UK's Retirement Savings Plan Mandatory 403(b)

What You Need to Know: 

The University of Kentucky's Retirement Plan is designed to help you save and invest for your retirement. There are two carriers as options for where to invest your savings. Immediate advantages are that your contributions are set aside from your paycheck before taxes are withheld and you are not taxed on contributions or investment earnings while those dollars remain in your plan account.

Eligibility

You are eligible to participate in the University of Kentucky's Retirement Plan if you are a regular full-time employee of the University.  Your participation is mandatory unless you are under age 30 or if you are a Federal Civil Service or Federal employee.

Enrollment in the basic retirement plan must be done within the first 30 days of regular full-time service or the attainment of age 30. Beginning January 1, 2012, if you do not enroll, you will be automatically enrolled through a default enrollment on day 31. Your contributions will be split evenly between Fidelity and TIAA-CREF.

You may participate in the Plan if you are under age 30, however, it is not mandatory until your 30th birthday. Participation is irrevocable once started.

Contributions

The University of Kentucky's Retirement Plan is designed to help you save and invest for your retirement.

  • You will contribute the required amount - 5% of your base salary - on a pre-tax basis.
  • The University will contribute 10% of your base salary, a generous 200% match.
  • You pay no federal, state, and in some cases, city tax on these amounts, until you begin receiving income from the Plan.
  • To contribute on a tax-deferred basis, you must enter into a Salary Reduction Agreement with the University.
  • The total amount you may tax-defer is limited by the Internal Revenue Code.

How It Works

The Plan offers two immediate advantages to participants:

  • Your contributions are set aside from your paycheck before taxes are withheld
    • so you lower the amount of taxable income on your W-2, enjoying a tax break today while you save for tomorrow.
  • You are not taxed on contributions or investment earnings while those dollars remain in your plan account
    • that account is not taxed until it is paid out.

Because contributions and investment earnings grow tax-sheltered, your savings grow and compound more quickly than in a bank savings account. Because retirement investment earnings compound on a tax-free basis, it is to your advantage to join the University's retirement plan as soon as you are eligible.

Carriers

The University Retirement Plan offers two carriers from which to choose for investing your savings:

You may choose to invest among hundreds of investment options with both carriers.

Vesting

Employees hired on or after January 1, 2010 will be subject to a three-year vesting on the University’s contributions to the Plan. This means that your right to retirement income benefits provided as a match by the University cannot be revoked after three years of service.