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147 RETIREMENT BENEFITS UNDER TIAA/CREF PROGRAM (Board of Trustees meeting, June 17-18, 1979) Dr. Richards presented a proposal to increase the College’s contribution under the TIAA/CREF program. He explained that under the existing policy approved by the Board of Trustees, the College paid, on a matching basis, retirement benefits amounting to 6.25 percent on the social security wage base and 7.5 percent on salary in excess of the social security wage base. He showed, however, that as a result of the recent federal increase in the social security wage base, faculty members experienced a loss in retirement benefits under existing policies. He explained further that the College’s contribution under TIAA/CREF was lower in percentage than contributions paid under the Virgin Islands Retirement Program. Mr. Kirwan estimated that, if approved, the proposed policy would cost the College between $20,000 and $25,000 a year in additional contributions. Dr. Richards recommended that a 7.5 percent matching rate be established for the payment of contributed benefits under TIAA/CREF beginning on July 1, 1979, in place of the present sliding scale rates of 6.25 percent on the social security wage base and 7.5 percent above it. A motion to adopt the recommendation was proposed by Dr. Turnbull, seconded, and approved unanimously. «) Memo - Board of Trustees -2- June 6, 1979 | 49 Declining TIAA/CREF Benefits Ona salary of $20,000 per annum, a faculty member in 1977 accumulated $1,284 in benefits for the year from College contributions. In 1979 benefits on the same salary would amount to $1,250. This decrease of $34 is attributable to the increase in the social security wage base to which TIAA/CREF benefits are tied. Comparison with V, I. Retirement Based on the rates established by law for the V. I. Retirement program, the Gollicne makes retirement contributions amounting to 11% of the salary of an employee enrolled in this program. On a salary of $20, 000 the College's annual contribution amounts to $2,200. For 1979 this compares with a contribution of $1,250 under TIAA/CREF for a faculty member earning a salary of $20,000 per annum. Recommendation Based on the foregoing, we are recommending that a 75% matching rate be established for the payment of contributed benefits under masa beginning July 1, 1979. This rate will replace the present sliding scale rates of 64% on the social security wage base and 73% above. With the increases in social security wage base it would no longer be relevant to tie the rate of TIAA/CREF contributions to this figure. Arhur A. Richards