IU 457(b) Retirement Plan

The IU 457(b) Retirement Plan is a section 457(b) defined contribution retirement plan. This is a voluntary employee-funded plan; therefore, the participant makes all plan contributions.

The information on this page is only a summary. Review the IU 457(b) Retirement Plan – Plan Document for a detailed description of the terms and conditions of the Plan.

Plan Details

Eligibility

All IU employees are eligible to participate in this plan.

 Enrollment

Eligible employees may enroll in the plan at any time by following these step-by-step enrollment instructions to enroll in the plan, setup your account online through Fidelity NetBenefits, select your investments, and designate your beneficiaries.

Contributions

Employees make all contributions to the plan. Contributions may be made on a pre-tax or after-tax Roth basis, and can be a flat-dollar amount or a percentage of pay. See the section below titled ‘Contribution Limits’ for additional details. 

Contribution Limits

  • $19,500 limit for 2021 for all employee (both pre-tax and after-tax Roth) contributions
  • Plus an additional $6,500 if you are age 50 or older
  • Plus up to an additional $19,500 if you are age 62, 63, or 64

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Contribution Limits

The information below is a summary of IRS contribution limits that apply to this plan. It is your responsibility to ensure you do not exceed these maximums between all of your retirement saving accounts. Visit the IRS Limits page for further details.

Employee Elective Deferrals – IRC 457(b)
For 2021, the IRS limit on employee contributions is $19,500. Participants age 50 or older may contribute an additional $6,500. Participants age 62, 63, or 64 may contribute up to an additional $19,500.   

The annual limit applies to employee contributions to the IU 457(b) Retirement Plan; a 457(b) plan sponsored by an employer in the same controlled group as IU; and a 457(b) plan in which you participate sponsored by any other employer.

A participant may not make both an age 50 or older catch-up contribution and an age 62, 63, or 64 catch-up contribution to the plan in the same year.

Vesting

A participant is always 100% vested in his or her plan account.

 Investment Options

This is a “participant directed plan” meaning you are responsible for directing the investment of your plan account. If you do not select investments, your funds will be invested in the plan’s default investment option – and age-appropriate Vanguard Institutional Target Retirement Date Fund.

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Distributions & Withdrawals

You can withdraw funds from your IU 457(b) Retirement Plan account held at Fidelity while still employed by IU if you are age 59½ or older, or at any age after your IU employment ends. 

  • Distributions of pre-tax contributions are subject to a 20% federal income tax withholding. 
  • Distributions of Roth (after-tax) contributions are tax-free if they are made (1) after a 5-year holding period (begins January 1 of the year you made your first Roth contribution); and (2) after you reach age 59½, become disabled, or pass away. 

A loan may be available from your IU 457(b) account by contacting Fidelity directly (university authorization is not required). Loans are subject to both federal tax code and investment company rules and regulations.

Fidelity
www.netbenefits.com/indiana
Service: 800-343-0860

Video: Explore Your Withdrawal Options at Fidelity

For more information on distributions and withdrawals, visit the Frequently Asked Questions page. For information on Required Minimum Distributions (RMDs) see the ‘Options When You Separate from IU’ section below.

Options When You Separate from IU

All plan contributions stop when your employment with IU ends. Upon termination of employment, you may:

  • Leave accumulations in the plan account and continue to manage investments;
  • Withdraw all or a portion of vested plan account accumulations (subject to income taxes and/or penalty taxes); or
  • Rollover all or a portion of vested plan account accumulations to an eligible retirement plan (e.g., an IRA).

After terminating employment with the university, most transactions related to your plan account are handled directly with the applicable investment company. For more information, review the Benefits After Separation Guide.

Required Minimum Distributions (RMD) at Age 72
Federal law requires participants to begin receiving at least a partial distribution of tax-deferred retirement account funds by April 1 of the calendar year following the year he/she reaches age 72, or upon retirement/separation, whichever is later. Failure to withdraw the RMD annually by the applicable deadline can result in substantial tax penalties

Resources

Customer Service Contacts

IU Human Resources

Phone: 812-856-1234

Fidelity
www.netbenefits.com/indiana
Service: 800-343-0860
Appointment Scheduling: getguidance.fidelity.com or 800-642-7131
Speak to a Retirement Planner: 800-328-6608