The University will offer an optional opportunity for eligible employees in a University of Missouri core retirement plan that includes a pension (either the Defined Benefit (DB) Plan or the Hybrid Plan) to transfer their current benefit to a new defined contribution retirement plan.
Participating in this program is voluntary. A number of employees have been asking for more flexibility, choice and control of their own benefit and investment decisions and this program would enable eligible employees to choose how they earn their retirement benefits going forward. Choosing between retirement plans is an important choice; one each employee must make for themselves based on their personal situation and retirement goals. Those who wish to remain in their current retirement plan do not need to take any action and will continue in their plan, with no changes.
About the Voluntary DC Opt-In Program
Eligible employees with a pension benefit under their core retirement plan (either the Defined Benefit (DB) Plan or the Hybrid Plan) will have an opportunity to transfer the value of their pension benefit to a new defined contribution retirement plan during a one-time election window in 2026. Employee participation is voluntary.
If an eligible employee chooses to participate in this program, the value of their pension in the DB Plan or the DB component of the Hybrid Plan would be converted to a lump sum and transferred to a defined contribution retirement plan. Going forward, their future retirement benefits would be earned under a full defined contribution plan.
There are no changes to the DB Plan or Hybrid Plan. No action is necessary for eligible employees who prefer to remain in their current core retirement plan (umurl.us/retplans).
The university's pension plan (the Retirement, Disability and Death Benefit Plan, or “the pension plan”) is in good health. Members who remain in the DB Plan and the Hybrid Plan can count on receiving the benefits they’ve earned.
Timeline
Beginning Fall 2025, eligible employees will receive more information regarding their options and how the program works, including a personalized statement showing their benefit and lump sum value.
- June 2025: Plan Amendment
- Fall 2025: Employees receive personalized statements
- November 2025 – April 2026: Education sessions (webinars, one-on-one, Fidelity support, etc.)
- February 2026 – April 2026: Election window
- By September 1, 2026: Employees convert to new defined contribution plan and receive lump sum transfer in tax deferred account
Why the university is offering this program
The ability to move to a full defined contribution plan has been a frequent request from employees over the last several years with the implementation of the Hybrid Plan in 2012 and the DC Plan in 2019. Following the successful lump sum offer for former employees in 2024, the University recognized an opportunity to provide an option for employees who prefer to earn their retirement benefits under a defined contribution plan over a defined benefit and have been working on the development of this program since that time.
How this program relates to programs offered in the past such as early retirement incentives or retiree insurance
The Defined Contribution Opt-In Program is not a voluntary early retirement incentive program (VERIP). The DC Opt-In Program is designed for those who intend to continue University employment but prefer to earn their retirement benefits under a different option. This program converts the employee’s pension benefit to a lump sum and transfers it to a defined contribution plan.
Employees who choose to participate in the DC Opt-In Program will retain their same access to retiree insurance so long as they meet eligibility requirements when they separate from the University in the future (umurl.us/retireeben).
Financial status of the pension plan
The Defined Contribution Opt-In Program will not adversely affect the pension plan’s financial position. The Plan is in good health and members who remain in the plan can count on receiving the benefits they’ve earned. The program will not have an impact on the benefit levels for retirees or those who choose to remain in the plan.
The University is committed to the sound fiscal management of the pension plan and contributes millions of dollars each year to ensure the financial health of the pension plan.
These optional programs are a common practice for defined benefits plans and will marginally improve the plan’s funded status and reduce the liability. The University gains the benefit of reducing the number of plan members and a reduced financial risk from carrying value of the liability.
Program Structure
Eligibility
Employees eligible to participate in the Defined Contribution Opt-In Program will be those who, as of September 1, 2026, are:
- Active benefit-eligible employees who are:
- Vested in the DB Plan or DB component of the Hybrid Plan, and
- Not eligible for normal retirement (age 65 with at least 5 years of service or age 62 with at least 25 years of service)
- Active benefit-eligible employees who:
- Were rehired on or after October 1, 2019, and as of September 1, 2026, have a pension benefit under the DB Plan or Hybrid Plan that they have not yet started to receive. These employees will have the option to transfer the lump sum value of their pension benefit to their current defined contribution plan (instead of a new plan).
Employees not eligible for the offer will be those who, as of September 1, 2026, are:
- Active benefit-eligible employees in the DB or Hybrid plan who:
- Have attained eligibility for normal retirement (age 65 with at least 5 years of service or age 62 with at least 25 years of service)
- Were hired or rehired on or after October 1, 2019 (unless they have a deferred pension benefit)
- Active employees in a non-benefit eligible position who have a frozen pension benefit under the DB Plan or DB component of the Hybrid plan
- Terminated employees, including those with a deferred benefit
- Employees with an approved Division of Benefits Order (DBO) on file with the University.
How the program works
If you choose not to participate, there are no changes to the current retirement plans. If you prefer to remain in your current retirement plan, no action is required and nothing will change for you.
If you choose to opt-in and voluntarily elect to participate in the Defined Contribution Opt-In Program, you will switch from your current retirement plan to a new plan.* You will not lose the retirement benefits you have earned so far – they will transfer to your new retirement plan.
To comply with IRS regulations, individuals who participate in the program will have a 2% minimum required employee contribution into their defined contribution 457(b) Plan. Participants also qualify for a 100% match from the university up to 8%.
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As of Sept. 1, 2026 |
Current DB Plan Participants |
Current Hybrid Plan Participants |
Current DC Plan Participants rehired after 10/1/19 with a deferred pension benefit |
|---|---|---|---|
|
Contributions |
Your contributions to your current retirement plan will stop (1% of the first $50,000 in salary and 2% of salary above $50,000 per calendar year). | Your contributions toward your pension benefit will stop (1% of the first $50,000 in salary and 2% of salary above $50,000 per calendar year). | You currently make no contributions toward your deferred pension benefit (no change). |
|
Conversion |
The value of your pension benefit will be converted to a lump-sum and transferred to a new 401(a) ERIP account at Fidelity that will be set up for you. There are no tax implications for the transfer of funds since this is treated as a plan-to-plan transfer. | The value of your pension benefit will be converted to a lump-sum and transferred to your 401(a) ERIP retirement account at Fidelity. There are no tax implications for the transfer of funds since this is treated as a plan-to-plan transfer. | The value of your deferred pension benefit will be converted to a lump-sum and transferred to your 401(a) ERIP retirement account at Fidelity. There are no tax implications for the transfer of funds since this is treated as a plan-to-plan transfer. |
|
Your Plan Moving Forward |
Moving forward, you will have only a defined contribution plan. Your retirement contributions* will include:
|
Moving forward, you will have only a defined contribution plan. Your retirement contributions* will include:
|
Moving forward, you will continue to participate in your current defined contribution plan (no change). Your retirement contributions include:
|
*You can change the voluntary portion of your employee contributions to the Defined Contribution Plan, but you must contribute at least 6% to the 457(b) Plan in addition to your mandatory 2% in order to receive the benefit of the full 8% match from the University.
Making the Best Decision for Your Situation and Retirement Goals
A personal decision
Choosing between retirement plans is an important choice; one only you can make for yourself. To make an informed decision, it’s important to understand how each of the retirement plans work and how they apply to your personal situation and retirement goals. The University is committed to providing you with the tools and resources you will need to make the decision that’s right for you.
If you are eligible to participate in the DC Opt-In Program, you will receive a personalized statement in Fall 2025 comparing your current benefit to the new plan with the estimated lump sum value of your current pension benefit. Additional resources such as webinars and one-on-one availability with a Fidelity retirement expert will be available to help you decide what is best for you.
Moving to a defined contribution plan may be right for some, but not for others. After you receive your personal statement, we encourage you to meet with a Fidelity retirement representative or your personal financial advisor to discuss whether or not this program would benefit you. Topics you may want to be thinking about include:
- Goals for retirement
- Personal financial situation
- Health situation
- Desire for access to a lump sum vs monthly annuity payments
- Desire to leave money to heirs
Learn more about your current retirement plan on the core and voluntary retirement plans webpage. If you need assistance identifying your retirement plan, contact the HR Service Center.
Reasons someone may prefer a defined contribution plan over a defined benefit (pension) plan
The Defined Contribution Opt-In Program provides an option (if you are eligible) to transfer your retirement benefit to a type of plan that was not available when you joined the University and to continue to earn future benefits in your chosen type of plan going forward.
In general, a defined contribution benefit grows with contributions and investment returns producing an account which the retiree can withdraw from in retirement as they wish.
Some may prefer a defined contribution plan because they want:
- Spending flexibility in retirement (they may expect their needs to change over time or don’t expect to live long in retirement)
- To choose their own investments and/or the opportunity for their benefit to grow through investment earnings
- The ability to take their full benefit with them if they leave the University before retirement
- To have their benefit as a lump sum*, vs monthly payments, so they can continue to earn investment income in retirement and mitigate the effects of inflation
- To more easily be able to pass money on to their heirs
*The voluntary DC Opt-In Program allows members, who choose to participate, access to the full lump sum value of their pension benefit when they separate, which is not a current option under the plan for retirement eligible (age 55 with 10 years of service, or age 60 with 5 years of service) members.
Reasons someone may prefer a defined benefit (pension) plan over a defined contribution plan
In general, a defined benefit plan grows during employment based on pay and years of service to provide a fixed monthly benefit for life in retirement.
Some may prefer a defined benefit retirement plan because they value:
- Professional investing: Not having to manage their own investments
- Lifelong monthly income: A set monthly benefit in retirement
Under the DB Plan and the DB component of the Hybrid Plan, payment options differ depending on when you leave the plan. To understand more how you receive your income in retirement under the DB Plan or Hybrid Plan, review the individual plan Summary Plan Description (section “What Happens When I Leave the University”).
Employee Resources
Understanding your Benefits
How you plan for retirement is personal. Understanding your benefits and thinking about your plan for retirement is well worth your time. You can get started by:
- Learning about your current retirement plan (umurl.us/retplans). It’s important to know what you have and think about your plan for retirement, whether you are interested in exploring the Defined Contribution Opt-In or not.
- Gathering all your retirement resources – not only from the university. Go to the Social Security website to download your Social Security statement. Make a list of retirement benefits you have from previous employers and/or your spouse, as well as your other savings.
- Looking at your plan for retirement. Do you have a plan for when you want to retire and how to get there? Are you on track? Schedule a free one-on-one consultation with Fidelity (umurl.us/retconsult) or make time to check in with your own financial advisor.
- Checking out the UM System retirement planning checklist for more information.
- Consulting Fidelity information on Saving for Retirement (exit UM System site)
Reviewed 2025-06-27
