Supplemental Retirement Plans

Supplemental plans allow you to save extra money for retirement. NAU does not match your contributions.  NAU offers two types of supplemental retirement plans:

• 403b Tax-Deferred Annuity Plan through Arizona University System
• 457 Deferred Compensation Plan through the State of Arizona

Eligibility

All NAU employees are eligible to participate in both the 403(b) and the 457(b) plans.

Pre-tax contributions are deducted from your pay before income taxes are taken out. This means that you may lower the amount of current income taxes withheld each period. Any earnings on your contributions are tax deferred until you withdraw them from your account.

Roth contributions are taken after taxes, as a result there are no current tax saving. In the event of either retirement or termination, your contributions and earnings can be withdrawn tax free as long as it has been five tax years since your first Roth contribution, and you are at least 59½ years old. 

Contribution limits

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

• 2025, the contribution maximum is $23,500 for both plan types.
• If you are age 50 or older, you can contribute an additional $7,500 each calendar year for an annual maximum of $31,000.
• Some employees may also be eligible for an additional catch-up contribution amount. Contact your supplemental retirement plan vendor directly to determine if you are eligible.

Investments

You direct the investments for the supplemental retirement plans.

• If you enroll in the 403(b) plan you can invest your contributions with either Fidelity or TIAA.
• If you enroll in the 457(b) plan your contributions are invested with Nationwide Retirement Solutions.

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. 

Hardship distribution

You can request a distribution for the reason of ‘Hardship’ as defined by the IRS while still employed. Distributions taken before you are 59½ and that are not rolled over may be subject to taxes and penalties.

Leaving the university

Once you leave NAU or retire you can leave your funds in your account, rollover your account to an IRA or another qualified retirement plan or request a distribution.

• Most distributions are subject to income tax withholding.
• Distributions taken from your 403(b) account before you are 59½ that are not rolled over may be subject to tax penalties.
• There is no early withdrawal for penalty for distributions taken from your 457(b) account.

Review the 403(b) vs 457 Plan Comparison

Still have questions??

Contact the Benefits Team at nauhrbenefits@nau.edu or call (928) 523-2223.