403 (b) Retirement Plan: Loans, Withdrawals, and Transfers

Loans, 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.

Working Full-Time at Berklee Working Part-Time at Berklee Not Working at Berklee
Age: Under 59 and 1/2

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

Withdrawal:
only if you have a 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

Age: 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

Age: 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 of 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.

If you fail to repay your loan according to its terms, you will default. Default will trigger a tax event, and may disqualify you from taking 403(b) loans in the future. If you have an outstanding 403(b) loan with Transamerica, your loan balance is payable in full when your employment ends. If you do not pay your outstanding balance, it will go into default, and a taxable amount will be reported to the IRS and you on Form 1099-R.