Skidmore College Retirement Plan Overview

OVERVIEW

Skidmore College’s Retirement Plan is designed to provide employees with flexibility in meeting individual financial objectives at retirement by offering a wide choice of investment alternatives for both the basic and supplemental parts of the retirement plan. Investment choices are offered through two providers: TIAA-CREF and Vanguard Mutual Funds.

The plans established through these firms provide for individually owned retirement accounts which are 100% vested immediately as well as provide portability/transferability to some other institutions. Employees select the manner in which contributions are to be applied and adjust the application of contributions depending upon personal preference and any plan restrictions.

The following is a brief overview of the Plan. It is not meant to interpret, extend or change the Plan in any way. The provisions of the Plan can only be determined accurately by consulting the Plan itself. A copy of the Plan is on file with the Plan Administrator and may be read by any employee at any reasonable time. In the event of any discrepancy between this announcement and the actual provisions of the Plan, the provisions as set forth in the Plan document shall govern.

BASIC RETIREMENT PLAN

What is the basic retirement plan?
The College will contribute an amount equal to 10% of base annual salary/wage when an eligible employee is less than age 50, or 11% if age 50 or over, into the Skidmore College Retirement Plan (basic retirement plan), a defined contribution plan as described in section 403(b) of the Internal Revenue Code (IRC).

Eligible employees have the choice of choosing either TIAA-CREF and/or Vanguard Mutual Funds to establish an investment account with a wide array of investment funds from which to choose. Fund rate of returns can be obtained in Human Resources or on each firm’s web page. Employees are 100% vested upon participation.

Do I have to participate?
If eligible, participation in the basic retirement plan is mandatory.

Who is eligible for the basic retirement plan?
Exempt and non-exempt employees, who work at least 1,000 hours per year, or effective June 1, 2005 an equivalent of teaching at least 9 credit hours per year, are eligible to participate in the Plan after completing one year of service to the College.

A year of service shall be defined as a twelve consecutive month period in which the employee is credited with 1,000 hours of service or with teaching at least 9 credit hours per year. The initial computation period shall commence on the employee's date of hire. Subsequent computation periods shall be based on the Plan Year (a calendar year). An employee who meets eligibility requirements after the initial computation period shall commence participation in the Plan as of the first payroll period following completion of the eligibility requirements and necessary enrollment forms.

The College will recognize time spent previously employed at a post secondary degree granting institution, or a qualified research organization which is considered tax-exempt under code 501c(3) of the IRC, and the employee has participated in their previous employer’s 401(a), 403(a) or 403(b) basic retirement plan. The previous employer must confirm participation in one of the above mentioned basic retirement plans and certify the term of such employment to the College.

SUPPLEMENTAL RETIREMENT ACCOUNT

What is a supplemental retirement account?
Employees have the opportunity to contribute a portion of salary/wages into the retirement plan through TIAA-CREF or Vanguard Mutual Funds on a salary/wage reduction basis. Any money contributed will be deducted from salary/wages before state and federal taxes are computed. Tax liability is deferred until funds are withdrawn.

What is the maximum amount an employee can contribute?
While the minimum contribution is $8.25 per pay period, there are a number of federal testing regulations established to ascertain an employee’s maximum contribution. The College will provide the maximum contribution level upon request to new employees, and annually to all eligible employees. Employees have the option of electing a flat dollar amount or a percentage of total salary/wage into a supplemental retirement plan account. If a percentage of total salary/wage is chosen, the contribution will automatically increase when the employee’s salary/wage is increased.

Who is eligible to begin a supplemental retirement account?
All exempt and non-exempt employees are eligible to establish a supplemental retirement account as of date of hire.

ALTERNATIVE INVESTMENT VEHICLES

VANGUARD MUTUAL FUNDS INVESTMENTS
Mutual Funds are “No Load” funds available under the Basic and Supplemental Retirement Plan through Vanguard. “No Load” means operating expenses are charged against investment earnings before those earnings are distributed to the owners. They include equity funds (such as common stock), balanced funds (a combination of common stocks and bonds), income (combination of stocks and bonds paying a high level of interest and dividends) and money market funds (short-term securities) as follows:

This list may not be all inclusive. Refer to the Vanguard enrollment kit for an up-to-date list of funds. To learn more about each fund or to download a prospectus, you may visit Vanguard’s web site  (http://skidmore.vanguard-education.com/) or call 1-800-523-1188.

Vanguard Withdrawal Provisions
You may withdraw or rollover the value of your total accumulations from the basic retirement plan if you have terminated employment with Skidmore. You may withdraw the value of your total accumulations from the supplemental retirement plan prior to terminating employment if you have reached age 59 ½, you have become disabled or you have encountered financial hardship. Please note that when you receive a distribution due to financial hardship, your distribution may not exceed the amount of your salary reduction contributions to your SRA, excluding investment earnings as of January 1, 1989. If you elect to withdraw your SRA contributions at age 59 ½ or later, your future SRA contributions may be suspended for up to 18 months.

Distributions are subject to ordinary income taxes. Under current legislation, 20% of the taxable portion of any eligible withdrawal that you elect not to transfer directly to an IRA or other eligible retirement plan will be withheld for taxes. In addition, you may pay a 10% tax on distributions made before age 59 ½.

The 10% additional tax does not apply to:

• Distributions you receive after you separate from service because you have attained age 55 with a minimum of 15 years of service and are eligible for retirement status with Skidmore College;
• Distributions used to pay medical expenses to the extent that you may deduct these expenses (generally, if they exceed 7.5% of your adjusted gross income);
• Distributions you receive after you separate from service that are made in equal periodic payments over your life expectancy, or over the joint lives or life expectancies of you and your beneficiaries;
• Distributions you transfer directly to an Individual Retirement Account (IRA) or another qualified retirement plan;
• Distributions because of death or disability.

You may receive your distributions in the form of one or more lump-sum payments or in regular monthly, quarterly, or annual installments. Installment payments are made over a period not to exceed your life expectancy or the joint life expectancies of you and your beneficiary.

TIAA-CREF INVESTMENTS
Contributions to TIAA-CREF are made toward Regular Retirement Annuities (RAs) or a Group Supplemental Retirement Account (GSRA). These are “No Load” accounts. There are ten funds to choose from for investments as follows:

TIAA's Traditional Annuity
CREF Bond Market Account
CREF Global Equities Account
CREF Growth Account
CREF Equity Index Account
CREF Inflation-Linked Bond Fund Account
CREF Money Market Account
TIAA Real Estate Account
CREF Social Choice Account
CREF Stock Account

This list may not be all inclusive. Refer to the TIAA-CREF enrollment kit for an up-to-date list of funds. To learn more about each fund or to download a prospectus, you may visit TIAA-CREF’s web site (http://enroll.tiaa-cref.org/skidmore/?microsite.aspx) or you may call TIAA-CREF at 1-800-842-2776. 

TIAA-CREF Withdrawal Provisions
The basic retirement account can not be withdrawn or rolled over while employed by Skidmore College. Upon terminating employment from the College, withdrawal and rollover options are subject to regulations through TIAA-CREF. See withdrawal brochures provided by TIAA-CREF for detailed information. In general, if a new employer does not offer TIAA-CREF as an investment option, the options may include a lump sum payout, 10 year distribution, fixed period payments from 10 to 30 years, interest payment options or lifetime annuity income options. TIAA Traditional Annuities (basic retirement plan) can not be withdrawn, rolled over, or transferred in a lump sum. However, any money in this account can be withdrawn, rolled over, or transferred over a ten-year period.

Group Supplemental Retirement Accounts (GSRAs), either TIAA or CREF funds, may be withdrawn or rolled over in a lump sum after termination of employment, if you have reached age 59 ½, or you have become disabled, or you have encountered financial hardship. Please note that when you receive a hardship withdrawal, distributions are limited to employee contributions including earnings attributable prior to January 1, 1989. If you elect to withdraw your SRA contributions at age 59 ½ or later, your future SRA contributions may be suspended for up to 18 months.

Distributions are subject to ordinary income taxes. Under current legislation, 20% of the taxable portion of any eligible withdrawal that you elect not to transfer directly to an IRA or other eligible retirement plan will be withheld for taxes. In addition, you may pay a 10% tax on distributions made before age 59 ½.

The 10% additional tax does not apply to:

• Distributions you receive after you separate from service because you have attained age 55 with a minimum of 15 years of service and are eligible for retirement status with Skidmore College;
• Distributions used to pay medical expenses to the extent that you may deduct these expenses (generally, if they exceed 7.5% of your adjusted gross income);
• Distributions you receive after you separate from service that are made in equal periodic payments over your life expectancy, or over the joint lives or life expectancies of you and your beneficiaries;
• Distributions you transfer directly to an Individual Retirement Account (IRA) or another qualified retirement plan;
• Distributions because of death or disability.

TIAA Supplemental Retirement Account Loan Program
Loans at a competitive variable interest rate are available for up to 45% of your total TIAA and CREF GSRA accumulations. The maximum amount you can borrow is $50,000. You must have 110% of the amount you wish to borrow in your TIAA accumulation as security for the loan. Repayment of the loan is from one to five years (ten years if the money is for the purchase of a house). Payments are due every three months, either by check or by an automatic transfer from your bank account directly to TIAA-CREF. If interested, call TIAA-CREF directly to discuss interest rates and to make arrangements for the application.

Transfer of Investments
The following is a schedule of transfers that are permissible under the Plan:

If you do not have an established account with the investment firm to which you are transferring, contact Human Resources for an application.

General Information
Both investment firms mail quarterly statements to each participant. 800 telephone numbers are also provided for questions and fund transfers. Additionally, both firms have Web pages that you can locate through Human Resources’ Web page.

Federal pension law requires a spouse’s written consent or verification that your spouse cannot be located, or that a participant is not married, before benefits can be distributed. Federal pension law also provides that unless a spouse signs a waiver, he or she has the automatic right to receive survivor benefits of at least 50% of a participant’s annuity accumulation from contributions made under a retirement or tax-deferred retirement plan subject to the Employee Retirement Income Security Act of 1974 (ERISA). It is advisable to discuss any distribution with a financial planner or tax advisor before making your final decision on the method of distribution.

 

 

 

 

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Every attempt has been made to ensure that all information in the Retirement Plan Overview is clear and accurate.  However, this overview is not a legal document.  An individual Summary Plan Description governs each benefit plan available through Skidmore's benefits programs.  Benefits may be changed or revised at the sole discretion of the College.

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