The Mount Holyoke College Defined Contribution Retirement Plan is a 403(b) Plan that consists of both elective and mandatory participation components for employees. Additionally, the College makes contributions on behalf of eligible employees. Read more about the Plan Highlights.
All active employees, except for student employees, have the option of making elective pre-tax savings contributions and/or after-tax Roth contributions to the Plan through payroll deduction.
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 like this:
- 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 on a regular basis.
- 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 59½ unless an IRS exception applies.
The Roth option works like this:
- 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” is met (you’ve satisfied the five-year holding period and are age 59½ or older, disabled or deceased).
- You pay your taxes upfront – 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.
Eligible employees are required, as a condition of employment, to begin making mandatory contributions to the Plan no later than the first day of the month following the later of age 21 and 1 Year of Service. Additionally, the College will make employer contributions on behalf of eligible members of the Plan. All employee mandatory and employer contributions are made on a pre-tax basis.
Contributions
All active employees, except for student employees, have the option of making pre-tax savings contributions and/or after-tax Roth contributions to the Plan through payroll deduction.
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 an Authorization for Payroll Deduction/Reduction Form and submitting it to your Human Resources Department prior to the effective date of such change.
Mandatory and Employer Contributions
Eligible employees* are required, as a condition of employment, to begin making mandatory contributions to the Plan no later than the first day of the month following the later of age 21 and 1 Year of Service**. The mandatory employee contribution is equal to 5% of annual compensation that exceeds $40,000.
Additionally, the College will make employer contributions on behalf of eligible members of the Plan equal to 10.5% of compensation. An eligible member of the Plan whose annualized compensation is below or is expected to be below $30,000 is not required to contribute in order to receive the College’s contributions.
All employee mandatory and employer contributions are made on a pre-tax basis.
* Eligible employee means all employees other than:
- Student employees;
- Employees who have not completed a Year of Service**; or
- Employees covered by a collective bargaining agreement with the College, except for (a) employees covered by the collective bargaining agreement with the New England Coalition for Public Safety, or (b) any employee who was a member of the United Automobile, Aeronautical and Agricultural Implement Workers (UAW) AFL-CIO, Local 2322 who was a participant in the Plan on June 14, 2001 , or (c) an employee who is a member of Local 2322 who is hired by the College after July 1, 2012, or who has elected to participate in the Plan instead of the College’s pension plan in accordance with the terms of their collective bargaining agreement.
** A Year of Service means a 12-month period established by the College during which the eligible employee completes 756 or more hours of service or, for faculty members, the equivalent of 756 hours of service as defined in the College’s administrative policies. Year(s) of Service performed by the eligible employee with another higher educational institution or the Mount Holyoke College Alumnae Association immediately prior to his or her date of hire with the College will be counted for meeting the eligibility requirements, provided that the employee was eligible to participate in that employer’s retirement plan.
Exchanges and Rollovers
The Plan:
- Accepts exchanges from prior Mount Holyoke 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 Mount Holyoke College Defined Contribution Retirement Plan to accept rollovers from Roth IRAs.)
Exchanged assets can only be withdrawn 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 aspects. There may also be tax consequences associated with the transfer of assets. Consult with your own advisors regarding your particular 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 available to assist you with the exchange/rollover process. Please call (866) 865-2660 or email ACT@voya.com.
Loans
Loans are available to all active employees enrolled in the Plan. The Plan allows three outstanding loans at any time. Loans are available for a maximum term of 5 years.
The minimum loan amount is $1,000. The maximum loan amount is the lesser of:
- $50,000 reduced by the greater of (i) the highest outstanding balance on any loan from the Plan during the 1-year period ending on the day before the date the loan is made, or (ii) the outstanding balance on loans from the Plan on the date on which the loan is made; or
- 50% of your vested account balance (as of the valuation date immediately preceding the date on which the loan is approved).
Your entire account balance is used to determine the amount available to borrow; however, you may only take a loan from your employee pre-tax contributions (both elective and mandatory) and pre-tax rollover contributions. Loans are also only permitted to be taken from your Voya Financial™ account. You must exchange ("transfer") your account(s) with TIAA-CREF, Fidelity, or Vanguard 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 impact your withdrawal value and limit participation in future growth potential. Other restrictions may apply.
Defaulting
All scheduled payments must be made by the end of the calendar quarter following the calendar quarter in which the payment was due in order to avoid default. 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 that amount is repaid or there is a sufficient amount available for distribution from your account to repay the Defaulted Amount (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. It will further provide the date on which the loan will be defaulted unless a repayment is made in accordance with the Plan and applicable loan agreement or promissory note.
Requesting a Loan
You may also request a loan by calling Customer Service at (800) 584-6001. Customer Service is available Monday – Friday 8:00 a.m. to 9:00 p.m. Eastern Time.
Interest Rate
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.
Payments
The monthly repayment frequency method will be ACH debit payments from your bank account. If you retire or have a severance from employment, you may continue to make loan repayments per the original term of your promissory note and security agreement. You may also 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 five 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 twelve months or the period of your authorized leave. Please consult the Plan Administrator for further information.
Hardship Withdrawals
If you experience severe hardship for which other personal funds are not available, the Plan will allow you to withdraw the amount which you need for that emergency, provided that you obtain the consent of your spouse, if applicable, and you have available funds in the money sources that can be accessed for hardship withdrawals.
The maximum hardship withdrawal is limited to the amount in your account consisting of employee elective pre-tax savings and Roth contributions (exclusive of earnings on such contributions). You may not withdraw rollover contributions, mandatory employee contributions or employer contributions on account of hardship.
Hardship withdrawals are also only permitted to be taken from your Voya Financial™ account. You must exchange ("transfer") your account(s) with TIAA-CREF, Fidelity, or Vanguard to Voya™ 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 your dependent or unreimbursed expenses that are necessary so that you, your spouse or dependent could obtain medical care.
- Tuition, education fees, and room and board expenses for the next twelve months of post-secondary education for you, your spouse or your 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.
Read more about Preparing to take a Withdrawal.
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 make elective contributions for 6 months and possibly limit, according to IRS rules, the amount which you may contribute in the future; and
- Borrow the maximum amount available to you under the Plan’s loan provisions.
Rollover Contributions
You may elect at any time to withdraw all or a portion of your rollover contributions that 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.
Phased Retirement Program
If you have attained at least age 58 and you elect to participate in the College’s Phased Retirement Program, you may withdraw all or a portion of the employer contributions in your account. However, in-service withdrawals may not be made from your employee contributions (both elective and mandatory) until you reach at least age 59½ (except as provided above in case of hardship).
To make a withdrawal, you must elect to participate in the Phased Retirement Program and make a written request with the Plan Administrator at least 30 days before you wish to withdraw the funds and receive the consent of your spouse, if applicable.
Attainment of Age 59 ½
Upon your attainment of age 59½, you are permitted to withdraw all or a portion of your employee contributions, both elective and mandatory (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 at (800) 584-6001 for the appropriate withdrawal forms. Customer Service is available Monday – Friday 8:00 a.m. to 9:00 p.m. Eastern Time.
Death Benefit
Upon your death, your beneficiary will be entitled to receive the full value of your account under the Plan as a death benefit. If you are married at the time of your death, your spouse will be the beneficiary of the death benefit, unless you designate another beneficiary and your spouse has consented to that designation.
Benefits will be paid to your beneficiary as he/she chooses, unless you have elected in writing the method that benefits will be paid to your beneficiary. The methods that are available for distribution are a single sum payment or installment payments. However, if no valid waiver signed by your spouse is in effect, the death benefit is payable to your surviving spouse. The default form of payment to your spouse is a survivor annuity providing monthly payments to your spouse for his/her lifetime.
Required Minimum Distributions
You are required to begin taking distributions by April 1 of the year following the year you reach age 73 or you retire, whichever occurs later.
Taxation
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 10% of your adjusted gross income;
- Due to a Federal tax levy; or
- For a qualified reservist distribution.
Roth Contributions:
For your Roth contributions, you pay taxes upfront – 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 State tax rules in your own State) only if you have met the IRS’ five-year holding period requirement and the distribution is due to:
- Attainment of age 59½,
- Disability (as defined by the Internal Revenue Code), or
- Death
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 five-year holding period is measured from the earlier of:
- The first day of the first taxable year that Roth contributions are made on your behalf to the Plan, 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.
Termination Withdrawals
You may elect to begin receiving distributions from the Plan at any time upon your retirement, whether you elect to retire at your Early Retirement Date or Normal Retirement Date.
If your employment with the College terminates as a result of a disability, you may request that distributions begin after the Plan Administrator has determined that you are disabled, as defined by the Internal Revenue Service (IRS). Per the IRS: "An individual shall be considered to be disabled if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration."
If you terminate employment with the College before your Normal or Early Retirement Date, for reasons other than death or disability, and elect to withdraw from your vested amount, distribution of your employee contributions can be made following your date of termination, and distribution of employer contributions can begin, at your election, once you reach age 55.
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, he/she will receive a monthly payment for the remainder of his/her life equal to 50% of the payment you were receiving at the time of your death.
If you wish 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. Your Human Resources Department will provide you with forms to make these elections. Because your spouse participates in these elections, you must immediately inform your Human Resources Department 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 include:
- Defer all or a portion of your distributions to a later date
There are several possible advantages to leaving your assets in the Plan including:
- Access to diversified investment options;
- Continued tax deferral of prior contributions and accumulated earnings until withdrawn from the Plan;
- Personalized investment and financial education from your local Voya Financial™ representative.
Effective January 1, 2020, the date to begin taking RMDs has been pushed out from December 31st of the year you reach age 70½ to December 31st of the year you will reach age 72. You may still defer your first distribution (for the year you reach age 72) until April 1st of the following year. However, if you defer your RMD in the first year, you will be required to take two distributions in the following year.
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 only be taxable to you 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; or
- For a qualified reservist distribution.
Roth Contributions:
For your Roth contributions, you pay taxes upfront – 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 State tax rules in your own State) only if you have met the IRS’ five-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
- Death
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 five-year holding period is measured from the earlier of:
- The first day of the first taxable year that Roth contributions are made on your behalf to the Plan, 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 would require spousal consent if you are married, provides you with a regular stream of income payments, which 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 Voya™ account. You have the flexibility to transfer your account balance among the Plan's various investment options. There are two different 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 three years and the first distribution must be at least $250. The maximum specified period is limited to your life expectancy, or joint life expectancy of you and your designated primary beneficiary that is your spouse. For example, if you elect to receive your payments monthly for three 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 recalculation 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 to continue accumulating tax deferred within your account, 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 in 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 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 rollover 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. (Special rules apply to rollovers of Roth and non-Roth after-tax amounts; see your tax advisor for more information.)
All distributions are eligible for rollover except for:
- A financial hardship withdrawal;
- IRS Required Minimum Distributions payable on or after you attain age 70½; and
- Periodic payments made over your life or a specified period of 10 years or more.
Amounts rolled from the Plan to another plan type would be 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.