The Smith College Defined Contribution Retirement Plan is a 403(b) Plan that allows you to postpone receiving (defer) a portion of your salary. Additionally, the College makes contributions on behalf of eligible employees.
You can view the Smith College Program Highlights for a summary of the plan.
All active employees, except for student employees, are eligible for Plan membership for the purposes of making pre-tax savings and/or Roth contributions through payroll deduction upon their date of hire.
You should consider the investment objectives, risks, and charges and expenses of the mutual funds offered through a retirement plan, carefully before investing. The fund prospectuses and information booklet containing this and other information can be obtained by contacting your local representative. Please read the information carefully before investing.
The pre-tax option works this way:
- You decide, within certain legal limits, how much of your income you want to defer.
- The College reduces your paycheck before income tax by that amount and forwards it to Voya Retirement Insurance and Annuity Company.
- Your contributions are invested in the investment options you have selected.
- The contributions and any earnings that accumulate are not taxed until they are distributed to you. This is usually at retirement, when you may be in a lower income-tax bracket.
- Distributions will be taxed as ordinary income when distributed and will be subject to an IRS 10% premature distribution penalty tax if taken prior to age 59 ½, unless an IRS exception applies.
The Roth option works this way:
- You can make contributions on an after-tax basis, and the earnings on those contributions may be tax-free for federal income-tax purposes when you take a distribution as long as the criteria of a “qualified distribution” are met (you’ve satisfied the 5-year holding period and are age 59½ or older, disabled, or deceased).
- You pay your taxes up front—at your current income-tax rate—rather than later at whatever your tax rate would be when you retire.
- Your Roth contributions do not reduce your current income-tax liability.
All active employees, except student employees, are eligible for Plan membership for the purpose of making pre-tax savings and/or Roth contributions through payroll deduction upon their date of hire.
The IRS limits annual contributions to the lesser of the dollar amount shown below or 100% of includable compensation.
|2017||$18,000 regular limit
$24,000 Over 50 Catch-up Limit ($6,000 over the regular limit)
This IRS limit takes into account any other elective pre-tax or Roth contributions you make in the same tax year to other 403(b), 401(k), salary reduction Simplified Employee Pension, and SIMPLE plans.
If you make both elective pre-tax savings and Roth contributions, your aggregate elective contributions cannot exceed the limits noted above.
You may stop making your pre-tax savings and/or Roth contributions at any time, and you may elect to recommence your contributions, or to increase or decrease the amount of your contributions, at any time by completing a Retirement Plan Election Form, Salary Reduction Agreement and submitting it to Human Resources prior to the effective date of such change.
Employees will become eligible for Plan membership for purposes of receiving employer contributions as of the first day of the month following the date they meet the following requirements:
- Minimum service—1 year of eligibility service*
- Minimum age—26 years
Under the Plan, the following employees are excluded from receiving employer contributions:
- Employees who are regularly scheduled to work less than 5 months in a calendar year or fewer than 17.5 hours per week, provided the employee has not completed 1 year of eligibility service;
- Employees who are regularly employed on less than a half-time basis (fewer than 910 hours per year), provided the employee has not completed 1 year of eligibility service; and
- Student employees
*A year of eligibility service is a 12-month period measured from your date of hire in which you are credited with at least 910 hours of service. If you were paid for fewer than 910 hours in that period, you will be credited with a year of eligibility service whenever you complete at least 910 hours in any Plan year following your date of hire. You will receive credit for years of eligibility service with another college or university if your employment with the other institution ended within 90 days prior to being hired by Smith College.
Exchanges and Rollovers
- Accepts exchanges from prior Smith College Defined Contribution Retirement Plan investment providers.
- Does not accept exchanges of non-Roth after-tax dollars.
- Accepts eligible rollovers from pre-tax 401, 403(b), or governmental 457(b) deferred compensation plans; Roth accounts under 401(k), 403(b) or governmental 457(b) plans; and traditional IRAs.
- Does not accept rollovers from Roth IRAs. Note: IRS rules do not permit the Smith College Defined Contribution Retirement Plan to accept rollovers from Roth IRAs.
Exchanged assets can be withdrawn only upon a distributable event.
Rollover assets may be withdrawn without a distributable event. However, rollover assets may be subject to an Internal Revenue Service (IRS) 10% premature distribution penalty tax if distributed prior to age 59½ unless an IRS exception applies. Earnings on Roth rollover amounts that do not satisfy the requirements for a tax-free qualified distribution (as defined by the IRS) are subject to income tax and may be subject to an IRS 10% premature distribution penalty tax if distributed prior to age 59½ unless an IRS exception applies.
Before transferring assets, carefully consider the features of both the existing and the new product for differences in costs, surrender charges, and other important features. There may also be tax consequences associated with the transfer of assets. Consult your own Advisors regarding your individual situation.
For any incoming exchanges or rollovers, please complete and submit an Acceptance Letter to Voya Retirement Insurance and Annuity Company.
We have a team of rollover specialists to assist you with the exchange/rollover process. Please call (866) 865-2660 or e-mail RIGHT@voya.com.
All active employees enrolled in the Plan may be eligible for a loan. The Plan allows one outstanding loan at any time. General loans are available for a maximum term of 5 years and residential loans are available for a maximum term of 15 years.
The minimum loan amount is $1,000. The maximum loan amount is the lesser of:
- $50,000 minus the excess of the highest outstanding balance of loans during the last 1-year period ending on the day before the loan is taken over the outstanding balance of loans on the date the loan is taken; or
- 50% of your vested account balance.
Your entire account balance is used to determine the amount available to borrow; however, you may take a loan only from your pre-tax employee and rollover contributions. Also, loans are permitted to be taken only from your Voya account. You must exchange (transfer) your accounts with prior investment providers to Voya in order to borrow from those Plan assets, if applicable.
If you are married, your spouse must consent to your loan request.
Please note: Loans will reduce your account balance, may have an impact on your withdrawal value, and limit participation in future growth potential. Other restrictions may apply.
The index for establishing the loan interest rate for the Plan is the Moody’s Corporate Bond Yield Average—Monthly Average Corporates.* The rate will be updated on the first business day of the month following the month in which a change in the Index occurs.
*as published by Moody’s Investors Service, Inc.
The monthly repayment frequency method will be ACH debit payments from your bank account. You may pay the outstanding loan balance prior to the loan maturity date without incurring a prepayment penalty.
If you take an unpaid leave of absence due to military service, your loan repayments may be suspended for a period of up to the lesser of 5 years or your period of military service. Please consult the Plan Administrator for further information.
If you take an authorized, unpaid leave of absence for other reasons, your loan repayments may be suspended for a period of up to the lesser of 12 months or the period of your authorized leave. Please consult the Plan Administrator for further information.
In the case of termination of employment, the entire outstanding loan balance must be paid within 30 days of termination. If you have terminated employment and fail to repay the entire outstanding loan balance within 30 days of termination, your account balance will be reduced by the amount of the outstanding loan.
In order to avoid default, all scheduled payments must be made by the end of the calendar quarter following the calendar quarter in which the payment was due.
If the loan is in default, the outstanding loan balance plus accrued interest (the “Defaulted Amount”) will be reported to the IRS for the year the default occurred. Interest will continue to accrue but will not be reported to the IRS until the loan is repaid or offset with a distribution. In the event of a distributable event, the Defaulted Amount will be withdrawn from your account to repay the loan. If the amount available for distribution from your account is not sufficient to cover the Defaulted Amount, interest will continue to be charged on the Defaulted Amount until it is repaid or there is a sufficient amount available for distribution from your account to repay it (pursuant to Internal Revenue Code and Plan requirements).
You will receive a warning letter if you have missed a loan repayment during the previous quarter. The letter will describe the implications of missing a loan repayment, and will also provide the date on which the loan will be defaulted unless a repayment is made in accordance with the Plan and the applicable loan agreement or promissory note.
Requesting a Loan
You can model different loan scenarios and request paperwork online. To do so, log in to your account and select Go to My Account, then Loans.
You may also request a loan by calling Customer Service, (800) 584-6001. Customer Service is available Monday–Friday, 8 a.m. to 9 p.m. eastern standard time.
If you experience severe hardship for which other personal funds are not available, the Plan will allow you to withdraw the amount you need for that emergency, provided you obtain the consent of your spouse, if applicable, and you have available funds in the money source that can be accessed for hardship withdrawals.
The maximum hardship withdrawal is limited to the amount in your account consisting of employee pre-tax savings contributions (exclusive of earnings on such contributions). You may not withdraw employee Roth or employer contributions because of hardship.
Also, hardship withdrawals are permitted to be taken only from your Voya Financial® account. You must exchange (transfer) your accounts with prior investment providers to VoyaTM in order to withdraw from those Plan assets, if applicable.
Hardship withdrawals will be allowed for:
- Costs directly related to the purchase of your primary residence (excluding mortgage payments).
- Unreimbursed medical expenses for you, your spouse, or a dependent or unreimbursed expenses necessary so that you, your spouse, or a dependent can obtain medical care.
- Tuition, educational fees, and room and board expenses for the next 12 months of postsecondary education for you, your spouse, or a dependent.
- Amounts necessary to prevent your eviction from your primary residence or to prevent foreclosure on your primary residence.
- Payments for burial or funeral expenses for your deceased parent, spouse, child, or other dependent.
- Expenses for the repair of damage to your primary residence that would qualify for a casualty deduction under the Internal Revenue Code.
Hardship withdrawals may not be paid back to the Plan. You will have to pay current income taxes on amounts you withdraw, and an IRS 10% premature distribution penalty tax for withdrawals prior to age 59½ unless an IRS exception applies.
To qualify for a hardship withdrawal, you will be required to:
- Provide documented proof of the hardship on an application form provided by the Plan Administrator;
- Obtain the consent of your spouse if you are married;
- Suspend your right to contribute for 6 months and possibly limit, according to IRS rules, the amount you may contribute in the future; and
Borrow the maximum amount available to you under the Plan’s loan provisions.
You may elect to withdraw all or a portion of the rollover contributions you have previously contributed into the Plan. Rollover assets may be subject to an IRS 10% premature distribution penalty tax. Consult your own legal and tax Advisors regarding your situation.
Attainment of Age 59½
Upon your attainment of age 59½, you are permitted to withdraw all or a portion of your employee pre-tax savings and Roth contributions (with the consent of your spouse, if applicable).
Requesting a Withdrawal
If you are eligible and would like to take a withdrawal, please contact Customer Service, (800) 584-6001, for the appropriate withdrawal forms. Customer Service is available Monday–Friday, 8 a.m. to 9 p.m. eastern standard time.
If you retire on or after your Normal Retirement Date, you may elect to begin receiving distributions from the Plan unless you otherwise elect in writing to defer receipt of your account assets.
If your employment with the College terminates as a result of a permanent and total disability, you may request that distributions begin after the Plan Administrator has determined that you are permanently and totally disabled.
If you terminate employment with the College before your Normal Retirement Date for reasons other than death or disability and elect to withdraw from your vested amount, distribution of your account balance can be made following your date of termination.
Spousal Joint and Survivor Annuity
If you are married on the date your distributions are to begin, your account will automatically be paid to you in a 50% joint and survivor annuity, with your spouse as co-annuitant,unless you and your spouse elect otherwise. This means that if you die and are survived by a spouse, she or he will receive a monthly payment for the remainder of her or his life equal to 50% of the payment you were receiving at the time of your death.
If you would like to waive the joint and survivor form of payment, you may do so during the 180-day period ending on the date the annuity is to begin. However, your spouse must consent in writing to the waiver in the presence of a plan official or a notary public. You may revoke any waiver. Human Resources will provide you with forms to make these elections. Because your spouse participates in these elections, you must immediately inform Human Resources of any change in your marital status.
Alternative Withdrawal Options
If you and your spouse elect not to take a joint and survivor annuity or if you are not married when your distributions are scheduled to begin, you may choose an alternative option. Your withdrawal options are:
- Defer all or a portion of your distributions to a later date
There are several possible advantages to leaving your assets in the Plan:
- Access to diversified investment options
- Continued tax deferral of prior contributions and accumulated earnings until they are withdrawn from the Plan
- Personalized investment and financial education from your local Voya Financial® representative
The latest date to which you can defer distributions is April 1 of the year following the year you reach age 70½ or April 1 of the year following the year you retire, whichever is later. If you fail to receive the Required Minimum Distribution (RMD) for any tax year, an IRS 50% excise tax is imposed on the required amount that was not timely distributed.
2. Total lump sum or partial lump sum withdrawal
Take all or a portion of your account balance in cash. Amounts distributed directly to you from the Plan will be taxable to you only when actually paid (unless you qualify for a Roth tax-free qualified distribution) and will be reported on IRS Form 1099R.
- Pre-tax Contributions
Contributions and earnings in the pre-tax portion of your account are subject to federal and state income taxes when distributed to you.
Federal income tax withholding will apply to your distributions, as described below, based on whether they are eligible to be rolled over.
- If you receive a distribution that is eligible to be rolled over, a mandatory 20% will be withheld for federal tax.
- If you receive a distribution that is not eligible to be rolled over, 10% for federal tax will be withheld; however, you may elect to have no taxes withheld.
Amounts distributed from the Plan are subject to the IRS 10% premature distribution penalty tax if distributed prior to your attaining age 59½ unless an IRS exception applies.
IRS exceptions to the 10% premature distribution penalty tax include distributions made:
- To your beneficiary as a result of your death
- Upon your severance from employment or retirement in the year that you are at least age 55
- In substantially equal amounts over your life/life expectancy
- As a result of your total and permanent disability
- Pursuant to a qualified domestic-relations order (QDRO)
- For qualified medical expenses greater than 7.5% of your adjusted gross income
- Due to a federal tax levy
- For a qualified reservist distribution
For your Roth contributions, you pay taxes up front—at your current income tax rate-rather than later at whatever your tax rate would be when you retire. Distributions from the Roth portion of your account will be tax-free for federal income-tax purposes (check the tax rules in your own state) only if you have met the IRS’s 5-year holding period requirement and the distribution is due to:
- Attainment of age 59½;
- Severance from employment;
- Disability (as defined by the Internal Revenue Code); or
Note: Distributions from the Roth contributions are subject to taxation, and potentially the IRS 10% premature distribution penalty tax, on the portion attributable to earnings if made before the above requirements for a qualified distribution are satisfied.
The 5-year holding period is measured from the earlier of:
- The first day of the first taxable year that Roth contributions are made to the Plan on your behalf or
- If a direct rollover contribution is made from another Roth 403(b), the first day of the first taxable year the Roth contributions were made to the account from which the direct rollover originated
3. Systematic Withdrawal Option (SWO)
This option, which requires spousal consent if you are married, provides you with a regular stream of income payments that can be made monthly, quarterly, semiannually, or annually. It allows you to continue to invest your money during the distribution period in any or all of the investment options offered under your VoyaTM account. You have the flexibility to transfer your account balance among the Plan's various investment options. There are two ways you can structure your SWO payments:
- Specified Payment. Under this option, you select a specific dollar payment. The amount of the payment chosen must be at least $250. Your payment will remain constant unless you need to take additional distributions in order to meet the Federal Required Minimum Distributions imposed at the time you turn 70½.
- Specified Period. You may elect to receive payments for a designated time period. The specified period must be at least 3 years and the first distribution must be at least $250. The maximum specified period is limited to your life expectancy or the joint life expectancy of you and your designated primary beneficiary if that is your spouse. For example, if you elect to receive your payments monthly for 3 years, your initial payment will be equal to 1/36 of your account balance; the second payment will be 1/35 of your account balance; the third 1/34; and so on.
4. Estate Conservation Option (ECO)
Unlike a SWO, payments under the ECO are based on recalculating your life expectancy each year. Because this method typically produces a longer life expectancy after the first year, the ECO provides lower payments each year. That, in turn, leaves more of your assets in your account to continue accumulating tax deferred, thus preserving more of your assets for your beneficiary(ies). An election of an ECO requires the consent of your spouse if you are married.
- ECO is designed to make annual payments to you in accordance with the Required Minimum Distributions of federal tax laws. You may select the month in which these payments are distributed to you from your account. You are eligible to begin receiving ECO payments in December of the calendar year during which you reach 70½ or retire, whichever is later.
- Your annual payment is determined by dividing the value of your account as of December 31 of the previous year by a life-expectancy factor. You may elect either a single or a joint life expectancy factor for your ECO payments. In order to elect a joint life expectancy factor, your spouse must be your sole primary beneficiary and at least 11 years younger than you.
5. Rollover into another eligible plan
You can roll over your pre-tax account assets into another employer-sponsored, eligible retirement plan (an eligible retirement plan is a 401 qualified plan, a 403(b) tax deferred annuity program, or a governmental 457(b) deferred compensation plan) or to a traditional or Roth IRA. Note: Special rules apply to rollovers of Roth and non-Roth after-tax amounts; see your tax adviser for more information.
All distributions are eligible for rollover except:
- A financial hardship withdrawal
- IRS Required Minimum Distributions payable on or after you attain age 70½
- Periodic payments made over your life or a specified period of at least 10 years
Amounts rolled from the Plan to another plan type are subject to any applicable IRS 10% premature distribution penalty tax if distributed prior to age 59½ unless an IRS exception applies. Please carefully consider the benefits of existing and potentially new retirement accounts and any differences in features. Consult your own legal and tax Advisors regarding your situation.
Requesting a Withdrawal
If you are eligible and would like to take a withdrawal, please contact Customer Service, (800) 584-6001, for the appropriate withdrawal forms. Customer Service is available Monday–Friday, 8 a.m. to 9 p.m. eastern standard time.
Mutual funds under a custodial or trust account agreement are intended as long-term investments designed for retirement purposes. Money distributed will be taxed as ordinary income in the year the money is distributed. Account values fluctuate with market conditions, and when surrendered the principal may be worth more or less than the original amount invested. A group fixed annuity is an insurance contract designed for investing for retirement purposes. The guarantee of the fixed account is based on the claims-paying ability of the issuing insurance company. Although it is possible to have guaranteed income for life with a fixed annuity, there is no assurance that this income will keep up with inflation. Early withdrawals, if taken prior to age 59½ will be subject to the IRS 10% premature distribution penalty tax, unless an exception applies. Amounts distributed will be taxed as ordinary income in the year it is distributed. An annuity does not provide any additional tax deferral benefit; tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does offer other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you.
For 403(b)(1) fixed or variable annuities, employee deferrals (including earnings) may generally be distributed only upon your: attainment of age 59½, severance from employment, death, disability, or hardship. Note: Hardship withdrawals are limited to employee deferrals made after 12/31/88. Exceptions to the distribution rules: No Internal Revenue Code withdrawal restrictions apply to '88 cash value (employee deferrals (including earnings) as of 12/31/88) and employer contributions (including earnings). However, employer contributions made to an annuity contract issued after December 31, 2008 may not be paid or made available before a distributable event occurs. Such amounts may be distributed to a participant or if applicable, the beneficiary: upon the participant's severance from employment or upon the occurrence of an event, such as after a fixed number of years, the attainment of a stated age, or disability. For 403(b)(7) custodial accounts, employee deferrals and employer contributions (including earnings) may only be distributed upon your: attainment of age 59½, severance from employment, death, disability, or hardship. Note: hardship withdrawals are limited to: employee deferrals and '88 cash value (earnings on employee deferrals and employer contributions (including earnings) as of 12/31/88).
Not FDIC|NCUA|NCUSIF Insured| Not a Deposit of a Bank|Credit Union|May Lose Value|Not Bank|Credit Union Guaranteed|Not Insured by Any Federal Government Agency
Insurance products, annuities and retirement plan funding issued by (third party administrative services may also be provided by) Voya Retirement Insurance and Annuity Company ("VRIAC"), Windsor, CT. VRIAC is solely responsible for its own financial condition and contractual obligations. Plan administrative services provided by VRIAC or Voya Institutional Plan Services LLC ("VIPS"). VIPS does not engage in the sale or solicitation of securities. All companies are members of the Voya® family of companies. Securities distributed by Voya Financial Partners LLC (member SIPC) or third parties with which it has a selling agreement. Custodial account agreements or trust agreements are provided by Voya Institutional Trust Company. All products and services may not be available in all states.