GURP Funding Update FAQs
March 25, 2010
What is the GURP Funding Update?
The Office of Faculty and Staff Benefits recently sent a mailing to the homes of all those who are entitled to a Georgetown University Retirement Plan (GURP) benefit. This update informed participants that, although the trust is not in an “at risk” category under federal law, and although the University has authorized additional contributions to the trust, the funding level of the GURP trust is currently below 80%. Beginning April 1, 2010, federal law imposes certain restrictions on plans not funded at 80% or greater.
How can I receive a copy of the update and the Annual Funding Notice?
All GURP participants should have received a mailing to their home address. You may also request one from the Office of Faculty and Staff Benefits by calling 202-687-2500.
What are the restrictions that currently apply to GURP?
For plans funded below the 80% threshold, federal law imposes restrictions on lump sum distributions. This means that for those electing to receive a lump sum distribution that would be paid after March 31, 2010, participants will only be able to receive 50% of their GURP balance as an immediate lump sum cash payment (certain Pension Benefit Guaranty Corporation restrictions may apply). The remaining 50% of the balance will be paid as an annuity.
Why is the trust currently funded below 80%?
As with all investments in stocks and bonds, the funds set aside in the GURP trust are subject to gains and losses based on the movement of the prices of the stocks and bonds. In late 2008, anyone with investments in the stock market, including the GURP, experienced large asset losses due to the economic downturn at the end of 2008. Investment returns were positive in 2009, but have not made up for the losses in 2008.
What is the purpose of these restrictions?
The purpose is to protect plan funding to ensure its availability for all participants.
Are other institutions, Universities, companies being impacted by these resrictions?
Yes; we have heard that other plans have become subject to benefit restrictions due to the decline in funding levels of pension plans.
I left the University and received a lump sum cash out already. Do these restrictions apply to me?
No, these restrictions apply only to benefit distributions after March 31, 2010.
I was planning to request my GURP benefit in the form of an annuity. How do these restrictions affect me?
They do not. For those electing benefits entirely as an annuity, these restriction will not apply to you.
Does this restriction impact how my GURP balance grows?
No. This restriction does not impact your benefit accrual. Your GURP retirement benefit will continue to grow.
The notice mentioned "certain PBGC restrictions" may impact my 50% lump sum cash distribution. What does that mean?
The maximum restricted lump sum payout is limited to the PBGC published lump sum values of the maximum benefit guaranteed by the PBGC in 2010. These values are published each year on the PBGC web site.
Who received the GURP Funding Update and Annual Funding Notice?
All those who are entitled to a GURP benefit. This includes -
• Staff participants who elected to remain in GURP during the 2008 Retirement Choice campaign;
• Staff who switched to the Defined Contribution Retirement Plan during the 2008 Retirement Choice campaign, but who continue to maintain a GURP balance;
• Staff no longer employed by the University who maintain a GURP balance;
• Retirees currently receiving a GURP pension.
How will I know the funding status of GURP next year?
In compliance with federal law, each year the Office of Faculty and Staff Benefits will distribute an Annual Funding Notice for the GURP. This notice will be mailed to your home address on record.
I have more questions. Who can I call for answers?
Contact the Office of Faculty and Staff Benefits at 202-687-2500.
