Contents:

Plan Highlights  

Eligibility

Contributions 

Investments 

Distributions & Withdrawals

Questions and Comments

See also:

IU Retirement Plan – Summary of Plan Provisions booklet (PDF)

Forms:

Investment Company Change Form (PDF)

Fidelity Retirement Plan Enrollment Form (PDF)

TIAA-CREF IU Retirement Plan Enrollment Form (PDF)

Retirement IU Retirement Plan

IU Retirement Plan (Plan) Highlights

• IRS Code Section 403(b) defined contribution plan
• Indiana University makes all contributions to participant accounts
• Four separate and distinct contribution levels
• Plan contributions are always 100% vested
• Participant directed investment - daily valuation plan
• Distributions only upon termination of employment with Indiana University

Eligibility

Eligible employees will participate in the Plan in one of four contribution levels. To be eligible to participate in the Plan at a stated contribution level, an employee must be a:

The following individuals are prohibited from participating in the Plan:

• Students with non-FICA status; and
• Medical residents and interns.

Commencement of Participation

An eligible employee may begin participating in the Plan upon his or her date of hire, provided the employee has properly completed and returned all required Plan enrollment materials to the campus Human Resource office.

Restricted Participation

An employee is no longer eligible to receive an allocation of Plan contributions if:

• The employee terminates employment with Indiana University; or
• The employee ceases to be a member of an eligible class of employees.

In the event an individual becomes ineligible to receive an allocation of Plan contributions:

• Contributions will stop being made to the Plan with the employee's last regular paycheck or the last paycheck attributable to employment in an eligible class of employees.
• The participant will have the same rights as any other participant except no additional contributions will be made to the Plan on his or her behalf.

Contribution Level Changes

To remain eligible to participate in the Plan at the 15%, 12%, or 11.25% contribution level, a participant must continue to satisfy the eligibility requirements for that contribution level. If a participant no longer satisfies the eligibility requirements for the contribution level, the participant will be placed in the 10% contribution level if they are at least a 50% or more FTE academic or professional staff employee. If the participant's employment is less than 50% FTE or if the participant is no longer an academic or professional staff employee, participation in the Plan will be restricted.

Participants in the IU 18/20 Retirement Plan and IU Replacement Retirement Plan will also lose their eligibility status under those plans if they no longer satisfy the eligibility requirements for the 15% contribution level.

Contributions

15% Contribution Level

A participant will receive an allocation equal to the sum of the following for each regular pay period he or she is eligible to participate in the Plan at the 15% contribution level:

• 11% of the first $7,800 of budgeted base salary, plus
• 15% of budgeted base salary thereafter.

Budgeted base salary does not include any supplemental pay received by the participant during the pay period.

12% Contribution Level

A participant will receive an allocation equal to 12% of his or her budgeted base salary for each regular pay period he or she is eligible to participate in the Plan at the 12% contribution level.   Budgeted base salary does not include any supplemental pay received by the participant during the pay period.

11.25% Contribution Level

A participant will receive an allocation equal to the sum of the following for each regular pay period he or she is eligible to participate in the Plan at the 11.25% contribution level:

• 11.25% of budgeted base salary, plus
• 11.25% of supplemental pay.

10% Contribution Level

A participant will receive an allocation equal to 10% of his or her budgeted base salary for each regular pay period he or she is eligible to participate in the Plan at the 10% contribution level.   Budgeted base salary does not include any supplemental pay received by the eligible participant during the pay period.

Maximum Contribution Amount (415 Limit)

The total amount of employer contributions and salary deferrals that may be contributed to the Plan, IU Tax Deferred Annuity Plan, and the 403(b) plan portion (i.e., continued contributions) of the IU 18/20 Retirement Plan on behalf of an employee during a calendar year cannot exceed the lesser of:

• 100 percent of the employee's compensation for the year; or
• $45,000 in 2007 (as adjusted to reflect increases in the cost-of-living).  

Vesting

A participant is always 100 percent vested in his or her Plan account.   This means that the participant's account may never be forfeited.

Taxes on Contributions

Contributions will not be included in a participant's income reported to the federal government for income tax purposes.

Military Service

The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) provides eligible individuals who return to employment with Indiana University from a period of military service with several employee benefit rights, including retirement plan benefit rights.

Upon reemployment or reinstatement following a period of military service, Indiana University may be required to restore any Plan benefits that would had been earned by the eligible employee for any portion of the military service period for which the employee would otherwise have been a participant had he or she continued working with Indiana University.

If an employee returns to work following a period of military service, please contact University Human Resource Services (UHRS) immediately.

Rollover Contributions

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

Beneficiary Designations

Any person or entity can be designated as a beneficiary.

Investments

General Terms and Conditions

The Plan is a participant directed plan. This means that 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 fund provided under the Plan. A participant may also transfer monies from one investment fund to another.

A participant's election to invest his or her account, to change the investment direction of future contributions, or to transfer amounts from one investment fund to another must be made in accordance with the rules established by the Plan Administrator. In addition, the Plan Administrator has adopted rules and procedures for the investment of amounts for which no elections are received.

Authorized Investment Companies

Indiana University has approved of the following investment companies under the Plan:

Representatives from TIAA-CREF and Fidelity Investments are available to meet with participants to discuss investment fund options.

Investment Company Fees

TIAA-CREF and Fidelity Investments do not generally charge participants the following types of fees: front end / sales load fees, account maintenance fees, cash-out or transfer fees. However, each individual fund will have minimum management fees as specified in the fund's prospectus.

Each investment company reports net investment return figures, which reflect investment performance after administrative expenses are deducted.

Participants should contact the investment company for more information about fees before investing with that company.

Investment Options at Fidelity Investment
(skip table)

Investment Options at TIAA-CREF

Account Statements

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

Investment Advisors (Agents and Brokers)

Indiana University prohibits investment advisors from having access to a participant's Plan account. Indiana University does not provide any participant information to an investment advisor without the express written consent of the participant.

Plan Distributions and Withdrawals

Distributable Events

A participant may only withdraw funds from his or her Plan account upon termination of employment with Indiana University.

Hardship Distributions

Hardship distributions are not allowed to be made to a participant from the Plan.

Loans

Loans are not allowed to be made to a participant from the Plan.

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.

Forms of Distribution

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
• Annuity
• Installment
• Any legally permissible form of distribution permitted by an authorized investment company

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 59 1/2 are generally subject to a 10% early withdrawal penalty tax.

There are exceptions to the 10% early withdraw 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.

90-24 Transfers

"90-24 transfers" are not allowed to be made from the Plan prior to a participant's termination of employment with Indiana University.

Qualified Domestic Relations Orders (QDROs)

Indiana University may be required by law to recognize obligations a participant incurs as a result of a court order relating to child support, alimony, or martial property rights. Indiana University must honor a qualified domestic relations order, which is defined as a decree or order issued by a court that obligates the participant to pay child support or alimony, or otherwise allocates a portion of the participant's assets in the Plan to his or her spouse, former spouse, child, or other dependent (collectively known as "alternate payees").

A distribution authorized by a QDRO to an alternate payee will be permitted under the Plan, even if the affected participant is not currently eligible for a distribution under the Plan.  

Rights and Privileges after Termination of Employment

A participant remains 100% vested in his or her Plan account after termination of employment with Indiana University. 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 Indiana University, most transactions related to a participant's Plan account are handled directly by the participant with the applicable investment company.

Participant Responsibilities

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

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

Questions and Comments

The IU Retirement Plan – Summary of Plan Provisions booklet contains a detailed description of the terms and conditions of the Plan. A copy of the booklet may be obtained from this website or by contacting the campus Human Resource office.

Please contact UHRS with any questions or comments regarding the Plan at:

University Human Resource Services
Attn: IU Retirement Plan
400 East 7th Street, E165
Bloomington, Indiana 47405-3085

Benefit plan information on these web pages is in a summary format and is not intended to replace actual plan documents. Indiana University reserves the right to amend or terminate all or any part of any benefit plan.