UNIVERSITY OF MARYLAND
Human Resource Services
Saving For Your Future
SUPPLEMENTAL RETIREMENT ACCOUNT PLANS The University of Maryland (UM) in Baltimore participates with the three supplemental retirement account (SRA) vendors listed at right. The SRA advisors can assist you with portfolio selection and answer your questions about their products and services. Please contact them directly regarding transfers, rollovers, loans, and fees. If necessary, schedule an appointment to meet with them on their designated days on campus.
Employees may enroll, change, or stop SRA contributions at any time. For more information, visit our website at http://hr.umaryland. edu/benefits/benefits_retirement_ programs_supplem.htm
We have made every eort to explain these plans accurately. However, if there is a conflict between this document and the source document, the latter shall govern.
This document is for informational purposes only and should not be interpreted as tax or investment advice. If there is a discrepancy between this document and the source document, the source document shall prevail. The University does not endorse any one product or vendor.
ON-CAMPUS VENDOR SCHEDULE All of the vendors have on-campus office hours to assist employees in enrolling and planning for retirement. The 2012 IRS contribution limit is $17,000 for a 401(k) or a 403(b) plan. You may also contribute an additional $17,000 to a 457(b) plan. If you are age 50 and older, you may be able to contribute an additional $5,500 ($22,500 overall) to the plans. Contact your vendor for additional details and IRS restrictions.
Vendor
Contact Information
Fidelity Investments 403(b), 457(b), and ORP
Christopher Barnes 1-800-642-7131
Web Address
www.fidelity.com
Vendor Days on Campus by Appointment only HRS Benefits Room 3-146 The first and third Thursday of the month
Christopher. barnes@fmr.com Nationwide (Maryland Teacher & State Employees Supplemental Retirement Plans), 401(k), 403(b), 457(b) and Roth 401(k) and Roth 457(b) plans TIAA-CREF 403(b), 457(b), and ORP
Kerri Kennedy Green 410-804-4897 greenk16@ nationwide.com
Eric L. Berry 1-800-732-8353 eberry@ tiaa-cref.org
www.msrp.state.md.us Account Info website: www.MarylandDC.com
http://www.tiaa-cref. org/public/ products-services/ retirement-consultation/ index.html
The second Tuesday and Wednesday of the month
The first and third Tuesday of the month
Please note, this information is subject to change. Check the Human Resources website for the most up-to-date information.
AIG VALIC’s contracts were discontinued effective Jan. 1, 2008. Dan Bissontz 410-706-8254 Fax 410-720-0419 dan_bissontz@valic.com
SUPPLEMENTAL RETIREMENT ACCOUNT PLANS QUESTIONS & ANSWERS Roth, 401(k), 403(b), and 457(b) Deferred Compensation Plans 1. Who is eligible to participate in these plans? All full-time, part-time regular, contingent category II (contractual), and contingent category I (which includes adjunct faculty) employees of the University System of Maryland (USM). 2. How much can I contribute? A. Employees can contribute a combined total of $17,000 to a 403(b) or 401(k) and a separate $17,000 to a 457(b). The minimum is as little as $1 per pay. B. Employees age 50+ can contribute an additional combined total of $5,500 to a 401(k) or 403(b) and a separate $5,500 to a 457(b) for a total of $22,500. (The amounts to the 457(b) deferred compensation is a separate limit from the 401(k) or 403(b) annual contribution.) 3. Are my payroll deductions pre-tax for federal, state, and local income taxes? Yes, except the Roth (see question No. 7). 4. Are my payroll deductions pre-tax for FICA? No, FICA (Social Security) tax is based on your gross annual salary. 5. If I am age 50 or older, am I eligible for the “age base catch-up� provision? Deferred Comp 457(b) Yes, an additional $5,500. However, you cannot use this provision with the original catch-up provision available during the three years prior to retirement. 403(b) and /or 401(k) Yes, an additional $5,500. Consult your SRA advisor.
SUPPLEMENTAL RETIREMENT ACCOUNT PLANS QUESTIONS & ANSWERS 6. May I participate in more than one plan? Yes. The employee is responsible for monitoring combined deferral amount to the plans so these amounts do not exceed the allowed Internal Revenue Service (IRS) maximums. UM advises that you contribute to either a 403(b) or 401(k) rather than both. It will be easier to monitor. (Exceeding the IRS limit will have tax implications.) 7. Does participation in the Maryland State Retirement & Pension System affect how much I may contribute to these plans? What about participation in the Optional Retirement Program? Pre-tax contributions made to the Maryland State Retirement & Pension System, as an employer pick-up, reduce the total compensation amount that investment providers consider in calculating your annual, maximum tax shelter limits under IRS regulations. This may lower the maximum amount you are eligible to contribute to the tax-deferred investment plans. The state contributes 7.25 percent of the first $250,000 (or $17,762.50) of your fiscal year salary into the Optional Retirement Program (ORP). The IRS contribution limit applies to employees beginning ORP participation on or after July 1, 1996. Your contributions to a 403(b) (tax-deferred annuity), combined with the state’s contribution to your ORP, cannot exceed the lesser of 100 percent of your salary or $49,000. (The age 50+ catch-up provisions are in addition to the $49,000 limit.) 8. What are my current investment options? All plans offer a variety of fixed/guaranteed and variable investment options. Contact the SRA advisor for investment options that are available to employees of the USM or obtain current prospectus information from the UM Benefits Office.
SUPPLEMENTAL RETIREMENT ACCOUNT PLANS QUESTIONS & ANSWERS 9. When can I receive payments from my account? Deferred Comp 457(b) When you leave state employment, regardless of your age. Or if you are still employed, payments can be received due to an unforeseeable emergency (unforeseeable emergency as defined by the plan). 403(b) and/or 401(k) Payments may be received when you leave University employment, regardless of your age, or if still employed, when you reach 59½, experience hardship, disability, divorce, or death. You may be subject to a 10 percent excise tax in addition to other required personal income tax if your distribution is made before age 59½, except in the following situations: death, disability, separation from service, or retirement after age 55, selection of annuity payments based on your life expectancy, or tax-deductible medical expenses. 10. Is there a hardship provision? Deferred Comp 457(b) No, but withdrawals can be made if you are over 70½ or meet the conditions for withdrawals due to unforeseeable emergency. 403(b) and /or 401(k) Yes, must be verified by employer. Only contributions would be available and future contributions are suspended for six months following the withdrawal. A 10 percent penalty may apply if less than 59½ years of age. 11. Can I receive payout while employed? Deferred Comp 457(b) Yes, if 70½ years of age or older, you may stop deferrals and elect to start payout. 403(b) and /or 401(k) Yes, if you are 59½ years of age or older, you may elect to take distributions from your account. If you request a single distribution and not a systematic distribution, the vendor will automatically withhold Maryland state taxes per state law (7.75 percent) and a 20 percent federal tax also will be withheld. Also, you may be able to withdraw money if you encounter hardship, as defined by the IRS. Hardship withdrawals are from contributions only, not investment earnings.
SUPPLEMENTAL RETIREMENT ACCOUNT PLANS QUESTIONS & ANSWERS You must first exhaust all loan opportunities before requesting a hardship and provide hardship documentation (eviction, mortgage payment for primary residence, etc.). Contact your vendor for further details. The UM Benefits Office must sign off on all hardships and loans. 12. When am I required to take withdrawals from these plans? If retired or separated from service, payout must begin by April 1 of the year following the calendar year in which you reach age 70½; however, you’re not required to take payout until retired or separated from University service. A 50 percent federal excise tax may be assessed by the IRS if the required distributions have not begun by the later of the above April 1 date or retirement. 13. What are my options upon separation from employment? If you are age 55 or older, you can receive your account balance as taxable income, transfer your account to another plan, or elect to defer your distribution to a later date, but no later than April 1 in the calendar year following the attainment of age 70½. Life annuities, lump-sum distributions, rollovers, and payout over time are available. 14. When I withdraw my account, will I pay a withdrawal or deferral sales charge? Deferred Comp 457(b) With some companies, there may be certain charges when you switch companies or make early withdrawal. 403(b) and/or 401(k) No. 15. Can I use money from my SRA to purchase service credits for the Maryland State Retirement & Pension System? Yes. 16. Can I roll over my earned unused holiday and vacation time to an SRA when I retire? Yes, this request requires pre-planning and you cannot exceed the IRS’ limitations for contributions. Be sure to talk with the HR Benefits Specialist at least a month in advance of retiring.
INSTRUCTIONS USM Sponsored Supplemental Retirement Account/SRA 403(b), 457(b), and 401(k) Plan/s Paperwork Directions SRA calculations are determined on a calendar year from January through December (over 26 pays). If you are enrolling mid-year and the “per pay” amount you wish to contribute when multiplied by less than 26 pay periods meets the maximum for the current year, you must submit additional paperwork simultaneously for the following calendar year. You may either lower the contribution effective the first pay in January or stop the current contribution the pay after the maximum contribution will be made. This will prevent you from exceeding the IRS maximum, which has tax implications. Please note: Deductions are not automatically stopped when the IRS maximums are reached and the maximums are the limit regardless of the number of employers i.e., Veterans Affairs, University Physicians, Inc., within a calendar year.
Please note:
SRA contributions must be taken as payroll deductions according to what your salary can support within the IRS guidelines; the minimum contribution an employee can make is $1 per pay period.
New employees must have received one paycheck before SRA deductions can start, which impacts the number of remaining pays available for the initial enrollment.
You may enroll, change, or stop deductions at any time (with the above exception for new hires). You may change vendors at any time, but need to submit USM paperwork to stop contributions and open a new account.
The total between a 401(k) and 403(b) plan together cannot exceed the IRS’ annual limit. As opposed to opening both a 401(k) and 403(b) plan, for diversification purposes, it is recommended you open a 457(b) plan to avoid over-contributing. 457(b) plans allow you to contribute an additional annual limit.
You should review your paychecks to ensure the correct contributions are taken out of your paycheck.
Contact the Benefits Office immediately if there are any discrepancies.
Remember contributions are NOT AUTOMATICALLY stopped when the maximums are reached.
Consider rolling over your leave payout when you separate/retire from employment.
Enrollment /Change Checklist NATIONWIDE (only vendor with a 401(k) plan, Roth 457(b), Roth 401(k) in addition to 403(b) and 457(b) plans) Enrollment Application (select 401(k), 403(b), or 457(b))
Deferral Change Form (if you are
FIDELITY and TIAA-CREF USM Salary Reduction Agreement Form indicating vendor of choice and action USM Deduction Authorization Form indicating initiate, change, or cancel
Fund or a Fidelity Freedom Fund. The vendor will send you additional information for designating your beneficiary(ies) and other allocation options available under USM.
(use black ink only) (Mark off “cancel” and 0 in current amount to stop contributions)
Submit to the UM Benefits Office When enrolling, your account will be established electronically upon receipt of funds and directed into a TIAA-CREF Lifecycle
changing or stopping your Nationwide contributions) Send original directly to Nationwide and a copy to the UM Benefits Office
If opening another account and or changing vendors, you must send supporting documentation (i.e., cancellation forms). A second account cannot be initiated until the Benefits Office has documentation that deductions have stopped in the first account.
BENEFITS Salary Reduction Agreement Calculation Instructions for Employees Changing Contribution Amount Mid-Year (less than 26 pays)
1. Yearly amount employee wishes to contribute within the IRS guideline: (2012 maximum = $17,000, age 50 or older = $22,500) $___________. 2. YTD (year to date) employee contributions: $___________ (Current dollar amount ___________ X number of paychecks received YTD _______, look at processing schedule on reverse side to determine if upcoming pay check will have current deduction to determine how many pays received) Be sure to include any additional contributions made through another employer or former employer within the calendar year. 3. Subtract annual amount (No. 1) from YTD (No. 2) to determine amount left in the calendar year $ ___________. 4. Determine how many pay periods are left in the calendar year: _____________ (Must look at processing schedule to determine how many pays are left in calendar year) 5. Divide the number of pay periods remaining by the amount in No. 3 in order to obtain the new deduction/contribution amount: $_____________. Change in contributions will become effective as of ___________. (see processing schedule)
Maximum Amount/Pay
SRA Forms due to Benefits Office by
$17,000 Up to age 49
$22,500 Age 50+
$653.84
$865.38
*12/14/11
$680
$900
1/4/12
$708.33
$937.50
1/18/12
$739.13
$978.26
2/1/12
$772.72
$1,022.72
2/15/12
$809.52
$1,071.42
2/29/12
$850
$1,125
*3/13/12
$894.73
$1,184.21
3/28/12
$944.44
$1,250
4/11/12
$1,000
$1,323.52
4/25/12
$1,062.50
$1,406.25
5/9/12
$1,133.33
$1,500
5/23/12
$1,214.28
$1,607.14
6/6/12
$1,307.69
$1,730.76
6/20/12
$1,416.66
$1,875
*7/3/12
$1,545.45
$2,045.45
7/18/12
$1,700
$2,250
8/1/12
$1,888.88
$2,500
8/15/12
$2,215
$2,812.50
8/29/12
$2,428.57
$3,214.28
9/12/12
$2,833.33
$3,750
9/26/12
$3,400
$4,500
10/10/12
$4,250
$5,625
10/24/12
$5,666.66
$7,500
*11/6/12
$8,500
$11,250
*11/19/12
$17,000
$22,500
*12/5/12
2013 Limits Unknown
*12/12/12
*Dates advanced due to holiday scheduling or state service reduction days. All dates subject to change.
Pay Date Change is Effective
Remaining Pays in 2012
Number of Paychecks Received in 2012
Pay Period Ending Dates
1/6/12
26
1
12/31/11
1/20/12
25
2
1/14/12
2/3/12
24
3
1/28/12
2/17/12
23
4
2/11/12
3/2/12
22
5
2/25/12
3/16/12
21
6
3/10/12
3/30/12
20
7
3/24/12
4/13/12
19
8
4/7/12
4/27/12
18
9
4/21/12
5/11/12
17
10
5/5/12
*5/24/12
16
11
5/19/12
6/8/12
15
12
6/2/12
6/22/12
14
13
6/16/12
7/6/12
13
14
6/30/12
7/20/12
12
15
7/14/12
8/3/12
11
16
7/28/12
8/17/12
10
17
8/11/12
*8/30/12
9
18
8/25/12
9/14/12
8
19
9/8/12
9/28/12
7
20
9/22/12
10/12/12
6
21
10/6/12
10/26/12
5
22
10/20/12
11/9/12
4
23
11/3/12
*11/20/12
3
24
11/17/12
12/7/12
2
25
12/1/12
1
26
12/15/12
First pay of the year
1
12/29/12
12/21/12 1/4/13
(final deduction for 2012 SRA)
Human Resource Services 620 W. Lexington Street Baltimore, MD 21201 Benefits Office 410-706-2616 www.hr.umaryland.edu/benefits
Produced by the Office of Communications and Public Affairs, 2012