Supplemental Retirement Plans

• 403(b) Tax-Deferred Annuity Plan sponsored by Arizona Board of Regents (ABOR)
• 457(b) Deferred Compensation Plans sponsored by the State of Arizona

Eligibility

All university employees (full-time, part-time, hourly, or temporary) are eligible to participate in the 403(b) plan and the 457(b) plan.

Contribution limits

You can contribute up to the IRS annual maximum each calendar year to each plan.

• For 2019 the contribution maximum is $19,000.
• For 2020 the contribution maximum is $19,500.

Catch up contributions

• If you are age 50 or older you can make catch-up contribution of an additional $6,000 each calendar year for and annual maximum of $25,000.
  • For 2020 the catch up contribution limit is $6,500 and an annual maximum of $26,000.
• Both plans also allow additional catch-up contributions provisions.  To find out if you are eligible to make these additional  catch-up contributions, contact your supplemental retirement plan vendor directly.

Note: Contributions to the 457(b) plan must be coordinated with any other 457(b) plans.

Hardship

While you are an active employee, you are not allowed to access your account except for the reason of ‘Hardship’ as defined by the IRS.

Loans

Typically you can borrow between $1,000 and $50,000 per plan. The amount you can borrow depends on your account balance available for loans.

403(b)

• You may only have 1 general loan and 1 home loan at a time at a time
• Loans may only be taken from your accounts with the plan’s active investment managers Fidelity and TIAA

403(b) Tax-Deferred Annuity Plan

Investments:

Each investment vendor offers a wide menu of funds with different investment strategies.Your contributions can be invested with:

• Fidelity
• TIAA

Enrollment and changes:

You may start, stop or change your contribution amount at anytime through Fidelity net benefits.

• Learn how to enroll in the 403(b) plan
• Learn how to change your contribution amount or investment elections.

Review the 403(b) Enrollment Guide to learn more about the 403(b).

Contributions:

Contributions to the Plan can be deducted on a pretax basis from your paycheck or on an after-tax basis [Roth 403(b)]. Northern Arizona University does not match your contributions.

Pre-taxed contributions: The contributions are deducted from your pay before income taxes are taken out. This means that you may actually lower the amount of current income taxes withheld each period. It could mean more money in your take-home pay versus money in a taxable account. Any earnings on your contributions are tax deferred until you withdraw them from your account.

After-tax [Roth 403(b)] contributions: You can make after-tax payroll contributions and withdraw those contributions tax free (subject to the terms of the Plan). Your earnings may also be withdrawn tax free if you have a qualified distribution.* Generally, a Roth contribution may be beneficial if you expect your tax rate in retirement will be higher than it had been during the years you contributed. In the event of either retirement or termination, your earnings can be withdrawn tax free as long as it has been five tax years since your first Roth 403(b) contribution and you are at least 59½ years old.

You may want to consider consulting your tax expert to determine if the pretax or Roth after-tax option is right for you.

Distributions:

Once you leave the university system you may request a distribution.

• While you are an active employee, you are not allowed to access your account funds except for the reason of ‘Hardship’ as defined by the IRS.
• Once you leave the university or retire you can request a distribution by contacting your investment representative.
• Distributions taken before age 59 1/2 that are not rolled over to another qualified retirement plan or IRS may subject to tax penalty in addition to income taxes.