Plan Overview

403(b) Voluntary Retirement Savings Plans

All FIU employees can participate in a voluntary 403(b) Savings Plan, including a pre-tax 403(b) and/or a Roth 403(b).

A pre-tax 403(b) Savings Plan account allows participants to save money for retirement while reducing their income tax liability.

A Roth 403(b) account allows participants to pay taxes on contributions now but will receive qualified withdrawals (including earnings) tax-free at retirement.

Both 403(b) types are excellent options for employees when planning for retirement. The voluntary 403(b) plan is only available to FIU employees.

Contributions are payroll deducted on a pre-tax basis for pre-tax 403(b) participants and/or on a post-tax basis for Roth 403(b) participants and are forwarded to a participating investment company.

Participation in the plan is open to all eligible employees. All eligible employees can make contributions to the plan immediately.

403(b):

  • Helps reduce taxable income (pre-tax 403(b))
  • Investments grow tax-free (Roth 403(b))
  • Competitive fund options
  • Fund options are actively monitored quarterly by a 3rd party investment firm.
  • The ability to roll over other qualified funds into your 403(b) accounts
  • Only available through your employment at FIU
  • Easy enrollment, changes, or stops to your contributions using Retirement@Work

The plan highlights are only a brief overview of the plan's features and are not a legally binding document. The information in this section does not modify the terms of the plan and in the event of a conflict, the terms of the plan control.

Your contributions

Through payroll deduction, your plan allows you to make pretax and Roth after-tax deferrals up to the maximum annual deferral limits. You may view the current limits.

This includes both pretax and Roth after-tax deferrals. Special catch-up provisions may also be available. Talk to your financial advisor for more information. If you have an existing qualified retirement plan (pretax) or qualified retirement plan (Roth after-tax deferrals) account with a prior employer, you can transfer or roll over that account into the plan on becoming a participant in the plan.

Vesting

You are always 100% vested in employee contributions and rollover contributions, plus any earnings they generate.

Investment flexibility

You decide how to invest your plan account, selecting from investment choices provided under the plan. You can change your investment choices anytime.  

Accessing your money before retirement

The plan was established to encourage long-term savings, so withdrawals prior to age 59½ might be subject to federal restrictions and a 10% federal early withdrawal penalty may apply.

Money can be withdrawn from the plan in these events:

Death 

Disability

Severance from employment 

Financial hardship (Hardship withdrawals may be made from salary reduction contributions only, not from earnings on those contributions) 

Income taxes are payable upon withdrawal. Be sure to talk with your tax advisor before withdrawing any money from your plan account.

In addition, the Internal Revenue Service (IRS) requires you to take Required Minimum Distribution (RMD) withdrawals from your retirement account(s) annually beginning the year you reach the RMD eligible age. RMD eligible age is:

  • Age 73 if you were born January 1, 1951, or later (The RMD eligible age will increase to age 75 after December 31, 2032)
  • Age 72 if you were born after June 30, 1949, and before January 1, 1951 (For individuals turning age 72 in 2023, no RMD payment is required in 2023)
  • Age 70 ½ if you were born before July 1, 1949.

Loans

The plan is intended to help you put aside money for your retirement. However, Florida State University has included a plan feature that enables you to access money from the plan.

The amount the plan can loan to you is limited by rules under the tax law. All loans will be limited to the lesser of one-half of your vested account balance or $50,000. 

Loans must generally be repaid within five years. 

You pay interest back to your account. The interest rate on your loan will be the Prime Rate plus 1%. 

Defaulted loan amounts will be taxed as ordinary income and may incur a 10% federal early withdrawal penalty if the employee is under 59½ years of age. 

Other requirements and limits must be met prior to borrowing money from your account. For additional information regarding loans, please see your financial professional.

 

Mutual funds under a custodial or trust account agreement are intended as long-term investments designed for retirement purposes. Money distributed from a 403(b) plan will be taxed as ordinary income in the year the money is distributed. Early withdrawals from a 403(b) plan, if taken prior to age 59½, will be subject to the IRS 10% premature distribution penalty tax unless an exception applies. Account values fluctuate with market conditions, and when surrendered the principal may be worth more or less than the original amount invested. A group fixed annuity is an insurance contract designed for investing for retirement purposes. The guarantee of the fixed account is based on the claims-paying ability of the issuing insurance company. Although it is possible to have guaranteed income for life with a fixed annuity, there is no assurance that this income will keep up with inflation. An annuity does not provide any additional tax deferral benefit; tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does offer other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you.

For 403(b) fixed or variable annuities, employee deferrals (including earnings) may generally be distributed only upon your: attainment of age 59½, severance from employment, death, disability, or hardship. Note: Hardship withdrawals are limited to employee deferrals made after 12/31/88. Exceptions to the distribution rules: No Internal Revenue Code withdrawal restrictions apply to ‘88 cash value (employee deferrals (including earnings) as of 12/31/88) and employer contributions (including earnings). However, employer contributions made to an annuity contract issued after December 31, 2008 may not be paid or made available before a distributable event occurs. Such amounts may be distributed to a participant or if applicable, the beneficiary: upon the participant’s severance from employment or upon the occurrence of an event, such as after a fixed number of years, the attainment of a stated age, or disability.  For 403(b) custodial accounts, employee deferrals and employer contributions (including earnings) may only be distributed upon your: attainment of age 59½, severance from employment, death, disability, or hardship. Note: hardship withdrawals are limited to: employee deferrals and ‘88 cash value (earnings on employee deferrals and employer contributions (including earnings) as of 12/31/88).