Wayne State University

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403(b) Retirement Savings Plan

The Plan is established under Section 403(b) of the Internal Revenue Code.  The Plan offers several KEY ADVANTAGES:

Value:  Wayne State University offers an excellent retirement savings plan as part of our strong benefits package to attract and retain the best employees, because our University success depends on the talent of our faculty and staff.

Tax Savings: You can save before-tax(i.e., the amount you contribute is deducted from your pay before income taxes are taken out). This before-tax feature reduces your taxable income. The plan also permits tax deferral on investment earnings for both your Employee Contributions and University Contributions.

Additional Savings:  WSU provides a 10% University Contribution to the 403(b) plan for eligible participants who are making contributions of at least 5%. The University “matches” your Employee Contributions on a $2 for every $1 basis (200% match rate), to a maximum contribution of 10%. This compares favorably to the typical company contribution in the private sector of 3% to 4% of base salary.  

Superior Investment Options : The WSU 403(b) plan offers 2 investment options, both of which are the premier investment providers in the retirement plan arena – TIAA-CREF and Fidelity Investments. You may elect one or both  Investment Carriers, each of which offer multiple investment options to help you professionally manage your savings.

Frequently Asked Questions

When am I eligible?

Who is Eligible to make Contributions to the Plan?  You must be employed by WSU in an eligible employee classification in order to participate in the Plan.  Eligible employees are employees who normally work 20 hrs per wk OR have at least 50% appointment OR union employees whose bargaining contract permits participation.

The following groups are not eligible to make Employee contributions:  Student assistants, Graduate assistants, and  members of Building Trades Union (Eclass SK). 

Part-Time Faculty represented by AFT Local 477, AFL-CIO are eligible to make Employee Contributions, but are not eligible for University Contributions.

When am I Eligible to make Employee Contributions to the Plan?

You may start your Employee contributions any time after your date of hire in an eligible classification.

What is the Maximum amount of Employee Contributions?

For calendar year 2012 the amount is limited to $17,000/$22,500 (under age 50/over 50). For calendar year 2013 the amount is limited to $17,500/$23,000 (under age 50/over 50). This maximum includes any Employee Contributions made to plans sponsored by other employers. These limits are indexed each year by the Internal Revenue Service.

Wayne State University also limits the percentage amount you can contribute for any one paycheck to 80% of gross pay (considering both 403(b) and 457(b) plan contributions). This is necessary to ensure that you have compensation remaining to cover other employee benefits costs.

How do I enroll?

Step 1: You must complete a WSU 403(b) Retirement Plan Salary Reduction Agreement and FAX or MAIL it to TCW. This form authorizes your payroll deduction. Your payroll deduction cannot be processed until you have also completed the Enrollment with an Investment Carrier.

Step 2: Enroll Online! If you enroll on-line, there will be no delay in starting your Contributions – Once you enroll, you will receive a Welcome Packet from the Investment Carrier (at your home address) which will provide a PIN number and will explain how to manage your account on-line.

Investment Carriers

TIAA-CREF ENROLLMENT
Website: http://www.tiaa-cref.org/wayne
Select GROUP RETIREMENT ANNUITY (GRA)
or
SUPPLEMENTAL RETIREMENT ANNUITY (GSRA)

FIDELITY ENROLLMENT

Website: http://plan.fidelity.com/waynestateuniversity

The Plan ID Number is 52864

 

How do I apply for a Waiver of Service?

Importance of 2 Years of Service Requirement
You may start your Employee Contributions any time after your date of hire in an eligible classification. Under the Traditional Plan, University Contributions begin after you agree to contribute 5% Employee Contributions and have attained 2 Years of Service and you are fully vested immediately. Under the Modified Plan, University Contributions begin when Employee Contributions do, but are not fully vested until you have 2 Years of Service.

How to Apply for Waiver
Employees with less than 2 Years of Service at Wayne State University may submit a Waiver of
Service Requirement to satisfy all or a portion of the requirement, based on service at another employer. WSU will not waive
the age 26 requirement. Service at one or more of the following will qualify:

• an institution of higher learning (e.g. college or university), or
• an educational institution eligible to purchase annuity contracts for its employees under Section 403 (b) of the
Internal Revenue Code (e.g. K-12 school district), or
• a tax-exempt organization (as described in Section 501(c)(3) of the Internal Revenue Code) which is
affiliated with an institution of higher learning (e.g. hospital).


NOTE: WSU looks back 3-years prior to your date of hire with Wayne State University. If your prior service extended into the 3-year look
back period, we will consider the prior service toward the Waiver of Service Requirement.

To apply for a Waiver of Service Requirement, you must submit the following to TCW:


• Letter from your previous employer (on letterhead stationery), signed by a representative of the
employer
• A statement describing the institution: university, community college, K-12 school, tax-exempt
organization, or a tax-exempt hospital
• Your actual dates of employment (beginning and end dates).
• Your percentage of full-time worked (e.g. 100% or 50%, etc.). Only service where you worked 50% or more
time will be considered.
• Your job title while employed.

  • Service when you were employed as an “medical intern”, “medical resident” or “medical fellow” will be considered.
  • Service with Wayne State University as a temporary employee that was at least 50% time will be considered.
  • Service when you were employed as a “graduate student”, “graduate assistant”, “part-time faculty” or “volunteer faculty” will not be considered.

FAX this information to (313) 577-0637

What are the Plan Features?

Overview of the Traditional Plan

Covers all Others.  The minimum Employee Contribution is 1%. You must have 2 Years of Service and be age 26 and make Employee Contributions of at least 5% before University Contributions will begin.  The University Contribution is 10% of salary. University Contributions are Fully Vested.(See below for definition of Fully Vested and Years of Service).

Start Date for Employee Contributions Any time after date of hire
Employee Contribution Amount 1% minimum, in increments of 1%, to a
maximum under IRS rules.
Fully vested at all times.
Start Date for University Contributions After 2 Years of Service and attainment of
age 26 and provided you are making
Employee Contributions of at least 5%.
University Contribution Amount

University Contributions of 10%, if Employee
Contribution is at least 5%.
Fully vested.

 Overview of the Modified Plan

Covers Non-Represented employees, P&A union, Staff Association,  Housing HERE union, HERE union, Operating Engineers union, Public Safety Officers union, and Local 517-M of SEIU Union. The minimum Employee Contribution is 1%. You must be age 26 and make Employee Contributions of at least 1% before University Contributions will begin. The University Contribution match is $2 for every $1 to a maximum of 10% of salary. University Contributions are Fully Vested after 2 Years of Service. (See below for definition of Fully Vested and Years of Service).

Start Date for Employee Contributions Any time after date of hire
Employee Contribution Amount 1% minimum, in increments of 1%, to a
maximum under IRS rules.
Fully vested at all times.
Start Date for University Contributions Once you begin your Employee Contributions
and have attained age 26.
University Contribution Amount $2 match for every $1 of Employee Contributions,
to a maximum of 10%.
You are vested after 2 Years of Service.

Fully vested means these amounts cannot be forfeited, even if you terminate your employment with WSU. Forfeiture means your accumulated University contributions and related earnings revert back to the University before you become Fully Vested.

The Years of Service requirement may also be met if the employee had service with an institution of higher learning (e.g., college, university), an educational organization eligible to purchase annuity contracts under IRC Section 403(b) (e.g., school district), or a tax-exempt organization affiliated with an institution of higher learning (e.g., teaching hospital), but NOT including service as a graduate student, graduate assistant, part-time faculty, or volunteer faculty.

What are the Investment Options?

TIAA-CREF This investment carrier offers variable and fixed annuities (called the guaranteed option, or TIAA Traditional account) as well as 5 mutual funds and 10 lifecycle funds

 

Pre 8/1/2010

 8/1/2010 and after

 Base Plan
(Plan No 103167)

 Retirement Annuity (RA)

 Group Retirement Annuity (GRA)

 Supplemental Plan
(Plan No 103168)

Group Supplemental Retirement Annuity (GRSA)

Base Plan (No 103167) - You should put your first 5% of Employee Contributions into this Plan option first, in order to receive the University Contlributions.

Supplemental Plan (No 103168) - You may put any amount of Employee Contributions into this plan or you may elect to put Employee Contributions over 5% into the Base Plan.

FIDELITY INVESTMENTS This investment carrier offers mutual funds, including money market, stock and bond funds and an array of pre-mixed Freedom Funds. 

Base Plan
(Plan No 52864)		 150+ mutual fund options

Uncertain about How to Invest?

TIAA CREF Fidelity Investments

http://www.tiaa-cref.org/wayne

Call 1-800-842-2776
Mon through Fri 8AM to 11PM EST
Sat and Sun 9AM to 6PM EST
Enter "0" for live person

http://www.fidelity.com/atwork

Call 1-800-343-0860
Mon through Fri 8AM-Midnight EST
Enter "0" for live person


You may want to consider the pre-mixed funds that are designed to provide a single diversified portfolio, managed based on the target date you want to retire:

                            TIAA-CREF             Lifecycle Funds
                            Fidelity                  Freedom Funds

How can I make a counseling appointment?

FREE one-on-one retirement counseling is available with each investment carrier each month on campus. Click here for dates and locations.

Can I take a loan from the Plan?

You may borrow from the Plan, subject to the following rules:

  • The maximum loan amount is the lesser of (a)  50% (%45% at TIAA-CREF) of the vested account value in the Plan minus current outstanding loan balances in the Plan or (b)  $50,000 (reduced by the higher of the outstanding balance on all loans or the highest outstanding balance on all loans during a one-year look back period).
  • The maximum loan repayment period is 5 years, unless the loan is used to buy your primary residence (10 year limit). 
  • The loan repayments must be repaid directly to the Investment Carrier.
  • Fidelity Investments charges fees for loans ($75 set-up plus $6.25 per quarter processing fee). The interest rate is the prime rate per Reuters, as adjusted at the 1st of each quarter, and remains fixed over the term of your loan. Repayment is monthly.
  • TIAA-CREF charges no fees for loans. The interest rate is based on Moody’s corporate bond rate, as adjusted at the first of each calendar quarter. For the first 6 months of your loan, the rate is fixed and after that the loan rate on your loan adjusts. Repayment is monthly or quarterly.

 NEW LOAN LIMITS

  • Beginning on and after January 1, 2011, an employee may have no more than five (5) loans outstanding at any time per Investment Carrier. Any loan outstanding on December 31, 2010 does not count toward the loan limit, but an employee who has one or more defaulted loans may not take another loan until all defaulted loans have been repaid.

Tax Impacts

  • When you receive the Plan loan proceeds, the Federal Tax Withholding (20%) and Early Withdrawal Penalty (10%) will not apply.
  • If you fail to make repayments, as required by the terms of the loan, your loan will be “defaulted” which will result in taxable income to you and an Early Withdrawal Penalty of 10%  if you are under age 59-1/2.

Loan Highlights

Minimum

 $1000
Maximum 45-50% of your vested account balance
Interest Rate Reset each quarter for new loans
Repayment At least monthly
Default If you fail to make repayments, as required by the
terms of the loan, your loan will be "defaulted" which
will result in taxable income to you and an Early
Withdrawal Penalty of 10% (if you are under age 59-1/2)

Loan Instructions - Effective November 19, 2010

  1. Call Fidelity at 1-800-343-0860 and/or TIAA-CREF at 1-800-842-2776. Explain that you are interested in a Loan and ask them to compute how much you have available for a Loan. They will complete a Loan Application (for your records).
  2. Authorization for the loan will NOW be made by your Investment Carrier - TIAA-CREF or Fidelity - when you submit the forms or web request, not the WSU – TCW office. This means you DO NOT send any Loan Authorization Form to TCW.
  3. Your Investment Carrier - TIAA-CREF or Fidelity - will process your Loan Application within 2-3 business days and will notify you when the loan is approved.
  4. Check back with your Investment Carrier (Fidelity or TIAA-CREF) to check on timing of the cash distribution – use the numbers show below:
TIAA CREF Fidelity Investments

http://www.tiaa-cref.org/wayne

Call 1-800-842-2776
Mon through Fri 8AM to 11PM EST
Sat and Sun 9AM to 6PM EST
Enter "0" for live person

http://www.fidelity.com/atwork

Call 1-800-343-0860
Mon through Fri 8AM-Midnight EST
Enter "0" for live person

Can I take a Hardship Withdrawal?

You may withdraw from the Plan for an “immediate and heavy financial need” for which you lack other available resources. This distribution is different from a loan because when you make a hardship cash withdrawal, you do not need to pay it back to the Plan.

The approved expenditures that meet the Plan criteria are:

  1. Unreimbursed Medical Expenses  for the employee, spouse or the employee's dependents
  2. Purchase of your principal residence
  3. Prevent home eviction or foreclosure
  4. Post-secondary education expenses for the next semester or quarter post-secondary education for the employee, spouse or dependents (expenses for books or room and board do not qualify)
  5. Repair casualty loss damage to principal residence
  6. Payment for funeral or burial expenses.

Key Conditions

  • Only Employee contributions may be withdrawn due to hardship (not University Contributions or any accumulated investment earnings).  
  • You must utilize all available Plan loans before you can apply for a Hardship Withdrawal
  • You are prohibited from making Employee Contributions under the Plan for a 6-month period, beginning on the date you receive the Hardship Withdrawal. This also means all University Contributions will be discontinued for 6 months. Following the ending of the 6- month period, you will need to complete a Salary Reduction Agreement and send it to TCW to reinstate your contributions.

The Federal Tax Withholding (20%) does not apply, but the Early Withdrawal Penalty (10%) does apply when you take a Hardship Withdrawal.

 

Hardship Highlights

What funds

 Only Employee Contributions (without investment earnings)
Loans first You must utilize all available Plan loans before you can apply
for a Hardship Withdrawal
Stop Employee
Contributions		 WSU will stop all Employee Contributions under the Plan
for a 6-month period.

Hardship Withdrawal Instructions - effective November 19, 2010

  1. Review the Key Conditions above to see if you quality for a Hardship Withdrawal
  2. Call Fidelity at 1-800-343-0860 and/or TIAA-CREF at 1-800-842-2776. Explain that you are interested in a Hardship Withdrawal and ask them to compute how much you have available. They will complete a Hardship Withdrawal Application (for your records), but you will also have to submit documentation to them.
  3. Authorization for the Hardship will NOW be made by your Investment Carrier - TIAA-CREF or Fidelity- not the WSU – TCW office. This means you DO NOT send any Hardship Forms to TCW.
  4. Your Investment Carrier – TIAA-CREF or Fidelity - will process your Hardship Withdrawal Application within 3-4 business days and will notify you when the Hardship Withdrawal is approved.
  5. Check back with your Investment Carrier (Fidelity or TIAA-CREF) to check on timing of the cash distribution.

When Can I take a Cash Withdrawal?

Your Employee Contributions and University Contributions are made on a pre-tax basis. Thus, Federal and state income taxes are deferred until you withdraw your vested account balance as cash. Any investment return on your contributions are tax-deferred, and also subject to tax upon cash withdrawal, as shown on the chart below. 

Events that permit Cash Withdrawals

 

Early Withdrawal Penalty
before Age 59-1/2

20% Federal Tax
Withholding

Termination of employment at any age

Yes1

Yes

Attainment of age 59-1/2

No

Yes

Disability

No

No

Plan loan

No

No

Hardship Withdrawal

No

Yes

 20% Federal Tax Withholding
Generally cash withdrawals are subject to a 20% Federal income tax withholding.

Early Withdrawal Penalty

A 10% IRS early withdrawal penalty will assessed if you receive a cash withdrawal before you are age 59 ½, except for death, Disability, Loan or Hardship Withdrawal.  1If you separate from service before age 55 and elect Substantially Equal Periodic Payments (SEPP) and these payments  continue for 5 years or until you reach 59-1/2 ( whichever is later), you will not be subject to the Early Withdrawal Penalty.

What Forms of Payment can I Receive?

Once you terminate your employment from Wayne State University, you make elect any of the following distribution options:

  • RETAIN YOUR WSU ACCOUNT- Leave your vested account balance with your current Investment Carrier (inside the WSU 403(b) Retirement Plan) until some later date. Later you can take cash withdrawals or arrange to annuitize your vested balance.
  • ROLLOVER TO YOUR NEXT EMPLOYER’S PLAN  - Roll your vested account balance into another qualified plan of your new employer.
  • ROLLOVER TO AN IRA- Roll your vested account balance into an IRA.
  • CASH WITHDRAWAL- Elect a cash income option (subject to 20% Federal income tax withholding and 10% Early Withdrawal Penalty if you are age 59-1/2 or less).
  • ANNUITY OPTION-  Elect an annuity option from TIAA-CREF. When you “annuitize” your account balance, you may select regular cash payments in the form of a single life annuity, joint and survivor annuity, fixed period certain annuity. There is no requirement that you elect an annuity as an option if your funds are invested with TIAA-CREF, unless you have savings in the TIAA Traditional Account.

How Can I add a Self-Directed Broker Account?

A participant in the WSU 403(b) Plan may elect this option that permits you to move your contributions to a brokerage account outside the Plan – generally called a “Self-Directed Brokerage Account”. The advantages include:

  • You can invest in mutual funds from several fund families (beyond the investments choices offered by Fidelity or TIAA-CREF as the Investment Carriers under the WSU Plan).
  • Once you have enrolled in this plan feature, you may transfer accumulations to your brokerage account and back again, subject to certain restrictions by the Investment Carrier.
  • This feature is for sophisticated investors who want greater investment flexibility.
  • By law, participants in 403(b) plans may only invest in mutual funds or annuities. Investments in individual stocks or Exchange-Traded Funds are not permitted.

The cost of this service depends on the WSU Investment Carrier and what kinds of funds you elect to invest in. There are about 800 funds to choose from that do not charge a transaction fee, where there are thousands of additional fud options which may result in transaction fees.

Below, for each Investment Carrier, is a description of how to sign up and the fees that apply. For more details, follow the link to the current fact sheet (providing step by step instructions on how to enroll) and a link to the current  agreement used for enrollment.

Fidelity Brokerage Link

Sign Up  - Call Fidelity at 1-800-343-0860 and speak to a Retirement Services Specialist. They will send you enrollment forms by mail.

Fees - There are no plan level fees. However depending on the transaction, there may be commissions and related fees

TIAA-CREF Brokerage Services

Sign Up - Call TIAA-CREF at 1-800-927-3059 to speak with a TIAA-CREF consultant. They will guide you through the on-line enrollment process.

Fees  - An annual maintenance fee of $40 will be charged to your TIAA-CREF Brokerage Services Account. Where applicable, there may also be other standard fees in addition to this annual maintenance fee. No-transaction-fee mutual funds have no fees to buy, sell or exchange these funds. Transaction-fee mutual funds have a $35 fee to buy or sell. There is an $8 fee to exchange within a fund family.

For more information please contact benefits@wayne.edu