SUMMARY PLAN DESCRIPTION
This document is a plan language summary of the Smithsonian Institution Defined Contribution Plan (the Plan). This summary is intended only as an outline of the Plan's major features, and does not discuss every plan provision. If more information is needed, you should consult the Plan document. The Plan document, and not this summary, will govern if there is a difference between the Plan and the summary. Please contact the SAO Benefits Office if you have questions pertaining to the Plan.
You can elect to defer a percentage or dollar amount of your salary pursuant to a Salary Reduction Agreement entered into between you and Smithsonian Institution. However, there are overall limits on the amount you can contribute.
You will have to pay FICA taxes on your salary deferred in the Plan, but you will pay no income taxes on that amount or the earnings on that amount until you take the money out of the Plan.
Smithsonian Institution will contribute an amount into the Plan on your behalf up to specified limits set forth in Section IIB.
- You are immediately vested in all contributions made to the Plan on your behalf.
When you take a distribution from the Plan, the amount will be included in your taxable income. You may also have to pay a ten percent (10%) early withdrawal penalty in addition to applicable income taxes to the Internal Revenue Service for distributions from your retirement account before retirement, except in limited circumstances. If you die, your family may receive the money without paying the early withdrawal penalty.
Participant Salary Reduction Contributions
Upon being hired, you will be eligible to make salary reduction contributions to the Plan after you execute a Salary Reduction Agreement.
This agreement authorizes Smithsonian Institution to withhold from your base salary the percentage of your salary or dollar amount you have elected to contribute to the Plan. You may begin having amounts withheld from your paycheck on your entry date, which is the first day of the first payroll period beginning after you have submitted a Salary Reduction Agreement. You may change the amount you elect to defer throughout the year, and you can discontinue your contributions at any time.
You will be eligible to receive employer contributions once you have attained age 35 or two years of service with Smithsonian Institution, whichever occurs first. A year of service generally means a consecutive 12-month period during which you work at least 1,000 hours.
IMPORTANT: You will not receive Smithsonian contributions for any period during which you are eligible to participate, but for which enrollment forms have not been received by the SAO Benefits Office. Because of the voluntary nature of this plan, no retroactive contributions will be made. Smithsonian contributions can begin the first day of the pay period following receipt of all enrollment forms from an otherwise eligible employee.
Prior Trust Fund employees who have been re-employed will have their prior time counted toward the two-year requirement. Also, if you were previously a Trust Fund employee and were receiving the Smithsonian contribution, you will need to submit a new application in order to receive the contribution again. Contact the SAO Benefits Office for an enrollment kit.
Salary Reduction Contributions
You can make salary reduction contributions in an amount equal to a percentage of your base salary or a specific dollar amount. However, there are limitations on the amount you can contribute based on the Internal Revenue Code.
Your salary reduction contributions are subject to a number of Internal Revenue Code limitations. As a general rule, you cannot contribute more than $17,500 in 2014; however, employees who attain age 50 in 2014 may contribute up to $23,000 to the Plan as salary reduction contributions. Also, your salary reduction contribution plus the employer matching contribution cannot exceed $51,000 ($56,500 if you are age 50 or over) or 100% of your annual includable compensation, whichever is less. The additional contributions that an employee who is age 50 or over may make toward the Plan are referred to as "catch-up" contributions.
If you exceed any of these limits, Smithsonian Institution may be required to cease your contributions before the end of the year or may be required to refund any excess contributions you have made on an after-tax basis.
Upon reaching age 35 or completion of two years of Trust Fund service (Federal service time does not count for purposes of this benefit) with Smithsonian Institution, you will become eligible to receive employer contributions in an amount equal to the following:
For employees hired before January 1, 1988: Regular Salary (up to a maximum of $7,800) x 12%, plus Regular Salary (in excess of $7,800) x 17%
For employees hired on or after January 1, 1988: Regular Salary (up to the Social Security Wage Base in effect for the Year of Participation) x 12%, plus Regular Salary (in excess of the Social Security Wage Base in effect for the Year of Participation) x 17%.
All salary reduction contributions and employer contributions are subject to the limitations required by the Internal Revenue Code.
III. INVESTMENT SPONSOR AND OPTIONS
Your annuity provider is Teachers Insurance and Annuity Association College Retirement Equities Fund (TIAA-CREF). You may select where to invest your salary reduction contributions and employer matching contributions from among the family of funds provided by TIAA-CREF, which are available under the Plan.
The Plan is maintained primarily to provide you with retirement income. It is designed to make payments over your lifetime and the lifetime of your spouse or other beneficiaries, once you retire. You are entitled to receive retirement benefits at any age subject to the limitations described in this Section IV.
Separation from Service
If your employment with Smithsonian Institution is terminated, you may be permitted to take a distribution from the Plan pursuant to the terms of your TIAA-CREF account. In many cases, this distribution may be transferred to another employer's 403(b) plan or may be transferred to an IRA. Contact TIAA-CREF's Counseling Center for more information at 1-800-842-2776.
In-Service Withdrawal Rules
TIAA-CREF Retirement Annuity (RA) - The RA plan, which is funded by the Smithsonian Institution on your behalf and allows pre-tax contributions by the employee, does not allow in-service withdrawals.
TIAA-CREF Group Supplemental Retirement Annuity (GSRA) - If you have made pre-tax contributions to the TIAA-CREF GSRA prior to 1988, the pre-1988 funds can be withdrawn at any time. You will need to contact the TIAA-CREF Counseling Center (see phone number above) to initiate the withdrawal.
Funds deferred into the TIAA-CREF GSRA from 1988 through the present time may be accessed as an in-service withdrawal if you are over age 59-1/2, with no IRS penalty. If you are under age 59-1/2, you may have access to your funds only by applying for a hardship withdrawal. You also have access to these funds through the Plan's loan feature.
Minimum Required Distributions
Under the Internal Revenue Code, you must begin taking distributions from your 403(b) plan if you are no longer working at age 70-1/2. You will have to pay a fifty percent (50%) excise tax if you fail to take these distributions timely, so it is important to keep in contact withTIAA-CREF so that they will know where to send your distributions.
If you take a distribution from the Plan, the amount of the distribution will be included in your taxable income. Distributions may be subject to certain restrictions imposed by TIAA-CREF.
If you experience serious financial hardship, you may receive distributions from the Plan subject to the conditions as required by TIAA-CREF.
V. YOUR PLAN RIGHTS
Your benefits under the Plan are limited to the contributions you make and the contributions made by Smithsonian Institution and any earnings or losses on those contributions. The Plan does not guarantee that you will receive a specific amount at retirement and does not guarantee any specific rate of return (earnings) on the contributions made.
Your benefits under this Plan are not guaranteed or insured by the Pension Benefit Guarantee Corporation (PBGC). A Tax Sheltered Annuity 403(b) plan is a "defined contribution" type of plan, and defined contribution plans are not covered by the PBGC.
VI. OTHER INFORMATION
The following is pertinent information concerning the administration of the Plan:
Smithsonian Institution Defined Contribution Retirement Plan
January 1 through December 31
The Smithsonian Institution
750 9th Street, NW, Suite 6100
Washington, D.C. 20560
The Smithsonian Institution
750 9th Street, NW, Suite 6100
Washington, D.C. 20560
The designated legal agent for the Plan is the Plan Sponsor.
ADDITIONAL RETIREMENT RESOURCES
TIAA-CREF has developed an online seminar for Smithsonian Trust Fund employees entitled, Retirement Plans 101. This brief seminar is especially useful for newly hired Smithsonian employees, but it can also serve as a refresher for longer service Trust employees. Check out this online seminar at your convenience.
The TIAA-CREF Bookstore offers many free booklets in PDF format for download, or booklets may be ordered online.
Upon separation of employment, please contact the SAO Benefits Office for details on applying for retiree benefits that may be available to you. These benefits might include retiree medical insurance coverage and retiree life insurance coverage. Eligibility for these benefits will be based upon your age at separation, length of service, and insurance plan coverage and participation history. See Retirement Benefits.
For enrollment materials and assistance, please contact the SAO Benefits Office at (617) 495-7371.