Retirement Benefits

Retirement Benefits

RETIREMENT

 

Vincennes University offers retirement benefits to supplement its employees' retirement income.  VU is an active partner in helping faculty and staff build a foundation for retirement.

It is important to plan and prepare for retirement throughout your working career.  In addition to the plan we contribute to on your behalf, VU offers additional opportunities for you to supplement your retirement income.  All employees of the University may elect to make voluntary contributions to the VU Tax Deferred Annuity (TDA) plan.  The TDA plan offers tax advantages as a pre-tax investment that allows your contributions to grow over time while deferring the payment of tax on the both the contribution and the interest earned until you withdraw the funds.

Vincennes University is pleased to offer retirement plans that can be an important part of your retirement planning.


Perf





Customer Service Phone Number: 1-888-526-1687

The Public Employees’ Retirement Fund (PERF) and the Teachers’ Retirement Fund (TRF) have merged the administration of funds. 
 Effective July 1, 2011, the official name became the Indiana Public Retirement System (INPRS). Bringing together the administration of the funds created more efficiency and eliminated the duplication of efforts.  Each retirement fund will continue as a separate fund under the oversight of  a nine-member board of trustees.  CLICK HERE for additional information.  


TIAA

Customer Service Phone Number: 1-800-842-2776
 

TIAA-CREF is a Fortune 100 financial services organization that is the leading retirement provider for people who work in the academic, research, medical and cultural fields. TIAA-CREF serves 3.7 million active and retired employees participating at more than 15,000 institutions and has $487 billion in assets under management.  TIAA-CREF is committed to helping their clients make their financial well-being possible. 

TIAA-CREF 403(B) RETIREMENT ANNUITY

 

TIAAVU Retirement 403(b) Plan - Highlights

  • IRS Code Section 403(b) defined contribution plan
  • Vincennes University makes all contributions to participant accounts
  • Participant directed investment - daily valuation plan
  • This plan is a defined contribution plan. Income during retirement is  based on the participant’s total account balance.

Vincennes University provides full time Faculty and Professional Staff with a tax deferred 403(b) Retirement Annuity Plan (RA) through TIAA-CREF.  With the RA, the money contributed on your behalf by Vincennes University will grow tax deferred. Additionally, the interest you earn on the money in your account also grows tax deferred.  Participants are immediately 100% vested in the funds the University contributes and any earnings associated with those contributions.

Eligibility

To be eligible to participate in the Plan, an employee must be a Full-time employee hired in an eligible position.

  

Enrollment

Vincennes University will enroll the eligible employee with TIAA-CREF.  The employees will receive information from TIAA-CREF to complete regarding beneficiary information and investment choices.

Contributions

Vincennes University will make contributions on your behalf.  RA contributions are immediately 100% vested.

10% Contribution Level

Vincennes University will make contributions on your behalf equal to 10% of earned wages.  A participant will receive an allocation equal to 10% of his or her total salary for each regular pay period he or she is eligible to participate in the Plan at the 10% contribution level. Total salary includes base salary and supplemental pay. 

 

Maximum Contribution Amount

415(c) Limit

The total amount of employer contributions and salary deferrals that may be contributed to the Plan and the VU Tax Deferred Account on behalf of an employee during a calendar year, cannot exceed: THE 415(C) LIMIT FOR THE CURRENT YEAR.

Rollover Contributions

Rollover contributions are not allowed to be made to the Plan.  

Beneficiary Designations

Beneficiaries must be designated on the applicable form of the TIAA-CREF.

Investments

The Retirement Plan is a participant directed plan.  Each participant is responsible for directing the investment of his or her account.  A participant may direct the investment of his or her Plan account among any investment fund provided under the Plan.   A participant may also transfer monies from one investment fund to another.   If you fail to direct the investment of your contributions, the default investment option will be Lifecycle Funds.  

Each of the investment options offers certain advantages and risks.  Depending upon your personal savings goals - and the level of risk you want to accept - you can create your own investment strategy.  The value of your accounts may fluctuate upward or downward as a result of changes in the market price of the assets in the investment options you select.

Please read the investment options carefully before selecting.  Contributions invested in the TIAA Retirement Annuity are subject to certain transfer restrictions.

Receiving your Benefits

Generally, you will begin to receive your benefit when you retire. You will pay income tax on the taxable portion of your benefit as you receive it. Because the purpose of the RA Plan is to save money for retirement, there are restrictions on when you can receive your benefits.  Upon terminating your employment from Vincennes University any distributions from the plan will be subject to regular income tax.  Depending on your age of termination you could be subject to an early distribution tax of 10% in addition to regular income tax.

If you die before distribution of your account begins, your designated beneficiary will receive the balance in your accounts under a payment option available under TIAA-CREF.  

If you die after distribution of your account begins, any remaining account balance distributed to your beneficiary will be determined by the form of payment you selected prior to your death.  Under some forms of payment, your beneficiary may elect to receive a lump sum payment or another form of payment available under the Plan.  However, if your accounts have been used to purchase an annuity, any remaining payments will be made under the terms of the annuity. 

Forms of Benefit Payment

A participant may choose to receive a distribution of his or her Plan account in any one of the following forms or combination of forms:

  • Single sum distribution of cash
  • Systematic Withdrawal
  • Annuity 
  • Any legally permissible form of distribution permitted by TIAA-CREF

Minimum Required Distributions

Federal law requires that distribution of a participant's Plan benefit, regardless of the form, must begin on or before April 1st of the calendar year following the calendar year in which he or she attains age 70½ or the calendar year, in which the participant retires, whichever is later.

Account Statements

Participants receive account statements from each TIAA-CREF in which Plan contributions are invested each calendar year quarter. Account statements detail all investment activities including contributions, earnings (or losses), and transfers.

Leaving Employment with Vincennes University

If you have a complete severance from employment from Vincennes University you are entitled to receive a distribution of your account.

Rights and Privileges after Termination of Employment

A participant is not required to cash-out or transfer his or her Plan account upon termination of employment. Upon termination of employment, a participant may:

  • Leave accumulations in the Plan account and continue to manage investments;
  • Withdraw all or a portion of Plan account accumulations (subject to income taxes and/or penalty taxes); or
  • Roll over all or a portion of Plan account accumulations to an eligible retirement plan (e.g., an IRA).

After terminating employment with Vincennes University, most transactions related to a participant's Plan account are handled directly by the participant with TIAA-CREF.

Participant Responsibilities

Upon termination of employment with Vincennes University, a Plan participant must:

  • Handle withdrawals and rollovers directly with TIAA-CREF.
  • Continue to direct the investment of the Plan account.
  • Notify TIAA-CREF of any name and/or address change.
  • Notify TIAA-CREF of any beneficiary change.
  • Begin to receive minimum required distributions on or before the required beginning date.

Taxation of Benefits

Contributions will grow tax deferred and are not included in a participant's income reported to the federal or state government for income tax purposes until money is received.

Plan distributions are generally subject to a 20% mandatory federal income tax withholding rate. This mandatory withholding will reduce the amount a participant actually receives upon withdrawing funds from the Plan. However, the amount withheld will be credited against any taxes the participant owes for the year when the participant files his or her annual tax return.  There are exceptions to the mandatory federal income tax withholding rule, including receiving the Plan distribution as a life-time annuity payment or directly rolling over the Plan distribution to an eligible retirement plan (e.g., an IRA). 

In addition, Plan distributions made prior to attainment of age 59 1/2 are generally subject to a 10% early withdrawal penalty tax. There are exceptions to the 10% early withdrawal penalty tax, including: receiving the Plan distribution as a life-time annuity payment, receiving the Plan distribution after terminating employment at age 55 or older, or receiving the Plan distribution after terminating employment due to a permanent disability.

The general rules described in this section are complex and contain many conditions and exceptions that are not included in this summary.  Vincennes University does not presume to give you tax advice.  You should discuss your situation with your tax advisor before you apply for the payment of your account from the plan. 

Additional Information

The information contained in this section is a general overview.  You may contact TIAA-CREF directly at 800-842-2776 or online at WWW.TIAA-CREF.ORG/VINU.

TAX DEFERRED ANNUITY

 

TIAAVU Tax Deferred Annuity 403(b) Plan - Highlights

  • IRS Code Section 403(b) defined contribution plan
  • Employees make all contributions to the Plan
  • Plan contributions are always 100% vested
  • Participant directed investment – daily valuation plan
  • Distributions upon termination of employment with Vincennes University or after attainment of age 59½.

All employees are immediately eligible to make voluntary salary deferral contributions to Vincennes University’s tax-deferred voluntary retirement plans.  Vincennes University offers a 403(b)/Group Supplemental Retirement Annuity (GSRA) which allows employees to contribute money toward retirement on a pre-tax basis.  The University also offers a 457(b) Deferred Compensation Plan for employees who have maximized their 403(b) plan limits.


Advantages

There are several advantages to the tax-deferred plans.  First, because your contribution is deducted from your salary before taxes, you are taxed on a smaller amount of total salary.  In addition, your contributions will grow tax deferred.  You do not pay taxes on your contributions or its earnings until you receive the money. 

Eligibility

All employees are eligible to begin making pre-tax contributions to the GSRA immediately after your date of employment with the Vincennes University.    A participant is always 100 percent vested in his or her Plan account.

Enrollment

To begin making contributions you must complete a SALARY REDUCTION AGREEMENT and TIAA-CREF application.  Completed paperwork must be submitted to the Payroll department.

Contributions

Contributions to the tax-deferred plans are solely financed by the employee and are immediately 100% vested.  Please keep in mind that your accounts are subject to investment risks and will fluctuate with the market value of the investment options you make. 

A participant may elect to defer from one to 100 percent of his or her compensation to the Plan each calendar year up to the maximum percentage allowable by law not to exceed the limits of federal tax code sections 402(g), 403(b), or 415.  

You may elect to make pre-tax contributions any time throughout the year.  Changes to the contribution amount may be made by completing a new salary reduction agreement.   Requests to change or discontinue contributions cannot be made retroactively. 

Please note that employment taxes (i.e., Social Security taxes) and premiums for employer-provided benefits will be deducted from a participant's compensation prior to salary deferrals and catch-up contributions.

Federal law limits the amount of salary deferrals that can be contributed to the Plan and to all 403(b) plans, 401(k) plans and other similar type of plans in which an individual participates in any calendar year.

Age 50 or Older Catch-Up Contributions

For participants who are at least age 50 before the end of the calendar year, the current dollar limit on salary deferrals is increased. The additional amount of salary deferrals that are permitted to be made by an eligible participant is the lesser of (i) the participant's compensation for the year reduced by any other salary deferrals of the participant for the year or (ii) the "applicable dollar amount."

Catch-up contributions will not be taken into account when applying the salary deferral contribution limit described above or the maximum contribution amount limit (415 limit) described below.

Maximum Contribution Amount (415 Limit)

VIEW THE 415 LIMIT FOR THE CURRENT YEAR

Federal law limits the total amount of contributions that may be contributed to Vincennes University retirement plans on behalf of an employee for any calendar year. The total amount contributed cannot exceed the lesser of 100 percent of the employee's compensation for the year or the "applicable dollar amount." (The IRS adjusts the contribution limit periodically for increases in the cost-of-living.) However, age 50 or older catch-up contributions will not be taken into account in applying the maximum contribution amount.

The maximum contribution amount limits the total amount of employer contributions and salary deferrals that can be made to the Plan and the VU Defined Contribution Retirement 403(b) Plan, or the VU Supplemental Retirement Plan for Faculty and Professional Staff 403(b) Plan, on behalf of an employee.

Taxes on Contributions

Salary deferrals and catch-up contributions will not be included in a participant's income reported to the federal government for income tax purposes. However, the participant and Vincennes University must pay employment taxes (i.e., Social Security taxes) on salary deferrals and catch-up contributions when they are made to the Plan.

Contributions Will Not Reduce Social Security Benefits

Employment taxes are deducted from a participant's compensation before salary deferrals and catch-up contributions are contributed to the Plan. Therefore, making salary deferrals and catch-up contributions to the Plan will not reduce a participant's compensation for purposes for calculating Social Security benefits.

Investments

The Plan is a participant directed plan.  Each participant is responsible for directing the investment of his or her Plan account. A participant may direct the investment of his or her Plan account among any investment funds provided under the Plan. A participant may also transfer monies from one investment fund to another.

You may change the investment election of your future contributions or existing contributions at any time by contacting TIAA-CREF.  You will receive annual and quarterly statements directly from TIAA-CREF showing your accumulation of benefits.

Each of the investment options offers certain advantages and risks.  Depending upon your personal savings goals - and the level of risk you want to accept - you can create your own investment strategy.  The value of your accounts may fluctuate upward or downward as a result of changes in the market price of the assets in the investment options you select.

Please read the investment options carefully before selecting.  Contributions invested in the plans are subject to certain transfer restrictions.

Receiving your Benefits

Generally, you will begin to receive your benefit when you retire. You will pay income tax on the taxable portion of your benefit as you receive it. Upon terminating your employment from Vincennes University any distributions from the plan will be subject to regular income tax.  Depending on your age of termination you could be subject to an early distribution tax of 10% in addition to regular income tax.

If you die before distribution of your account begins, your designated beneficiary will receive the balance in your accounts under a payment option available TIAA-CREF.  

If you die after distribution of your account begins, any remaining account balance distributed to your beneficiary will be determined by the form of payment you selected prior to your death.  Under some forms of payment, your beneficiary may elect to receive a lump sum payment or another form of payment available under the Plans.  However, if your accounts have been used to purchase an annuity, any remaining payments will be made under the terms of the annuity. 

Federal law places limits on the maximum time period when benefits must be paid and on the minimum amount that must be paid after your death. TIAA-CREF will notify your beneficiary(ies) if any of these limits apply.

Distributions and Withdrawals
A participant may only withdraw funds from his or her Plan account upon:

  • Attainment of age 59½ or older while employed at Vincennes University; or
  • Termination of employment with Vincennes University.


Minimum Required Distributions

Federal law requires that distribution of a participant's Plan account, regardless of the form, must begin on or before April 1st of the calendar year following the calendar year in which he or she attains age 70½ or the calendar year in which the participant retires, whichever is later.


Forms of Distributions
Participant s may elect to receive a distribution of his or her Plan account in any one of the following forms or combination of forms:  

  • Single sum distribution of cash
  • Systematic Withdrawal
  • Annuity 
  • Any legally permissible form of distribution permitted by TIAA CREF


Taxes on Distributions

Plan distributions are generally subject to a 20% mandatory federal income tax withholding rate. This mandatory withholding will reduce the amount a participant actually receives upon withdrawing funds from the Plan. However, the amount withheld will be credited against any taxes the participant owes for the year when the participant files his or her annual tax return.

There are exceptions to the mandatory federal income tax withholding rule, including receiving the Plan distribution as a life-time annuity payment or directly rolling over the Plan distribution to an eligible retirement plan (e.g., an IRA).

In addition, Plan distributions made prior to attainment of age 59½ are generally subject to a 10% early withdrawal penalty tax.

There are exceptions to the 10% early withdrawal penalty tax, including: receiving the Plan distribution as a life-time annuity payment, receiving the Plan distribution after terminating employment at age 55 or older, or receiving the Plan distribution after terminating employment due to a permanent disability.


Direct Rollover Distributions
A direct rollover of an eligible rollover distribution may be made at the participant's election.   A direct rollover is a payment of an eligible rollover distribution from the Plan directly to another eligible retirement plan, such as a 401(a) plan, 403(b) plan, 401(k) plan, governmental 457(b) plan, or IRA. However, certain types of distributions, such as life-time annuity payments, are not eligible for direct rollover treatment.

Leaving Employment with the Vincennes University

If you have a complete severance from employment from the Vincennes University, you are entitled to receive a distribution of your accounts.  If you decide to have your distribution paid to you, TIAA-CREF is required by federal law to withhold 20% from your distribution to be applied against your federal income tax liability for the year. 

You may also retain your accounts if you leave employment with Vincennes University.  Your accounts will continue to earn interest and dividends.  If you are later employed by an organization that offers eligible plans through TIAA-CREF, you may be able to enter into a salary reduction agreement through the new employer.

Taxation of Benefits

The general rules described in this Section are complex and contain many conditions and exceptions that are not included in this summary.  Therefore, you should discuss your situation with your tax advisor before you apply for the payment of your accounts from the Plan.


Additional information

The information contained in this section is a general overview.  You may contact TIAA-CREF directly at 800-842-2776 or online at WWW.TIAA-CREF.ORG/VINU

CONTRIBUTION LIMITS

 

Retirement Plan Contribution Limits

VU Defined Contribution Retirement 403(b) Retirement Plan and

VU Supplemental Retirement Plan for Faculty and Professional Staff 403(b) Plan

Maximum Contribution Amount (415 Limit)

Federal law limits the total amount of contributions that may be contributed to certain Vincennes University retirement plans on behalf of an employee for any calendar year. The total amount contributed cannot exceed the lesser of 100 percent of the employee's compensation for the year or the "applicable dollar amount." (The IRS adjusts the contribution limit periodically for increases in the cost-of-living.) However, age 50 or older catch-up contributions will not be taken into account in applying the maximum contribution amount.

The maximum contribution amount limits the total amount of employer contributions and salary deferrals that can be made on behalf of an employee.

415(c) contribution limit

  • Total employer and employee contributions (excluding age 50 catch up) to the VU 403(b) plans--the VU Retirement Plan and the VU Tax Deferred Account Plan (TDA)--may not exceed $57,000 for 2020.

401(a)(17) compensation limit

  • Limits total compensation that may be used to calculate employer contributions to a salary of $285,000 for 2020.  May not apply to all participants.


VU Tax Deferred Annuity 403(b) Plan
402(g) contribution limit

The annual dollar limit for employee contributions to the VU Tax Deferred Annuity  403(b) plan is the lesser of:

  • 100 percent of compensation for the calendar year; or
  • $19,500 in 2020

AND

For age 50 and over catch-up the participant may increase the annual dollar limit on elective deferrals by an amount not exceeding the lesser of:

  • The participant’s compensation for the year reduced by any other elective deferrals of the participant for the year; or
  • $6,500 in 2020

VU Deferred Compensation 457(b) Plan
457(b)(2) contribution limit

The annual dollar limit for employee contributions to the VU Deferred Compensation 457(b) Plan is the lesser of:

  • 100 percent of compensation for the calendar year; or
  • $19,500 in 2020

AND

For age 50 and over catch-up the participant may increase the annual dollar limit on elective deferrals by an amount not exceeding the lesser of:

  • The participant’s compensation for the year reduced by any other elective deferrals of the participant for the year; or
  • $6,500 in 2020