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Inside Iowa State, a newspaper for faculty and staff, is published by the Office of University Relations.

Dec. 12, 2008

Supplemental retirement savings plan may be a good decision

by Paula Van Brocklin

Life is a series of choices. Public university or private college? Graduate school or career? Rent or own? Married or single? Kids or dogs?

As an ISU employee, another choice you may want to consider is whether a supplemental retirement savings plan is right for you. It may seem like an insignificant decision now, but it could help provide you with more money -- and choices -- as retirement nears.

What is it?

A supplemental retirement savings plan allows you to save additional money from your paycheck each month in addition to what you're contributing through IPERS or TIAA-CREF. This money goes into either a taxed or pre-taxed account with TIAA-CREF or AIG Retirement. The choice is yours.

ISU employees ages 49 and younger currently can save a yearly maximum of $15,500 through a supplemental retirement savings plan. Employees ages 50 and older can save an additional $5,000, to "catch up" on their savings. Those annual maximum amounts are increasing in 2009 to $16,500 and $5,500, respectively.

With a supplemental retirement savings plan, you can deduct a specific dollar amount or a percentage of your salary from each paycheck. The minimum deduction is $20. Ann Doty, retirement information specialist, recommends the latter.

"The advantage to choosing a percentage of your salary is that as you receive pay increases, the amount you save automatically goes up and you don't miss it," Doty said.

Unlike the university-sponsored retirement plans, ISU does not match a percentage of your contribution to a supplemental retirement savings plan. But you can choose in which funds to invest, similar to your university-sponsored plan.

This savings plan offers flexibility as well. You can change your contributions as often as you wish. You just need to complete the appropriate paperwork by the 15th of the month so payroll can process it before payday.

"If you want to stop contributing for a while around the holidays, you can do that," Doty said. "You can change your contribution amount as often as you want."

Who is eligible?

All ISU employees, whether they have IPERS or TIAA-CREF, may enroll in a supplemental retirement savings plan. This includes faculty, professional and scientific and merit staff, post-docs and graduate assistants.

As with any savings plan, Doty suggests getting started now. She said younger employees should consider investing in an after-tax Roth account, which works like a Roth IRA. Why? Young employees earn less money and are in a lower tax bracket. That means they pay lower taxes now on the money they save, and the earnings grow tax free. Older employees typically prefer saving pre-tax to lower their taxable income now, when their salary is at its peak and they are in a higher tax bracket.

How to sign up

There are several ways to sign up for a supplemental retirement savings plan.

  • Go to Select the link for the supplemental annuity form on the Bulletin Board. Be sure to read the instructions page before completing the form. This form also lets you change or terminate your contributions.
  • Contact the TIAA-CREF office in Ames, 268-8600.
  • Contact Kerry Ferguson, AIG Retirement, or (800) 982-5558, ext. 66213.

Doty said most people prefer to discuss how the supplemental retirement savings plan can benefit them prior to enrolling. Employees may contact her at 4-4800 or at to set up an appointment. Employees also may call the TIAA-CREF or AIG Retirement offices to discuss retirement goals. For those who want to save without seeing a smaller paycheck, the best time to set up an initial meeting is about one month before you receive a pay increase.

The decision to enroll in a supplemental retirement savings plan is up to you. But, "having additional money as you reach retirement age means you have more options," Doty said.


For more information on retirement options, go online, or contact:

  • TIAA-CREF Ames office, 268-8600.
  • Kerry Ferguson, AIG Retirement, (800) 982-5558, ext. 66213.
  • Ann Doty, HRS, 4-4800


"If you want to stop contributing for a while around the holidays, you can do that. You can change your contribution amount as often as you want."

Ann Doty, HRS retirement information specialist