When can I participate in the 403(b) retirement plan?
If you are an eligible employee, you may begin participating in the plan to make employee pre-tax contributions or after-tax (Roth) contributions as soon as practicable after your date of hire. You may begin this participation by completing an online salary deferral to make pre-tax or after-tax (Roth) contributions on TIAA's website. Your contributions to the plan will begin as early as the first payroll period after the receipt and processing of your salary deferral agreement by TIAA and submitted to the University unless you specify a later date. Please allow at least one to two payroll cycles for the deductions to begin.
How do I know if I am an eligible employee?
You are eligible to make pretax and/or Roth contributions to the plan if you are an employee of the University, or Drexel University Online, LLC. You are not eligible to participate if you are:
- A student performing services as described in IRS code section 3121(b)(10)
- A leased employee as defined in IRS code section 414(n)
- An independent contractor (even if you are later reclassified as an employee)
What is automatic enrollment, and who is eligible to be automatically enrolled?
All eligible employees (full-time, part-time, adjunct, per diem, casual, temporary, co-op) will be auto enrolled.
If you do not make an election to participate in the plan or affirmatively elect not to participate in the plan within 31 days of hire, you will be automatically enrolled in the plan to make employee pretax contributions at the rate of 2 percent per pay.
If you do become automatically enrolled in the plan, you may elect to stop future contributions at any time. Any elections to participate, to not participate, or to change your contribution rate can be made through your TIAA retirement account, accessible through DrexelOne.
Automatic enrollment does not apply to certain collectively bargain employees.
What if I get automatically enrolled and deductions were taken from my check?
Once contributions have been deducted from your check and deposited into your TIAA account, they are not immediately accessible to withdraw. Those funds must follow the rules of the plan for withdrawal which state that you must terminate all employment with the University or retire from all service with the University before you can elect to receive a distribution of your account. Review page 12 in the Summary Plan Description [PDF] for more information.
Who is eligible for a Drexel contribution?
Full-time and part-time employees are eligible on a payroll basis and employees classified as adjunct, casual, temporary, per diem or co-op are eligible on a plan year basis if employee had at least 1,000 hours of service and was an eligible employee on the last day of the plan year. Union employees are eligible to make employee contributions only. Student employees are not eligible to participate.
Does Drexel contribute to my retirement plan?
Yes, if eligible for a university contribution, the university will match any percent that you contribute, up to a maximum of 6% per pay. PLUS, the university will make an additional contribution based on age. If you are under 50, you will receive an additional 3% from the university. If you are over 50 you will receive an additional 5%.
How much must I contribute to the plan in order for Drexel to contribute?
Drexel University contributions begin when an employee commits to at least a 1% contribution.
How do I enroll?
To enroll or make changes to your 403(b) contributions log in to DrexelOne and select the Employee tab. Scroll down to the My Benefits section on the left-hand side of the screen and select the link for Retirement Plan Management, which will take you to the TIAA.org portal.
The system will not allow me to enter in dollar amounts. Why?
Since the plan is based on a match system, only full percentages are able to be entered as elections.
Am I required to contribute six percent, or can I elect for a lower contribution?
If you are an eligible employee, the University will match your contributions dollar for dollar up to a maximum of six percent. However, you are not required to contribute that much in order to participate. You can contribute as little as one percent per pay and still receive a match and University contribution. Example: John Doe is 53, and he contributes two percent pre-tax. He will have another two-percent employer match plus five-percent basic contribution for a total of nine percent of his pay deposited into his account each payroll.
I have a dollar amount in mind that I want to contribute but I am not sure how to factor that into a percentage for my election. How can I do this?
To determine the percentage amount that is closest to your desired dollar amount, divide the amount you want to contribute by the amount of your gross salary (weekly, biweekly, or monthly depending on your pay schedule). You will then want to multiply that percentage by the gross salary. Since the desired amount may not be exact, you can increase the percentage by whole percent amounts.
For example: John wishes to contribute about $150 per pay. He is a monthly paid employee and his annual salary is $52,000.
$52,000/12 = $4,333.33 (monthly salary)
$4,333.33 x .03 = $129.99
$4,333.33 x .04 = $173.34
You must choose a whole percentage amount therefore you can choose either three percent or four percent of the salary.
May I contribute more than six percent, and, if so, how much more?
You can elect to contribute a maximum of 75 percent of your pay. However, the IRS annual compensation limit will state the maximum you can contribute each year. Drexel’s payroll system will automatically end your contributions when you reach the annual limit. This annual limit is determined by the IRS and may increase each year.
I was enrolled in a 403(b) plan with my prior employer. How does that change my 403(b) enrollment at Drexel?
If you were enrolled in a 401(k), 403(b) or another qualifying retirement plan with your previous employer in the current tax year, your total contributions to all of your plans cannot exceed the annual IRS contribution limit. This is the employee’s responsibility to monitor contributions between multiple employers.
Will my contributions ever be taxed?
Pre-tax contributions are calculated before taxes. Roth contributions are calculated after-tax. When you retire and begin to receive distributions from your account, or when you remove funds from the plan after you leave Drexel, the funds will be taxed unless they were contributed as Roth dollars. There is a penalty of 10 percent if you remove funds before age 59 ½. After you leave Drexel, you may convert your 403(b) plan to an IRA (Individual Retirement Account) or another employer’s 403(b) or 401(k) plan without penalties or taxes. Then, when you are ready to remove the funds, they will be taxed.
Do I own the Drexel contribution or will I lose it if I leave Drexel?
The Drexel contribution is “vested” (you own it) from the first day the contribution goes into your plan.
Where may I invest my money?
TIAA is the University’s single retirement plan recordkeeper. You can access your account on TIAA.org through DrexelOne.
Can I withdraw funds from my 403(b) account while I am still employed?
You may be eligible to withdraw up to the full amount of Employee Pre-Tax Contributions and Roth Contributions in your account (but not earnings post 1/1/89).
To qualify you must have an Immediate and Heavy Financial need (a “hardship”). If you make a hardship withdrawal prior to your attainment of age 59½, you may be subject to a 10% excise tax on the amount of the withdrawal.
You may be eligible to withdraw amounts in your account prior to your termination of employment with the University if you have reached age 59½. Subject to spousal consent you can receive the requested in-service withdrawal in a lump sum or in any other form permitted by TIAA. You may continue to make Employee Pre-Tax and Roth Contributions to the plan and be eligible for Employer Contributions even though you have elected an in-service withdrawal after age 59½.
For more detailed information on hardship and in-service withdrawals, review pages 9-10 in the Summary Plan Description [PDF].