403 b DC Plan Enrollment and Participation Guide

Enrolling in a 403(b) DC Plan can be a straightforward process, but it's essential to understand the basics to make the most of your retirement savings. You can enroll in a 403(b) DC Plan at any time, but it's usually best to do so during your employer's open enrollment period.

If your employer offers a 403(b) DC Plan, you'll typically need to provide some basic information, such as your name, date of birth, and Social Security number. This information will be used to set up your account and start tracking your contributions.

The amount you can contribute to a 403(b) DC Plan varies, but it's generally limited to a percentage of your income, usually up to 25% of your annual salary. You can choose to contribute a fixed amount each month or a percentage of your income, whichever is more convenient for you.

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To enroll in a 403(b) DC plan, you need to select a plan and begin the enrollment process. Contact your HR Benefits Office for additional information and assistance.

You can choose from plans like the 403(b) DC Plan or the Financial Accounting Foundation 403(B) TDA Plan. Keep in mind that you may need to complete a Salary Reduction Agreement form to fund your account.

Eligible employees can participate in a 403(b) plan, including those who work for tax-exempt organizations, public school systems, cooperative hospital service organizations, and certain ministers.

Participate in a 403(b) plan, and you'll be glad you did. It's a great way to start building a nest egg for your future. To be eligible, you must be an employee of a tax-exempt organization established under IRC Section 501(c)(3).

You can also participate if you're an employee of a public school system, involved in the day-to-day operations of a school. This includes employees of cooperative hospital service organizations and civilian faculty and staff of the Uniformed Services University of the Health Sciences (USUHS).

Some ministers are also eligible to participate, but they must meet certain criteria. It's worth noting that these eligibility requirements are specified in the article.

The following types of employees are eligible to participate in a 403(b) plan:

To make sure employee contributions are deposited on time, it's essential to understand the rules. You must deposit all contributions to a 403(b) plan account or transfer them to an annuity contract issuer within a period that is not longer than is reasonable for the proper administration of the plan.

This timeframe can vary, but it's crucial to stay on top of it to avoid any issues. 403(b) plans governed by ERISA may be subject to more restrictive requirements, so it's worth double-checking if your plan falls under this category.

If you're an employer offering a 403(b) plan, you should also consider the contribution limits set by the IRS. The annual limit is $23,000 in 2024, and individuals aged 50 and over can contribute an additional $7,500 as a catch-up contribution.

Here's a breakdown of the contribution limits:

This will help you ensure that you're staying within the allowed limits and avoiding any penalties. By following these guidelines, you can help your employees make the most of their 403(b) contributions.

You can withdraw up to 10% of your lifetime annuity income in cash to help with the transition into retirement. This amount will directly reduce your lifetime annuity income accordingly.

A 403(b) plan offers tax-deferred earnings and returns on your contributions, just like a regular 401(k). However, if you have a Roth 403(b), your withdrawals are tax-free if you meet the qualified distribution requirements.

Some 403(b) plans vest funds more quickly than 401(k)s, and a few even offer immediate vesting, which is a rare benefit. This means you can access your funds sooner, which is a big plus.

According to an AARP survey, only 33% of people saving for retirement expect to have enough money to be financially secure, even if they continue saving at their current rate.

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Loans are available from a minimum of $1,000 to a maximum of $50,000 from each employer that you are eligible to take a loan from.

You can borrow as much as your current plan balance allows, but you may also have outstanding loans that affect the amount you can borrow. If you have money in other employer's plans, you might be able to transfer or roll it over to increase your maximum loan amount.

To roll over funds, you'll need to consider your other options, such as leaving money in your current plan, withdrawing cash, or rolling it over to an IRA. Compare the differences in investment options, services, fees, and expenses, as well as withdrawal options and tax treatment.

Contact TIAA or your HR Office to verify details of your plan, including loan availability and transfer/rollover loan eligibility.

A single-sum death benefit is a set amount your beneficiary(ies) will receive from your retirement account if you die before taking income. This amount is typically a specific dollar figure that's determined by your account's rules.

It's a way to provide financial security for your loved ones in the event of your passing.

One of the key advantages of 403(b) plans is that earnings and returns on amounts in a regular 403(b) plan are tax-deferred until they are withdrawn.

Many 403(b) plans vest funds over a shorter period than 401(k)s, and some even allow immediate vesting of funds, which 401(k)s rarely do.

Employees with 15 or more years of service with certain nonprofits or government agencies may be able to make additional catch-up contributions to a 403(b) plan, such as $3,000 a year, up to a lifetime limit of $15,000.

This means that employees who have been with their employer for a long time can save even more for retirement, which is a huge advantage.

Here are some key benefits of 403(b) plans at a glance:

Overall, 403(b) plans offer a range of benefits that can help employees save for retirement and achieve their long-term financial goals.

You can withdraw your 403(b) DC plan funds in various ways, depending on your plan rules and contract terms.

You can choose to receive a lump-sum distribution, which is a single cash payment, but this may be restricted by your contract or certificate.

If your plan allows, you can opt for systematic withdrawals, which are regular income payments made on a specified schedule, such as semimonthly, monthly, quarterly, semiannual, or annually.

You can increase, decrease, or suspend these payments at any time. However, these withdrawals are not available from TIAA Traditional Account balances.

If you leave your employer, you may be eligible to withdraw your retirement savings, and in some cases, you can withdraw your entire balance if the value does not exceed $2,000.

A lump-sum distribution is a single cash payment from your account, and you can withdraw all or part of your balance, depending on your plan rules and contract terms.

If you have a TIAA Traditional Account, your right to a lump-sum distribution may be restricted to taking periodic payments under the contract terms. You should refer to your contract or certificate for full details.

You can contact TIAA at 800-842-2252 for more information on your lump-sum distribution options.

Systematic withdrawals allow you to receive regular income payments from your plan on a semimonthly, monthly, quarterly, semiannual or annual basis.

You have the flexibility to increase, decrease or suspend these payments at any time, which is a great feature for managing your finances.

These withdrawals are not available from TIAA Traditional Account balances, so be sure to review your plan details if you're considering this option.

You can choose the payment frequency that best suits your needs, whether it's to cover living expenses or fund a specific goal.

If your retirement savings are small, you may be able to withdraw them easily. Your plan may distribute your entire balance if the value does not exceed $2,000.

You can withdraw your entire retirement savings if your TIAA Traditional Account value does not exceed $2,000. This is a straightforward process that can be completed without much hassle.

Even if your plan doesn't allow cash distributions, you can still withdraw your entire retirement savings if your overall account balance is below a certain limit set by your employer's plan. This limit is either $1,000 or $5,000.

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Terminating a 403(b) plan can be a complex process, but it's an option for plan sponsors under certain circumstances.

To terminate a 403(b) plan, the plan sponsor must adopt a binding resolution. This is a formal decision to end the plan.

The plan sponsor must also stop making contributions to other 403(b) plans for a period of 12 months after the termination date. This is to prevent participants from transferring their benefits to another plan.

However, there's an exception to this rule. If fewer than 2% of eligible employees are participating in another 403(b) plan of the sponsor, this requirement can be disregarded.

The plan sponsor must notify all participants and beneficiaries about the plan's termination. This is a crucial step to ensure everyone is aware of the plan's status.

A 402(f) rollover notice must also be provided to participants and beneficiaries. This notice explains their options for distributing their benefits.

Distributing all plan assets within 12 months of the termination date is also required. This must be done in accordance with Rev. Rul. 2011-7.

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You can roll over your 403(b) DC plan to another retirement plan or an Individual Retirement Account (IRA) if you've had an IRS-defined "triggering event" and your plan allows withdrawals. Direct rollovers are nontaxable and not reported as income to the federal government.

Before rolling over, compare your options and consider leaving money in your current plan or withdrawing cash. Take a look at the differences in investment options, services, fees, and expenses, as well as withdrawal options, required minimum distributions, and tax treatment.

If you need some of your retirement savings in cash, you can withdraw your balance through a Transfer Payout Annuity (TPA) under the terms of your contract. This will be subject to a surrender fee, depending on your plan rules and contract terms.

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Before you roll over your retirement funds, take some time to consider your options. You may be able to leave your money in your current plan or withdraw cash.

It's essential to compare the differences in investment options, services, fees, and expenses between your current plan and the one you're considering rolling into. This will help you make an informed decision.

If you've had an IRS-defined "triggering event" and your plan allows withdrawals, you can roll over your accumulations to another retirement plan or an Individual Retirement Account (IRA).

Direct rollovers are a great option, as they are nontaxable and not reported as income to the federal government. Your plan's rules will specify when you're eligible for a distribution.

Here are the key benefits of direct rollovers:

If you need some of your retirement savings in cash, you can withdraw your TIAA Traditional Account balance through a Transfer Payout Annuity (TPA) under the terms of the contract.

A lump-sum payment, subject to a surrender fee, may be available depending on your plan rules and the terms of your contract.