Retirement Plans Frequently Asked Questions

• A 401(k) plan is a type of retirement plan offered by an employer under section 401(k) of the Internal Revenue Code.
• A 403(b) plan is a somewhat different type of retirement plan, which has many of the same features of a 401(k). Since Duke is a tax-exempt, non-profit organization and educational institution we can offer a 403(b) plan.

• The amount that you elect to have deducted for the 403(b) is contributed to the plan before federal and state income tax, therefore reducing your taxable income, which may reduce the federal and state income taxes you pay each year. Deductions do remain subject to FICA. 
• The earnings on contributions grow tax deferred until you take a distribution. At that time, both your contributions and earnings will be taxed as income. 

• Roth 403(b) after-tax refers to the deduction amount that you elect to have contributed to the 403(b) plan after federal and state income tax have already been withheld, therefore it does not reduce your taxable income.
• The earnings on contributions are eligible to be withdrawn tax free as long as you are age 59 ½ and your withdrawal is made at least five years after your first Roth 403(b) contribution.
• Click here to learn more about Roth

• Duke offers two different types of retirement plans. Generally, eligibility for participation in these plans is determined by whether you are paid biweekly or monthly. Both plans provide a comparable retirement income.
• Biweekly paid staff are eligible for two Duke retirement plans - the Employees' Retirement Plan and the Duke University Faculty and Staff Retirement Plan.
  • The Employees' Retirement Plan is a defined benefit pension plan paid for entirely by Duke. This plan does not contain individual accounts and the benefit is typically determined on a formula basis considering level of compensation at retirement and years of service.
  • The Duke University Faculty and Staff Retirement Plan is a defined contribution 403(b) plan funded by your voluntary pre-tax or Roth after-tax contributions. Duke does not contribute to this plan for biweekly paid staff.  This plan does provide individual accounts for employees who contribute and this plan places the responsibility on the employee for the investment decisions in this type of retirement plan.
• Faculty and monthly paid staff are eligible for the Duke Faculty and Staff Retirement Plan. This plan is funded both by your voluntary pre-tax or Roth after-tax contributions and Duke's contributions. Your retirement benefit will be based on 1) the amount you and Duke contribute, and 2) your investment decisions, which will be reflected in the final amount you have accumulated at retirement.

• For the minimum and maximum amounts that you can contribute to your 403(b) retirement plan, please see How Much Can I Contribute?

• Vesting refers to a participant's right to receive a present or future retirement benefit.
• Monthly paid staff and faculty are always 100% vested in their own voluntary contributions to the 403(b) retirement plan.  Vesting only applies to Duke's contribution.  Once you are vested, you have an irrevocable right to the amount of the Duke contribution in your account adjusted for gains or losses. Duke's contribution for Housestaff and Post-Doctoral Associates, including any associated gains or losses allocated to your Plan account, is fully and immediately "vested".
• Biweekly paid staff are immediately vested in their contributions to the 403(b) retirement plan. Biweekly paid staff are entitled to receive benefits under the Employees' Retirement Plan, Duke's pension plan, after completing five years of continuous service.

• The investment options are offered through Fidelity. It is up to you to determine the right mix of investments that meets your needs. Duke offers a tiered approach to investing, based on how hands-on you want to be with your investments. Duke actively monitors funds in Tier 1 and Tier 2. Funds in Tier 3 are available for employees to invest in, but not monitored by Duke. Visit Fidelity to select your investment options. If you need assistance selecting your investment options, contact Fidelity.
• Please review the Investment Performance and Fee Disclosure Summary information before making your investment selections.
• Quarterly account statements are mailed to your home address or emailed to you based on your preference to help you monitor your retirement plan assets.

• You may call the investment carrier(s) directly in order to update your beneficiary (keep a copy for your records).

• Loans are only available at Fidelity. Contact Fidelity directly to obtain a loan.
• You may borrow against your contributions invested at Fidelity.
• You are simply borrowing money from your retirement plan account. You will repay the loan amount and interest through monthly payments directly to Fidelity.
• There are no taxes or penalties involved when taking out a loan.
• If you default on your repayments, however, you will be taxed as if the outstanding balance of your loan was distributed to you and might possibly include a 10 percent penalty, if you are under the age of 59½.
• The interest you pay on the loan is not tax deductible.
• For more information, please visit Request a Withdrawal or Loan.

• You may request a withdrawal from your 403(b) retirement plan by contacting your investment carrier(s) directly. There are some restrictions on when you are eligible to withdraw the contributions that you put into the plan. Please carefully consider all your options before you withdraw money from your retirement plan.
• For more information, please visit Request a Withdrawal or Loan.
• All withdrawals and distributions from the plan are subject to federal and state taxes. You may be subject to a 10 percent federal tax penalty if you make a withdrawal before age 59 ½. In addition, the federal government requires that 20 percent of your withdrawal be withheld as a prepayment of your federal income tax due on the taxable portion of the withdrawal. This 20 percent withholding requirement does not apply to direct rollovers to an IRA or a new employer's retirement plan.

• There may be some cases where the 10 percent early withdrawal penalty does not apply*:
   
  • Distributions made after you attain the age of 59 ½
  • After separation from service after attainment of age 55
  • Approved disability
  • Distributions made on account of your death
  • Distributions for certain medical expenses may possibly be exempt from the penalty

* You should consult your accountant, tax attorney, or other qualified financial adviser before making a withdrawal from the plan.

• You can leave the money in the plan.
• You can roll over your pre-tax balance and/or your Duke contribution vested account balance into a traditional IRA, Roth IRA or another employer's 403(b) plan, 401(k) plan, 401(a) plan or governmental 457(b) plan. Please contact your future employer to find out if their plan accepts rollovers.
• You can roll over your Roth after-tax balance into a Roth IRA or another employer's 403(b) plan, 401(k) plan, 401(a) plan or governmental 457(b) plan. Contact your future employer to find out if their plan accepts rollover of Roth after-tax.
• You can withdraw your vested account balance as cash.
• Duke does not restrict the types of distribution options you can choose. However, restrictions, limitations and fees may apply. Contact your investment carrier(s) regarding the many options available to you.
• The options include, but are not limited to: lump sum, systematic withdrawals, non-periodic payments, or annuities.

• The IRS requires that, after a certain point, you begin to withdraw from your 403(b) retirement plan account.
• If you turn age 73 between January 1, 2023 and December 31, 2032, your required beginning date (RBD) is April 1 of the year following the year you attained age 73 or, if later, April 1 of the year following the year in which you terminate employment with Duke.
• If you turn age 75 after December 31, 2032, your RBD is April 1 of the year following the year you attained age 75 or, if later, April 1 of the year following the year in which you terminate employment with Duke.
• If you do not take the required minimum distribution, you may be subject to an excise tax on the amount you should have received in addition to our regular taxes.
• Contact your tax accountant and investment carrier(s) for more information.

• You may rollover the money associated with your voluntary contributions to a retirement carrier or retirement plan outside Duke's plan once you attain age 59 ½ or you separate service from Duke. Any vested money that Duke has contributed towards your retirement only becomes available for rollover once you separate from service, your attainment of age 67, retirement, death, or disability.

• Contact your investment carrier(s) and they will forward you the paperwork to process a rollover.

• Transfers to Fidelity - You can transfer money from your Duke Faculty and Staff Retirement Plan 403(b), including any frozen accounts at TIAA or VALIC to your Fidelity account. Please note, some annuity products have transfer restrictions. Contact Fidelity to request transfer forms.
• Transfers to TIAA - You can transfer money from your Duke Faculty and Staff Retirement Plan 403(b) to the only investment option available at TIAA: the TIAA Traditional Retirement Account - Retirement Choice Contract. All other accounts and contracts are frozen at TIAA and are closed to transfers. Contact TIAA to request forms to transfer funds.
• Frozen accounts at Corebridge Financial (AIG/VALIC) and TIAA - You cannot transfer money into frozen accounts at TIAA or Corebridge Financial; however, you may transfer money from these accounts to Fidelity or the TIAA Traditional Retirement Account - Retirement Choice contract. Please note, some annuity products have transfer restrictions.
• For additional information, visit Transfer of Funds.

• A QDRO, or a qualified domestic relations order, is a legal order which can follow a divorce or legal separation. This type of order splits ownership of a retirement account to give the alternate payee/ex-spouse a share of the assets.
• Contact your retirement plan investment carrier directly to obtain model language or additional instructions pertaining to a QDRO.

• Refer to the Summary Plan Description for more detailed information.