DCRP and VCRP Safe Harbor Notice

This notice gives you important information about Georgetown University’s Defined Contribution Plan (DCRP) and Voluntary Contribution Retirement Plan (VCRP).  This notice applies to eligible faculty and staff, e.g., those who are least age 18 and whose positions are at least .50 Full Time Equivalents (“FTEs”) or who are regularly scheduled to work at least 20 hours per week (“DCRP-Eligible Employees”) hired by the University on or after February 1, 2018.

All DCRP-Eligible Employees can participate in the VCRP upon hire.  There is a phased waiting period before DCRP-Eligible Employees are eligible to participate in, or receive full University contributions under, the DCRP.  Certain exceptions to the waiting period may apply[1].

The notice covers these points:

• When the Plans’ automatic enrollment feature applies to you;
• How you can change your employee contributions;
• What amounts the University will contribute to your DCRP account;
• When your Plan accounts are vested;
• How your Plan contributions may be invested and how you can change your investment elections.

The Plans’ Automatic Enrollment

Phase One: Upon hire, DCRP-Eligible Employees are automatically enrolled in the VCRP.  Under the VCRP’s automatic enrollment feature, the University deducts 3% of your eligible pay each pay period, deposits that amount as a pre-tax contribution to your VCRP account, and invests that amount in a TIAA LifeCycle Index Fund most appropriate for your age.  The automatic enrollment feature will apply to your first paycheck if administratively feasible and, if not, to your second paycheck.  You may opt out of the VCRP’s auto enrollment feature, increase or decrease the automatic contribution amount, or change your investment funds (including investment company) at any time. You must log in to the Georgetown Management System (GMS) at http://gms.georgetown.edu to make any of these changes by completing a Retirement Savings Change.  Your change(s) will apply to your next paycheck if made at least one week before the pay day or, if not, the next following pay day.  The VCRP’s automatic enrollment feature will terminate and any separately elected employee contributions to VCRP will also end as you enter Phase Two.  If you wish to recommence or continue making contributions to the VCRP after its automatic enrollment feature terminates, you must make a VCRP Salary Reduction Election .

Phase Two:  After one year of service, DCRP-Eligible Employees are automatically enrolled in the DCRP.  Under the DCRP’s automatic enrollment feature, the University deducts 3% of your eligible pay each pay period, deposits that amount as a pre-tax contribution to your DCRP account, and invests that amount in a TIAA LifeCycle Index Fund most appropriate for your age.  The DCRP’s automatic enrollment feature will apply upon your completion of one year of service.  You may opt out of the DCRP’s auto enrollment feature, decrease the automatic contribution amount, or change your investment funds (including investment company) at any time by logging into GMS as described in the Phase One section above.  During Phase Two, you are eligible to receive a University Match Contribution of up to 5% of eligible pay.  If you terminate the DCRP’s automatic enrollment feature by opting out or decreasing the automatic contribution amount, you must make a DCRP Salary Reduction Election  to reinstate or increase your employee contribution amount.

Phase Three: After two years of service, the University will deposit on a pay period basis, a non-elective University Core Contribution of 5% of your eligible pay to your DCRP account upon completion of two years of service. Unless previously terminated or changed, the DCRP’s automatic enrollment feature will continue to apply. If you terminate the DCRP’s automatic enrollment feature by opting out or decreasing the automatic contribution amount during Phase Three, you must make a DCRP Salary Reduction Election to reinstate or increase your employee contribution amount.

If Phased Waiting Period is Waived: If you qualify, and are approved, for a waiver of the Phased Waiting Period, you will be automatically enrolled in the DCRP’s automatic enrollment feature and are eligible to receive a University Match Contributions as described in the Phase Two section above.  The University will also deposit on a pay period basis, a non-elective University Core Contribution of 5% of your eligible pay to your DCRP account as described in the Phase Three section above.  As described in both sections, you may opt out of the DCRP’s auto enrollment feature, decrease the automatic contribution amount, or change your investment funds (including investment company) at any time by logging into GMS.

Pre-Tax Contributions

Pre-tax contributions are deducted from your eligible pay before federal and most state income taxes are applied which means that your current taxable income is reduced by the amount of your pre-tax contributions.  Instead, you pay taxes on your contributions (and any investment returns) when withdrawn from your Plan accounts.

Changing the Amount You Contribute to the Plan

You can change your contribution rate at any time.  If you want to contribute more or less to your Plan account than would be provided on an automatic basis, you can make such election by selecting Change Retirement Savings on the Georgetown Management System(GMS) website at http://gms.georgetown.edu.

The maximum annual employee contribution you can make to the DCRP is 3% of your eligible pay not to exceed $200,000 or $6,000.  You can contribute amounts in excess of $6,000 to the VCRP up to the maximum annual amount set by the IRS.  The maximum annual amounts increases once you attain age 50.These limits can be found on the Benefits website, http://benefits.georgetown.edu.

University Match Contributions

Upon entering Phase Two of the DCRP, the University will match your employee contribution, up to 5% of your eligible pay not to exceed $200,000.

Based on your employee contribution, you would receive a matching contribution from the University as illustrated below:

GU contributes 5% (You contribute 3%)
GU contributes 3.34% (You contribute 2%)
GU contributes 1.67% (You contribute 1%)
GU contributes 0% (You contribute 0%)

To maximize your University Match Contribution, you must make employee contributions equal to at least 3% of your eligible pay for each pay period.  If you choose not to contribute for a pay period, you will receive no matching contributions for that pay period.  The maximum University Match Contribution you can receive is $6,000 per year ($200,000 multiplied by 3%).

The University Match Contribution is intended to be a safe harbor matching contribution as described in Section 401(m)(11) of the Internal Revenue Code.

University Core Contributions

In Phase Three of the DCRP, the University makes a contribution on your behalf whether or not you make employee contributions. This contribution is called the “University Core Contribution” and is equal to 5% of eligible earnings not to exceed $200,000.  The maximum University Core Contribution you can receive is $10,000 per year ($200,000 multiplied by 3%).  Once you are in Phase Three, your combined employee contribution and University contributions can total up to 13% of earnings.

Vesting of Plan Contributions

You are immediately fully vested in your employee contributions as well as your University Match and Core Contributions and any investment returns thereon.  To be fully vested means that your Plan contributions and any investment returns will always belong to you, and you will not lose them even if your employment with the University terminates.

Even though you are vested in your Plan accounts, there are restrictions on when you may withdraw funds from your Plan accounts.  These restrictions may be important to you in deciding how much, if any, to contribute to the Plans.  Generally, you may only withdraw funds from your DCRP and VCRP accounts after you terminate your employment with the University.  However, you may withdraw funds from your VCRP account upon attaining age 59½ or through the loan option at TIAA.  Your beneficiary is entitled to any amounts remaining in your Plan accounts upon your death.

Investment of Plan Contributions

The Plans allows participants and beneficiaries to direct the investment of their Plan contributions, i.e., employee contributions, University Match Contributions and University Core Contributions. If you do not provide investment instructions, Plan contributions are automatically invested in the Plans’ qualified default investment option and remain invested in the qualified default investment option until you direct otherwise. To make a choice regarding the investment of your Plan contributions, you may do so by electing your preferred retirement plan investment company (Fidelity, TIAA, Vanguard) in GMS (http://gms.georgetown.edu) and then contacting the company to specify your fund allocations.

TIAA LifeCycle Index Fund 

Your plan contributions to both the DCRP and VCRP are automatically invested in an age appropriate TIAA LifeCycle Index Index Fund if you do not select your investment options. The default fund election will remain in effect until you select other investment options.

TIAA LifeCycle Index Funds, also known as Target Date funds, consist of a series of target retirement date funds in five-year increments where you select the fund that most closely matches your retirement year, e.g. a LifeCycle Index 2040 Fund is for an investor planning to retire in or around 2040.  If your investments are defaulted to the TIAA LifeCycle Index Fund, your investments will be placed in the fund that most closely matches the year of your 65th birthday. They are professionally managed and automatically adjust over time—relieving you of the need to make investment, allocation, and rebalancing decisions every year. 

TIAA LifeCycle Index Funds aim for an age appropriate investment over time while maintaining a diversified, risk managed exposure across a wide range of asset classes. By providing exposure to equities during early periods of retirement savings, the LifeCycle Index Funds are designed to provide opportunities for asset growth and favorable risk adjusted returns.  As retirement approaches, the gradual increase in fixed-income investments, up to and during the target retirement period, addresses investor’s need for increased stability of principal over shorter savings horizons.  The ongoing allocation to equities during retirement is designed to strike a balance between the need for both current income and continued growth throughout retirement years.

The TIAA LifeCycle Index Funds are intended to be “qualified default investment alternatives” as described in Section 404(c)(5) of the Employee Retirement Income Security Act (ERISA).  Specific information, including a description of the fund’s investment objectives, risk and return characteristics, fees, and expenses, are included with this notice. 

Change How Your Plan Contributions are Invested 

If your Plan contributions are automatically invested in a TIAA LifeCycle Index you have the option at any time to change the investment of your future and past Plan contributions. If you do nothing, your Plan contributions will continue to be invested in a TIAA LifeCycle Index Fund. 

To make investment changes or to learn more about the Plans’ investment options log on to your account at www.tiaa.org/georgetown, or call TIAA at 1-800-842-2888.

Designate Your Beneficiary

To view or change your beneficiary designation, contact your investment company.  Until you designate a beneficiary, your designation will default to your estate if you are unmarried, and to your spouse if you are married.

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[1] You may apply for a waiver of the waiting period if (1) you have a signed offer of employment or appointment letter by January 31, 2018 and have a start date of February 1, 2018 or later;  (2) your last employer was an academic institutions (colleges, universities, non-profit research institutes) where they received employer contributions or accrued benefits under that institution’s retirement plan; or (3) if you previously worked for Georgetown University (prior to February 1, 2018), participated in DCRP or GURP, and are subsequently rehired by Georgetown. You may also qualify for immediate participation if you worked at Georgetown within the last five years. Learn more at http://benefits.georgetown.edu/dcrpwaiting.