You are automatically enrolled in the IU Retirement Plan plan if you are a 50% or more full-time equivalent (FTE) employee hired as:
Academic appointee
Exempt staff
Eligible non-exempt (PAO & PAU) staff
The IU Retirement Plan is a section 403(b) defined contribution retirement plan.
If you were hired after June 30, 1999, Indiana University contributes 9% of your budgeted base salary (excluding supplemental pay). This plan is fully funded by IU—employee contributions are not required or allowed.
This plan has a three-year cliff-vesting requirement. You are fully vested in the plan after three years of IU employment.
You are automatically enrolled in the appropriate plan when you are hired, but you must set up your plan account, choose investments, and designate your beneficiaries.
This is a “participant directed plan,” which means 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–an age-appropriate Vanguard Institutional Target Retirement Date Fund.
IU’s dedicated Fidelity Workplace Financial Consultants are available year-round to help you understand your plans and investment options. Whether you’re just getting started, planning for retirement, or somewhere in between, they’re here to assist you.
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
Roll over 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.
Required minimum distributions (RMD) at age 72
When you turn age 72, the IRS requires that you begin taking distributions from certain retirement accounts, called a “required minimum distribution” or RMD. You can take this first withdrawal either in the year you turn 72 or wait until April 1 of the next year. If you're still working, you can defer RMDs until after you separate/retire from IU without penalties.
Hardship distributions and loans are not permitted with this plan.
Learn more details
We count academic years as a full year for 10-pay employees. If you are primarily a 10-pay and work three full academic years, you are 100% vested.
It is your responsibility to ensure you do not exceed the IRS maximums between all of your retirement saving accounts.
Total contribution limit – IRC 415(c)
The calendar-year limit on total contributions is the lesser of 100% of your compensation or $69,000 for 2024 / $70,000 for 2025.
This total contribution limit applies to the sum of employer contributions to the IU Base Retirement Plan, the IRC 403(b) plan portion of the 18/20 Retirement Plan on behalf of a participant, and employee contributions to the IU TDA Plan, except for the extra $7,500 that employees age 50 or older may contribute.
Note: The total contribution limit also applies to any contributions you make to 403(b) plan sponsored by employer in same controlled group as IU and, if you own 50% or more of an employer (such as a faculty practice plan), that employer’s defined contribution 403(b), 401(a), 401(k) plan or SEP.
Annual compensation limit – IRC 401(a)(17)
The IRS limits the maximum annual compensation on which qualified retirement benefits can be calculated. The maximum annual compensation is $345,000 of plan-eligible earnings in 2024 / $350,000 in 2025.
If your position change or reclassification causes you to move from academic/exempt staff to non-exempt staff or part-time with retirement, or vice versa, you cannot stay in the same base retirement plan.
You are automatically enrolled in the retirement plan that you are eligible for, based on your position’s classification:
For non-exempt staff and part-time with retirement employees, that is the Retirement & Savings Plan.
For academic and exempt staff, that is the IU Retirement Plan.
Your balance will stay in the previous plan, but you will not receive contributions to that plan going forward.
Vesting will not start over if you move between plans.
11.25% level:
50% or more FTE exempt staff or eligible non-exempt staff (PAO or PAU) employees hired into a grade 15 and below appointed position before July 1, 1999; or academic employees hired in an appointed position before July 1, 1999, who are less than a 100% FTE, but at least a 50% FTE for 12 pays, 60% FTE for 10 pays, or 65% FTE for nine pays.
12% level:
100% FTE academic or exempt staff employees hired into a grade 16 and above appointed position on or after January 1, 1989, but no later than June 30, 1999.
15% level:
100% FTE academic or exempt staff employees hired into a grade 16 and above appointed position before January 1, 1989.
If you retire from IU and begin taking distributions from an IU retirement plan, you may be re-employed by IU as long as the IRS rules of a bona fide separation have been followed.
A bona fide separation consists of the following requirements:
A 30-day break in employment
No verbal or written arrangements for re-employment can be made prior to, or as a part of, retiring from IU
Employees who meet these requirements can return to employment without a break in service and also access their IU retirement funds. However, the department must process a termination eDoc due to retirement and rehire the individual into a different position, such as hourly, adjunct, etc.
To confirm IU retiree status and bona fide status eligibility, contact askHR@iu.edu.
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