This required annual “Universal Availability Notice” summarizes the terms and conditions of the University of Illinois Supplemental 403(b) Retirement plan. This notice is for your information and you are encouraged to read it carefully. No action is necessary, unless you would like to enroll in or make changes to your 403(b) account.
Overview
The University of Illinois System (the “system”) sponsors the University of Illinois Supplemental 403(b) Retirement Plan (the "Plan"). Eligible employees of the system can voluntarily elect to defer a portion of their compensation to the Plan to supplement their retirement savings.
The Plan is a supplement to the State Universities Retirement System (SURS) pension. Participation in the Plan does not reduce any system benefits based on full salary, such as SURS, life insurance, disability, or survivor benefits.
Eligibility
Generally, all common law employees of the system who receive compensation reportable on a Form W-2 are eligible to participate in the Plan, so long as the employee elects to contribute at least $200 each year. The only employees not eligible to participate in the Plan are non-resident aliens with no U.S. source income.
Contributions
An employee can elect to defer a portion of his or her compensation to the Plan on a pre-tax and/or Roth (after-tax) basis.
Pre-Tax Contributions - Both Federal and State income taxes are deferred on the contributions and any earnings thereon until distributed from the Plan. Distributions are taxed as ordinary income for Federal tax purposes. However, distributions are not taxed by the State of Illinois if distributions are made (i) in accordance with Plan provisions, (ii) on or after the participant has attained full retirement age, and (iii) while the participant is a legal resident of the State of Illinois.
Roth (after-tax) Contributions - Federal and State income taxes are withheld from Roth contributions at the time that they are contributed to the Plan. However, contributions and any earnings thereon are not subject to Federal and State income taxes upon distribution if a five-year period has passed since Roth contributions were first made to the Plan and the distribution is a “qualified distribution”. A qualified distribution is a distribution (i) made on or after the date on which the participant attains age 59 ½, (ii) made to a beneficiary on or after the death of the participant, or (iii) attributable to the participant being totally and permanently disabled.
Employee contributions to the Plan can be allocated among the investment options offered by any approved vendor under the Plan. Employees are 100% vested in their accounts under the Plan at all times.
There is no employer contribution in this plan.
Contribution Limits
Annual contributions to the Plan are limited per IRS regulations. The contribution limits for the 2023 calendar year are:
|
Basic Elective
Contribution Limit
|
Age 50+ Catch-up
Contribution
|
15 Years of Service
Catch-up Contribution
|
|
$22,500
|
$7,500
|
$3,000*
|
* The 15 years of service catch-up contribution applies before the age 50+ catch-up, and is based on a formula that takes into account all past contributions to the Plan and the employee's total years of full-time service to the system. The maximum 15 years of service catch-up available is $3,000 per year up to a $15,000 lifetime benefit, but an employee's actual catch-up may be lower than this maximum. Questions about your contribution limit should be directed to University Payroll & Benefits (UPB).
If you contribute, in any calendar/tax year, to a retirement plan through another employer, it is your responsibility to monitor your total contributions to all plans to ensure that you do not contribute over the IRS maximum allowed each year.
To Enroll
Eligible employees may begin participating in the Plan at any time. To enroll in the Plan, an employee must (i) select an approved vendor(s) to open an account and (ii) complete a Salary Reduction and/or Redirection Agreement (SRA) to elect the contribution amount. Access the 403(b) Plan Enrollment Guide for additional information. Complete the SRA to designate contributions as a percent of salary or as a flat dollar amount. The SRA will apply only to amounts earned after enrolling in the Plan, and an employee's election under the SRA will continue until the SRA is modified or revoked by the employee.
To Modify a Deferral Election
Employees may increase, decrease, or stop their contributions to the Plan at any time. Employees may also change the approved vendor to which their contributions are made at any time. Access the SRA using the link provided above to make these changes.
Approved Vendors
The approved vendors under the Plan are Fidelity Investments and TIAA. Employees should contact each vendor for information about the Plan investment options and services it offers.
Questions?
Contact University Payroll & Benefits (UPB) or one of the approved vendors directly with questions or for help enrolling in the Plan. A paper copy of this notice is also available at UPB.
UPB
Approved Vendors
- Fidelity Investments: 800-343-0860
- TIAA: 800-842-2776
This notice is provided as a source of information and does not constitute legal, tax, or other professional advice. If legal advice, tax advice, or other professional assistance is required, the services of a professional advisor should be sought. Every effort has been made to make this notice as thorough and accurate as possible. However, there are other legal documents, laws, and regulations that govern the operation of the Plan. It is understood that in the event of any conflict, the terms of the Plan document, applicable laws, and regulations will govern.
