Retirement

Voluntary 403(b)

The ̽»¨¾«Ñ¡ provides a voluntary 403(b) to all employees. This account is for employee contributions only. No employer contributions are allowed. There are two options for the 403(b): pre-tax contributions via Tax-deferred Annuity (TDA) and post-tax contributions via Roth. 

 

Voluntary 403(b) Enrollment

All ̽»¨¾«Ñ¡ employees are eligible to participate in the 403(b). This includes students, adjuncts and other temporary employees. Participation in this plan is voluntary and consists of employee contributions only. 

Any employees can open a voluntary 403(b) at any time. Employees can also change or stop this contribution at any time. Employees will choose a fund sponsor to receive their contributions.​

Any benefit-eligible employee can start, stop, or change their contributions at any time.

Any benefit-eligible employee can start, stop, or change their contributions at any time.

Any temporary employee can start, stop, or change their contributions at any time. (This includes any students, graduate students, or adjunts.)

Complete a New Form
Employees participating in the voluntary 403(b) may change fund sponsors at any time by submitting a new .

Decide to Consolidate Accounts or Keep Separate
Once submitted, the change will affect where new contributions are deposited and will not automatically transfer account balances.  Employees may keep the accounts separate or consolidate accounts. To combine funds, employees will need to contact the previous fund sponsor and request a rollover form  to transfer the balance from the previous fund sponsor to the new fund sponsor.

Stop the Right Fund Sponsor
If an employee wants to change their current 403(b) fund sponsor to a different fund sponsor, they must indicate on the form that they are stopping deductions for one fund sponsor and starting them for another fund sponsor. We will not automatically stop any active deductions without an employee's direct authorization.

If an employee submits a form to start a fund sponsor, but does not make any indication regarding their current fund sponsor, we will simply add the new fund sponsor and will not start, stop, or change the existing fund sponsor.

Employees can make both changes on the same form by selecting their current 403(b) provider and entering "$0" to stop the deductions and then entering the dollar amount for the new provider immediately below.

Stopping the deduction does not move the funds from one fund sponsor to another. Review "Decide to Consolidate Accounts or Keep Separate" above.

To update the contribution limit, complete a new and indicate the new biweekly and yearly goal amount(s). Be sure to designate if these contributions will be pre-tax (tax-deferred) or post-tax (Roth). 
To update the contribution type to/from TDA or Roth, complete a new and indicate the biweekly and yearly goal amount(s) and what type (pre-tax or post-tax). Changing the deduction from pre- to post-tax will not move the funds that have already been contributed from one type of contribution to the other. 
 Coverage and contributions begin when the employee elects to start a voluntary 403(b). Contributions end when an employee stops their contributions or separates from the university. 

 

Voluntary 403(b) Basics​

There are two types of voluntary 403(b)s:

  • Tax-deferred Annuity (TDA) where employees contribute pre-tax dollars
  • Roth where employees contribute post-tax dollars (provided with TIAA only)

Tax-deferred Providers

  • (VALIC/AIG)
  • (includes ReliaStar Life, ING and ILIAC)

Roth Providers

Contact the Fund Sponsor
It is the employee's responsibility to maintain accurate beneficiary records with their fund sponsor (TIAA, Fidelity, Lincoln, VALIC/Corebridge). Review the "Fund Sponsor" drop down for more information. 

 

Voluntary 403(b) Details

New Accounts - Set Up with Vendor REQUIRED
Employees must have an account with their provider before the first payroll contributions is made toward the account.

  • To start a new Tax-deferred Annuity (TDA) 403(b), review the list of vendors in the "Fund Sponsor" drop down and open an account.
  • The Roth option is available with TIAA only. If an employee already has a TIAA voluntary 403(b), they can begin designating contributions as Roth immediately. If an employee does not have a TIAA voluntary 403(b) account already, they must open an account with TIAA to begin making Roth contributions. 
There are no employer contributions to any voluntary 403(b) account. 

Contributions Limits Set by IRS
Contribution limits are set by the IRS each calendar year.

For calendar year 2024, the contribution limit is $23,000.
For calendar year 2025, the contribution limit is $23,500.

Elective deferrals for both Tax-deferred Annuities (TDA) and for Roth accounts combined for a calendar year may not exceed the IRC limit under Section 402(g).

Catch-up Amounts for 2025

  • If an employee is over the age of 50, they  are eligible to contribute an additional $7,500 catch up amount bringing the total to $31,000.
  • If an employee is between 60-63, they are eligible to contribute an additional $11,250 catch up amount bringing the total to $34,750.
While UA allows contributions to a 403(b) through payroll deduction, the management of the account lies entirely with the employee - including managing maximum contribution limits according to the IRS.
Employees are 100% vesting in any funds contributed to a voluntary 403(b) account. 

In-service Distributions
An in-service distribution from a voluntary 403(b) account is highly regulated by the IRS. In-service distributions are allowed for qualified loans, qualified hardship distributions, Qualified Domestic Relations Order (QDRO), or if the employee is over 59.5. In-service distributions apply to the voluntary 403(b) only. 

No in-service distributions are allowed in Public Employees Retirement Plan (PERS), Teachers Retirement Plan (TRS), the Optional Retirement Plan (ORP) or UA Pension Plan. Review the respective webpages for more information. 

Obtaining a Loan or Hardship Distribution
Contact your voluntary 403(b) provider directly to initiate a loan or hardship distribution. Loans and hardship distributions are only allowed from current and active providers. If an employee has funds with a non-current provider, they may rollover the funds to a current provider to access the a loan or hardship distribution. Review the "Fund Sponsor" drop down for a list of current providers.

Hardship Distributions
Contact your voluntary 403(b) provider directly to initiate a loan or hardship distribution. Hardship distributions are available for an immediate and heavy financial need, such as severe medical debt, risk of foreclosure or eviction, educational expenses, expenses to repair damage to the employee's home, and others. 

Qualified Domestic Relations Order (QDRO)
If an employee's voluntary 403(b) account is involved in QDRO, the employee must work with their vendor directly to process the order. 

Retirement Age Distribution
Employees can access their voluntary 403(b) accounts after age 59.5 even if they are still employed.  All pre-tax distributions made directly to the employee (not rolled over or transferred to another pre-tax qualified account) are taxable in the year the employee takes them.

Market Gain/Loss Income
The voluntary 403(b) is a Defined Contribution (DC) plan. DC plans are account-based plans where the employee contributions are invested into mutual funds or money market funds where they grow tax-deferred until withdrawn. The 403(b) is managed by one of the fund sponsors listed in the drop down labeled "Fund Sponsors" above.

UA is Not Authorized
UA is not authorized to provide financial advice to employees. Please contact the fund sponsor directly to discuss.

Age 59.5+
Per IRS guidelines, withdraws from the 403(b) can begin with the member is age 59.5. Withdraws prior to age 59.5 may face additional tax penalties for early withdraw. Employees can also access their voluntary 403(b) accounts after age 59.5 even if they are still employed.  All pre-tax distributions made directly to the employee (not rolled over or transferred to another pre-tax qualified account) are taxable in the year the employee takes them. Post-tax contributions via Roth are not taxable as long as the distribution is "qualified" (i.e. reached age 59.5) and you have been participating in the plan for 5 years. Review the offboarding webpage for up-to-date information. 

Review offboarding webpage
Employees who are separating from the university (but are not retiring) have a few different considerations for their 403(b) accounts. Review the offboarding webpage for information on separating from the university. 


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