You are automatically enrolled in the IU Retirement Plan plan if you are a 50% or more full-time equivalent (FTE) employee hired as:
Academic appointee
Exempt staff
Eligible non-exempt (PAO & PAU) staff
The IU Retirement Plan is a section 403(b) defined contribution retirement plan.
If you were hired after June 30, 1999, Indiana University contributes 9% of your budgeted base salary (excluding supplemental pay). This plan is fully funded by IU—employee contributions are not required or allowed.
This plan has a three-year cliff-vesting requirement. You are fully vested in the plan after three years of IU employment.
You are automatically enrolled in the appropriate plan when you are hired, but you must set up your plan account, choose investments, and designate your beneficiaries.
This is a “participant directed plan,” which means you are responsible for directing the investment of your plan account. If you do not select investments, your funds will be invested in the plan’s default investment option–an age-appropriate Vanguard Institutional Target Retirement Date Fund.
Hardship distributions and loans are not permitted with this plan.
Required minimum distributions
The IRS requires you to begin taking distributions from certain retirement accounts (called “required minimum distributions” or RMDs) starting at age 72 or 73. This requirement only kicks in after you separate or retire from IU — as long as you are still working, you can defer RMDs without penalty until you retire.
If you turned 72 on or before December 31, 2022, your RMDs begin at age 72.
If you turned 72 on or after January 1, 2023, your RMDs begin at age 73.
You must take your first RMD by April 1 of the year after you reach the required age, and then by December 31 each year after that.
All plan contributions stop when your employment with IU ends. Upon termination of employment, you may:
Leave accumulations in the plan account and continue to manage investments;
Withdraw all or a portion of vested plan account accumulations (subject to income taxes and/or penalty taxes); or
Roll over all or a portion of vested plan account accumulations to an eligible retirement plan (e.g., an IRA).
After terminating employment with the university, most transactions related to your plan account are handled directly with the applicable investment company.
Learn more details
We count academic years as a full year for 10-pay employees. If you are primarily a 10-pay and work three full academic years, you are 100% vested.
The IRS limits the maximum annual compensation on which qualified retirement benefits can be calculated. It also limits the total contributions that can be made to each plan. Find the limits for the current plan year.
If your position change or reclassification causes you to move from academic/exempt staff to non-exempt staff or part-time with retirement, or vice versa, you cannot stay in the same base retirement plan.
You are automatically enrolled in the retirement plan that you are eligible for, based on your position’s classification:
For non-exempt staff and part-time with retirement employees, that is the Retirement & Savings Plan.
For academic and exempt staff, that is the IU Retirement Plan.
Your balance will stay in the previous plan, but you will not receive contributions to that plan going forward.
Vesting will not start over if you move between plans.
11.25% level:
50% or more FTE exempt staff or eligible non-exempt staff (PAO or PAU) employees hired into a grade 15 and below appointed position before July 1, 1999; or academic employees hired in an appointed position before July 1, 1999, who are less than a 100% FTE, but at least a 50% FTE for 12 pays, 60% FTE for 10 pays, or 65% FTE for nine pays.
12% level:
100% FTE academic or exempt staff employees hired into a grade 16 and above appointed position on or after January 1, 1989, but no later than June 30, 1999.
15% level:
100% FTE academic or exempt staff employees hired into a grade 16 and above appointed position before January 1, 1989.
If you retire from IU and begin taking distributions from an IU retirement plan, you may be re-employed by IU as long as the IRS rules of a bona fide separation have been followed.
A bona fide separation consists of the following requirements:
A 30-day break in employment
No verbal or written arrangements for re-employment can be made prior to, or as a part of, retiring from IU
Employees who meet these requirements can return to employment without a break in service and also access their IU retirement funds. However, the department must process a termination eDoc due to retirement and rehire the individual into a different position, such as hourly, adjunct, etc.
To confirm IU retiree status and bona fide status eligibility, contact askHR@iu.edu.
Get help with your retirement accounts
IU’s dedicated Fidelity Workplace Financial Consultants are available year-round to help you understand your plans and investment options. Whether you’re just getting started, planning for retirement, or somewhere in between, they’re here to assist you.
