This program is sponsored by the University of North Carolina System. There are two participating vendors in the program, Fidelity and TIAA. The UNC System Voluntary 403(b) Retirement Program is a supplemental retirement plan that allows employees to set aside payroll-deducted contributions on either a tax-deferred or Roth after-tax basis.
All permanent and temporary employees who are subject to FICA withholdings are eligible to participate (students are not eligible).
You can contribute up to the lesser of 100% of your compensation or $18,000. You may be eligible for a catch-up contribution of an additional $6,000 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 $24,000. You contributions can be deducted on either a tax deferred basis (reduces your federal and state taxes) or an after-tax basis using a Roth 403(b) account.
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 supplemental 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 in 2015 cannot exceed the elective deferral plan limit of $18,000. The age 50 catch-up is also a combined amount with the 401(k) program.
Contributions to a 457(b) deferred compensation plan are not aggregated with either 403(b) or 401(k) plan limits.
Vesting & Loans
You are immediately 100% vested in the value of your employee contributions. You may be able to borrow against your account, depending on the vendor you select. Contact the vendor directly for information about loans
In-Plan Roth Conversions
You can take 403(b) pre-tax employee contributions (and earnings) and convert under the Roth In-Plan conversion option. A conversion is a taxable event for income tax purposes. When you convert any portion of a tax-deferred traditional account, it is treated as accelerating the distributions on the account for the converted portion. You will have to pay income tax on the converted assets in the year of conversion. The tax is paid at your applicable income tax rate. Contact your local vendor representation for additional information.
Retirement Benefits & Distribution Options
Generally, distributions from 403(b) accounts can only 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.
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).