Contributions to the Plan consist of College core contributions, optional participant contributions that the College matches, and optional participant contributions that the College does not match. Contributions are a percentage of base earnings. Base earnings do not include summer pay for faculty, overtime or on-call pay, benefits, bonuses, or other remuneration that is in addition to and not covered by regular salary or wages. Contributions may be initiated or changed by completing a Salary Reduction Agreement available on the Human Resources Forms page.
Both College and participant contributions and related earnings are tax-deferred. This means that contributions are not considered taxable income for federal and state purposes when made to the Plan, but that retirement income from the Plan is taxed when received.
The College contributes 6% of each Participant’s base earnings up to the breakpoint and 9% of base earnings above the breakpoint, regardless of whether the participant contributes to the plan. The breakpoint is $68,842 effective July 1, 2019, and changes each July 1 based on the amount that College salaries increase.
Example 1. Bi-Weekly-Paid Participant with Base Earnings Not Exceeding Breakpoint. In July 2019, the bi-weekly breakpoint is $2,647.77 ($68,842 divided by 26) for participants who are paid bi-weekly. A participant whose bi-weekly base earnings during July 2019 are $2,647.77 or less will receive College core contributions of 6% of $2,647.77, or $158.87 on a biweekly basis.
Example 2. Bi-Weekly-Paid Participant with Base Earnings Exceeding Breakpoint.
A participant whose bi-weekly base earnings are more than $2,647.77 during July 2019 will receive College core contributions equal to 6% of the first $2,647.77 of bi-weekly base earnings plus 9% of bi-weekly base earnings in excess of $2,647.77. For example, a participant whose bi-weekly base earnings are $3,000 during July 2019, will received core contributions of $190.57 on a bi-weekly basis (6% of $2,647.77 + 9% of $352.23).
Optional Participant Matched Contributions and Matching College Contributions
Participants may make optional matched contributions to the Plan of 1%, 2% or 3% of their base earnings. The College makes matching contributions equal to each Participant’s optional matched contributions. A participant who elects to make maximum optional contributions of 3% will have total Plan contributions of 12% of base earnings up to the breakpoint and 15% of base earnings above the breakpoint. These contributions consist of College contributions of 9% on base earnings up to the breakpoint (6% core contributions plus 3% matching contributions) and College contributions of 12% on base earnings above the breakpoint (9% core contributions and 3% matching contributions), plus the Participant’s 3% optional matched contributions.
Optional Participant Unmatched Contributions and Matching College Contributions
A Participant who makes the maximum 3% matched contribution to the Plan may also make optional unmatched contributions to the Plan. The combined limit on voluntary employee pre-tax salary reduction contributions, i.e., a combination of matched and unmatched contributions, is $19,500 for 2020 (adjusted each year by the Secretary of Treasury). In addition, an employee who has reached age 50 by the end of a calendar year can make an additional contribution to the plan for that year. The amount of this additional contribution is $6,500 in 2020.
A Participant who has not yet satisfied the one-year waiting period for College contributions is nevertheless permitted to make unmatched contributions.
Eligible Employees may roll over certain contributions from another eligible retirement plan into a Rollover Account under the Plan. An “eligible retirement plan” includes a qualified retirement plan or annuity, a Code Section 403(b) annuity contract, an individual retirement account or annuity (“IRA”), or an eligible governmental 457(b) plan. A Rollover Account can be distributed at any time.
No current taxes are payable on such a rollover. However, rollovers must be made within a time limit provided by law (generally on or before the 60th day following the receipt of the distribution from the other plan.)
Retirement Annuities and Supplemental Retirement Annuities
A Participant’s optional unmatched contributions must be allocated by the Participant to either a Retirement Annuity or Supplemental Retirement Annuity. A Retirement Annuity receives a higher interest rate under the TIAA Traditional Annuity. However, amounts allocated to a Supplemental Retirement Annuity can be immediately transferred from TIAA Traditional to CREF (or TIAA Real Estate) instead of over the 10-year period required by the Retirement Annuities. Also, amounts allocated to a Supplemental Retirement Annuity can be withdrawn from the Plan by the Participant for any reason after he or she attains age 59-½ (see Withdrawals Prior to Separation from Service).
Leaves of Absence
During a paid leave of absence, both College and participant contributions continue to be made to the Plan based on salary paid during the leave. During an unpaid leave, no contributions are made. Contact the Human Resources Office for an explanation of retirement contributions for someone receiving benefits under the College’s Long Term Disability Plan.