Retirement Annuity

Enrolling in the Retirement Annuity

You are eligible to join the retirement annuity (RA) after one-year of service at Lesley. Once you have completed the necessary enrollment forms, Human Resources will submit them to the Payroll Office, which in turn will set up deductions from your paycheck. Additionally, the application to establish your account will be sent to TIAA-CREF directly, and any money you or Lesley contributes will be allocated to the funds indicated on the application. If you were a member of another 403(b), 401(a), or 401(k) plan before working at Lesley, there is a possibility that the one-year waiting period to join the RA may be waived. You will need to provide a statement to Human Resources from the prior plan indicating all of the following:

• The former employer offered a Code Section 403(b), 401(a), and/or 401(k) retirement plan;
• In the same plan mentioned above, the employer and/or you made contributions for at least 12 consecutive months;
• An employer matching and/or other employer contribution were made on your behalf to this plan within three years prior to being employed with Lesley University; and
• The former employer has maintained an account for you in this plan.

For more information on waiving the one-year service requirement, contact your human resources representative.

Contributions to the Retirement Annuity

TIAA-CREF offers a variety of investment choices. These include annuities, stocks and money market funds. To gain a better sense of the options available, or to learn about how to invest your retirement contributions, TIAA-CREF recommends that you go to their Asset Allocation Evaluator. After answering a brief set of questions, the site recommends allocations according to individuals' savings needs and risk tolerances. You may also call the TIAA-CREF Counseling Center at (800) 842-2252 to speak to a counselor directly. Plan participants may also make changes to their investment choices by contacting TIAA-CREF anytime during the year.

Before Tax Versus after Tax Contributions

Lesley's RA allows employees to choose between making before- or after-tax contributions. By making your contributions on a before-tax (or pre-tax) basis, you lower your current state and federal taxes. In this situation, you pay taxes when you withdraw the money from your account during retirement. As most people's tax brackets will be lower during retirement than during their working years, this pre-tax contribution is advantageous. Additionally, the taxes an employee pays out when receiving income upon retirement might be lower than they are currently.

Contribution Limitations

Although you are required to contribute either 3 percent (biweekly-paid employees) or 5 percent (monthly-paid employees) to join the RA and receive the Lesley contribution, you may want to save more to ensure a secure retirement.

On June 7,2001, the Economic Growth and Tax Relief Reconciliation Act of 2001 went into effect. The most significant changes related to EGTRRA and retirement plans are highlighted below.

Greater Salary Deferrals

The Act eliminates the complex set of "alternative limits," which used to determine the maximum contribution employees could make to the retirement plan, effective January 2002. In 2009, plan participants will be able to defer up to $16,500 annually.

Catch-Up Contributions

Employees aged 50 and older will be able to make additional, tax-deferred contributions ("catch-up contributions'), beyond the general limits described above. The catch-up contribution amount is $5,500 in 2009.

15-Year Rule

In the past, because of the "alternative limits" mentioned earlier, few employees were able to take advantage of a special provision of retirement plans in higher education called the "15-year rule." This rule allows employees with 15 or more years of service at Lesley (including service at AIB), to contribute up to an additional $3,000 per year to the plan on a pre-tax basis (up to a career maximum of $15,000 total in these extra contributions). A few highly compensated employees who have made maximum contributions over many years may be limited in the extra amounts they can contribute under the rule.

Note: Employees who are eligible for catch-up contributions under both the 50+ rule and the 15-year rule, may be able to combine these contributions. Employees are automatically eligible for the 50+ rule if they are age 50 or older as of December 31, 2002. However, TIAA-CREF will need to run a TDA (tax deferred annuity) calculation to determine eligibility for the 15 years of service rule. Eligibility is dependent upon prior contributions, salary and years of service. Employees must contact TIAA-CREF directly to request a 15-year calculation. Eligible employees should contact their human resources representative to complete appropriate paperwork.

Changing or Stopping Elections

You are allowed to change or stop contributions to TIAA-CREF up to four times during the calendar year. If a change is desired, you need to contact your human resources representative before the 1st of the month in order for it to occur for the following month. Past contributions to TIAA-CREF will remain intact and will continue to be active. While employed at Lesley, employees do not have access to the money contributed to the RA.

Changing Your Beneficiary

To change your TIAA-CREF beneficiary designation, call TIAA-CREF directly at (800) 842-2888.