Voluntary Contribution Retirement Plan (VCRP)

A company-sponsored qualified retirement plan for employees. Contributions and earnings in a 403(b) plan are not subject to federal and most state income taxes until the funds are withdrawn. This plan allows you to save money on a pretax basis, decide how much you contribute (up to the maximum allowed by the government), and choose where you will invest your contributions (from a list of funds provided by your plan sponsor).

Eligibility

If you are a paid employee of the University (you receive a W-2), you are eligible to enroll in the Voluntary Plan.

If you were hired on February 1, 2018 or later, and meet the eligibility for participating in the Defined Contribution Retirement Plan (DCRP), during year one of the phased waiting period for DCRP you’ll be automatically enrolled in the Voluntary Contribution Retirement Plan at a default 3% employee contribution to a TIAA LifeCycle Index Fund.

Contributions

Each month, Georgetown University remits your contributions to whichever investment company(ies) you have chosen. You may choose from three investment companies:

Fidelity Investments 1-800-343-0860
TIAA 1-800-842-2776
Vanguard 1-800-523-1188

The investment company(ies), in turn, invest your contributions in the specific funds you have chosen. Each company offers a variety of investment options, ranging from conservative to aggressive.

Please note that this limit does apply to all the tax-deferred contributions you may have made to other 401(k) or 403(b) plans during the calendar year. This rule commonly affects participants who change employers during the year, but can also affect any employee who contributes to more than one employer’s plan or plans in the same calendar year.

Our payroll system will automatically discontinue employee contributions when you reach the appropriate dollar limit for the calendar year. However, if you have contributed to more than one employer’s plan in a calendar year, it is your responsibility to monitor this limit, because Georgetown will not have any record of your contributions to the other plan(s). If you are a newly hired employee, you can usually determine your employee contributions to your prior employer’s plan by looking at your last pay stub from that employer. If you notify us of the amount you contributed to that plan, we can adjust our payroll system to monitor this limit.

If you contribute to more than one employer’s retirement plan or plans simultaneously, you will need to monitor your contributions so you do not exceed the limit.

How Much Does Georgetown Contribute To This Plan?

Georgetown University does not make any employer contributions to this plan. It is funded exclusively with employee (your) contributions.

Enrolling

Log in to GMS 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 review step-by-step instructions to enroll in or make changes to your retirement savings.

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.

Enrollment Timing and Deadlines

You may enroll in the Voluntary Contribution Retirement Plan at any time. You do not have to wait for Open Enrollment if you do not enroll when first eligible to do so.

However, please note that many employees who enroll in this plan wish to contribute at a level so that their contributions (combined with any employee contributions in the Defined Contribution Retirement Plan) reach the yearly IRS limits imposed on employee contributions. If you wish to reach this limit, you will need to enroll early enough in the plan year, and contribute at a high enough level, to reach this limit strictly through payroll deductions. Although it has done so in the past, the Office of Faculty and Staff Benefits has discontinued the policy of allowing employees to contribute to this plan by writing personal checks in order to reach the IRS limit at the end of the year.

Making 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.

• Increase or decrease the amount you wish to contribute via GMS and indicate the new total amount which you wish to contribute to the Voluntary Contribution Retirement Plan.
• Discontinue contributions entirely via GMS and indicate that you wish to contribute zero dollars to the Voluntary Contribution Retirement Plan.
• Change where you wish your future contributions 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. Change your investment allocation with respect to the investment companies via GMS and adjust the allocation of your chosen contribution amount between the retirement companies. Please note that the distribution will need to total 100%.
• 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 Faculty & Staff Benefits Office 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. In order to accomplish this, contact the investment company that will be receiving the transfer:

Fidelity Investments (1-800-343-0860)
TIAA (1-800-842-2776)
The Vanguard Group (1-800-523-1188)

The investment company representatives  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 third step listed above. Please note that the Office of Faculty and Staff Benefits has no involvement in this process, it is handled directly between you and the investment companies.

Minimum Distribution Rules

As long as you are employed, you are not required to take a minimum retirement 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 72. Contact your vendor (Fidelity, Vanguard, or TIAA) to do so.

Accessing Funds While Still Employed

While working at Georgetown University, you have very limited access to the money accumulated in your account(s). You cannot take a distribution of your account balance while still employed. The only ways in which you can access your money are by hardship withdrawal, by personal loan, and through an in-service age 59 ½ distribution (Please note that personal loans and hardship withdrawals are only available through TIAA).

You may borrow up to 45% or $50,000 (whichever is less) from your Voluntary Contribution Retirement Plan account by personal loan. Money borrowed can be used for any purpose and is not subject to taxes or penalties. You must repay the loan directly through the investment company. At this time, TIAA is the only one of the three investment companies that can process a loan in a manner compatible with Georgetown University. If you are interested in a loan, but your account is not with TIAA, you may transfer funds into TIAA (see above for the steps required to transfer existing accumulated funds from one investment company to another) and then request a loan. For more information regarding loans from the Voluntary Contribution Retirement Plan, contact the Benefits Office at benefitshelp@georgetown.edu.

Hardship withdrawals will only be authorized for one of six purposes:

• to finance the purchase of a primary residence;
• to avoid eviction/foreclosure;
• educational expenses for you or your dependents;
• out-of-pocket medical expenses for you or your dependents;
• funeral expenses for your parent, spouse, children or dependents; or
• to pay for expenses for the repair of damage to your residence, that would qualify for the casualty deduction

These rules are promulgated by the IRS and therefore we cannot make any exceptions to them. Most notably, you cannot receive a hardship withdrawal to pay off credit card balances.

Before requesting a hardship withdrawal, you must first maximize your personal loan options with TIAA. If this has been done, you will need to submit proof of the hardship that corresponds to one of the above categories. Examples of the type of proof we require include: documentation showing the purchase or sale of a primary residence, an eviction or foreclosure notice, or a college tuition bill. You would need to submit this documentation to the Benefits Office at the time that you apply for the hardship withdrawal.

Hardship withdrawals are subject to Federal and state income tax and early withdrawal penalties if used before retirement age. Please note that if you elect to take a hardship withdrawal, your contributions to both the Deined Contribution Retirement Plan and the Voluntary Contribution Retirement Plan will be suspended for six months. For more information about Hardship Withdrawals from the Voluntary Contribution Retirement Plan, please contact the Office of Faculty and Staff Benefits at benefitshelp@georgeteown.edu or 202-687-2500 to make an appointment.

If you are working at Georgetown University when you reach age 59 ½, you can access your 403(b) account(s) without penalty. This is through what is called an in-service age 59 ½ distribution. Please contact the appropriate investment company(ies) for information and paperwork. Once complete, contact the Office of Faculty & Staff Benefits to set up an appointment with our Retirement analyst, who will need to sign off on your withdrawal. Please note that federal and state taxes are applicable.

FAQs