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Important Changes to Your 403(b) Retirement Plan

403(b) plan changes
As part of ongoing efforts to provide faculty and professional staff with the most competitive and beneficial retirement plan, Drexel Human Resources recently reviewed and redesigned the University's Drexel’s 403(b) plan to simplify the election process, align with benchmark norms and encourage faculty and professional staff to save enough to enjoy a comfortable retirement.

A study conducted by Human Resources, in conjunction with AonHewitt, found that Drexel’s existing 403(b) plan design does not promote adequate savings. Financial planners recommend that employees set aside at least 15 percent of their salaries, through a combination of employee and employer contributions, in order to retire comfortably. According to the study, most Drexel faculty and professional staff are not saving enough to comfortably retire because the current plan design only requires a two percent employee contribution in order to receive the full university contribution.

The new plan, which will be rolled out during Open Enrollment in November and takes effect Jan. 1, 2015, is designed to encourage full-time benefit-eligible faculty and professional staff of all ages to save the recommended 15 percent. It was approved by the President’s Cabinet and the Board of Trustees. Benefits of the plan changes include:

▪   More savings encouraged: Under the new plan, the University will match any percentage that you contribute up to a maximum of six percent of your salary, plus an additional employer contribution of three percent for employees under age 50 and five percent for employees 50 or older, regardless of the percent you contribute. Under this plan, all full-time benefit-eligible faculty and professional staff have the opportunity to save 15-17 percent of their base salary, compared to 11-13 percent under the existing plan.


Age

Faculty / Staff Contribution

University Match

University Additional Contribution

Total

Under 50

6%

6%

3%

15%

50 +

6%

6%

5%

17%

▪   Alignment with industry benchmarks: The new plan increases the maximum university contribution for faculty and professional staff under the age of 40, who are currently receiving a maximum of seven percent, to the higher education industry benchmark of nine percent, while allowing faculty and professional staff over 40 to continue receiving the maximum nine-11 percent amount they were eligible for before the change.

▪   Simplified process: The redesigned plan is open to all full-time benefit-eligible Drexel University and Drexel University College of Medicine faculty and professional staff, regardless of age, and has only two age-based tiers. Enrollment will be conducted online through the DrexelOne portal.


What you must do…

The redesigned 403(b) is voluntary, and all faculty and professional staff must re-enroll in the plan using the electronic system. Those who choose not to participate must still go into the system to waive their participation. Please note that existing employees will not be automatically enrolled in the plan, regardless of your past contributions. If you do not re-enroll by Jan. 1, enrollment will still be open for you to begin saving at any time after that.

Open Enrollment for the redesigned 403(b) plan will begin November 1, and seminars will be held throughout the month of October at all Philadelphia campuses to explain the new plan and how to enroll. Special enrollment help sessions will also be held in the training room in the Korman Center to walk faculty and professional staff through the enrollment process. Please see the schedule below for seminar and enrollment session dates, times and places and visit the 403(b) Open Enrollment website for additional details.

403(b) Seminars

Center City Campus

Queen Lane Campus

University City Campus

October 10

1:30–2:30 p.m.

New College Building

DiPalma Conference Room

(room 610-1)

October 15

11 a.m.–noon

Classroom A8

October 16

2–3p.m.

LeBow Engineering Center

Hill Conference Room (room 240)

October 22

10–11 a.m.

MacAlister Hall

Sky View Conference Room


Enrollment Help Sessions
All sessions will be held on the University City Campus at Korman Center, Training Room 013.

▪   November 7 · 1–4 p.m.

▪   November 10 · 10 a.m.–1 p.m.

▪   November 11 · 2–4 p.m.

▪   November 19 · 1–4 p.m.

▪   November 20 · 11 a.m.–2 p.m.

▪   November 24 · 11 a.m.–2 p.m.

▪   November 25 · 1–4 p.m.