|Policy No.:||4-24||This policy applies to:|
|Policy Name:||Retirement Plan||
Loyola University New Orleans offers a retirement plan, referred to as, "The Retirement Plan" and TIAA is the Record Keeper for the Plan. The following is a brief summary of the main features of the retirement plan offered and is not intended to govern the respective plans. If there is a discrepancy between the information contained within this policy and the official Plan Document, the plan documents will be followed. The Summary Plan Description (SPD) for each plan is available on the Human Resources website.
All contributions to the 403(b) retirement plan are immediately and fully vested. Generally, the contributions are not accessible to the participant while currently employed. However, upon retirement or termination of employment, several distribution options are available. Employees should contact TIAA for information concerning the specific procedures that apply to their investment account at 1-800-842-2252.
You and Loyola University are partners in funding your retirement plan benefit. You are eligible to contribute, on a pre-tax and/or Roth basis, immediately upon hire. If you take no action, you will be automatically enrolled in the Plan with pre-tax deductions equal to 3.5% of pay, effective the first of the month following 30 days of employment. This is a voluntary contribution that can be changed at any time by increasing or decreasing your contribution rate through an online salary deferral agreement on www.TIAA.org.
You may contribute up to the annual IRS limit and, if you will be 50 or older, you are eligible to make catch up contributions up to the annual IRS limit. The maximum contribution limit and "Age 50+ Catch-up" amounts are determined annually by the IRS.
Effective the first of the month after meeting the eligibility requirement of 1 year of service and 1,000 hours worked, Loyola will contribute 2% of your gross earnings. You are vested in Loyola's contribution immediately upon participation. If you were employed by another institution of higher education in the 12-month period immediately prior to being employed at Loyola, and you completed the required forms, your prior service with that institution will apply to the eligibility service requirement to receive Loyola's contribution prospectively.
Participation will generally begin as of the first pay day of the month following eligibility date. If no investment selection is made prior to the first contribution remitted, default accounts (i.e., Lifecycle Funds) will be selected based upon the participant's age and anticipated retirement date.
The difference between pre-tax and after-tax (Roth) contributions
Pre-tax contributions are deducted from your paycheck before federal and state income taxes are deducted. Pre-tax contributions grow tax-deferred, meaning that you will eventually pay ordinary income tax on your distributions. Roth contributions are deducted from your paycheck after you have paid taxes on them. The "benefit" of Roth contributions is that, if you have waited until you are 59.5 or older and at least 5 years after your first Roth contribution, they are distributed tax-free.
When will my account be vested and available to me?
To be fully vested in Plan contributions means that the contributions (together with any investment gain or loss) will always belong to you, and you will not forfeit them if you leave Loyola. You are always fully vested in both your own and Loyola's contributions to the Plan. Although you are vested in your Plan account, there are restrictions on when you may withdraw your funds. Withdrawals or distributions are allowed after your employment has ended either through separation, retirement or disability. While you are still employed, distributions are restricted to employees attaining age 59.5 years old. Partial withdrawals are allowed in the event of a financial hardship, as defined by the IRS. Generally, distributions may incur a 10% tax penalty if made prior to age 59.5.
If a participant dies before retirement, the full current value of his/her account, including any amount attributed to the University’s contributions, becomes payable to the employee’s designated beneficiary(ies).
Other retirement resources are:
Social Security Administration: www.ssa.gov or call 1-800-772-1213
Medicare: http://medicare.gov or call 1-800-633-4227.