IU Tax Deferred Account (TDA) Retirement Plan

The IU Tax Deferred Account (TDA) plan is a section 403(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 Tax Deferred Account (TDA) Plan – Plan Document for a detailed description of the terms and conditions of the Plan.

Plan Details

Eligibility

To be eligible to participate in the IU TDA plan, an employee must be a(n):

  • Academic (including IU Residents) or Staff employee appointed at 50% or more full-time equivalent (FTE); or
  • Part-Time employee appointed as “Part-Time with Retirement”

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

  • $20,500 for 2022 for all employee (both pre-tax and after-tax Roth) contributions
  • Plus an additional $6,500 if you are age 50+

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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.

Total Contribution Limit – IRC 415(c)
The calendar-year limit on total contributions is the lesser of 100 percent of your compensation or $61,000 for 2022.

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 Tax Deferred Account (TDA), except for the extra $6,500 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.

Employee Elective Deferrals – IRC 402(g)

  • $20,500 for 2022 for all employee (both pre-tax and after-tax Roth) contributions
  • Plus an additional $6,500 if you are age 50+

The annual limit applies to employee contributions to any employer’s savings plan under IRC Sections 403(b) and 401(k). This includes the IU Tax Deferred Account Plan; the IU Health 401(k); If you own 50% or more of an employer (such as a faculty practice plan), that employer's defined contribution 403(b) or 401(k) plan; and salary deferrals to a SARSEP (a simplified employee pension (SEP) plan set up before 1997 that includes a salary reduction arrangement).

Vesting

A participant is always 100% vested in their 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 TDA funds 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. 
  • Distributions made prior to reaching age 59½ are generally subject to a 10% early withdrawal penalty, even if you are no longer employed by the university.

Take Action:

  • Watch a video: Explore Your Withdrawal Options at Fidelity
  • For information on Required Minimum Distributions (RMDs) see the ‘Options When You Separate from IU’ section below.
  • Contact Fidelity at 800-343-0860 or log in to your Fidelity NetBenefits account to learn about your withdrawal or distribution options.

Loans

A loan may be available from your IU TDA. You are limited to one loan across your IU supplemental retirement plan accounts (IU TDA and 457(b)) held at Fidelity.

Before you make the decision to take a loan from your account, consider the following:

  • Loans are subject to both federal tax code and investment company rules and regulations.
  • In most cases, you don’t pay taxes or penalties on a loan but you do repay the loan with after-tax dollars plus interest and there may be additional fees.
  • Fidelity On-Demand Workshop: Understanding Plan Loans

To request a loan, contact Fidelity at 800-343-0860 or log in to your Fidelity NetBenefits account and select ‘Loans or Withdrawals’ from the Quick Links menu next to the plan name.

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
  • 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. 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 Workplace Financial Consultant: 800-328-6608

TIAA (legacy accounts only)
www.tiaa.org/public/
Service: 800-842-2252