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Contents: Publications: Plan Booklet (PDF)
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IU Replacement Retirement Plan (Plan)Highlights
EligibilityTo be eligible to participate in the Plan, an employee must satisfy the Participant List Requirement and IU Retirement Plan Requirement described below and not be a member of an excluded class of employees. Participant List Requirement. An employee must be listed as an eligible participant in the IU Replacement Retirement Plan Eligible Participant List (Section H of the IU Replacement Retirement Plan Summary of Plan Provisions Document). To be listed as an eligible participant in the Eligible Participant List, an employee must have satisfied one of the following criteria:
IU Retirement Plan Requirement. An employee must be an active participant in the IU Retirement Plan at that 15% contribution level. To be eligible to participate in the IU Retirement Plan at the 15% contribution level, an employee must be a 100% full-time equivalent (FTE) academic or professional staff employee, (grade 16 and above), hired in an appointed position before January 1, 1989.
Termination of ParticipationAn employee is no longer eligible to participate in the Plan if:
In the event an individual becomes ineligible to participate in the Plan prior to becoming vested, the individual’s entire Plan benefit will be forfeited. ContributionsEmployer ContributionsIndiana University will make all contributions required to fund the Plan. All contributions will be paid into the trust fund and will be held, managed, invested, and distributed in accordance with the provisions of Plan and trust agreement. Employee ContributionsIndiana University makes all contributions to the Plan. Employees are not required, nor permitted, to make any contributions to the Plan. Maximum Contribution Amount (IRC Section 415 Limit)Federal law limits the total amount that a participant can accrue under the Plan when such benefit is expressed as an “annual benefit.” The annual benefit cannot exceed the lesser of $175,000 or 100 percent of the participant’s average compensation for his or her highest 3 years. (The IRS adjusts the contribution limit periodically for increases in the cost of living.) The term “annual benefit” means a benefit payable annually in the form of a straight life annuity under a plan to which employees do no contribute and under which no rollover contributions are made. Rollover ContributionsRollover contributions are not permitted to be made to the Plan. A “rollover contribution” is an employee directed transfer of retirement plan assets from a retirement plan of a prior employer or an IRA to the retirement plan of a current employer. Continued ContributionsThe Plan benefit replaces the “interim benefit” under the IU 18/20 Retirement Plan only. In addition to the Plan benefit, an employee may also be eligible for the “continued contribution benefit” under the IU 18/20 Retirement Plan. Continued contributions benefits are subject to the terms and conditions of the IU 18/20 Retirement Plan. Please reference the IU 18/20 Retirement Plan Summary for more information on continued contribution benefits. VestingAn employee must satisfy all of the following age, service, and employment conditions in order to become vested in his or her Plan benefit:
*Faculty participants with a 10-pay academic year appointment will satisfy the attainment of age 64 requirement on:
ForfeitureA participant’s Plan benefit is forfeited when the participant terminates employment, becomes ineligible to participate in the Plan, or dies before becoming entitled to his or her full benefit under the Plan. Forfeitures will be used to reduce Indiana University’s contribution to the Plan in the following Plan Year. If a participant receiving benefit payments under the Plan is reemployed by Indiana University, that participant will forfeit any payments that otherwise would have been payable during the period of reemployment, effective as of the date of rehire. Plan BenefitA vested participant may elect to receive his or her Plan benefit in one of the following forms:
Standard Retirement BenefitIf elected, the standard retirement benefit is the annual benefit amount a vested participant will receive for life based on the following formula: Final average salary x 36% = annual benefit amount Optional Retirement BenefitIf elected, the optional retirement benefit is the annual benefit amount a vested participant will receive for 5 years or until death if earlier based on the following formula: Final average salary x 100% = annual benefit amount Final Average SalaryFinal average salary means a vested participant’s average base salary for the five year period preceding the earlier of:
DistributionsDistribution of the Standard Retirement BenefitIf a vested participant elects to receive his or her Plan benefit as the standard retirement benefit, the Plan benefit will be distributed as a monthly amount payable for the vested participant’s life. The monthly amount is determined by dividing the participant’s annual benefit amount by 12. Distribution of the Optional Retirement BenefitIf a vested participant elects to receive his or her Plan benefit as the optional retirement benefit, the Plan benefit will be distributed as a monthly amount payable until the earlier of:
In-Service DistributionsIn-service distributions, including hardship distributions, are not allowed to be made to a participant from the Plan. LoansLoans are not allowed to be made to a participant from the Plan. Minimum Required DistributionsFederal 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 70 ½ or the calendar year in which the participant retires, whichever is later. Death DistributionIf a participant dies before distribution of his or her Plan benefit commences, the participant’s Plan benefit will be forfeited. If a participant dies after distribution of his or her Plan benefit has commenced, the remaining portion of the participant’s Plan benefit will be forfeited. Taxes on DistributionsPlan 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. Direct Rollover DistributionsA direct rollover of an eligible rollover distribution may be made at the participant's election. A direct rollover is a payment of an eligible rollover distribution from the Plan directly to another eligible retirement plan, such as a 401(a) plan, 403(b) plan, 401(k) plan, governmental 457(b) plan, or IRA. However, certain types of distributions, such as life-time annuity payments, are not eligible for direct rollover treatment. Qualified Domestic Relations Orders (QDROs)Indiana University may be required by law to recognize obligations a participant incurs as a result of a qualified domestic relations order (QDRO). A QDRO is 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 Plan distribution. Questions or CommentsThe IU Replacement 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 University Human Resource Services with any questions or comments regarding the Plan at:
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