NYU Retirement Plans
NYU offers a number of valuable defined benefit, 403(b) and 457(b) retirement plans to its employees. Participation in these plans provides an excellent opportunity for you to build a financially secure future.
- The Supplemental Tax Deferred Annuity (STDA) Plan is a 403(b) plan available to all non-student employees.
- The NYU Retirement Plan is a 403(b) plan available to eligible full-time Faculty, Administrators, and Professional Research Staff and Local 30 and Local 153 union staff.
- The 457(b) Deferred Compensation plan is available to eligible full-time Faculty, Administrators, and Professional Research Staff.
- The Staff Pension Plan is a defined benefit plan available to all Office & Clerical (Local 3882), Laboratory & Technical (Local 3882), and Service Employees (Local 1, Local 810).
The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) established maximum annual limits on the amount that you can contribute to your 403(b) accounts each year. If you participate in both the NYU Retirement Plan and STDA Plan, your combined contributions to both plans are subject to the IRS maximum.
You are fully vested immediately in all contributions you and the University make to your account.
You can join the NYU Retirement Plan if you are an “eligible employee,” you normally work at least 20 hours per week and 1,000 hours per year, and you have completed at least one year of service.
You are an “eligible employee” if you are in an eligible job category at NYU or a participating employer under the Plan, and you are not:
(i) an employee who is employed only by the New York University School of Medicine or Hospital,
(ii) a nonresident alien with no US source income,
(iii) a leased employee,
(iv) a student employee whose employment is incidental to his or her education, or
(v) covered by another retirement plan sponsored by NYU or its affiliates (other than the NYU Supplemental Tax Deferred Annuity Plan).
Year of Service
You have a year of service if you've worked:
- One year at NYU in which you worked at least 1,000 hours; or
- One year with your previous employer provided that:
-- Your previous employer was a college, university, medical institution or practice, or tax exempt medical research institution;*
-- Your employment with that institution ended not more than 180 days before your employment with NYU; and
-- You were employed with that institution for at least one year in a nonstudent capacity and you worked at least 1,000 hours in that one-year period.
It is your obligation to notify NYU PeopleLink if you believe you are eligible for service credit with your previous employer.
* NYU determines whether a prior employer meets this requirement.
It's never too early to start investing for retirement and the NYU Retirement Plan makes it easy by providing the following advantages:
- Convenient payroll deductions. Contributions are deducted from your paycheck, so saving is automatic.
- Defer taxes on your contributions. You will not pay federal, NY State or NY City income taxes on the portion of your pay that you contribute to the Plan until you make a withdrawal.
- You decide on how much to save. You decide on how much you want to contribute to the Plan (subject to Internal Revenue Service (“IRS”) limits). You can stop your contribution at any time.
- You choose how your contributions are invested. You decide how your contributions are to be allocated. The Plan offers a wide variety of professionally-managed investment funds from which to choose, including age-specific target retirement funds.
- You can change your mind. You have the flexibility to increase, decrease or suspend your contributions at any time. You also have the flexibility to adjust how your contributions are invested.
- Tax-deferred growth. Any interest or dividends that your savings may earn are not taxed as long as your contributions remain in the Plan.
- You choose how to receive distributions from the Plan, either all at once, gradually over time, or through an annuity. You may also roll the money over to an IRA or another eligible retirement plan.
To enroll, login to NYUHome and click on PeopleSync under the Work tab. For tips on how to elect retirement benefits, tools to monitor your current account balances, and the way you have your funds invested, visit the websites of the two investment vendors where you can invest your contributions: The Vanguard Group and TIAA. Both vendors have customized websites designed specifically for NYU employees. These sites offer detailed fund information, retirement planning calculators, and all the forms you need to enroll.
- The Vanguard Group: www.vanguard.com
From the Vanguard home page, you can access "Investing Goals" under the "Advice & Guidance" tab. You can also research the funds' holdings and past performance.
- TIAA: www.tiaa.org
The TIAA site includes a set of web pages developed especially for NYU employees. You can also access additional information about planning and investing for retirement by choosing the various "Planning & Education" links under the "What We Offer" tab.
You can change your investment allocation at any time. You also can transfer monies between vendors and between investment funds at any time, subject to limitations on the frequency and amount of transfers set by the investment vendors.
The Supplemental Tax Deferred Annuity (STDA) Plan is a savings investment program that allows you to defer taxes and save money at the same time. The Plan is a defined contribution plan under Section 403(b) of the Internal Revenue Code.
The STDA Plan is available to all employees beginning on their first day of employment. Participation in the plan is voluntary and funded completely by your own contributions. There is no waiting period and you can join at any time during the year.
You decide how much you want to save, up to the IRS maximum, and you choose the investment funds in which your contributions will be invested. A wide array of choices are available, so that you can choose the investments that are right for you. (See also, "How much can I contribute to a 403(b) Plan?" above.)
You contribute to your account through pre-tax salary deductions. This means that your contributions are taken out of your pay before taxes are calculated, thus reducing current taxable income. (See also, "A Note on Tax-Deferred Contributions and State Practices" below.)
The University has selected TIAA and The Vanguard Group to offer as investment options under the Plan. When you join the Plan, you choose the investment funds in which your contributions will be invested. You can choose to invest your entire account in one fund, or you can spread your investments among several funds. You do not pay Federal, New York State or New York City taxes on the money you save or the earnings on your investments until you withdraw the money, or you begin receiving a regular monthly annuity payout.
If you are not participating in the NYU Supplemental Tax Deferred Annuity Plan and would like to join, contact NYU PeopleLink at firstname.lastname@example.org or 212-992-LINK (5465). If you choose to participate, NYU will deduct the amount that you elect to contribute from your pay and invest it on your behalf into the investment option or options that you choose from among the available alternatives.
Loans and hardship distributions from the NYU Retirement Plan are not allowed.
You are permitted to borrow from your TIAA account under the Supplemental Tax-Deferred Annuity (STDA) Plan. If your STDA Plan is invested with Vanguard, you must transfer your investments to TIAA before a loan and hardship distribution would be available to you.
IRS Regulations prohibit a hardship withdrawal unless you have an outstanding loan for the maximum amount permitted by the Plan.
The maximum amount you can borrow is the lesser of 50% of your vested account balance or $50,000. Your loan must be repaid within five years by any means allowed by the Plan administrator.
You may be eligible to take a hardship distribution of part or all of your STDA Plan contributions only (excluding investment earnings). A withdrawal shall be available only in the event of an immediate and heavy financial need arising from:
- The purchase of your principal residence (excluding mortgage payments)
- Tuition and related educational fees for the next twelve (12) months of post high school education for you, your spouse, your child, or dependent claimed on your income tax return
- Avoidance of eviction or mortgage foreclosure in connection with your principal residence
- Uninsured medical expenses incurred or to be incurred by you, your spouse, or a dependent you claim on your tax return
- Payments for burial or funeral expenses for your deceased parent, spouse, children, or dependents
- Expenses for the repair of damage to your principal residence that would qualify for a casualty deduction such as fire, flood, storms including hurricanes, and tornadoes
There are no situations other than those listed above which constitute a hardship under the STDA Plan.
In addition, hardship distributions are only available from TIAA. The STDA Plan requires that you exhaust your maximum loan available before being eligible for a hardship distribution.
TIAA will require such documentation as it deems necessary to support a participant's assertion of a financial hardship. If a distribution is approved, your NYU Supplemental Tax Deferred Annuity Plan contribution will be stopped and you will not be permitted to resume contributions for six months from the date your hardship was approved. You must re-enroll to begin your contribution after the six month suspension period ends. Contact TIAA at 800-842-2776 for more information.
The NYU Section 457(b) Deferred Compensation Plan is a deferred compensation plan for eligible faculty, professional research staff, and administrative and professional staff that allows additional tax-deferred savings under Section 457(b) of the Internal Revenue Code.
Eligibility to participate in the 457(b) Plan is determined annually. In February each year, eligible employees will be notified through email of their eligibility to participate in the Plan, which runs from April 1 through December 31.
Note: Under Section 457(b) of the Internal Revenue Code, this Plan must be considered "unfunded" which means that your deferrals of salary (including any earnings on those deferrals) must be part of NYU's general assets. This means that in the unlikely event that NYU ever became insolvent, your deferrals under the Plan and any investment earnings that have accrued would be subject to the claims of NYU's general creditors and you might lose part or all of your benefits.
The NYU Staff Pension Plan is a defined benefit plan. The University funds the Plan and has oversight of the management of the assets.
You are eligible to participate in the NYU Staff Pension Plan if you are a staff employee working in an eligible job category - Office & Clerical (Local 3882), Laboratory & Technical (Local 3882), and Service Employees (Local 1, Local 810).
If you are an eligible staff employee, your participation in the Plan will begin on the September 1 closest to when you have completed at least 1,000 hours of service in the 12-month period from your date of hire and you have attained at least 21 years of age.
Note: If you were a Security Officer who was a participant in the Local One Security Officers Money Purchase Pension Plan on June 30, 2007, you became a participant in the NYU Staff Pension Plan on July 1, 2007.
NYU has outsourced the administration of the Plan to Milliman, Inc., which calculates the benefits and makes sure they are paid. You can reach them by calling the Milliman Benefits Service Center at 866-767-1212 or visit www.millimanbenefits.com.
Your contributions to the 403(b) plans are taken from your paycheck before Federal and state taxes are calculated.
State tax laws, however, can differ from state to state. New York State and New York City do not currently tax your individual contributions. However, New Jersey and Pennsylvania consider your contributions to a 403(b) plan as taxable income. Therefore, if you reside in one of these states, you may have to include your 403(b) contributions in your state or local taxable income. Consult with a tax advisor, if necessary.
Age 70-1/2 Minimum Distributions
Tax-deferred contributions to the NYU Retirement Plans (both your individual contributions and the NYU employer contributions) and earnings on those contributions cannot remain in the plan indefinitely. Federal minimum distribution requirements were established to ensure that you actually use your retirement plan account balances for your retirement.
The federal minimum required distribution applies to all employer-sponsored retirement plans and most IRAs.
If you continue to work at NYU beyond age 70 1/2, you may defer taking distributions from your NYU retirement plan(s) until April 1 of the calendar year after you retire.
If you have other tax-deferred retirement accounts in addition to your NYU plan(s), you will be required to receive minimum distributions from those accounts once you reach 70 1/2, even if you are still working at NYU.
If you retire in the calendar year you turn age 70 ½, you are required to begin receiving distributions from your retirement account(s) no later than April 1 of the calendar year in which you turn age 70 1/2, or April 1 of the year after you retire, whichever is later.
In each subsequent year, the minimum required distribution must be made on or before December 31. These distributions must be spread evenly over a time period not extending beyond the life expectancy of you and your designated beneficiary.
The IRS rules are specific and strict. If you do not take at least the minimum required distribution amount from each of your retirement accounts by April 1 of the year after you turn 70 1/2 or retire, and continue to receive distributions each year thereafter, the Internal Revenue Code imposes a 50% penalty tax on the amount that should have been withdrawn in each calendar year. This tax is in addition to regular income taxes.
For more detail about the Minimum Distribution rules, visit the IRS website
If you have a plan with a previous employer, you will have to take a minimum required distribution from that plan once you turn 70 1/2, but you may defer receiving payments from NYU's plan(s) as long as you are still working at NYU.
No, minimum distributions are taxable income and are not eligible for roll over into another pre-tax account.
No. You can take more than the minimum required distribution from your retirement plan in a given year. However, if you withdraw more than the minimum in any given year, you may not apply the amount in excess of the minimum required distribution toward the subsequent year.
Vanguard and TIAA-CREF allow you to elect a Minimum Distribution Option (MDO). The MDO allows you to choose monthly, quarterly, semiannual, or annual payments and choose any day from the 1st to the 28th of the month for payment.
Once you decide how you would like to receive your distribution, it can be directly deposited into your bank. In subsequent periods, you will receive the federal required minimum distribution payments automatically and you will not have to worry about completing paperwork and deadlines.
Unlike annuity options (in which you use your accumulation to purchase a lifetime annuity income or income for a fixed period of years), if you are receiving a minimum required distribution under an MDO contract, you may be able to increase your future income, as long as there is a balance remaining in your account.
Your minimum required distribution is generally based on your life expectancy, beginning in the year you attain age 70. Payments are calculated by dividing the portion of your retirement savings that are subject to the rules by the applicable life expectancy, which is estimated using Internal Revenue Service (IRS) mortality tables.
If your spouse is your sole beneficiary and is more than 10 years younger than you, the IRS allows you to use the joint life expectancy of you and your spouse. This calculation, which uses a different IRS table, will result in lower required minimum distributions.
Contributions and earnings credited to your account before 1987 are grandfathered and are not subject to the federal minimum distribution requirements until the year you reach age 75.
If you receive any payments before you are subject to the minimum distribution requirements, or make withdrawals in excess of minimum distribution amounts, these payments will reduce your grandfathered accumulation first. In the year you reach age 75, your grandfathered amount will automatically be included in your minimum distribution calculation.
Payments will be reported to the Internal Revenue Service (IRS) as income, distributions are usually fully taxable as ordinary income due to the fact that contributions were made on a tax-deferred basis.
Federal income tax will be withheld from your payments, if required, and state withholding may apply as well - requirements vary from state to state.