The IU Retirement & Savings Plan for Support and Service Staff Employees is a section 401(a) defined contribution retirement plan. All plan contributions are made by Indiana University. Participants are not required, nor permitted, to make additional contributions to the plan.
The information on this page is only a summary. Review the Retirement & Savings Plan – Plan Document for a detailed description of the terms and conditions of the Plan.
To be eligible to participate in the plan, an employee must have been hired on or after July 1, 2013 and be in a:
- Support or Service Staff position at 50% or more full-time equivalent (FTE); or
- Temporary with Retirement position.
For each eligible employee Indiana University contributes an amount equal to 10% of actual base wages for each regular pay period. Base wage does not include any supplemental pay received by the eligible participant during the pay period.
For employees hired prior to July 1, 2013, see PERF.
Eligible employees are automatically enrolled in the appropriate plan, but must setup their plan account, choose investments, and designate beneficiaries by following these step-by-step enrollment instructions. For assistance with any of these processes, contact Fidelity at 877-343-0860.
Indiana University contributes an amount equal to 10% of base wages for each regular pay period. Base wage does not include any supplemental pay received by the eligible participant during the pay period.
Indiana University makes all contributions to the plan. Employees are not permitted to contribute to the plan.
The information below is a summary of IRS contribution limits that apply to this plan. It is your responsibility to ensure you do not exceed these maximums between all of your retirement saving accounts. Visit the IRS Limits page for further details.
Total Contribution Limit – IRC 415(c)
For 2020, the calendar-year limit on total contributions is the lesser of 100 percent of your compensation or $57,000.
This total contribution limit applies to the sum of employer contributions to IU Supplemental Early Retirement Plan and the IU Retirement & Savings Plan.
Note: The total contribution limit also applies to defined contribution 401(a) plans or 401(k) plans sponsored by an employer in the same controlled group as IU, and any Simplified Employee Pension (SEP) to which you or another employer contribute.
Annual Compensation Limit – IRC 401(a)(17)
The IRS limits the maximum annual compensation on which qualified retirement benefits can be calculated. For 2020, the maximum annual compensation is $285,000 of plan-eligible earnings.
Participants in the plan are subject to a three-year cliff-vesting requirement. This means that an employee is fully vested in the plan after three years of IU employment.
This is a “participant directed plan” meaning you are responsible for directing the investment of your plan account. If you do not select investments, your funds will be invested in the plan’s default investment option – and age-appropriate Vanguard Institutional Target Retirement Date Fund.
Distributions & Withdrawals
Hardship distributions and loans are not allowed to be made to participants from this plan. For information on Required Minimum Distributions (RMDs) see ‘Options When You Leave IU’ below.
Options When You Leave IU
All plan contributions stop when your employment with IU ends. Upon termination of employment, you may:
- Leave accumulations in the plan account and continue to manage investments;
- Withdraw all or a portion of vested plan account accumulations (subject to income taxes and/or penalty taxes); or
- Roll over all or a portion of vested plan account accumulations to an eligible retirement plan (e.g., an IRA).
After terminating employment with the university, most transactions related to your plan account are handled directly with the applicable investment company. For more information, review the Benefits After Separation Guide.
Required Minimum Distributions (RMD) at Age72
Federal law requires participants to begin receiving at least a partial distribution of tax-deferred retirement account funds by April 1 of the calendar year following the year he/she reaches age 72, or upon retirement/separation, whichever is later. Failure to withdraw the RMD annually by the applicable deadline can result in substantial tax penalties.