The Duke Faculty and Staff Retirement Plan (“the Plan”) is a tax-advantaged retirement plan under the Internal Revenue Code.
In order to maintain its favorable tax status, the Plan must comply with certain requirements under the Internal Revenue Code including one that requires contributions and benefits do not favor Highly Compensated Employees (HCEs). For the 2020 Plan year, an HCE is defined as an employee who earns more than $125,000 in 2019.
To meet this requirement for the 2020 Plan year, Duke has decided to provide a one-time additional Duke Contribution to certain eligible non-HCEs.
Questions and Answers
Why is Duke making a one-time additional contribution?
The one-time additional Duke contribution allows the Duke Faculty and Staff Retirement Plan to maintain its tax favorable status for the 2020 calendar year.
How much is the additional Duke contribution?
The one-time additional contribution is up to $90. Most employees eligible for the one-time additional Duke contribution will receive the full $90. If your total compensation in 2020 was less than $90, your Duke contribution will be limited as per Internal Revenue Code requirements.
Who is eligible to receive the one-time additional Duke contribution?
In order to be eligible for the one-time additional Duke contribution, the following criteria must be met:
- Employee was eligible to receive Duke contribution as of December 31, 2020, and must have received compensation in 2020,
- Employee was a non-highly compensated employee in 2020 (earned less than $125,000 in 2019), and,
- Employee is an active employee (not terminated) as of September 1, 2021.
How was the value of the one-time additional contribution determined?
The IRS provides several correction methods to comply with the contributions and benefits requirements. Duke has chosen the more inclusive approach. The $90 contribution was determined based on the amount needed to meet these requirements.
When is the additional Duke contribution reflected in retirement accounts?
The $90 one-time additional contribution will be reflected in retirement accounts by October 8, 2021, as an employer contribution. It will be allocated according to your retirement service provider election in effect on October 1, 2021, and your investment election in effect at your retirement service provider on the date the contribution posts.