Retirement Plans
Faculty and staff will participate in the Swarthmore College Regular Retirement Plan (403(b) Plan) after completing one year of eligible service (i.e., 1000 hours in an anniversary year). This waiting period is waived however, upon the faculty or staff member providing acceptable documentation of prior eligible service with an employer that sponsored a 403(b) Plan by having the Early Entry Form completed by their prior employer's Human Resources Department and submitting it to benefits@swarthmore.edu for review and approval.
Participation in the Swarthmore College Retirement Plan is mandatory and is a condition of employment once the eligibility requirements have been satisfied. These mandatory/basic non-elective 403b contributions to the plan continue as long as the employee is actively employed by the College in an eligible status. Employees are 100 percent vested in their accounts on the date participation begins. Contributions to this mandatory/basic portion of the Retirement Plan are calculated according to the following schedule:
| College Contribution | Employee Contribution | |
|---|---|---|
| First $20,000 of annualized salary | 10% | 0% |
| Annualized Salary in excess of $20,000 | 10% | 5.5% |
How do I put more money into my retirement plan?
You need to complete a Salary Deferral Agreement (SDA) to put more money into your retirement plan. These voluntary contributions will be on top of (in addition to) your mandatory/basic contributions. Any new SDA replaces the one on file and becomes effective on the 1st of the month as designated on the form. All SDA's must be submitted to benefits@swarthmore.edu at least 30 days prior to the month in which the employee wants additional or supplemental (voluntary) contributions or changes to begin. If the SDA is not received timely, the requested changes will not be processed until the 1st of the next month.
Supplemental/Voluntary Retirement Contributions
Employees may contribute additional sums to their Swarthmore College Retirement Plan, on a voluntary basis. These elective supplemental/voluntary contributions cannot exceed the legally allowed IRS maximum per calendar year. These are employee contributions only with no College contribution. Supplemental/voluntary contributions can be withheld from the employee's pay on either a before-tax basis or on an after-tax, Roth, basis as designated on the SDA submitted to the benefits department.
Roth Contribution
The Roth option permits participants to make retirement contributions to the Plan on an after-tax basis. Roth contributions and earnings on those contributions may be withdrawn from the plan tax-free at the time of distribution. The IRS limit for participant Roth contributions above the mandatory 5.5% is the same as the pre-tax contribution limits. Participants who wish to contribute to both a pre-tax and a Roth account may do so up to the combined annual IRS limit.
What is the difference between my pre-tax contributions and Roth contributions?
The key difference between your pre-tax and Roth contributions is when they are taxed. Pre-tax retirement contributions are not taxed at the time they are made and any earnings that accumulate in the account grow tax-deferred. When you take a distribution, the amount of the distribution (the original contribution and earnings from the growth of the contribution) will be considered ordinary income and will be taxed at that time..
A Roth contribution, conversely, is an after-tax contribution, which means you pay current income tax through payroll on the amount you contribute and earnings on those contributions accumulate tax-free. When you take a distribution from a Roth retirement account, as long as you satisfy certain distribution conditions, the entire distribution can be taken tax-free.
What are the conditions for a tax-free distribution from a Roth account?
The distribution must be a qualified distribution, meaning you are at least age 59½, or upon your death or disability. In addition, funds must be in the Roth account for at least 5 years.
Can I make pretax and Roth contributions?
Yes! You can make pretax and Roth contributions as long as the total contribution amount does not exceed the annual contribution limit as specified by the IRS.
Where can I locate additional information on Roth Contributions?
You can watch a short video and review Additional Information about the Roth Option.
How do I enroll?
To enroll in the Retirement Plan, complete a Salary Deferral Agreement (SDA). When completing the form, you may identify the amount that you wish to make as a pre-tax deduction and/or the amount that you wish to designate as a Roth contribution. The completed form should be returned to benefits@swarthmore.edu.
Retirement planning is complex, and we encourage you to consult your tax advisor prior to making any changes. You may also make an appointment to speak with a TIAA counselor at 1-800-732-8353 or schedule a meeting at tiaa.org/schedulenow to discuss establishing a Roth account.
Notice: This plan is governed in accordance with the provisions of the Plan Documents and related Administrative agreements. Please refer to the Summary Plan Description for additional details and contact benefits@swarthmore.edu with any questions.
