Benefits

Frequently Asked Questions

The following reflect some of the more commonly asked questions regarding the 403(b) Supplemental Retirement Plan. We hope this quick reference is helpful.
What is a 403(b) Supplemental Retirement Plan?
Can I contribute to both the 403(b) Base Retirement Plan (BRP) and the 457(b) Deferred Compensation Plan, in addition to the SRP?
Will enrolling in the 403(b) SRP affect the University match on my Base Retirement Plan (BRP)?
What investment options are available?
How will I enroll?
Is there a University contribution to the 403(b) SRP?
May I enroll in the 403(b) SRP at anytime?
How often can I make a change to the 403(b) SRP?
How much can I contribute or defer to the 403(b) SRP?
Will the 403(b) SRP provide any catch-up provisions for employees?
When is my 403(b) SRP account vested?
What happens to my account if I die before I retire?
When can I take a distribution from my 403(b) SRP account?
If I take a distribution from my 403(b) SRP account prior to age 59 ½, due to a hardship, is there a penalty?
Will MSU allow loans against the 403(b) SRP?
What happens to my 403(b) SRP account if I leave MSU?
May I rollover my 403(b) SRP account if I go to a different employer?
When do I pay income taxes?
What affect does enrolling in the 403(b) SRP have on my Social Security?
What is a 403(b) Supplemental Retirement Plan? This is a non-qualified tax-deferred compensation plan that allows you to increase your savings toward retirement. You determine the pre-tax amount that you want to defer (up to the IRS maximum) and how it is to be invested. Assets are held in a group or individual contract directly with the investment sponsor.
Can I contribute to both the 403(b) Base Retirement Plan (BRP) and the 457(b) Deferred Compensation Plan, in addition to the SRP? Yes. The plans all have separate enrollment. You may be required to enroll in the 403(b) BRP but the 457(b) Deferred Compensation Plan is voluntary (optional). The federal government sets yearly limits on the amount of tax-deferred contributions an individual can contribute towards retirement or deferred compensation plans.
Will enrolling in the 403(b) SRP affect the University match on my Base Retirement Plan (BRP)? No.
What investment options are available? Six investment sponsors are presently available: AIG VALIC, AXA Advisors/Equitable, Fidelity Investments, Lord Abbett, 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) SRP.
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.  To complete an account application for AIG VALIC, AXA Advisors/Equitable or Lord Abbett please contact your investment sponsor to set up an appointment with a representative. 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.
Is there a University contribution to the 403(b) SRP? No. The plan is designed for employee contributions only.
May I enroll in the 403(b) SRP at anytime? Yes. Enrollment is always effective the month following acceptance of your online salary deferral.
How often can I make a change to the 403(b) SRP? You may submit an online salary deferral change as often as once a month to change your deferral amount, investment sponsor selection, or cancel your contributions.
How much can I contribute or defer to the 403(b) SRP? You may contribute up to the maximum as defined by the Internal Revenue Code (IRC). The contribution limits are governed by Sections 415 and 402(g) limits. The voluntary maximum for 2008 will be $15,500 for most employees.
Will the 403(b) SRP provide any catch-up provisions for employees? Yes. If you are over the age of 50 you may contribute an additional $5,000 for 2008, and increases thereafter in accordance with the law. If you have 15 or more years of service, you may be eligible for an additional $3,000 deferral. Contact MSU Human Resources Benefits for additional information at 517-353-4434, 800-353-4434 ext. 0 or benefitsinfo@hr.msu.edu
When is my 403(b) SRP account vested? The 403(b) SRP account balances are fully and immediately vested. This means there is no minimum age or service requirement in order for you to own your contributions. Note: Vesting in the 403(b) Supplemental 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) SRP 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 form 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) SRP 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) SRP? 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) SRP 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) SRP account if I go to a different employer? Yes, if your new employer accepts rollovers.
When do I pay income taxes? The 403(b) SRP 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) SRP have on my Social Security? Enrollment in the 403(b) SRP does not reduce your current Social Security taxes or your future Social Security benefits. This is also true for the 403(b) Base Retirement Plan and the 457(b) Deferred Compensation Plan.