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EligibilityWho is eligible to participate in the Retirement Plan?Any employee on the regular payroll who is scheduled to work half-time or more (17.5 or more hours per week) and is at least age 24 may participate in the University's Matched and Unmatched Retirement Plans. There is a one year waiting period for these plans for newly eligible employees. Any employee who is at least half time or more may participate in the Voluntary Retirement Plan.
Can the one year waiting period be waived?The one year waiting period is waived if an individual provides the Benefits Division with documentation of employment in a benefits eligible position for at least one continuous year at a governmental or tax-exempt employer immediately prior to employment at Northwestern University.
ContributionsHow much can I contribute to the Retirement Plan?
If you would like to contribute the maximum to your 403(b), please use the 403(b) calculator to determine your required contributions.
What types of pay are eligible for 403(b) contributions?You will earn retirement contributions on your base salary including overtime, summer salary, and summer session pay. Additional Pay for supplemental pay, temporary assignments and additional assignments will be paid on employees who do not meet the IRS limit of highly compensated. In 2009 the highly compensated rate is $110,000. There is a list of all earnings eligible for retirement contributions on the benefits website.
Can I change the amount I contribute?Yes. Changes will become effective the month after a completed enrollment form is received by the Benefits Division.
Are contributions taxed?No, Retirement Plan Contributions are tax deferred - you do not pay taxes at the time they are contributed or on any earnings. Your Contributions and associated earnings are taxed only as the money is withdrawn as income.
Can I transfer funds from my 401(k) plan to the University's plan?Yes. Current tax law permits an individual under Portability provisions to transfer funds from a 401(k) plan offered by a for-profit corporation to a 403(b) plan such as the plan offered by Northwestern University. Individuals wishing to do so should contact their investment companies. Contributions made during NU employment must be allocated to a 403(b) plan.
How much does the University contribute to the Plan on my behalf?
Enrollment and Effective DatesWhen can I begin participation in the University's Retirement Plan?Participation in the Retirement Plan requires the completion of the online enrollment process at hire and during Open Enrollment and afterward the submittal of a completed Retirement Plan Enrollment and Contribution Change Form as well the establishment of an investment company account which may be done online. Contributions will not commence until the enrollment process is completed. Voluntary Contributions Should you decide not to enroll in the Plan at hire, you may join the Plan at any time simply by contacting the Benefits Division and completing the necessary application forms. The effective date will be the first of the month following month the Benefits Division receives an enrollment form. Matched Contributions The one year waiting period is waived if an individual provides the Benefits Division with documentation of employment in a benefits eligible position for at least one continuous year at a governmental or tax-exempt employer immediately prior to employment at Northwestern University.
How do I enroll in the Retirement Plan?
When can I enroll in the Retirement Plan?You can enroll in the Retirement Plan at any time. If the one year eligibility waiting period cannot be waived, we recommend that you enroll in the Plan at the time of hire, and contributions will be deducted automatically after your 1 year anniversary.
Why should I participate in the Retirement Plan?There are many reasons for participating in the University's Retirement Plan including the fact that it is currently estimated that the Contributions you are making to Social Security will provide for only a small portion of the income you will need after you retire. The University's Retirement Plan is an excellent means of setting aside money you will need in the future. Other reasons include the fact that Contributions you make to the Retirement Plan are not subject to federal or state income taxes at the time they are deducted from your paycheck. Contributions and earnings are taxed at the time of withdrawal. The money you invest in the Retirement Plan can add up to substantial amounts over time and you will benefit from the compounding of interest and dividends.
Where can I invest my Retirement Plan Contributions?You can direct contributions to two investment companies, TIAA-CREF and/or Fidelity Investments These two investment companies offer a full range of diversified aggressive to conservative investment funds. Employees who do not select an investment fund(s) will have contributions allocated to the investment company's age applicable lifecycle fund.
General InformationWhat are the differences between the Matched and Voluntary Plans?The Matched Plan provides for an individual to make contributions which are matched by the University. dollar for dollar up to 5% of the employee's salary. The Voluntary Plan provides for an individual to make contributions over and above those contributions which are matched by the University. An individual may make voluntary contributions up to IRS limits.
What is RA, SRA, GRA, GSRA?The term RA refers to Regular Retirement Annuity contracts offered by TIAA-CREF. A Retirement Annuity (RA) is used to fund your main or "Basic" plan with contributions made by your employer and/or yourself once you've met some basic eligibility requirements (e.g., your length of service). Monies invested in the RA TIAA Traditional fund may be withdrawn over a ten year period. The term GRA refers to a Group Retirement Annuity contract which enables TIAA Traditional fund monies to be withdrawn over a five year period. Employees enrolling in the Matched or Unmatched plan for the first time must allocate contributions to the GRA contract. The term SRA refers to Supplemental Retirement Annuity contracts also offered by TIAA-CREF. With a Supplemental Retirement Annuity (SRA), you can set aside extra money from your own salary on a pre-tax basis. That is, the money you put into an SRA isn't counted as taxable income in that year, though you'll have to pay tax on it when you withdraw it or convert it to annuity income at a later date. The term GSRA refers to Group Supplemental Retirement Annuity contracts. Employees enrolling in the Voluntary plan for the first time must allocate contributions to the GSRA. For more information, call TIAA-CREF at 1 800 842-2733, extension 5509, and ask for copies of the booklets Retirement Annuities and Supplemental Retirement Annuities.
What is a defined contribution plan?A Defined Contribution (DC) plan is a type of retirement plan where the employer and employee "contribute" to the plan a certain specified percentage of employee compensation each year. These Contributions are held in an employee's account and invested by the employee. At retirement, the pension benefit payable to the employee is dependent upon the employee's account, investment earnings, and timing of the retirement or withdrawal.
What happens to Retirement Plan funds after I leave the University?The money you contribute to the Retirement Plan belongs to you and is immediately vested. When you leave the University, you take the amount you have accumulated with you. You will continue to earn interest and applicable dividends on such funds until you begin receiving annuity income at retirement or withdraw funds at an earlier date.
What is an annuity?An annuity provides regular payments or income over a predetermined number of years enabling you to receive all of the principal (Contributions) and earnings. When the specified period is over, payments stop. A lifetime annuity pays you income for the rest of your life. A fixed period annuity, such as for 10 or 20 years, guarantees income for the selected number of years. If you die prior to the end of the annuity period, your beneficiary will receive continued income to the end of the guarantee period.
What are your sole, primary and contingent beneficiaries?It is essential that you specify who should receive your accumulated retirement plan funds in the event of your death. Should you specify one individual as your beneficiary, such an individual will be your sole beneficiary. If you specify more than one individual, these individuals will be your primary beneficiaries. Should your specified primary beneficiaries not survive your death, the value of your retirement plan funds will be distributed to your named contingent beneficiaries. You may change your designated beneficiaries at any time by contacting either TIAA-CREF or Fidelity.
Can I change beneficiary designations at any time?Yes. You may change beneficiary designations at any time by contacting the Fidelity Investments and TIAA-CREF directly.
When can I withdraw money from the Retirement Plan?The IRS takes the position that the money you contribute to the Retirement Plan is to be used as income after you retire. While the IRS encourages your participation by allowing you to make Contributions and receive associated earnings on a taxed-deferred basis, there are restrictions on when you may access accumulated funds. Matched/Unmatched Contributions
The basis for withdrawing funds due to financial hardship must comply with IRS regulations defining financial hardship. This includes purchase of a primary residence, prevention of eviction or foreclosure on an individual's primary residence, medical expenses as defined under the Internal Revenue Code, and tuition and related educational expenses. An application for financial hardship distributions must be approved by the University. Voluntary Contributions You also have the option of receiving Retirement Plan funds in the form of monthly annuity income after you retire. PLEASE NOTE: Should you have an interest in withdrawing Retirement Plan funds, you are advised to contact a competent tax-adviser or financial planner in order to know the tax implications of such withdrawal.
Can I transfer money from TIAA-CREF to Fidelity and vice versa?Yes, the University's Retirement Plan provides for the transfer of accumulated funds in the following manner: For matched and unmatched contributions allocated to TIAA-CREF Regular Retirement Annuity (RA) contracts, you can transfer CREF funds to Fidelity and/or TIAA at any time. The funds are transferred immediately. You can also transfer TIAA funds to CREF and/or Fidelity at any time though such funds will be transferred over a ten year period. Monies allocated to Fidelity can be transferred to TIAA-CREF at any time. The transfer will occur immediately. There is a $1,000 minimum for CREF transfers or the entire account must be transferred if less than $1,000. There is a $10,000 minimum for TIAA transfers. If the amount of accumulated funds is less than $10,000, the entire amount will be transferred over the 10 year period. If the amount is $2,000 or less, the transfer of the entire amount will occur immediately. There is no transfer minimum for the transfer of Fidelity funds to TIAA-CREF. For voluntary contributions to either TIAA-CREF SRA contracts and/or Fidelity, you can transfer TIAA, CREF and Fidelity funds at any time. The transfer will occur immediately. There is a $1,000 minimum for TIAA-CREF transfers or the entire amount if less. There is a $250 minimum for the transfer from one Fidelity fund to another. Should you have an interest in transferring funds, all you need to do is to contact the investment company to which you want the funds transferred. Transfer applications do not require University approval.
Can I borrow against my Retirement Plan funds?Yes, (effective January 1, 1999) you may borrow against RA, GRA, GSRA and SRA and both matched and voluntary Fidelity Contributions.
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| Plans | Type of Employee | Life Change Event | Benefits FAQ | Benefits Forms | Provider Contact Information Human Resources Home | Jobs | Training & Development | Benefits | Payroll | HRIS | Forms | Policies & Procedures Staff Handbook  Faculty Handbook || Holiday Schedule | Human Resources StaffNorthwestern Home | Northwestern Calendar: Plan-It Purple | Northwestern Sites A-Z | Northwestern Search Human Resources 720 University Pl. Evanston, IL 60208 Phone: 847-491-7513 Fax: 847-467-2288 E-mail:benefits@northwestern.edu Last updated 06/26/2009 World Wide Web Disclaimer and University Policy Statements © 2009 Northwestern University |
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