403(b) Retirement Savings Plan

Updated September 1, 2013.

The 403(b) retirement plan is a "defined contribution" plan that provides an opportunity for you to invest for your future through payroll deduction contributions. You may contribute using the pre-tax or a Roth IRA post-tax method. Since 403(b) and 401(k) plans are very similar, much of the information you may find in the media about a 401(k) generally also applies to a 403(b).

Your Contributions

 

You choose how much to contribute, subject to limits established by federal law. You express your contribution as a percentage of your gross pay (example: if your gross pay is $50,000 per year and you wish to contribute $5,000 per year, your contribution rate would be 10 percent).

Note: If your hire date is on or after February 1, 2014, you will automatically contribute 3 percent to the plan from your pay. [Read here about how to cancel or change this automatic contribution.] 

Each year, federal law limits the dollar amount you may contribute. The table below shows the maximum employee contribution.

 

Calendar Year Maximum Employee Contribution

if under age 50 in Calendar Year

Maximum Employee Contribution

if age 50 or OLDER in Calendar Year

2013 and 2014 $17,500 $23,000

Berklee will monitor your contributions to ensure that you do not contribute more than the maximum from your Berklee salary. If you contribute to another employer's retirement plan or to a self-employed retirement plan, your contribution limit may be reduced. See the Additional Information section below for more information.

Saver's Tax Credit

Depending on your income, you may be able to receive a federal tax credit for contributing to your 403(b). You may be able to take a credit of up to $1,000 (up to $2,000 if filing jointly). This credit could reduce the federal income tax you pay. Contact your tax advisor or see IRS Publication 590 for more information.

Pre-Tax vs. Roth IRA Post-Tax Contributions

You may contribute using either the pre-tax or Roth IRA post-tax method. You may change your contribution method at any time, but you may not use both methods at the same time.

Pre-Tax

Both your contributions and any Berklee matching contributions are sheltered from federal and Massachusetts income taxes, thereby decreasing your current income tax liability. These contributions and their associated investment earnings, if any, are generally taxed when you withdraw them. See the Taxes on Withdrawals section below for more information.

Roth IRA Post-Tax

Your contributions are not sheltered from federal and Massachusetts income taxes. Therefore, your contributions do not decrease your current income tax liability. However, if you make a "qualified" withdrawal, withdrawn contributions and their associated investment earnings, if any, are not taxed. See the Taxes on Withdrawals section below for more information. Any Berklee matching contributions are treated as pre-tax contributions. Therefore, these contributions and their associated investment earnings, if any, are generally taxed when you withdraw them. See the Taxes on Withdrawals section below for more information.

Berklee Contributions

Who Hired 2011 or Earlier Hired 2012 or Later
Full-time faculty and staff

Part-time/staff working at least 50 percent of full-time

Dollar-for-dollar matching contributions up to three percent of pay Three percent basic contribution (no employee contribution required)

plus

Dollar-for-dollar matching contributions up to six percent of pay

Part-time faculty eligible for health insurance benefits Fifty percent matching contributions up to 10 percent of pay; maximum matching contribution is five percent of pay Fifty percent matching contributions up to ten percent of pay; maximum matching contribution is five percent of pay

There are no Berklee contributions for faculty members who continue or return to work after participating in the transition contract appointment.

Vesting (Ownership of Contribution)

Vesting refers to your degree of ownership of contributions.

Matching Contribution

You are immediately 100 percent vested in Berklee's matching contributions.

Three Percent Basic Contributions

You are partially vested in these contributions after three years and fully vested after six years.

Your Contributions

You are always 100 percent vested in your own contributions.

Investment Options

You choose how contributions are invested among Berklee-approved investment options administered by Transamerica Retirement Solutions. 

Transamerica / 1-800-755-5801

If you participated in the plan before 2012, you may have a pre-existing account balance at TIAA-CREF (1-800-842-2776). Since January 2012, all new contributions have been allocated to investments options at Transamerica.

Assistance Choosing Investment Options

Contact the following for free education and information to help you make investment decisions:

Enrolling and Making Changes to Investments or the Amount of Your Contributions

You may start, stop, or change the amount of your contributions at any time using either of these methods:

or

  • Call Transamerica at the number above to speak with a customer service representative between 8:00 a.m. and 9:00 p.m. ET, Monday through Friday.

You may also change how your money is invested in the plan at any time. For assistance, contact Transamerica or TIAA-CREF.

You may transfer part or all of your account at TIAA-CREF to Transamerica at any time. For assistance, contact a Transamerica transfer specialist at 1-800-275-8714.

Additional Information

Generally, the aggregate of your own contributions to Berklee's 403(b) plan plus your voluntary, pre-tax contributions to other employers' 403(b), 401(k), or similar plans may not exceed the maximum employee contribution outlined at the top of this page. Additional limitations may apply if you contribute to certain self-employed retirement plans such as SEP-IRAs and some Keogh or HR-10 plans.

If you contribute both to Berklee's 403(b) and any other employer-sponsored retirement plan (including self-employed plans), we strongly encourage you to seek tax advice to ensure that you comply with the IRS-mandated contribution limits. Compliance with contribution limits is your responsibility. Contact the Office of Human Resources for more information.

Withdrawals and Transfers to Non-Berklee-Approved Investments

By law, the availability of withdrawals from your 403(b) account and/or transfers to investments other than those currently approved by Berklee depends on your age and Berklee employment status.

Age

Working Full-time at Berklee

Working Part-time at Berklee

Not Working at Berklee

Under age 59 and 1/2

Withdrawal:
only if you have financial hardship or take a loan

Withdrawal:
only if you have financial hardship or take a loan

Withdrawal:
available

Transfer to non-Berklee-approved investments:
not permitted per federal law

Transfer to non-Berklee approved-investments:
not permitted per federal law

Transfer to non-Berklee-approved investments:
available via withdrawal

59 and 1/2 to 70 and 1/2

Withdrawal:
available

Withdrawal:
available

Withdrawal:
available

Transfer to non-Berklee-approved investments:
available via withdrawal

Transfer to non-Berklee-approved investments:
available via withdrawal

Transfer to non-Berklee-approved investments:
available via withdrawal

70 and 1/2 or older

Withdrawal:
available (but not required)

Withdrawal:
available (but not required)

Withdrawal:
required by federal law

Transfer to non-Berklee-approved investments:
available via withdrawal; options may be limited due to minimum distribution requirements

Transfer to non-Berklee-approved investments:
available via withdrawal; options may be limited due to minimum distribution requirements

Transfer to non-Berklee-approved investments:
available via withdrawal; options may be limited due to minimum distribution requirements

How to Withdraw

For assistance, contact Transamerica or TIAA-CREF.

Financial Hardship Withdrawals

Withdrawals due to financial hardship are subject to the IRS's definition of "financial hardship." The approval and payment process -- excluding the time for you to prepare required documentation -- may take two to three weeks. Effective February 1, 2012, hardship withdrawals will only be available from Transamerica. If you have an account at TIAA-CREF, you may be able to transfer some or all of it to fund your hardship withdrawal.

Taxes on Withdrawals

The information below summarizes current tax rules, and is not tax advice. Consult you tax advisor on these important matters.

Your Pre-Tax Contributions and All Berklee Contributions

For purposes of federal income tax, withdrawals of pre-tax contributions and their associated investment earnings, if any, are generally taxed as regular income unless they are rolled over to IRAs or other eligible retirement plans that accept rollovers. To rollover, contact both your current investment company and your rollover destination for instructions.

Roth Post-Tax Accumulations

"Qualified" withdrawals of Roth post-tax contributions and their associated investment earnings, if any, generally are not taxed. A "qualified" withdrawal generally means:

  1. You made your first Roth contribution at least five years before the withdrawal, and;
  2. The withdrawal is made after you have either reached age 59 ½, become disabled per IRS standards, or deceased.

Loans

You may borrow the lesser amount of 50 percent of your 403(b) account balance or $50,000 for any reason. However, the amount available for loan may be less based on certain IRS-required limits. Should you be interested in a loan, contact Transamerica to discuss your options. Effective January 1, 2012, loans are available only from Transamerica. If you have a plan account at TIAA-CREF, you may be able to transfer some or all it to Transamerica to fund your loan.

You may have only one outstanding loan with Transamerica at any time. Allow two weeks for Transamerica to process your loan request. Add another two to three weeks if you need to transfer funds from TIAA-CREF to Transamerica.

If you borrow from your 403(b) account in order to buy a home, keep in mind that your mortgage lender might include the amount of your loan in your debt-to-income ratio.

In Case of Your Death

Upon your death, your account is payable to your named beneficiary or beneficiaries. Be sure to keep your beneficiary designation up to date.

To update your beneficiary election with Transamerica, complete the Beneficiary Designation Form (Transamerica Accounts) . Use this form to elect persons as beneficiaires for your Transamerica 403(b) account.

To review or update your beneficiary election with TIAA-CREF, contact TIAA-CREF directly.

In Case of Divorce

Under the terms of a special court order known as a qualified domestic relations order (QDRO), the 403(b) plan may be required to transfer all or part of your account to your former spouse as part of a marital property settlement. In addition, a QDRO may require that all or part of your account be used to satisfy your child support obligations. If you are preparing for divorce, be sure that your attorney obtains a copy of the plan's QDRO procedures and model documents from each company where you have a 403(b) account. If the plan receives a QDRO pertaining to your account, you will be notified.