Benefits Handbook for Faculty and Professional Research Staff

Retirement Benefits

The NYU Section 457(b) Deferred Compensation Plan

This plan allows you to take advantage of the additional tax-deferred savings opportunity made possible by Section 457 of the Internal Revenue Code. This is in addition to any contributions you make to the the 403(b) Plan. Participation in the 457(b) Plan is discretionary and restricted to employees who:

• earn more than $140,000 per year (i.e. your regular monthly base salary for your primary appointment is at least $11,666.67 per month) and
• have elected to contribute the maximum permissible amount to the 403(b) Plan.

For more information please request a Plan Highlights Brochure form the NYU Benefits Office.

Social Security Retirement Benefits

How Social Security Works

During your working years, you and your employer pay Social Security taxes. When your earnings cease due to retirement, total disability, or death, Social Security pays benefits to you or your survivors to replace part of the lost income. Social Security retirement benefits are based on your earnings record. To be eligible for Social Security retirement benefits, you must be fully insured, which means that you must have earned "quarters of coverage" in jobs covered by Social Security.

* Depending on the year in which you were born, you may need a minimum of six to a maximum of 40 quarters (the quarters do not have to be consecutive). During this time you and your employer must have paid Social Security taxes on your earned income.**

*A "quarter" is one three-month period in a calendar year. Quarters begin on the first of January, April, July, and October.

**Earned income is a salary or wage paid to you by an employer.

Retirement Benefits

Generally, the amount of the Social Security retirement benefit is based on the average of your earned income for each year of employment, up to maximum creditable amounts. The amount will also depend on the age at which you retire. After retirement, if you earn income over the maximum allowed by Social Security, the total amount of benefits payable for that year could be reduced. The Social Security annual earnings limit governs the amount you may earn each year after retirement and still keep your Social Security benefits. Because the amount changes each year, it is wise to check with the Social Security Administration for the latest figures.

More Information

Information on other Social Security benefits can be found in this handbook as follows: disability benefit, death benefit. For more information on how Social Security works, visit the Social Security Administration Web site, www.ssa.gov.

Enrollment and Effective Date

NYU makes contributions to Social Security that equal the contributions you make through payment of Social Security (F.I.C.A.) taxes. Social Security (F.I.C.A.) taxes are automatically deducted from your paycheck beginning on the day you start work at NYU. The amount is a percentage of your salary, up to a set maximum which changes each calendar year. Contact the Payroll Department for the latest F.I.C.A. tax rate.

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