Benefits Plans - 457(b) Deferred Compensation Plan: The U-M 457(b) Plan at a Glance

Type of Plan

457(b) governmental deferred compensation plan

Investment Companies

TIAA-CREF and Fidelity Investments



Enrollment Deadline

Enrollment may occur at any time, effective the month following the date your applications are filed with the Benefits Office.

Vesting Schedule

All contributions are immediately vested.


All faculty and staff members with an appointment effort of 1% or greater, and university funding for 4 continuous months or longer. Temporary staff are not eligible to participate. Rehired retirees with funding and effort (including emeritus titles) are also eligible.

Tax Treatment

Contributions and earnings are tax-deferred until distribution. Subject to FICA withholding, but not state or federal taxation at time of contribution. Taxed as ordinary income at distribution.

Contribution Rate
  • You elect to contribute a fixed dollar amount per pay period.
  • You elect pre-tax or Roth after-tax contributions
  • There is no University contribution.
Changing Your Contribution

You may increase, decrease, or cancel your contribution at any time; all such changes are effective the month following the date your forms are filed with the Benefits Office.

Changing Investment Funds

You may change your investment funds at TIAA-CREF and Fidelity anytime.

Transfers Between TIAA-CREF and Fidelity

You may transfer accumulations between TIAA-CREF and Fidelity at any time. Contact the company that will receive the transfer for assistance.

Eligible Compensation

You may make contributions on earned compensation that is paid to you as a U-M faculty or staff member, subject to federal income tax withholding through the university, and reported on a W-2 issued by the university.

Your Limit for 2015
  • $18,000 general limit.
  • $24,000 if you are age 50 or older.

Contributions made to another plan, except another 457(b) plan, will not reduce your limit for making contributions to the U-M 457(b) plan. Consult with a qualified tax advisor to ensure your total contributions to all plan types do not exceed Internal Revenue Code limits.

Cash Withdrawal
Current Faculty or Staff Member
  • One-time withdrawal if your account balance is no more than $5,000 and you have made no contributions to the plan for two years prior to the date of distribution.
  • At age 70 ½ or older.
Cash Withdrawal
Former Faculty or Staff Member 1

At any age.


You may rollover your U-M 457(b) to another eligible retirement plan at any age once you have retired or terminated employment. See Rollovers Out of the U-M Plan for important tax implications.

IRS 10% Penalty Applies?


Minimum Distribution at 70 ½?

Yes. Minimum distributions must begin by April 1 of the calendar year following the calendar year you reach age age 70½ once you have retired or terminated from U-M. If you are already over age 70½ when you retire or terminate, then you must begin minimum distribution by April 1 of the following calendar year. 



Options When You Leave U-M
  • Lifetime or fixed-period annuity
  • Cash withdrawal (partial, total, systematic)
  • Minimum distribution at 70 ½
  • Rollover to another eligible retirement plan
  • Leave the accumulations until a later date.
How to Enroll

You may enroll online using Self Service > Benefits on Wolverine Access.

1 A former faculty or staff member is someone who has retired or terminated employment with the University of Michigan. Termination of employment does not include being on a layoff( RIF), leave of absence, phased retirement, furlough, long-term disability, 0% effort appointment, or periods of non-appointment.

Next: How does the 457(b) Plan Work?

The University of Michigan in its sole discretion may modify, amend, or terminate the benefits provided with respect to any individual receiving benefits, including active employees, retirees, and their dependents. Although the university has elected to provide these benefits this year, no individual has a vested right to any of the benefits provided. Nothing in these materials gives any individual the right to continued benefits beyond the time the university modifies, amends, or terminates the benefit. Anyone seeking or accepting any of the benefits provided will be deemed to have accepted the terms of the benefits programs and the university's right to modify, amend or terminate them.