UNC-Chapel Hill 403(b) Program

This program is sponsored by the University of North Carolina at Chapel Hill.  There are seven vendors participating in the program.

The UNC-Chapel Hill 403(b) Program is a supplemental retirement plan that allows employees to set aside payroll-deducted contributions on a tax-deferred basis. This means that taxes are not paid on contributions or earnings until the time of distribution. Individual accounts are established with any of the seven University approved 403(b) vendors, and are set up as annuity contracts with insurance companies and/or a custodial accounts invested in mutual funds (403(b)(7). 

All permanent and temporary employees who are subject to FICA withholdings are eligible.  (Students are not eligible.)

Contribution Amounts

The annual contribution limit to a 403(b) plan is based on a percentage of adjusted salary or "includible compensation." This means that your gross salary must be reduced by the amount of annual employee pre-tax contributions made to the N.C. Teachers' and State Employees' Retirement System or the UNC Optional Retirement Program before a calculation of the annual contribution limit can be made.

During 2008, you can contribute up to the lesser of 100 percent of your includible compensation or $15,500. You may be eligible for a catch-up contribution of an additional $5,000 if you are 50 or older, or will turn 50 during the current calendar year. For employees age 50 or older the maximum contribution amount is $20,500.

If you have 15 or more years of full-time service to the University, you may eligible for a special catch-up provision called the 15-year rule. You should discuss this with your vendor's retirement representative and have a calculation performed to determine if you are eligible. There are special rules for employees who are 50 or older (or will attain 50 in the current calendar year) and have 15 years of service full-time service at the University. Please contact your Benefit Specialist for additional details and to determine if these rules apply to you.

Coordination with other Supplemental Plans

An aggregation of 403(b) and 401(k) plan contributions must be made if you participate in more than one plan during a calendar year. For example, if you contribute to the 401(k) plan in addition to the 403(b) plan, the combined amount of the contribution to both plans in2008 cannot exceed the elective deferral plan limit of $15,500 (in addition to the higher 403(b) 15-year "catch-up" limit).

Contributions to the 457(b) deferred compensation plan are not aggregated with 403(b) or 401(k) plan limits. 
 

To enroll you will need to complete the University's Salary Reduction Agreement and an application for your selected 403(b) vendor(s). Both forms must be returned to Benefit Administration at:

Benefit Administration, Office of Human Resources
The University of North Carolina at Chapel Hill
104 Airport Road, CB# 1045
Chapel Hill, NC 27599

If the vendor does not have a completed application when contributions are sent, the vendor will return the contributions to the University.

Selecting an 403(b) Vendor

Under the 403(b) Program, you have a number of choices to make regarding your retirement fund. First, you must choose from the seven vendors. The approved 403(b) vendors are:

Vendor Name	National Call Center	Local Representative	Local Rep Number
AIG Retirement	888-568-2542	Harris Ogburn	919-943-0165
Fidelity Investments	800-343-0860	Katie Taylor	866-588-2619
ING	877-884-5050	Ken Stapleton	919-942-9111
Lincoln Financial Group	800-454-6265	Lydia Piersall	866-442-4731
MetLife	800-560-5001	Larry Penazek	919-350-6311
TIAA-CREF	800-842-2776	Louise Munn	919-401-7500
Verity Investments	919-490-6717	Amy Simonson	919-490-6717

Click the vendor name and visit their websites to find fund performance information. Many of the sites also have tools you can use to determine how to save for retirement and how to allocate your contributions.
 
Items to consider in selecting a vendor(s) are:

• Financial strength and stability of the 403(b) vendor
• Contract fees, charges, and operating expenses
• Explanations of annuity options
• Interest rate history, policies, and guarantees
• Descriptions and performance history of investment accounts, and
• Special features and services offered by the vendor

Allocating Contributions

When you enroll in the 403(b) Program you must also decide what portion of your contributions will go into a fixed account and/or what portion will go into an investment account. You may change your allocation for future premiums at any time by contacting your 403(b) vendor.

Transferring Funds

You may transfer your funds between any of the seven approved 403(b) vendors during your employment with the University.

Vesting

You are immediately 100 percent vested in the value of your employee contributions.

Loans

You may be able to borrow against your account, depending on the vendor you select. Contact the vendor directly for information about loans

Death Benefits

In the event of your death, your total account value is available to your designated beneficiary. You designate your beneficiary when you complete your 403(b) enrollment application.

Distribution Options After Leaving the University

Generally, distributions from 403(b) accounts can be made when an employee reaches age 59 1/2, severs employment, becomes disabled or dies. In most cases, payments received from a 403(b) account are taxed as ordinary income and may be subject to an additional penalty. Under minimum required distribution rules, an employee must receive all or at least a minimum portion of interest accrued after 1986 by April 1 of the calendar year following the year in which the employee reaches age 70 1/2 or retires, whichever is later.

Retirement Benefits

Under the 403(b) Program, the amount of the benefit is based on the total accumulation in the account(s) including any credited interest or dividends, your age, the age of your annuity partner, if applicable, and the income option selected. There are no age or service requirements to meet in order for a participant to begin receiving a benefit.

Each 403(b) vendor makes available optional forms of payments and a variety of retirement payment options designed to allow you to tailor-make your retirement program to meet your financial needs. These may be fixed annuity payments or payments on a variable basis, or a combination of payment options. You may also elect to receive a lump sum distribution, as permitted by the 403(b) vendor(s).

If you have questions about the 403(b) programs, contact the vendors directly, or contact your Benefit Specialist.