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

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.

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.  If you contribute less than 3% to the Plan (0%, 1% or 2%) the University will contribute less (5%, 6.67% or 8.34%). 

If you are contributing less than than 3%, the Office of Faculty and Staff Benefits will  automatically increase your contribution by 1% each July 1, until you reach the maximum 3% employee contribution to the 403(b) plan. You may opt-out of this “automatic enrollment” feature by contacting the Office of Faculty and Staff Benefits.

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 take full advantage of this plan, you must complete two separate forms and return them to the OFSB by the last business day of the second month of your hire date (i.e., you were hired on January 5, the forms are due February 27). By completing (and returning) the forms within this timeframe, your retirement account will be credited the full amount back to your initial date of hire.  The required forms 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 up to 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 Office of Faculty and Staff Benefits 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.

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?  Can I choose to contribute to the Plan? 
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 slightly below the limit set forth by Internal Revenue Code, Section 401(a)(17) ($245,000 for 2009). 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 2009, the IRS will allow participants under the age of 50 to contribute up to $16,500 throughout the year. Participants aged 50 and older are permitted to contribute up to $22,000 throughout the year. (In 2008, the limits were $15,500 and $20,500, respectively.)   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
  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 a new Salary Reduction Agreement 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.

Can I Roll Over Money From a Prior Employer's Tax Qualified Retirement Plan Into This Plan? 
As of January 1, 2009, you may roll over money into the Voluntary Contribution Retirement Plan only (not the Defined Contribution Retirement Plan).  This is 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: Ms. April Winstead, April.Winstead@FMR.com
TIAA-CREF: Mr. D. Glenn Collins at 202-637-8939
The Vanguard Group: Participant Services at 1-800-523-1188, hit "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.  Typically, you should see the contributions posted to your account within one week. 

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 Office of Faculty and Staff Benefits so your distribution can be authorized. You may mail the form to:
   
   Georgetown University
   Faculty and Staff Benefits Office
   Ground Floor, Healy Hall
   37 & O Streets, NW 
   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.