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Benefits 101: Voluntary Retirement Savings Plan (VRSP) Enrollment Forms

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We regularly remind you about the importance of adding personal retirement savings to your investment mix to ensure a comfortable retirement. We also offer seminars, including three coming up this semester, from experts to help you make a plan.

But once you’ve decided it’s time to take the plunge and start saving through Lehigh's Voluntary Retirement Savings Plan (VRSP) what do you have to do to make it happen?
The two-part paperwork process that turns your good intentions into action is the focus of our Benefits 101 lesson this month.

When you think about it for a moment, it makes sense that the enrollment process involves two steps. After all, there are two organizations involved – Lehigh and the company with whom you choose to invest. Both organizations need certain information from you to complete the whole transaction. 

The VRSP Vendor Form(s)

Each of our four VRSP vendors has a unique application form for its portion of the process. When you choose one or more of them to invest with, you will need to complete their forms. The application includes personal information (name, address, Social Security Number, and so on), your beneficiaries for the account you’re establishing, and the fund or funds in which you want to start investing.

These company application forms come from Human Resources and are returned there, so we can establish your account both here and with the company(ies) you’ve chosen.


Once your account has been established with a vendor, you then work directly with that vendor if you want to change the fund(s) in which you invest and/or to move money from one fund to another. You can work with the company(ies) by telephone; and you can establish online accounts with any of the four vendors so that you can monitor and adjust your investments that way.

This part of the process gives the vendor your instructions on how to invest your money. But, of course, they can’t invest your money until you’ve told Lehigh to send it to them. That’s where the Salary Reduction Agreement form comes into the process.

The Salary Reduction Agreement Form

To begin your tax-deferred saving plan, you must grant permission to Lehigh to divert money from your paycheck to one or more of the university’s VRSP vendors. This has to be done in writing, and the Salary Reduction Agreement form is the only official method.

This form can be downloaded from the HR website or can be picked up in our office. Once you’ve completed it, return the form to HR either in person or via inter-departmental mail.

The Salary Reduction Agreement has three sections.


 


Section One: The first section of the form asks what type of action is being requested. If you are starting a new account, you’ll choose New Enrollment. You can also use the form to change the amount of your contribution, to change how the funds are allocated, or to end your contributions.



Select one option in this section.

Section Two: In the second part of the form, you will indicate how much of your pre-tax earnings you want diverted from your paycheck into your retirement savings account or accounts. Use the first set of blanks if you want to choose a dollar amount. Use the second set of blanks if you want to save a percentage of your gross pay. In either case the minimum you can save is $15 per month.


 
This part of the form also explains the annual maximum limit on contributions. As you can see, if you are age 50 or older, you can set aside more tax-deferred funds each year. Keep in mind that the annual limit includes any funds you may have set aside through another employer at some point in the calendar year. If you have been saving through another employer in the current calendar year, be sure to figure that amount into your calculations when you are starting to save here at Lehigh.

Section Three: The third and final section of the form asks which vendor or vendors you are selecting and how much of your money you want sent to each of them.  Again, you can use percentages or dollar amounts to indicate your choices. You only need to use one of these options.



If you are only selecting one vendor, simply write 100% in the Percentage Allocation blank. If you are choosing two or more, indicate which vendors and what amount of your savings should be sent to them.


Finally, be sure to sign the form and include your Lehigh ID Number (LIN) or social security number and your date of birth.

Remember the two-step process:
  1. Enrollment forms for the vendors
  2. Salary Reduction Agreement for HR.

Making Changes

How changes in your salary reduction are made depends on what it is you want to change – and remember that you can change your salary reduction at any time during the calendar year. Contact Human Resources (use a Salary Reduction Agreement) if you want to change the:
  • Amount you tax defer each month
  • Company(ies) that receive your deposits (including opening an account with a new VRSP company)
  • Percentage of your monthly reduction that goes to each investment company.

Contact the VRSP company(ies) with which you have an account(s) if you want to:
  • Change the fund(s) in which you invest new deposits
  • Move money from fund to fund within the company.

If you have any questions while completing the Salary Reduction Agreement or company application forms, you can always contact HR. There are a number of staff members who can help you, so just call our main number – 610-758-3900 – or use our email: inben@lehigh.edu.

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Spotlight is published monthly by Human Resources. Please address any comments to Hillary Kwiatek, Spotlight Editor, Human Resources, 428 Brodhead Avenue, send email to hik210@lehigh.edu, or call extension 85165.

Current and past issues of Spotlight can be viewed and searched at: Past Issues.