CITY UNIVERSITY OF NEW YORK

Full-time employees must join a retirement program. You must elect a Program within your first 30 days of employment; once you choose, your election may not be changed. New employees without pre-existing vested open plan retirement contracts from TIAA-CREF will receive accumulated university contributions to the Program once they have completed 366 days of service. (If you do not serve for at least 366 days, the university will not contribute to your account, and your own contributions will be refunded with interest.)

The Optional Retirement Program requires members hired on or after July 17, 1992 to contribute 3% of base salary through regular payroll deductions. Legislation passed in 2007 requires the state or the city to pick up the 3% employee contribution after 10 years of ORP membership by increasing the employer contribution correspondingly. The university also will contribute the equivalent of 8-10% of salary on your behalf, depending on your length of service. (Earlier appointees receive university contributions based on their salary levels; see table below for details.)

Members hired prior to July 17, 1992 are required to contribute 1.5% of base salary through regular payroll deduction. The state or city will pick up the 1.5% employee contribution after 10 years of ORP membership by increasing the employer contribution correspondingly.

For new members: During the initial 366-day service period described in Eligibility, both your contributions and those of the university will accumulate in interest-bearing accounts. At the end of this period, the university will transfer a single lump-sum contribution, with interest, to TIAA-CREF covering the period, followed by regular biweekly contributions. In addition, your own contributions will be transferred to TIAA-CREF. Note: If you do not complete 366 days of service, your initial contributions will be refunded to you with interest, but you will not receive the university's contributions.

Contribution levels for new and existing Optional Retirement Program members are based on your employee tier, according to this schedule: 

• Fixed Period
  
  You can choose to receive income for a set period of two to 30 years, depending on the terms of our contract and your plan's rules (and not to exceed your life expectancy). Payments stop at the end of the period, during which you will have received all your principal and earnings. 
   
• Hardship Distribution
  
  If your plan permits, you can withdraw your elective deferrals (but not earnings) due to financial hardship while still employed.  Generally, you must show an immediate, significant need that cannot be met with other resources, including loans from your retirement plan.
   
• Interest Only
  
  You can receive the current interest earned on your TIAA Traditional Account in monthly payments. Your principal remains intact while you receive the interest.  These payments are generally available to individuals between ages 55 and 69½.
   
• Lifetime Retirement Income
  
  
  • One-life annuity — provides income for as long as you live.
     
  • Two-life annuity — provides lifetime income for you and an annuity partner (your spouse or someone else you name) for as long as either of you live.
    
    
  • One- or two-life annuity with guaranteed period — guarantees income for up to 20 years, as long as the period you choose does not exceed your life expectancy. It ensures that income continues to go to your beneficiaries for the remainder of the guaranteed period if you (one-life annuity) or both you and your annuity partner (two-life annuity) die before the end of that period.
     
• Lump Sum
  
  You can withdraw all or part of your account in a single cash payment, depending on your plan rules and the terms of your contracts. Your right to a lump-sum distribution from your TIAA Traditional Account may be restricted to taking 10 annual payments under those terms.
   
• Minimum Distribution Option
  
  Generally, you must begin taking minimum withdrawals from your account by April 1 following the year in which you turn age 70½ or retire, whichever is later. This can help you defer the minimum required distribution while keeping you in compliance with federal regulations.
   
• Retirement Transition Benefit 
  
  If your contract allows, you can withdraw, in cash, up to 10% of your accumulation at the beginning of a conversion to lifetime annuity income. The amount you withdraw will reduce your lifetime annuity income accordingly.
   
• Single-Sum Death Benefit
  
  A set amount your beneficiary(ies) will receive from your retirement account if you die before taking income.
   
• Small-Sum Distribution
  
  If your plan doesn't otherwise allow cash distributions, upon separation from service you can withdraw your entire retirement savings if your TIAA Traditional Account value does not exceed $2,000 and your overall account balance is below a limit set by your employer's plan (typically $4,000). If your plan does allow cash distributions, upon separation you may be able to withdraw your TIAA Traditional accumulation if the value does not exceed $2,000. Talk to your benefits office for details.
   
• Systematic Withdrawals
  
  If your plan allows, you can choose to receive regular income payments (minimum $100) on a semimonthly, monthly, quarterly, semiannual or annual basis. You can increase, decrease or suspend the payments at any time.  These withdrawals are not available from TIAA Traditional Account balances.
   
• TPA to Cash
  
  If your plan allows, you can withdraw your TIAA Traditional Account accumulation through a Transfer Payout Annuity (TPA) in 10 approximately equal annual payments. A lump-sum payment, subject to a surrender fee, may be available depending on your plan rules and the terms of your contract.

Employee contributions are considered 414(h) pick-up money. CUNY employees will receive a W-2 indicating that their total employee contributions for the year are pre-tax, therefore reducing their adjusted gross income. CUNY employees will need to add the total employee contribution to their taxable income.

414(h) contributions shown on your W-2 Statement in box 14 should be included on line 13 of form IT-150 (New York State Resident Income Tax Return, short form; line 21 of Form IT-201 (New York State Resident Income Tax Return, long form); or line 21 of Form IT-203 (New York State Nonresident/Part Year Resident Income Tax Return).

No taxes are due on pre-tax contributions and earnings made until the money is withdrawn, but because these Programs are intended primarily for retirement, you can generally withdraw funds only after termination of employment or age 59½ (subject to Program rules). If you withdraw funds before age 59½, they may be subject to an additional 10% early-withdrawal penalty. In limited instances when you are making contributions to your retirement plan with after-tax dollars, you will not have to pay income tax on your principal. However, when monies are withdrawn, taxes may be applicable to any earnings and interest accrued.

For additional information and guidance, contact your tax advisor.