Benefits

Frequently Asked Questions

The following reflect some of the more commonly asked questions regarding the 403(b) Base Retirement Plan. We hope this quick reference is helpful.
What is a 403(b) Base Retirement Plan (BRP)?
Am I required to participate in the 403(b) BRP?
Can I contribute to both the 403(b) Supplemental Retirement Plan (SRP) and the 457(b) Deferred Compensation Plan, in addition to the 403(b) BRP?
May I elect to defer a different percentage to the 403(b) BRP?
What investment options are available?
How will I enroll?
I did not enroll in the 403(b) BRP when I was newly hired and I’m not required, may I still enroll?
How often can I make a change to the 403(b) BRP?
When is my 403(b) BRP account vested?
What happens to my account if I die before I retire?
When can I take a distribution from my 403(b) BRP account?
If I take a distribution from my 403(b) BRP account prior to age 59 ½, due to a hardship, is there a penalty?
Will MSU allow loans against the 403(b) BRP?
What happens to my 403(b) BRP account if I leave MSU?
May I rollover my 403(b) BRP account if I go to a different employer?
When do I pay income taxes?
What affect does enrolling in the 403(b) BRP have on my Social Security?
What is a 403(b) Base Retirement Plan (BRP)? This is a non-qualified tax-deferred retirement plan. The BRP is a defined contribution plan that requires you to contribute 5% of your base salary. The University will provide a matching contribution equal to 10% of your base salary (some employees have a waiting period for the University contribution). Assets are held in individual contracts directly with the investment sponsor. For more information on eligibility see the: Base Retirement Plan Eligibility.
Am I required to participate in the 403(b) BRP? Participation in the plan may be voluntary or required (mandatory), based on your job category, age and full-time equivalent (FTE) service months. Once you are required to participate you must continue to participate as long as you are employed in a required class by MSU. You may participate prior to being eligible for the University matching contribution. For more information on eligibility see the: Base Retirement Plan Eligibility.
Can I contribute to both the 403(b) Supplemental Retirement Plan (SRP) and the 457(b) Deferred Compensation Plan, in addition to the 403(b) BRP? Yes. The plans have separate enrollment. The 403(b) Supplemental Plan and the 457(b) Deferred Compensation plan are voluntary (optional), and you may participate in either one or both plans. The federal government sets yearly limits on the amount of tax-deferred contributions an individual can contribute towards retirement or deferred compensation plans.
May I elect to defer a different percentage to the 403(b) BRP? No. The plan is a defined contribution plan, and the employee may only contribute 5%.
What investment options are available? Three investment sponsors are presently available: Fidelity Investments, TIAA-CREF, and The Vanguard Group. You should contact the investment sponsor of your choice regarding the funds that are offered for the 403(b) BRP.
How will I enroll? You must complete an account application for an investment sponsor first and receive a confirmation number in order to complete your Retirement Online Enrollment at MSU. To complete an account application for Fidelity, TIAA-CREF or Vanguard you must login to eHR with your MSU NetID and password.  Upon completion of the account application you will receive a MSU Confirmation Number.  With this confirmation number you may now complete your MSU salary deferral at Retirement Online Enrollment\Changes.
I did not enroll in the 403(b) BRP when I was newly hired and I’m not required, may I still enroll? Yes. Enrollment will be effective the month following acceptance of your online salary deferral.
How often can I make a change to the 403(b) BRP? You may submit an online salary deferral change as often as once a month to change your investment sponsor selection or cancel your contributions (if you are not required to participate).
When is my 403(b) BRP account vested? The 403(b) BRP account balances are fully and immediately vested. This means there is no minimum age or service requirement in order for you to own both your contributions and the University contributions. Note: Vesting in the 403(b) Base Retirement plan is not the same as being vested as an official retiree of the University.
What happens to my account if I die before I retire? When you enroll in the plan, you will designate a beneficiary(ies) and the full value of your account will be payable to your beneficiary(ies). You may change the beneficiary designation at any time. It is important to remember to review your beneficiary designation whenever you have a change in your personal situation, e.g. marriage, divorce, or death.
When can I take a distribution from my 403(b) BRP account? Distributions are allowed upon retirement, termination of employment, or resignation, regardless of your age or length of employment. You may also be able to take a distribution from your account under these circumstances: attainment of age 59 ½, disability, death, or financial hardship. These payments may be subject to restrictions imposed by your investment sponsor.
If I take a distribution from my 403(b) BRP account prior to age 59 ½, due to a hardship, is there a penalty? Yes. Hardships withdrawals are generally subject to an federally imposed 10% early distribution tax, in addition to income taxes, unless the amount withdrawn is used to pay medical expenses that are in excess of 7.5% of your Adjusted Gross Income. You should consult your tax advisor regarding your specific circumstances prior to any withdrawals. You will also be required to stop all voluntary contributions for six months.
Will MSU allow loans against the 403(b) BRP? Yes. MSU will allow loans from the plan but not all investment sponsors offer this option. Please check directly with the investment sponsor you select regarding availability, payment schedules, interest rates and criteria.
What happens to my 403(b) BRP account if I leave MSU? Your account is fully and immediately vested. There is no requirement to withdraw your funds when you leave MSU. You will have several distribution options to choose from. You will need to contact your investment sponsor for information and the proper forms.
May I rollover my 403(b) BRP account if I go to a different employer? Yes, if your new employer accepts rollovers.
When do I pay income taxes? The 403(b) BRP is funded through pre-tax contributions, so applicable federal and state taxes are not due until funds are withdrawn from the account.
What affect does enrolling in the 403(b) BRP have on my Social Security? Enrollment in the 403(b) BRP does not reduce your current Social Security taxes or your future Social Security benefits. This is also true for the 403(b) Supplemental Retirement Plan and the 457(b) Deferred Compensation Plan.