403(b) Retirement Program

SMU's 403(b) Retirement Plan is very competitive and SMU is committed to helping you achieve your financial goals for retirement.  Once you become eligible to participate in the 403(b) Regular Retirement Plan, SMU will contribute 8% or 10% (based on age) of your Base Salary - when you enroll and begin contributing 5%.  Even if you are not yet eligible to participate in the Regular Retirement Plan (with matching SMU contributions), you have the opportunity to begin your retirement savings by contributing to the Supplemental Retirement Account.  Please review the information below to better understand the eligibility criteria and IRS contribution limits.

The 403(b) has two components, the Regular Retirement Plan and the Supplemental Retirement Account.  Here's how they work...

Regular Retirement Plan

The Regular Retirement Plan has two components - Non-Elective Contributions (mandatory) and Elective Contributions (voluntary).  Depending on your circumstances your participation in the Regular Retirement Plan will either be Non-Elective or Elective, never both.  It is important that you understand the rules that apply to each.

  • Non-Elective Pre-Tax Contributions:  This is the mandatory component of the Regular Retirement Plan.
     
    • Full-time employees age 36 or older with one year of SMU service are required to participate as a condition of employment.  You will receive a reminder from Human Resources prior to your mandatory participation effective date.  The reminder will include information about your investment options, the necessary enrollment forms, and the deadline for self-enrollment.  If you do not enroll by the deadline, a Vanguard account will be set up for you and you will be enrolled in an age-appropriate Vanguard Targeted Retirement Fund.  Payroll deductions will begin on the first day of the month following your mandatory participation effective date.  If you decide to change your investment allocations, send the necessary forms to Human Resources and the changes will take effect on the first day of the month following the date you submit the completed forms to Human Resources.
       
    • Part-time employees are not subject to the mandatory participation requirement, regardless of age or length of service.
       
    • You will contribute 5% of base salary through pre-tax payroll deductions and SMU will contribute 8% through age 40 and 10% beginning the first of the month following your 41st birthday.
       
    • The IRS limits the amount of compensation that can be used to calculate your 5% contributions and, accordingly, SMU's contribution.  The IRS Compensation Limit for 2009 is $245,000.  This limits employee contributions under the Regular Retirement Plan to $12,250.  SMU's contribution is limited to $19,600 (8%) or $24,500 (10%), as applicable.
       
    • Your Non-Elective contributions are not subject to the IRS Annual Elective Deferral Limits discussed below.

     

  • Elective Pre-Tax Contributions:  This is the voluntary component of the Regular Retirement Plan.
     
    • Full-time employees with less than one year of SMU employment, even if age 36 or older, may contribute on an elective (voluntary) basis.  Once you complete one year of employment, participation in the Regular Retirement Plan will become Non-Elective (mandatory).
       
    • Part-time employees age 26 or older, with at least one year of SMU service, may contribute on a voluntary basis.
       
    • You will contribute 5% of base salary through pre-tax payroll deductions and SMU will contribute 8% through age 40 and 10% beginning the first of the month following your 41st birthday.
       
    • The IRS limits the amount of compensation that can be used to calculate your 5% contributions and, accordingly, SMU's contribution.  The IRS Compensation Limit for 2009 is $245,000.  This limits employee contributions under the Regular Retirement Plan to $12,250.  SMU's contribution is limited to $19,600 (8%) or $24,500 (10%), as applicable.
       
    • Your Elective contributions are subject to the IRS Annual Elective Deferral Limits discussed below.

Supplemental Retirement Account

The Supplemental Retirement Account also has two components.  Both are voluntary.

  • Elective Pre-Tax Contributions:
     
    • Available to Full-time and Part-time employees, regardless of age or length of service.
       
    • You may contribute a flat dollar amount per pay period through pre-tax payroll deductions.
       
    • SMU does not contribute to the Supplemental Retirement Account.
       
    • Your Elective contributions are subject to the IRS Annual Elective Deferral Limits discussed below.
       
  • Elective After-Tax (Roth) Contributions:
     
    • Available to Full-time and Part-time employees, regardless of age or length of service.
       
    • You many contribute a flat dollar amount per pay period through after-tax payroll deductions.
       
    • SMU does not contribute to the Supplemental Retirement Account.
       
    • Your Elective contributions are subject to the IRS Annual Elective Deferral Limits discussed below.

IRS Annual Elective Deferral Limits

The IRS places very strict limits on the amount employees (and SMU) can contribute (defer) to a 403(b) plan and it is extremely important that you understand these limits.  It is your responsibility to ensure that your contributions do not exceed the applicable limits so be sure to check your pay statements regularly.  If applicable, be sure to take into consideration any contributions you have made through a former employer during the current calendar year.  The IRS typically (but not always) increases the limits from year to year.  Following are the limits for 2009:

  • The 2009 Elective Deferral Limit for 2009 is $16,500.  This includes all Elective Contributions addressed above.  As a reminder, Non-Elective (mandatory) contributions to the Regular Retirement Plan are not subject to this limit.
  • 403(b) participants age 50 or older may contribute an additional $5,500 for 2009, increasing the Annual Elective Deferral Limit to $22,000.
  • Under very limited circumstances, you may have an opportunity to contribute an additional amount under the IRS 15-Year Rule.  Please contact the Benefits Department to determine if you are eligible.

Enrolling in the 403(b)

Enrolling in the 403(b) is easy but you have several decisions to make and forms to complete.

When you enroll...

  • you will select Fidelity, Vanguard and/or TIAA-CREF to manage your 403(b) account(s).
     
  • you will complete the 403(b) Salary Reduction Agreement to activate your 403(b) payroll deductions and SMU's contributions.  Using this form you will indicate the percentage of your contributions (and SMU's) that you wish to allocate to each company.
     
  • you will also complete the application/enrollment form(s) for each investment company you choose.  You will indicate the funds selected, provide beneficiary information, etc.  Links to the forms, fund descriptions, and informational material specific to each investment company are provided below.

TIP: Many of us feel a bit overwhelmed when it comes to making investment decisions, or just don't have the time to effectively manage our investments.  If you feel that way, you should consider the TIAA-CREF Lifecycle Funds, the Fidelity Freedom Funds and/or the Vanguard Targeted Retirement Funds.  The funds provide a balanced portfolio of investments geared toward the year you plan to retire.  Your portfolio is regularly monitored and rebalanced by a professional investment manager.

  • both completed forms must be delivered to the Department of Human Resources with your other enrollment forms.
     
  • pre-tax contributions to your 403(b) are subject to the IRS annual maximum.  To determine how much you can contribute to your 403(b) accounts, refer to the 403(b) MaxCalc (coming soon).

After enrolling...

  • be sure to visit the website(s) of the investment company/companies you chose.  You will be asked to register and once you do so, you will have 24/7 access to your personal account and current investment activity.  You will also have access to information and interactive tools that will help you determine your retirement needs - and the steps you need to take to meet those needs and achieve your retirement goals.

Making changes...

  • you can change your investment allocations at any time by contacting your investment company.
     
  • If you wish to change or add a new investment company you must complete the 403(b) Salary Reduction Agreement and the 403(b) Application (below) for the new investment company you have chosen.  Send (PO Box 750232) or bring your completed forms to the Department of Human Resources in Expressway Tower, Suite 200.

Fidelity Investments  (1-800-343-0860)

Fidelity Getting Started Brochure

Fidelity Fund Descriptions

Fidelity 403(b) Application

Fidelity Rollover/Transfer Form

Fidelity Rollover or Transfer Instructions

Fidelity Loan Application

Fidelity Loan Payment Authorization Form

Fidelity 403(b) Beneficiary Designation Form

Fidelity 457(b) Beneficiary Designation Form

 

Vanguard  (1-800-523-1188)

Vanguard Education-eKit

Vanguard Simplify Your Investment Decisions

Vanguard Fund Descriptions

Vanguard 403(b) Enrollment Form

Vanguard Rollover/Transfer Form

Vanguard Beneficiary Designation Form

Vanguard Asset Transfer Form

 

TIAA-CREF  (1-800-842-2776)

TIAA-CREF Building Your Retirement Portfolio

TIAA-CREF Fund Descriptions

TIAA-CREF Enrollment Form-5% Regular Retirement

TIAA-CREF Enrollment Form-SRA

TIAA-CREF Rollover/Transfer Form

TIAA-CREF Beneficiary Designation Form