Comparing the IU Supplemental Retirement Plans

In addition to your base retirement benefits, the university gives you the option to save even more with the IU TDA and 457(b) retirement plans. These plans allow you to enhance your retirement savings through voluntary pre-tax and after-tax Roth contributions. As an eligible employee, you can participate in one or both plans as long as you do not exceed the annual IRS limits.

KEY SIMILARITIES:

  • Both plans allow you to make pre-tax and after-tax contributions.
  • If you need to withdraw money while you’re still working for IU, both plans allow you to do so starting at age 59½.
  • Both plans are participant-directed and have the same investment choices.
  • Rollovers of existing retirement plan funds can be made into both plans.

KEY DIFFERENCES:

  • 10% early withdrawal penalty on IU TDA distributions before age 59½, even if you no longer work for IU.
  • Annual recordkeeping fees.
  • Aggregation rules with other retirement plans.
  • Special catch-up contributions at age 62, 63, and 64 for the 457(b) Plan.

Review the table below to discover additional similarities and differences between the plans.

Publications

 

IU 457(b) Retirement Plan

IU TDA Plan 403(b)

Eligibility and General Plan Details

Eligibility

All IU employees
  • Academic and Staff employees (including IU residents) appointed at 50% or more FTE
  • Part-time with retirement employees

Vesting

Immediate 100% vesting

Annual Recordkeeping Fee

$45

$28

Contributions

Pre-tax and Roth (after-tax) Contributions

Yes

Contribution Methods

Flat-dollar or percentage of pay

Employee Contributions
  • Up to $23,000 for 2024 ($23,500 for 2025).
  • Additional $7,500 if age 50+.
  • Some participants may be eligible to contribute up to an additional $23,000 for 2024 ($23,500 for 2025) at age 62, 63, 64.

(IRC 457(b) limit – includes employer and your contributions to all 457(b) plans combined).
  • Up to $23,000 for 2024 ($23,500 for 2025).
  • Additional $7,500 if age 50+.

(IRC 402(g) limit – includes your contributions to certain 403(b), 401(k), and SARSEP plans combined).

Age 50+ Catch-up Contributions

$7,500 for 2024 / 2025

Age 62, 63, 64 Special Catch-up Contributions

Some participants may be eligible to contribute up to an additional $23,000 for 2024 ($23,500 for 2025) at age 62, 63, 64.

No

Contribution Limit

Total of employer and your contributions to all 457(b) plans cannot exceed $23,000 for 2024 / $23,500 for 2025 (plus applicable catch-up amounts).

(IRC 457(b) limit – includes all contributions to 457(b) plans combined).

Total of employer and your contributions cannot exceed lesser of your annual compensation or $69,000 for 2024 / $70,000 for 2025.

(IRC 415(c) limit – includes all contributions to certain 403(b), 401(a), SEP, and 401(k) plans combined).

Rollovers

Yes

Distributions and Withdrawals

Hardship Distributions

No

Loans

Yes

Distributions
(Withdrawals)

Upon separation of employment or at age 59½ while still employed by IU.

Early Withdrawal Penalty

No

10% penalty on distributions prior to age 59½.

Required Minimum Distributions (RMD)

Yes