The Mobile Press Register reports that USA will no longer offer a pension under the Retirement Systems of Alabama to new employees at its medical facilities. Instead, it will offer a tax-deferred 403(b) match plan.
Current USA employees at the medical facilities can remain in RSA or switch to the new plan, according to USA officials. Approximately 2,400 employees will be eligible for the new plan. Employees in academics will not be affected.
Under the RSA, USA employees put in 5% of their gross salary and the university contributes 12%. Under the new plan, the employees can contribute up to 5% of their salary and the university will match what they contribute. The 403(b) has a shorter vesting period of three years, as opposed to 10 years in the RSA.USA spokesman Keith Ayers said the university is trying to address rising pension costs while still remaining competitive with other medical employers in the area, according to the news report. Ayers said with the new pension plan, the university “expects to save approximately $3 million the first year.” That amount, he said, would increase in following years.