457(b) Deferred Compensation Plan
The Drexel University 457(b) Deferred Compensation Plan is a voluntary retirement savings plan for faculty and professional staff members whose salary exceeds $150,000 during a calendar year. The plan is intended as a nonqualified, deferred compensation plan to provide supplemental retirement savings. The 457(b) Plan is another way to save more for retirement if you already contribute the maximum amount allowed under the 403(b) Plan. However, you are not required to do so in order to participate.
Contributions to the 457(b) Plan are made on a pre-tax basis, which allows you to build your retirement savings while reducing your current taxable income. There is no post-tax (Roth) option or employer contributions.
The plan offers a wide range of investment options [PDF] available through TIAA. Once enrolled, you can view and manage your investments through the TIAA website, along with beneficiary assignment.
Unlike the 403(b) Plan, which is a qualified plan, the 457(b) Plan is a nonqualified deferred compensation arrangement. This means that the assets that are held pursuant to the 457(b) Plan will be subject to the claims of all unsecured creditors of the University if the University becomes bankrupt or insolvent.
For more information on the 457(b) Plan, review the resources below:
[TIAA Video Presentation]
403(b) and 457(b) Comparison Flyer [PDF]
Drexel University faculty and professional staff whose salary exceeds $150,000 during a calendar year are eligible to participate in the plan.
You can enroll in the plan at any time by completing a Salary Reduction Agreement. Enrollments will be effective as of the first payroll period in the month following the month in which your request was submitted.
For example: if you submit the Salary Reduction Agreement on June 5, the election will be effective July 1.
The minimum amount you may contribute to the plan is $25 per pay period.
The maximum contribution limit is established by the IRS each year. In 2020, you can contribute up to $19,500. Additional "catch-up" contributions may be made in the three years before you turn age 65.
For more information on the "catch-up," please contact Joyce Vuocolo, Director of Total Rewards.
The contribution limit for the 457(b) Plan is separate from the 403(b) Plan. Contributions made to the 403(b) Plan do not count towards the 457(b) limit.
No, the university does not make contributions to the 457(b) Plan.
You are 100% fully vested in your contributions to the plan.
STEP 1 – Review all of the information on this website to ensure that you fully understand how this plan works
STEP 2 – Complete a 457(b) Salary Reduction Agreement and submit it to Joyce Vuocolo at email@example.com.
STEP 3 – Complete beneficiary designation by contacting TIAA directly either over the phone or through your online account.
You must submit a 457(b) Salary Reduction Agreement to authorize a new payroll deduction. You will elect to contribute a dollar amount of your gross salary to TIAA. Your enrollment, change or cancellation will be effective as of the first payroll period in the month following the month in which y your request was submitted.
Yes, you can change or cancel your contribution amount at any time by submitting a 457(b) Salary Reduction Agreement to Lauren Frankel at firstname.lastname@example.org. Your change will be effective as of the first payroll period in the month following the month in which your change was submitted.
Except in the case of an unforeseeable emergency (as described below), you cannot withdraw or otherwise take distributions from your plan account while you are employed by the University.
Once you leave the University (and all affiliates), you can choose to receive the value of your plan account in a single sum, in installments, as a lifetime annuity, or postpone distribution to a later date.
You must make your election within 60 days of your separation from employment. If you do not make an election within 60 days, your 457(b) Plan account will be automatically paid to you as a single lump-sum payment.
No, loans are not available through the 457(b) Plan.
Under a special rule, you may be able to withdraw a portion of your Plan account prior to your separation from the University in the event of an "unforeseeable emergency." This means a serious financial hardship due to an unforeseeable event or emergency such as death or illness of you or a family member. An unforeseeable emergency withdrawal must be limited to an amount sufficient to meet the unforeseeable emergency and cannot be obtained for the purchase of a home, the payment of college tuition or other foreseeable events.
You should consult your personal tax advisor to obtain information regarding the tax consequences before you request a withdrawal or distribution of any portion of your plan account.
In general, your contributions to the plan and the investment earnings on your contributions are income tax-deferred while held in your account under the plan. Taxes become payable when your account is distributed to you. You may not roll over distributions from the plan into an IRA or plan maintained by another employer.
The University is required to withhold income taxes from all plan distributions. But if a distribution substantially increases your annual taxable income, it will be your responsibility to pay the additional taxes that may be due for the year of the distribution.