Benefits Plans - Retirement Savings Plans: Cash Withdrawals - Current Employees


Basic Retirement Plan

This is the plan in which you contribute 5% of your salary on a tax-deferred basis and the University provides a 10% matching contribution.

Cash withdrawals are not available from the Basic Retirement Plan while you are employed with the University of Michigan. You must terminate employment or officially retire from the University (see SPG 201.83) in order to take a cash withdrawal.

Termination of employment does not include being on a leave of absence, layoff ( RIF), phased retirement, retirement furlough, or being on long-term disability. If you are on one of these statuses, you are still employed with the University because the employee-employer relationship is still in effect. You are not eligible for Basic Plan withdrawals until your employment is formally terminated.

Contact the HR/Payroll Service Center to determine if you are eligible for a cash withdrawal or rollover if you were previously enrolled in the retirement plans as an instructional staff member and now have a 0% appointment.

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Supplemental Basic Plan TIAA-CREF

This is the option that allows you to invest your supplemental contributions in the Basic Plan at TIAA-CREF, as opposed to investing in a separate SRA account.

If you have made supplemental contributions to TIAA-CREF under the Basic Plan, you can transfer those amounts to an SRA in order to have access to the SRA in-service cash withdrawal and loan options. Your 5% Basic Plan contributions and the 10% University match are not eligible to be transferred to an SRA. Contact TIAA-CREF for information on how to transfer your supplemental contributions from the Basic Plan to an SRA.

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Supplemental Retirement Account (SRA)

SRA contributions are those you make to a separate account in addition to the 5% under the Basic Plan, or as the primary type of contribution if you are not eligible for the Basic Plan.

You have greater flexibility to access your accumulations under the SRA (Supplemental Retirement Account) since they are not matched by the University and are not part of the Basic Retirement Plan.

There are three Internal Revenue Code (IRC) triggering events that allow you to access your accumulations; you also have the option of taking a loan from your SRA. For more details on these options, click on them below:

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Comparison of SRA Options

SRA in-service Withdrawal Options

 

Disability

Hardship

Age 59½

SRA Loan

Generally subject to IRS 10% early withdrawal penalty2

No

Yes

No

No1

Income tax due2

Yes

Yes

Yes

No1

Can you still contribute to the Basic Plan?

Yes

No, participation suspended for six months

Yes

Yes

Can you still contribute to the SRA?

Yes

No, participation suspended for six months

Yes

Yes

Requires Benefits Office approval?

Yes

Yes

No

No

Do you have to repay it?

No

No

No

Yes

How much can you access?

Entire SRA accumulation

Contributions only; earnings are not available

Entire SRA accumulation

45% of TIAA-CREF SRA

50% of Fidelity SRA

1 If you default on the loan, income taxes are due, and an IRS early withdrawal penalty may apply if you are under age 59½.

2 Consult with a qualified tax advisor for information on taxation of retirement plan distributions and the IRS early withdrawal penalty.

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Limitations
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.