TIAA-CREF 403(b) Retirement Annuity - Human Resources
TIAA-CREF 403b Retirement Annuity
TIAA-CREF 403(b) Retirement Annuity
- 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.
To be eligible to participate in the Plan, an employee must be a Full-time employee hired in an eligible position.
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.
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
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 are not allowed to be made to the Plan.
Beneficiaries must be designated on the applicable form of the TIAA-CREF.
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
- 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.
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.
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.
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.