403(b) retirement plan 101 - university of...

403(b) Retirement Plan 101 Basics and Beyond

Enroll

Contribute Agenda

Invest

Next Steps

Why should you save in your plan?

ENROLL

Reasons to contribute

Employer match Convenience Tax advantages Compounding

growth potential

Convenience

Taken right from your

PAYCHECK

ENROLL

ENROLL

Traditional

Roth

Contributions Taxes

Contributions

Tax advantages

A distribution from a Roth 401(k) is federally tax free and penalty free, provided the five-year aging

requirement has been satisfied and one of the following conditions is met: age 59½, disability, or

death. State taxes may apply.

Compounding

Account

Earnings

Employer

Contributions

Your

Contributions

ENROLL

This is a hypothetical example. Assumptions: Person A and Person B are both 45 years old. Person A contributed 3%/year until age 65. Person B increased contributions 1%/yr for 10 years, then stayed at 13% contributions until age 65. Both earn $40,000 per year and start with an account balance of $50,000. This hypothetical example is based on monthly contributions made at the beginning of the month to a tax-deferred retirement plan and a 7% annual rate of return compounded monthly. Your own plan account may earn more or less than this example, and income taxes will be due when you withdraw from the account. Investing in this manner does not ensure a profit or guarantee against loss in declining markets. Past performance is no guarantee of future results.

Person A

Balance without annual

increase in contributions

Person B

Balance with annual

increase in contributions

$358,185

$254,333

Year 0 4 8 12 16 20

Annual Increase

Age: 45

Salary: $40,000

Account balance: $50,000

Annual rate of return: 7%

ENROLL

ENROLL

Employer match

Employer match

Your contribution

How much should you save?

CONTRIBUTE

15% Save at least

CONTRIBUTE

Pay off

credit cards

Pay off

student loans

Contribute

more

Make monthly

payments

Save

enough ! Meet

the match

CONTRIBUTE

Your plan specifics

This workshop only provides a summary of the main features of the Plan, and the Plan document will govern in the event of any discrepancies.

University of Louisville offers 2 Retirement Savings Plans for Eligible Employees: 403(b) Retirement Plan 457(b) Retirement Plan


403(b) Retirement Plan

There are four components to this plan: 1. Employer 7.5% Contribution – UofL Only Contribution 2. Employer 2.5% Match Contribution – Employee & UofL Contributions 3. Employee Additional Contribution – Employee Only Contribution 4. Employee Roth Additional Contribution - Employee Only Contribution


UofL’s 403(b) Retirement Plan – Contribution Options After one year of retirement eligible service

Eligible Employees: After one year of retirement eligible service, regular full time employees and benefit eligible part-time employees who work at least 80% Full-Time Equivalent are eligible to receive the Employer 7.5% Contribution and are eligible to participate in the Employer 2.5% Match Contribution


1. Employer 7.5% Contribution

You Contribute

Nothing

UofL Automatically Contributes

7.5% of Your Base Annual

Salary


Salary Contributed to

your Retirement

Plan

2. Employer 2.5% Match Contribution (Pre-Tax)

You Contribute


Salary Pre-Tax

UofL Contributes


Salary to Match You

5% of Your Base Annual

Salary Contributed

to your Retirement

Plan

1. Employer 7.5% Contribution + 2. Employer 2.5% Match Contribution



your Retirement

Plan

5% of Your Base Annual


your Retirement

Plan



your Retirement

Plan


UofL’s 403(b) Retirement Plan – Contribution Options Both Before and After 1 Year of Service Eligible Employees: Any university faculty or staff member, full or part-time, can participate in the 403(b) plan in the Additional Employee Contribution (pre-tax) and/or the Roth Additional Contribution (after-tax) both before and after 1 year of service.

You Contribute Any % of Your Base Annual

Salary Pre-Tax - there is no UofL

Match

You Contribute Any % of Your Base Annual

Salary After-Tax - there is no UofL Match

Employee Additional Contribution (Pre-Tax)

Employee Roth Additional Contribution (After-Tax)

• These options are for your employee contributions only. • There is no UofL Match with these options. • Before reaching 1 year of retirement eligible service, you are eligible to contribute to these 2 options. • After working 1 year of retirement eligible service, you can continue to contribute to these 2 options. • If you participate in the 2.5% Employer Match after 1 year of service and want to contribute more than 2.5% pre-tax, you can use the Employee Additional Contribution to contribute above the 2.5% pre-tax. • The Roth option is for any after-tax contributions you want to make. • For example, if after 1 year of service, you contribute 3.5% in the Employee Additional Contribution and 2.5% into the Match Option and UofL contributes 7.5% and the 2.5% UofL Match, that’s equal to a total of 16% of your base annual salary contributed to your 403(b) retirement plan annually. • You may change your contribution amounts at any time.


UofL’s 403(b) Retirement Plan- 4 Contribution Categories on Fidelity Website

Before or After 1 Year of Service -- if contributing to Employee Match 2.5% after 1 year of service, use for your pre-tax % Above 2.50%

After 1 year of service, UofL automatically Contributes 7.5%

After 1 year of service, If You Contribute 2.50% of Your Pay here, UofL will also make a 2.5% Matching Contribution

Before or After 1 year of service – use for your after-tax contributions

For illustrative purposes only


403(b) Retirement Plan

Maximum Employee Contribution Limit • Maximum amount you can contribute in 2019 is $19,000 if you are

under age 50 or $25,000 if you are over age 50 • Maximum contribution limit is your combined contribution

amounts from only you into the following 3 categories: o Your 2.5% contributions to the Employer 2.5% Match Option o Employee Additional Contribution o Employee Roth Additional Contribution

• Note: this annual maximum limit does not include any contributions or matching contributions from UofL


403(b) Retirement Plan – Additional Plan Features

• Rollovers - You are permitted to roll over eligible contributions from another eligible retirement plan into the UofL 403(b) plan. Contact Fidelity at 1-800-343-0860 for details and to determine if your other retirement plan is eligible to be rolled over into the UofL 403(b) retirement plan.

• Vesting o You are immediately vested in your own contributions to the UofL 403(b)

retirement plan as well as any assets you rolled over to the plan from a prior employer’s eligible plan.

o You are 100% vested in any UofL contributions including the UofL 7.5% contribution and the UofL 2.5% matching contribution after 3 years of retirement eligible service.

• Loans – Although your plan account is intended for your retirement, you may take a loan from your account. Contact Fidelity at 1-800-343-0860 to request a loan.

• Withdrawals – Withdrawals from the plan are generally permitted when you terminate employment, retire or reach age 59 ½ while actively working at UofL. Contact Fidelity at 1-800-343-0860 with questions about withdrawals.


403(b) Retirement Plan – Enrolling, Contribution Changes & Investment Changes

If You Have Less Than 1 Year Retirement Eligible Service with UofL

• If you want to start making your own contributions to the 403(b) plan, send an email to the Human Resources Retirement Administrator at [email protected] and ask for your account to be set up.

If You Have Greater Than 1 Year Retirement Eligible Service with UofL

• You already have a 403(b) account set up at Fidelity

• If you want to make changes to your contribution amount, go to the Fidelity website at www.netbenefits.com to make your contribution amount changes. See the instructions handout for details.

• If you want to make changes to your investment elections, go to the Fidelity website at www.netbenefits.com to choose your investment provider and make investment elections. See the instructions handout for details.

mailto:[email protected]


UofL 457(b) Retirement Plan

• This is a separate plan and is for employee pre-tax contributions only. • There are no UofL employer contributions or UofL matching contributions

with this plan. • There is no 1 year service requirement – eligible employees can participate

any time regardless of years of service • Eligible employees may participate in both the 457(b) plan and in the

403(b) plan at the same time. • Two 457(b) Plans are Offered – You May Only Choose One

o UofL 457(b) Retirement Plan and the Kentucky Deferred Compensation Plan are offered

o Eligible employees can choose to participate in either the UofL 457(b) Retirement Plan or in the State of Kentucky Deferred Compensation Plan but not in both plans.


UofL 457(b) Retirement Plan – Contribution Categories on Fidelity Website

• For the UofL 457(b) plan, you can enter either a Flat Dollar Amount or a Percentage of Your Base Salary for your contribution on the Fidelity website (www.netbenefits.com)

• You may change your contributions at any time.

For illustrative purposes only


457(b) Retirement Plan – Maximum Employee Contribution Limit

• The maximum amount you can contribute to the 457(b) plan in 2019 is $19,000 if you are under age 50 or $25,000 if you are over age 50

• If you participate in both the 403(b) plan and in the 457(b) plan at the same time, you are allowed to contribute:

- 19,000 (under 50)/$25,000 (over 50) into the 403(b) plan

Plus

- $19,000 (under 50)/$25,000 (over 50) into the 457(b) plan


457(b) Retirement Plan – Additional Plan Features • Rollovers - You are permitted to roll over eligible contributions from another eligible

deferred compensation plan into the UofL 457(b) plan. Contact Fidelity at 1-800-343-0860 for details and to determine if your other deferred compensation plan is eligible to be rolled over into the UofL 457(b) retirement plan.

• Vesting - You are immediately vested in your own contributions to the UofL 457(b) retirement plan as well as any assets you rolled over to the 457(b) plan from a prior employer’s eligible plan.

• Loans – Although your plan account is intended for your retirement, you may take a loan from your account. Contact Fidelity at 1-800-343-0860 to request a loan.

• Withdrawals – Withdrawals from the plan are generally permitted when you terminate employment or retire. Contact Fidelity at 1-800-343-0860 with questions about withdrawals.


457(b) Retirement Plan – Enrollment • UofL 457(b) Retirement Plan

- If you would like to enroll in the UofL 457(b) plan, please email the UofL Retirement Plan Administrator at [email protected] and state you want to begin participating - You will receive a reply email with enrollment instructions.

• Kentucky Deferred Compensation Plan

- If you would like to enroll in the Kentucky Deferred Compensation Plan, please contact the State of Kentucky Deferred Comp. Plan at 1-800-542-2667 or at www.kentuckydcp.com.

• As a reminder, eligible employees can choose to participate in either the UofL 457(b) Retirement Plan or in the State of Kentucky Deferred Compensation Plan but not in both plans.

How do you want to invest?

How do you want to invest?

Professional

investment help

Do it yourself

INVEST

INVEST

Professional investment help

Single-fund

Solution

Managed

Account

Target date funds are designed for investors expecting to retire around the year indicated in each fund's name. The funds are managed to gradually become more conservative over time as they approach the target

date. The investment risk of each target date fund changes over time as the fund's asset allocation changes. The funds are subject to the volatility of the financial markets, including that of equity and fixed income

investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the

funds' target dates.

Savings and income

Social Security and medical

Expected retirement age

Tolerance for risk

A personalized approach to planning

and investing

Fidelity® Personalized Planning & Advice

Fidelity® Personalized Planning & Advice at Work is a service of Fidelity Personal and Workplace

Advisors LLC and Strategic Advisers LLC. Both are registered investment advisers, are Fidelity

Investments companies, and may be referred to as “Fidelity,” “we,” or “our” within. For more

information, refer to the Terms and Conditions of the Program. When used herein, Fidelity

Personalized Planning & Advice refers exclusively to Fidelity Personalized Planning & Advice at Work.

This service provides advisory services for a fee.

Keep you on track and

up to date with any changes

in the market or in your plan

Select your

investments

Create an investment

strategy based on your

personal information

1. 2. 3.

Your team of investment professionals will

Fidelity® Personalized Planning & Advice at Work is a service of Fidelity Personal and Workplace Advisors LLC and Strategic Advisers LLC. Both are registered investment advisers, are

Fidelity Investments companies, and may be referred to as “Fidelity,” “we,” or “our” within. For more information, refer to the Terms and Conditions of the Program. When used herein, Fidelity

Personalized Planning & Advice refers exclusively to Fidelity Personalized Planning & Advice at Work. This service provides advisory services for a fee.

Tools Resources

Do it yourself

INVEST

Take the next steps

NEXT STEPS

Enroll in

your plan

1

Set your

contribution rate

2

Increase your

contributions

3

Choose your

investments

4

Add beneficiaries

to your account

5

What’s next?

Call for help 1-800-343-0860

Take your next step

NEXT STEPS

Visit NetBenefits® Library NetBenefits.com

Email [email protected] with any questions

Schedule an in-person consultation with a Fidelity Retirement Planner at www.louisville.edu/hr/benefits/retirementplans . Click “Retirement Investment One-on-One Consultations” link.

Thank You

Investing involves risk, including risk of loss.

Fidelity® Personalized Planning & Advice at Work is a service of Fidelity Personal and Workplace

Advisors LLC and Strategic Advisers LLC. Both are registered investment advisers and Fidelity

Investments companies and may be referred to as “Fidelity,” “we,” or “our” within. For more information,

refer to the Terms and Conditions of the Program. When used herein, Fidelity Personalized Planning &

Advice refers exclusively to Fidelity Personalized Planning & Advice at Work. This service provides

advisory services for a fee.

Fidelity does not provide legal or tax advice. The information herein is general in nature and should not

be considered legal or tax advice. Consult an attorney or tax professional regarding your specific

situation.

The PDF of today’s presentation available for download should not be circulated any further and this

content is only current for the next 30 days.

© 2016 - 2018 FMR LLC. All rights reserved.

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403(b) retirement plan 101 - university of...

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