UNIVERSITY SYSTEM OF MARYLAND

457(b) Deferred Compensation Plan

These are important details regarding this plan.

ELIGIBILITY

Available to all employees.

CONTRIBUTIONS

Through payroll deductions, you can contribute additional pretax funds to a 457(b) plan above and beyond what is contributed to the ORP, 403(b) or Match plan up to the IRS maximum. Elective deferrals you have made to another 403(b), 401(k), SEP-IRA, 408(k)(6) SARSEP, Keogh or SIMPLE plan will offset the amount you can contribute to the MD supplemental retirement plan. Consult a tax adviser to determine whether the combined contributions you make to the plan and to other retirement plans do not exceed Internal Revenue Code limits.

EMPLOYER MATCHING

Employer Match contributions, if made, are not made directly to this plan.

VESTING

When you become "vested", you gain full ownership of the benefits set aside for you in the plan. Your right to vested benefits cannot be revoked, even if you leave your employer.

457(b) Plans are vested immediately. 457(b) benefits that are vested go with you if you leave your current job. You may roll over the accumulations in your account into another tax-qualified plan at another employer or into an Individual Retirement Account (IRA). Otherwise, you can leave the accumulation in your account to continue to participate in the investment experience until you decide to receive benefits.

If you die prior to retirement, the full accumulation is generally payable to your beneficiary. There may be tax consequences associated with the transfer of assets. Non-direct transfers may be subject to taxation, surrender charges and penalties. Consult with your own tax advisors regarding your particular situation.

INVESTMENTS

Your employer offers you a variety of investment choices from an array of asset classes. You can see a list of the investment choices under this plan on the Investment Choices page.

EXPENSES

Expenses vary from investment to investment. To learn about expenses associated with an investment, see a list of the investment choices under this plan on the Investment Choices page, and read the Fact Sheet or the prospectus for that investment.

DISTRIBUTIONS

You have a variety of options1 when it’s time to take income from this plan:

  • 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.
       
  • 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.
     
  • 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.
       
This plan is designed to provide you with income throughout your retirement. Leaving money in your account may allow the funds to grow on a tax-deferred basis.

This plan allows you to receive a cash withdrawal. This may be restricted by the terms of your TIAA-CREF contracts. Taxes and penalties may apply.

TAXATION

Because you make contributions with pretax dollars, federal income taxes are deferred on supplemental plans until you begin taking withdrawals later on.

No taxes are due on contributions and earnings until the money is withdrawn, but because these plans are intended primarily for retirement, you can generally withdraw funds only after termination of employment, attainment of age 70 1/2 (subject to plan rules) or death.

For additional information and guidance, contact your tax advisor.

LOANS

Loans are available on up to 45% of your 457(b) balance to a maximum of $50,000. The minimum loan is $1,000. Loans are repaid using a variable interest rate. Please contact TIAA-CREF directly if you would like to take a loan.


1 The availability of certain distributions may depend on the type of contract underlying your plan. Also, if you're married, your right to choose an option may be subject to your spouse's right to survivor benefits. Talk to your benefits office for details.

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