Defined Benefit Pension Plan ("DB" or "Pension" Plan)

The Berklee retirement plan is a defined benefit ("DB") pension plan that is designed to provide you with income after you retire. Your other income in retirement may include 403(b), social security, or other savings or investments. 

This summary provides highlights—not the full details—of the DB Plan. For more information please see the Summary Plan Description or contact Transamerica (1-800-755-5801) or the Office of Human Resources (benefits@berklee.edu; 617-747-8769).

The plan is closed to new members.

The plan provides benefits to eligible full-time faculty and benefits-eligible staff who were hired or rehired by the college before January 1, 2012. Employment at the Conservatory does not count for purposes of the plan. In addition, the plan provides benefits to certain part-time faculty hired by the college before October 2010 who became full-time before September 2, 2016, in accordance with the Faculty Contract Agreement.

The Amount of Your Benefit

Your benefit is based on your years of participation in the plan, your final average earnings, and your age when your benefit payments start.  

Final average earnings means your average compensation for the 60 consecutive calendar months that produce the highest average during your last 120 months of participation in the plan. This compensation includes your salary and wages, but excludes certain income such as relocation-related payments and earnings in excess of limits imposed by federal law.

Contact Transamerica (1-800-755-5801) for estimates of the value of your benefit.

Funding and Administration of the Plan

The college pays the entire cost of the plan, meaning you do not make contributions. The plan’s assets are held in a trust fund specifically for the purpose of providing benefits and paying the plan’s expenses.

Transamerica is the day-to–day administrator of the plan.

Vested: When You Own Your Benefit

Being vested means you have a right to some or all of your benefit from the plan when your Berklee employment ends. Generally, you are partially vested in your benefit after three years of employment and fully vested after seven years of employment.  

When and How You Can Receive Your Benefit

Generally, you may begin to receive your vested benefit from your plan at the earliest one of the following:

• Your Berklee employment has ended.
• You are at least age 65 and working part-time for Berklee.
• You are at least age 62 and in the second (part-time) phase of the Faculty Transition Contract program.

If your employment at the college ends before age 65, you may postpone receiving your benefit until age 65.

Benefit Payment Process

Unless you elect otherwise, your plan benefits will be paid in the “normal form” of payment based on your marital status when payments begin. Transamerica administers benefit payments. 

If You're Not Married

The “normal” form of payment is a monthly pension that lasts as long as you live. This is called a “single life annuity.” All payments will stop at your death.

However, you may elect to receive a:

• different form of annuity;
• single lump sum in lieu of the annuity that represents the entire current value of your benefit in one payment; or
• a combination of partial annuity and a partial lump sum.

If You're Married

The “normal” form of payment is a reduced monthly pension that lasts as long as you live and then continues at 50 percent to your surviving spouse. This is called a 50 percent joint and survivor annuity.

The reduction in your payment under this form of payment depends upon your age and your spouse’s age at the time your payments begin. However, if your spouse consents in writing, you may elect to receive a:

• different form of annuity;
• single lump sum in lieu of the annuity that represents the entire current value of your benefit in one payment; or
• a combination of partial annuity and a partial lump sum.

Small Benefit Cash-Out

If the lump sum value of your benefit is $1,000 or less, your benefit automatically will be paid to you in a single lump sum when your Berklee employment ends. No other payment option will be available to you. 

Lump Sum Availability for Certain High-Paid Participants

As required by federal law, certain senior college executives or other higher paid plan participants may not receive the lump payment if the plan does not meet applicable financial standards at the time these participants elect to begin payment.

Taxes and Your Benefit Payments

Always consult a competent tax advisor before electing benefit payments. Monthly annuity payments are taxed as regular income when you receive them. You may instruct Transamerica to withhold taxes for you.

If you roll over your lump sum payment into another qualified retirement plan, such as your Berklee 403(b) or a traditional IRA account, generally the lump sum is not taxed immediately if you are under age 70 and a half. Instead, the amount you roll over becomes subject to the tax rules governing that plan or account.

If you do not roll over your lump sum payment to into another qualified retirement plan or a traditional IRA account, your lump sum is taxable. As a result:

• Transamerica must automatically withhold 20 percent of the lump sum payment to apply to the federal income taxes you will owe;
• Transamerica must also withhold state income taxes if you are a Massachusetts resident when you receive the lump sum payment; and
• you are generally subject to a 10 percent penalty tax if you are under age 59 and a half (there are exceptions to this penalty).

Death Before Benefits Payment Begins

If you die before benefit payments begin, reduced survivor benefits are paid only to your surviving spouse. No survivor benefits are paid to any other party. As a result, you do not name a beneficiary for your benefit from the plan.