired members who return to work may have on the Trust Fund.
The Alternate Contribution Rate (ACR), for employers who hire ASRS retirees who return to work for fiscal year. More information regarding ACR is available on the ASRS website.
- 2020-2021 is 10.21%
- 2019-2020 is 10.41%
For individuals who have retired from an ASRS employer and receiving an ASRS benefit and recently hired, NAU is responsible to pay for and report the Alternate Contribution Rate (ACR).
The new contributions rates are effective July 1, 2020.