Effective January 1, 2012, the Internal Revenue Service (IRS) increased the contribution limits for retirement plans. These limits apply to the University of Illinois Supplemental 403(b) Retirement Plan and the State of Illinois Deferred Compensation Plan (457 Plan).
University of Illinois Supplemental 403(b) Retirement Plan
· The maximum contribution limit for the University of Illinois 403(b) Plan has increased to $17,000. For many individuals, this limit is the maximum that can be contributed.
· Age 50 Catch-up contributions: Participating employees age 50 or older may contribute an additional $5,500 for a total annual maximum of $22,500 in 2012.
· 15-Year Special Catch-up Option: Employees who have completed 15 years of full-time service, and have not taken advantage of all their deferral opportunities in the past, may also have the option of contributing an additional $3,000 to this plan. Please contact the UPB Benefits Services office on your campus to determine if you are eligible for the 15 years of service catch-up.
· Access NESSIE for more information about the 403(b) plan.
State of Illinois Deferred Compensation Plan (457 Plan)
· The maximum contribution limit for the State of Illinois Deferred Compensation Plan (457 Plan) has also increased to $17,000.
· Age 50 Catch-up contributions: Employees age 50 or older who participate in the 457 Plan may contribute an additional $5,500 for a total annual maximum of $22,500 in 2012.
· Special Catch-Up Option: Employees in their final 3 years before the year in which the employee attains Normal Retirement Age, may be eligible to contribute an additional amount. For more information, please contact the Deferred Compensation office at 217-782-7006 or your campus UPB Benefits Services office.
· General 457 plan information is available on the State's CMS website.
Combined Limit
You can contribute up to the maximum limit in both optional investment plans in 2012. Therefore, if you participate in both the 403(b) and 457 plans, you can contribute a combined total of $34,000 for calendar year 2012. If you are also eligible for the Age 50 Catch-up options, you may contribute up to a maximum of $45,000 in 2012 when participating in both plans. Aggregate supplemental retirement plan contributions should not exceed 80 percent of compensation (after SURS contribution) unless discussed with a UPB benefits counselor.
If you also work for another employer and contribute to a voluntary retirement savings program such as another 403(b) or 401(k) plan, your contributions to that plan when added to your contributions to the University's 403(b) plan cannot exceed the 2012 IRS limits as described above.
Estimate Your Deferral Amounts
Monthly and Bi-weekly Net Pay Calculators on the OBFS website can assist you in determining the effect various contribution amounts will have on your net pay.
How to Make Contribution Changes
To change the amount of your contribution to the State of Illinois Deferred Compensation Plan (457 Plan), please contact your campus UPB Benefits Services office.
For changes to your University of Illinois 403(b) Plan contributions, please use the online form in NESSIE.
Terminal Benefit Payouts
Employees can contribute a portion of their compensable sick and vacation leave payout to the 403(b) and/or the 457 plans by contacting their UPB Benefits Services office 60 days before their last day of employment.
QUESTIONS? If you have any questions, please contact your campus UPB Benefits Services office: Urbana 217-333-3111, Chicago 312-996-6471, Springfield 217-206-7144, or benefits@uillinois.edu.
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This notice is provided as a source of information and does not constitute legal, tax, or other professional advice. If legal advice, tax advice, or other professional assistance is required, the services of a professional advisor should be sought. It is understood that in the event of any conflict, the terms of the Plan document, applicable laws, and regulations will govern.
