University Human Resources
Retirement & Savings Plan
- IRS Code Section 401(a) defined contribution plan, effective July 1, 2013
- Indiana University makes all contributions to participant accounts in this Plan; there are two separate and distinct contributions: Retirement & Savings Plan contribution and Retirement & Savings Plan match contribution
- There are vesting requirements outlined below
- Participant directed investment
- Distributions upon termination of employment with Indiana University
To be eligible to participate in the Plan, an employee must be hired on or after July 1, 2013:
- A Support or Service Staff position
- 50% or more full-time equivalent (FTE)
- A Temporary position
- Temporary with Retirement and scheduled to work at least 1,000 hours or more in a calendar year
The following individuals are prohibited from participating in the Plan:
- Students exempt from FICA
- Medical residents
- Non-resident aliens
Commencement of Participation
An eligible employee begins participating in the Plan upon his or her date of hire into an eligible class of employees.
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.
Indiana University contributes up to 8 percent of a participant’s actual base wage. The Plan has two separate and distinct contribution components.
Retirement & Savings Plan Contribution
A participant will receive an amount equal to 4 percent of his or her actual base wage for each regular per pay period he or she is eligible to participate in the Plan. Base wage does not include any supplemental pay received by the eligible participant during the pay period.
Retirement & Savings Plan Match Contribution
A participant will receive an amount equal to the participant’s designated contributions to the IU Tax Deferred Account Plan (TDA) during such pay period, up to 4 percent of his or her actual base wage received during such pay period.
Participants are not required, nor permitted, to make additional contributions to the Plan.
Participants in the Plan are subject to a three-year cliff Vesting requirement. A Participant’s Account is fully Vested upon: 1) completion of three years of IU employment as a Plan Participant in an IU-sponsored Base plan; 2) Death; 3) Disability as defined by Social Security; or 4) attainment of age 65. Employment with an affiliated entity does not count toward years of IU employment for Vesting. If a Participant subject to Vesting terminates employment prior to becoming fully Vested, the Participant’s Account is forfeited upon termination. If a Plan Participant terminates employment before Contributions and earnings are fully Vested, and returns to IU employment as a Plan Participant within six months of termination, the forfeited Account Balance on the date of termination will be reinstated as soon as administratively possible. The returning Employee remains subject to Vesting, with prior years of Vesting service counting toward the three-year cliff Vesting requirement.
Taxes on Contributions
Contributions will not be included in a participant's income reported to the federal or state government for income tax purposes.
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 are not allowed to be made to the Plan.
A participant may only withdraw vested funds from his or her Plan account upon termination of employment with Indiana University.
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
- Any legally permissible form of distribution permitted by an authorized investment company
Hardship distributions are not allowed to be made to a participant from the Plan.
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 account, 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.
Direct Rollover Distributions
A 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 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. Participants should contact their chosen investment company(ies) for administration of the QDRO.
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 59½ are generally subject to a 10% early withdrawal penalty tax.
There are exceptions to the 10% early withdrawal penalty tax, including: receiving the Plan distribution as a life-time annuity payment or receiving the Plan distribution after terminating employment due to a permanent disability.
Rights and Privileges after Termination of Employment
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.
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.
IU offers individual counseling services for all eligible IU retirement plan participants. The University Retirement Program Services team is dedicated to working with IU employees to answer retirement plan questions and prepare for retirement readiness.
To schedule an appointment email .
In addition, the University’s two approved investment companies, Fidelity Investments and TIAA-CREF, offer investment counseling. More information about these companies is available in 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 funds provided under the Plan. A participant may also transfer monies from one investment fund to another.
A participant's election to choose an investment company(ies), 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 the following investment companies under the Plan:
|Company||Address||Telephone Numbers||Web site|
|TIAA-CREF||730 Third Avenue
New York, NY 10017
|Fidelity Investments||82 Devonshire Street
Boston, MA 02109
Representatives from TIAA-CREF and Fidelity Investments are available to meet with participants to discuss investment options.
Investment Company Fees
TIAA-CREF and Fidelity Investments do not charge the following fees: front end / sales load fees, account maintenance fees, 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.
Participants will 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. This information is always available online at the investment company web site.
Investment Advisors (Agents and Brokers)
Indiana University does not provide any participant information to an investment advisor without the express written consent of the participant.
Please contact University Human Resource Services with any questions or comments regarding the Plan at:
University Human Resource Services
Attn: Retirement & Savings Plan
400 East 7th Street, Poplars E165
Bloomington, Indiana 47405-3085