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Benefits

Loans & Withdrawals

What You Need to Know: 

Under certain conditions, you can borrow against your own retirement fund. Details below.

Loans

  • Loans can be obtained for active employees and retirees who are enrolled in a UK 403(b) or 457(b) retirement plan.
  • Employees may borrow up to 50% of the balance in their 403(b) or 457(b) account with Fidelity or up to 45% with TIAA-CREF ($50,000 maximum)
  • The minimum amount for a loan is $1,000.
  • The maximum loan period is five years. The IRS allows up to 10 years for a loan solely to purchase your primary residence. Documentation is required.
  • There is a maximum of five outstanding loans at any time.
  • Each retirement carrier may have additional rules related to the type of investments involved or company policies.
  • Fees for loan administration charged by the retirement carrier, if applicable, may vary and are the responsibility of the employee.
  • Employees who default on their loan will be subject to taxation by the IRS for the entire amount of the loan and penalties, if they are under age 59½.  In addition, a loan default will prohibit any future loans from your retirement plan.

Hardship Withdrawals

  • Hardship withdrawals are available only through TIAA-CREF after all other sources of income are exhausted, including retirement loans.
  • Funds available for hardship withdrawal are limited to amounts equal to 1) employee 5% contributions and 2) voluntary contributions from TIAA-CREF.
  • Distribution amounts cannot exceed the need documented. Payments can be "grossed-up" to accommodate the 20% federal tax withholding. No maximum hardship amount.
  • The IRS will impose a 10% penalty for early withdrawal if the employee is under age 59½.
  • Documentation of need is required for a hardship withdrawal and must be submitted to TIAA-CREF along with other necessary Hardship paperwork before the withdrawal is approved.
  • Hardship withdrawals are available under the IRS guidelines for:
    • Medical expenses for the employee, employee's spouse or dependents that exceed 7.5% of the Adjusted Gross Income;
    • Purchase of the employee's principal residence
    • Post secondary education for the next semester or quarter for the employee, spouse, or dependent.
    • Payments needed to prevent eviction or foreclosure.
    • Funeral expenses for a spouse or dependent.