In the Defined Contribution Retirement Plan (403 (b) Plan), building retirement income is a shared responsibility between you and Georgetown University. With this Plan, you and Georgetown University work together to invest in your future. Your retirement account balance grows based on:
- Your contributions,
- Georgetown University’s contributions, and
- Investment income on your total account balance.
Contributions to the Plan (yours and Georgetown University’s) are made to your account every pay period, giving your account the opportunity to grow throughout the year. Not only will the account grow with contributions, it also has the potential to grow as a result of investment returns on your balance that may be realized throughout the year. You decide how to invest your contributions and Georgetown University’s contributions by choosing among a variety of funds offered by Fidelity Investments, TIAA-CREF and The Vanguard Group. All investment earnings and/or losses are reflected in your account.
You may download the full Summary Plan Description for the DCRP here.
Who is Eligible?
All benefits-eligible faculty, AAP and staff working at least 20 hours a week are eligible to participate. Fellows are not eligible to participate in this plan.
How does the University contribution work?
The University automatically contributes 5% of your gross pay, regardless of whether you personally contribute; the University will contribute an additional 5% when you contribute 3% of your salary. In other words, when you contribute 3%, the University will contribute an additional 10% for a total of 13% being contributed to the Plan.
If you contribute less than 3% to the Plan (0%, 1% or 2%) the University will contribute less (5%, 6.67% or 8.34%, respectively).
Where Do My Contributions Go?
Each month, Georgetown University remits your contributions, along with the University contributions, to whichever investment company(ies) you have chosen. You may choose from three investment companies:
- Fidelity Investments (1-800-343-0860);
- TIAA-CREF (1-800-842-2776); or
- Vanguard Group (1-800-523-1188, hit "*" then "0" to speak with an associate.)
The investment companies, in turn, invest the contributions in the specific fund or funds you have chosen. Each company offers a variety of investment options, ranging from conservative to aggressive. Georgetown University contributions are allocated proportionately to your contribution allocation. You may split your investments in any way you like, however many employees find using more than one vendor leads to unnecessary paperwork upon withdrawal.
Log on to http://gms.georgetown.edu with your NetID and password. New Employees will be prompted to enroll as part of the New Hire benefit event in their GMS inbox (see the New Employees section for more information). All other employees should follow the instructions below to enroll or make changes to your 403(b) elections.
Once you submit your choices, you'll be automatically enrolled in a target retirement fund by the investment company(ies) you have selected. You can change your investment allocations at any time after your first contribution has been made by contacting your investment company. You'll be receiving information from your chosen investment company(ies) shortly after you enroll with instructions.
What happens if I don't enroll?
If you don't enroll by the end of the second month of your employment, you will receive the automatic 5% contribution from Georgetown University in a Lifecycle Fund with TIAA-CREF.
What if I don't enroll within my first two months at Georgetown?
Absolutely. Eligible employees may adjust their contributions and investment company elections in the Defined Contribution Retirement Plan at any time. There are no enrollment or change deadlines. If you do not actively enroll when first eligible, you may later choose to increase or change your personal contribution. These contributions - and the corresponding University contributions - are not retroactive. In other words, any changes you make to your contribution level will be applied to the next pay cycle. Therefore, the Office of Faculty and Staff Benefits highly recommends that you actively enroll and contribute in the plan as soon as you are eligible to do so in order to receive the full amount of University contributions to which you are entitled.
How Much Do I Contribute To This Plan? How Much Does Georgetown Contribute?
When you enroll in the Plan, you contribute either 0%, 1%, 2% or 3% of your gross pay each pay period. In addition, Georgetown University contributes up to 10% of your gross pay each pay period (participants who were hired prior to January 1, 1996, and participated in the Defined Contribution Plan prior to December 31, 2008, receive a 12% employer contribution). The University contribution is, in essence, an employer matching contribution. You will receive an automatic 5% University contribution even if you contribute nothing. The University will contibute an additional 5% when you contribute 3%.
When you participate in this Plan, you can contribute no more than 3% of your compensation. However, you may supplement your retirement savings, if you wish, by participating in the Voluntary Contribution Retirement Plan .
Is There A Limit on My Compensation For The Purposes Of Contributions To This Plan?
Yes, there is a limit of $200,000 earnings recognized for Plan purposes. This limit is below the limit set forth by Internal Revenue Code, Section 401(a)(17) ($270,000 for 2017). When your contributions reach the limit for a given Plan Year (calendar year), Georgetown University will automatically suspend your contributions (and the corresponding University contributions) for the remainder of the Plan Year, and subsequently re-start contributions when the next Plan Year begins.
Therefore, the maximum employee contribution to this Plan is $6,000 per year ($200,000 multiplied by 3%). The maximum employer contribution to this Plan is $20,000 for employees hired on or after January 1, 1996 and $24,000 for employees hired on or before December 31, 1995.
Are There Limits On Contributions To The Plan?
Yes, your contributions are limited by IRS regulation, not Georgetown policy. In 2017, the IRS will continue allow participants under the age of 50 to contribute up to $18,000 throughout the year. Participants aged 50 and older are permitted to contribute up to $24,000 throughout the year. It takes into account only employee contributions, but it includes those contributions in:
- This plan
- The Voluntary Plan
- Any other tax-qualified plan into which you make employee contributions.
Once Enrolled, How Do I Make Changes?
Once enrolled in the Plan, you may make changes at any time. The following are examples of changes you may wish to make, and the directions for how to make those changes:
- Change where you wish your future contributions to be invested. An example of this is if you wish to change the direction of your contribution from 100% Fidelity to 50% Fidelity and 50% TIAA-CREF. To change your investment allocation with respect to the investment companies, log in to GMS and follow the steps for completing a Retirement Savings Change (Please note that this type of change will change the allocation of future contributions only).
- Redirect your contributions in a different manner to the investment companies -- An example of this would be if you wish to change your investment election choice from 100% of one Vanguard fund to 100% of another Vanguard fund. To change your investment allocation with respect to the investments within one company, simply contact that company directly, either on-line or by telephone. You do not need to contact the Office of Faculty and Staff Benefits to make this type of change.
- Transfer existing accumulated funds -- An example of this would be if you wish to transfer your entire account balance from Vanguard to TIAA-CREF. In order to accomplish this, the first step you should take is to contact the investment company that will be receiving the transfer. The appropriate consultant will assist you in this process. The appropriate consultant will assist you in this process:
Fidelity: Mr. Glover Kebe, firstname.lastname@example.org
TIAA-CREF: Ms. Jahleel Gordon at email@example.com
The Vanguard Group: Participant Services at 1-800-523-1188, hit "0" to speak with an associate.
They will outline the steps necessary to affect the transfer. Please note that this will not change, in and of itself, the directions regarding where you want your future contributions to go. If you wish to move your existing account balance to another investment company, and begin making future contributions to that company, simply combine this step with the first step listed above.
- Discontinue your contributions entirely -- To discontinue contributing to the plan, simply complete the Retirement Savings Change process in GMS indicating future contributions of "zero". Once your request has been processed, you will continue to receive the automatic University contribution of 5% of your gross pay to the company of your choice.
Can I Roll Over Money From a Prior Employer's Retirement Plan Into This Plan?
The Defined Contribution Retirement Plan does not accept rollovers. You may roll over money into the Voluntary Contribution Retirement Plan only. Click here for details.
How Often Do I Receive Updates On My Account Balance?
Once you are enrolled in the plan, you will begin to receive quarterly statements from the investment company(ies) indicating amounts contributed and returns generated by the investments. You also have the ability to view your account balance at any time you wish via the internet, since each investment company offers you the ability to view your account on-line. You must establish a separate password with each investment company to use this feature, as it is not connected with your NetID or GMS in any way.
Will Contributions Made to the Plan Agree With The Amounts Shown On My Payslip?
No. There is an administrative delay between the time your contributions are taken from your paycheck and when they are actually posted to your account. Typically, you should see the contributions posted to your account within ten days.
Accessing Funds While Still Employed
While working at Georgetown University, you do not have access to the money accumulated in your account(s) for any reason whatsoever. There is limited access to funds accumulated in the Voluntary Contribution Retirement Plan while still working at Georgetown. Please see that Plan's web page for details.
Distribution Rules For Participants Who Are 70 1/2 Or Older
As long as you are employed, you are not required to take a distribution from this plan, regardless of your age. Once you terminate employment, you are required to take a minimum distribution from the plan once you attain age 70 1/2. Contact your vendor (Fidelity, Vanguard, or TIAA-CREF) to do so.
What Does Vesting Mean?
Vesting means the granting to an employee of credits toward a pension even if separated from the job before retirement. You are always 100% vested in your account balance in this plan. Therefore, you are entitled to all the funds in your account, regardless of how long you have been employed at Georgetown when you terminate.
If I Have a 403(b), Can I Contribute To An Individual Retirement Account ("IRA")?
The rules regarding an individual's ability to contribute to an IRA, and the tax deductibility of contributions to an IRA, are complex and depend on many factors that are beyond the scope of your employment at Georgetown. Your marital status, total household income, other sources of income (self-employment income from outside consulting is one of many examples), amount of employee contributions made to our plans, and other factors can impact the type of IRA that is appropriate for you. Consequently, the Office of Faculty and Staff Benefits cannot provide you with guidance regarding IRA contributions. You should contact your tax or investment advisor for assistance.
What Do I Do When I Retire or Terminate Employment?
When you terminate employment at Georgetown University for any reason (voluntarily, non-voluntarily, due to retirement, etc.), you have full access to all funds accumulated in the Plan. Funds can be accessed in a variety of forms, including, but not limited to, the following:
- Direct rollover to IRA or to other compatible plan;
- Cash out;
- Annuity payments*;
- Systematic withdrawals; and
- Interest only payments*.
*Indicates options available only through TIAA-CREF.
Taxes and penalties vary according to distribution option. Please contact the applicable investment company(ies) for more specific information regarding distribution options.
If you wish to access your funds after you terminate, you must take the following steps:
- Contact the applicable investment company and request distribution paperwork. The investment company will send the paperwork directly to you.
- When you receive the distribution paperwork, complete and sign all appropriate sections. Obtain the spousal signature, if required (including notarization)
- Send the distribution paperwork back to your vendor as indicated on the form. If there is a section on the form prompting you to get Employer Authorization, simply write in "On File." Our office completes this portion electronically when you terminate employment.
Please note that if you terminate employment after age 55 and completing 10 years of service (measured on an elapsed time basis), you are entitled to additional retiree benefits, such as retiree medical insurance coverage and retiree life insurance. To request a full retirement packet, please contact the Office of Faculty and Staff Benefits at firstname.lastname@example.org. If you are planning to retire, we suggest reviewing our Retiree Checklist and the Benefits for Retirees webpage at least three months before your retirement date.
How do I obtain information for my attorney to prepare a qualified domestic relations order, or QDRO?
Contact your retirement plan company (Fidelity, TIAA-CREF, Vanguard) directly for guidance on preparing the QDRO.