Defined Contribution Retirement Plan (403 (b)): Office of Faculty and Staff Benefits

IMPORTANT NOTICE:   The following information describes the Defined Contribution Retirement Plan available through December 31, 2008.  Georgetown University is implementing enhancements to the Plan effective January 1, 2009.  For more details on these enhancements, including staff eligibility requirements, click here.

The Georgetown University Defined Contribution Retirement Plan is a 403(b) retirement plan whereby Georgetown University provides retirement contributions to participants who choose to make employee pre-tax contributions. Your contributions, along with corresponding Georgetown contributions, are then invested according to investment options you choose. While employed at Georgetown University, you do not have access to the money in your account; however, when you leave Georgetown University, you will have full access to the funds in your account. As in all defined contribution plans, the amount in your account when you retire or terminate employment is dependent upon contribution levels and the earnings on those contributions.

Who is Eligible?
You are eligible to participate in the Defined Contribution Retirement Plan if you are:

• A faculty member working 50% or more time (as defined by class code); 
  
• An academic or administrative professional (AAP) working 50% or more time (as defined by class code); or 
•  A staff member with an annual base salary greater than or equal to the Social Security Wage Base. The wage base changes annually -- it is $102,000 for 2008.

Please note that eligibility does not imply automatic participation. Enrollment into the Defined Contribution Retirement Plan is not automatic. Eligible employees must enroll. Unlike the rule for staff members eligible to participate in this plan, if a Faculty member or AAP does not enroll in this Plan, he or she will accrue no retirement benefits whatsoever.

Where Do My Contributions Go? Where Do Georgetown's Matching 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.

How Do I Enroll?
To enroll, you must complete two separate forms. They are:

• Georgetown University Salary Reduction Agreement. This form authorizes Georgetown University to reduce your salary by the amount you elect, and remit the contributions to the company(ies) you elect. 
  
• Enrollment Application/Contract for each investment company you elect.

The Salary Reduction Agreement form authorizes Georgetown University to reduce your salary by 3% and remit the contribution to the company(ies) you elect. The investment company specific enrollment application/contract is required to set up your account with the investment company and instructs the investment company how to invest your contributions. You may obtain an enrollment application/contract for each of the investment companies by stopping by the Human Resource Office at Ground Floor Healy Hall or by e-mailing us at benefitshelp@georgetown.edu to request we send one to you. When you e-mail us for the packets, we will send them via inter-campus mail, so please include your office mailing address when requesting these packets. Unfortunately, the packets are too lengthy for us to post online.

Each enrollment application/contract comes in a packet that describes the funds available, provides information to you on the fund's investment objectives, historical rates of return, etc, and includes a contract for you to complete and sign if you choose to invest with that company. You should review the entire packet of information for each investment company so you are comfortable with:

1. The company(ies) you choose
2. The investment fund(s)s you choose

If you want more details on the investment options available, you can visit the investment company websites or contact each of the company's representatives and ask him or her any questions you may have about the investment funds available.

You should send all completed forms together -- i.e., the Salary Reduction Agreement and one or more enrollment application(s)/contract(s) -- to the Office of Faculty and Staff Benefits on the Ground Floor of Healy Hall.  Please make copies of the completed forms for your records.

When Can I Enroll? Are There Enrollment Deadlines?
Eligible employees may enroll in the Defined Contribution Retirement Plan at any time. There are no enrollment deadlines. If you do not enroll when first eligible, it is not necessary to wait for Open Enrollment.
However, the Benefits Office highly recommends that you enroll 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. This will also avoid your having any unusually large deductions from your paycheck. This is especially true if you are hired toward the end of the calendar year, since the IRS prohibits us from taking contributions from employee's paychecks attributable to a prior calendar year.

For example, if you are hired in April of 2002, and wait until November of 2002 to enroll in the plan (i.e., you wait 7 months), we can and will take the employee contributions retroactive back to your date of hire, so that you can receive the employer match on those contributions. However, if you are hired in November of 2002 and wait until January of 2003 to enroll in the plan (i.e., you wait 2 months), we cannot apply that election to any 2002 earnings, and you will permanently lose the employer matching contributions associated with those earnings.

How Much Do I Contribute To This Plan? How Much Does Georgetown Contribute?
When you enroll in the Plan, you contribute 3% of your gross pay each pay period. In addition, Georgetown University contributes 10% of your gross pay each pay period (participants who were hired prior to January 1, 1996 receive a 12% employer contribution). The University contribution is, in essence, an employer matching contribution. You do not receive the University contribution unless you contribute your own funds.
When you participate in this Plan, you contribute precisely 3% (no more, no less) 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 slightly below the limit set forth by Internal Revenue Code, Section 401(a)(17) ($220,000 for 2006). 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?
In addition to the contribution limits listed above (based on the Plan's provisions and the maximum compensation limitation), there is also an IRS mandated limit to employee contributions. This limit is determined on a calendar year basis. 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, complete a new Salary Reduction Agreement and any applicable company applications/contracts. (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:  Ms. April Winstead, April.Winstead@FMR.com
  TIAA-CREF:   Mr. D. Glenn Collins at 202-637-8939 or Mr. Michael DeSpirito at 202-637-8912
  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 contributions entirely -- To discontinue contributing to the plan, simply complete a new Salary Reduction Agreement indicating future contributions of "zero". Please note that although this is allowable, it is an extremely rare occurrence due to the fact that if you discontinue contributing to the plan, the employer contribution will cease as well.

Can I Roll Over Money From a Prior Employer's Tax Qualified Retirement Plan Into This Plan?
Yes, you can subject to the important caveats listed below. Every employer's tax qualified retirement plan is qualified under a specific Internal Revenue Code ("IRC") Section. Prior to 2002, participants could only roll over accounts from their prior employer's plan if that plan was qualified under the same Section as our plan -- IRC Section 403(b). Beginning in 2002, this restriction was liberalized and now participants can roll over money into our plan if their prior employer's plan was qualified under Sections 401(a), 401(k), 403(b) or 457(f). We realize that you may not know the specific IRS Code Section under which your prior employer's plan was qualified. Your prior employer, however, does know this, so it should be relatively easy for you to determine if you can roll over prior retirement accounts into our plan simply by obtaining this information from your prior employer.

Once you determine that you can roll over the funds, your prior employer more than likely will ask you to complete forms to request the rollover from them. Each employer has its own requirements for this process, and the extent of the paperwork varies considerably from employer to employer. Additionally, each of the investment companies associated with our plan will ask you to complete another set of paperwork in order for them to accept the rollover. For this reason, the first step you should take is to contact the investment company that will be receiving the rollover:

Fidelity: Joe Bouffard, CFP, 1-800-841-3363, ext. 73468
TIAA-CREF: Mr. D. Glenn Collins at 202-637-8939 or Mr Michael De Spirito 202-637-8912
Vanguard: Participant Services at 1-800-523-1188, hit "*" then "0" to speak with an associate.

The Office of Faculty and Staff Benefits has no involvement in this process.
Please note this plan does not accept rollovers from Individual Retirement Accounts (IRA's) or non-qualified deferred compensation plans. Also please note that because there are some investment options available in the Voluntary Plan that are not allowed in this Plan, most participants choose to make rollover contributions into the Voluntary Plan instead of this plan.

Once Enrolled, 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 Employee Access+ in any way.

Will the Employee and Employer Contributions Made to the Plan Agree With The Amounts Shown On My Pay Advice?
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. Georgetown University sends all employee and employer contributions to the investment companies (TIAA-CREF, Fidelity, and Vanguard) once per calendar month. We send these remittances on or before the 15th day of the month following the month for which the contributions are attributable. Therefore, there will often be a difference between the amount of employee and employer contributions per your pay records and the amounts posted to your accounts.

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 the appropriate 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.

How Does Participation In This Plan Affect My Ability To 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:

1. Contact the applicable investment company and request distribution paperwork. The investment company will send the paperwork directly to you.
2. When you receive the distribution paperwork, complete and sign all appropriate sections. Obtain the spousal signature, if required (including notarization) 
   
3. Send the distribution paperwork to the Faculty and Staff Benefits Office so your distribution can be authorized. You may mail the form to:
   
   Georgetown University
   Faculty and Staff Benefits Office
   Ground Floor, Healy Hall
   Washington, DC 20057-1265
   attn: Retirement Plan Benefits Analyst

It is critical that you complete the steps listed in the order above. If you do not, your distribution will be delayed. Please note that we can accept faxed copies of these signed forms. You may fax them to 202-687-2389. If you include your e-mail address on the fax cover sheet, we will send you an e-mail acknowledging receipt of your paperwork.

Once we receive your signed paperwork, the Office of Faculty and Staff Benefits will verify that you have terminated employment with Georgetown University and authorize your distribution (in the form of a signature). The Office of Faculty and Staff Benefits will then forward your completed distribution paperwork to the investment company which will process your distribution.

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 benefitshelp@georgetown.edu.