Benefits Plans - Retirement Savings Plans: Temporary Hourly Employees

Save with a 403(b) SRA

Temporary hourly employees may contribute to a 403(b) Supplemental Retirement Account (SRA) with TIAA-CREF or Fidelity at any time.  You contribute a fixed dollar amount with each paycheck; there is no university matching contribution.  You may choose to contribute as traditional tax-deferred, Roth after-tax, or any combination of both.

When do I enroll?

You may open a 403(b) SRA with TIAA-CREF and/or Fidelity Investments at any time to save for retirement.  You may also increase, decrease, or cancel your contribution at any time.

How much can I contribute?

The annual limit is $18,000 if your are under 50 and $24,000 for those age 50 and over.

When may I cash out the 403(b) SRA?

You may take a cash withdrawal of your 403(b) SRA accumulations at any age once you have terminated employment.  You may also take a loan from your 403(b) SRA.  There are three Internal Revenue Code (IRC) triggering events that allow cash withdrawals while employed:

  • Disability
  • Hardship
  • At age 59 ½  or older

How do I enroll?

Complete the Salary or Annuity Option Plan Agreement (PDF) and FAX it to SSC Benefits Transactions at 734-763-0363. Use this form to specify the amount you wish to contribute per pay period to TIAA-CREF and/or Fidelity Investments. Enrollment and changes are generally effective with your next available paycheck; please allow two weeks processing time for your changes to take effect.

How is My Account Established?

The Benefits Office will send an enrollment notice to your chosen investment company to create your account once you have successfully finalized and submitted the online enrollment process through Self Service > Benefits on Wolverine Access. Notifications are sent to Fidelity Investments on a weekly basis. Notifications to TIAA-CREF are sent with your first contribution; this is the first business day of the month after your first deduction.

What should I do next?

  1. Designate Your Beneficiary
    The investment company you selected will send you a welcome packet with information on how to how to designate your beneficiary. See Beneficiary for more information on making beneficiary designations.

  2. Choose Your Investment Funds
    The investment fund will be an age-appropriate Lifecycle Index Fund if you select TIAA-CREF or a Freedom Index Fund if you select Fidelity. You may change this by contacting TIAA-CREF or Fidelity Investments directly at any time once your account has been created. For example, this can be done once you receive your welcome packet from the investment carrier. If you do not have a U.S. street mailing address or if you have a non-U.S. mailing address, the default investment designation for TIAA-CREF will be CREF Money Market. You may not select a TIAA-CREF mutual fund without a
    U.S. residential street mailing address.

What are the Lifecycle Index or Freedom Index Funds?

A TIAA-CREF Lifecycle Index Fund or Fidelity Freedom Index Fund is a mutual fund that is a diversified portfolio of other mutual funds offered by that company. This includes domestic and international stock funds, bond funds, and money market funds.

Each Lifecycle Index or Freedom Index Fund automatically selects the allocation of stock, bond, and money market funds that are appropriate for a target retirement date of approximately age 65.

The Lifecycle Index and Freedom Index Funds gradually adjusts over time to become more conservative by decreasing the underlying equity holdings and increasing the fixed income holdings as the fund’s target retirement date nears. The gradual shift into fixed income from equities provides the potential for growth while reduces volatility as the retirement date approaches.

TIAA-CREF Lifecycle Index and Fidelity Freedom Index Funds are actively managed, however, the underlying mutual funds within each portfolio are index mutual funds. An index fund is a passive investment strategy that aims to replicate the movements of a specific benchmark that are held constant, regardless of market conditions. Using underlying index funds are a lower cost option to meet your retirement savings goals.

Your date of birth will be included in the enrollment notice sent to your chosen investment company. This will determine the specific Lifecycle Index or Freedom Index Fund into which you will be enrolled.

Lifecycle Index and Freedom Index Funds provide a simple solution if you lack the time, confidence, or investment knowledge to create and manage a well-diversified portfolio. Each fund is professionally managed and provides you with a simple, single investment fund.

What are my other investment choices?

Both TIAA-CREF and Fidelity Investments offer a wide selection of stock, bond, money market, and real estate funds. A select number of Vanguard mutual funds are also available through TIAA-CREF and Fidelity Investments. If you do not want your investment fund to be a Lifecycle Index or Freedom Index Fund, contact TIAA-CREF or Fidelity to designate a different fund.

  • TIAA-CREF: 800-842-2776
  • Fidelity Investments: 800-343-0860

Why do I need to designate a beneficiary?

The beneficiary you designate will receive the accumulations in your account in the event of your death. Designating a beneficiary is critical to ensure that your retirement account is paid to the beneficiary of your wishes, and helps avoid legal disputes over your account.
It is important to keep your beneficiary designations up to date. Family status changes, such as marriage, divorce, birth, or adoption may affect your desired beneficiary intentions. It is recommended that you review and update your beneficiaries periodically to make sure they reflect your wishes as your circumstance change.

Doesn’t the enrollment process declare my beneficiary?

No. You must designate your beneficiary directly with TIAA-CREF and/or Fidelity Investments.

What happens in the event of my death if I don’t designate a beneficiary for the 403(b) SRA?

For both TIAA-CREF and Fidelity the account will be paid according to person or persons surviving you in the following order:

a) spouse
b) children
c) parents
d) brothers or sisters
e) personal representative (executor or administrator)

Beneficiary Designation

You must complete a separate beneficiary designation for each plan in which you are enrolled. To designate or change your beneficiary for your TIAA-CREF and Fidelity Investments accounts, see Beneficiary.

Manage Your Enrollment

Contact the Benefits Office to ensure the correction deduction is taken and/or to adjust your enrollment in the 403(b) SRA if you have multiple jobs or change your job at the university. Situations where this may be necessary include:

  • You have more than one temporary job at the university;
  • You change temporary jobs (i.e., stop working for one department and start working for a different one);
  • If work as a temporary hourly employee and as a regular U-M employee;
  • You change job titles from a temporary hourly employee to a regular U-M employee or vice versa.

Next: IRC 415(c) Limit

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.