Retirement Savings Plans
Northwestern University has two 403(b) retirement savings plans:
- Retirement Plan
- Voluntary Savings Plan
Attention: Elect to maximize the Retirement Plan's 5% match BEFORE contributing to the Voluntary Savings Plan.
See the Retirement Savings Plans Summary Plan Description for more information on both plans.
Contributions
Because of the financial impacts resulting from the COVID-19 pandemic, Northwestern is suspending all University contributions to the retirement plan as of June 11, 2020. Contributions are expected to resume on January 1, 2021. Additional information can be found on the Human Resources Coronavirus FAQs page
The Retirement Savings Plans allow the following pre-tax contribution types:
- University automatic contribution of 5%. Once eligible, Northwestern will automatically contribute to your Retirement Plan account each pay period.
- Matched contributions of 1%-5% of eligible earnings. Once eligible, Northwestern will match your employee contributions to the Retirement Plan dollar-for-dollar up to 5% of your eligible earnings. Ensure you are not contributing to the Voluntary Savings Plan before maximizing the match to the Retirement Plan.
- Voluntary contributions. Contributions made before eligibility is met for the Retirement Plan OR If eligible for the Retirement Plan and contributing 5% in Matched contributions, then supplemental contributions to the Voluntary Savings Plan are allowed as a percentage of eligible earnings or as a flat dollar amount. This is entirely funded by pretax contributions by the employee.
| Contribution Source | 2020 Annual Limits |
|---|---|
| Eligible salary limit for retirement plans | $285,000 |
| Employee total contribution limit | $19,500 |
| Age 50 catch-up limit (above and beyond the limit) | $6,500 |
| Employee and employer aggregate contribution limit | $57,000 |
Eligibility
Retirement Plan
Hired Before 1/1/2020: Any benefits-eligible employee scheduled to work half-time or more (18.75 or more hours per week) and is at least age 24, may participate in the Northwestern University Retirement Plan starting the first pay period available after their one-year anniversary.
Hired On or After 1/1/2020: Any benefits-eligible employee scheduled to work half-time or more (18.75 or more hours per week) and is at least age 21, may participate in the Northwestern University Retirement Plan starting the first pay period available after their two-year anniversary.
Service Waiver
You may receive a Waiver of Service of the Retirement Plan’s two years of service requirement if you are at least age 21, and you submit a completed Waiver Form documenting that you (1) were employed by a tax-exempt educational or research organization or a state educational organization (see Code Sections below) for at least a 24-consecutive month period ending 60 or fewer days before your Northwestern Date of Hire; and (2) received employer contributions under a Code Section 403(b) or 401(a) retirement plan maintained by this organization 60 or fewer days before your Northwestern Date of Hire.
Voluntary Savings Plan
All actively-employed faculty and staff (excluding contractors, consultants, and leased employees) paid by Northwestern via payroll are eligible. There are no length of service or age requirements. You may participate in the Voluntary Savings Plan even before you are eligible to participate in the Retirement Plan starting the first available pay period after your date of hire.
If you are contributing to the Voluntary Savings Plan BEFORE becoming eligible for the Retirement Plan, your voluntary contributions will not automatically be transitioned to the Retirement Plan. You MUST ELECT to make Matched Contributions to the Retirement Plan this election and adjust your Voluntary Savings Plan.
Eligible earnings
Your 403(b) retirement contributions are calculated by using your base salary including any eligible earnings. Eligible earnings are generally considered wages - not scholarship funds, work-study, or NRSA earnings
Supplemental pay and pay for temporary assignments and additional assignments are included for employees who do not meet the IRS limit of highly compensated, which is $130,000 in 2020.