Retirement Plan

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1. How Are Required Contributions To The Basic Retirement Account Calculated?

Contributions to the Basic Retirement Account are calculated as a percentage of your regular salary. For faculty, "regular salary" means only your academic year appointment letter salary and annualized stipend, if applicable. For non-faculty, "regular salary" refers to the annualized base salary. Overage and/or overtime or additional compensation is not included in this calculation.

The 1993 Omnibus Budget Reconciliation Act (OBRA) imposes a $170,000 limit on includable compensation. This is the maximum amount of compensation that can be taken into account for purposes of calculating University and employee required contributions to the basic retirement. It is expected that this limit will be adjusted upward in future years for changes in the cost of living, however, no adjustments will be made until cumulative changes in the cost-of-living-index formula result in an increase of at least $10,000.

2. I Am Interested In Making Voluntary Contributions To My Retirement Plan. What Should I Do?

You will receive each year in the mail a Maximum Exclusion Allowance(MEA) calculation, as set forth by the IRS, to determine the maximum amount you may tax-shelter in the calendar year. You may wish to consult with Human Resources or the various plan investment options to obtain information/literature on guidelines on how you may determine your personal retirement investment objectives.

Once you have determined the amount of your voluntary contribution for the calendar year you must complete a Voluntary Contribution Election and Change Form and return it to your campus Human Resources Office for processing. You may also need to complete an enrollment application if you are designating your contributions to one of the three retirement plan fund options for the first time.

You may make two voluntary salary reduction amount elections each calendar year, up to September 30^th. You may begin voluntary contributions at any time during the period of January 1^st through September 30^{^th}.

3. May I Allocate My Contributions And Accumulations To Any Of The Fund Choices Offered In the Retirement Plan?

Employees may direct University contributions to any TIAA/CREF funds, any of the Fidelity funds, or after 20 years participation in a retirement plan to T. Rowe Price funds.

Employees may direct their required contributions, in addition to any voluntary contributions to any of the fund options offered in the Retirement Plan.

4. Must I Direct 100% Of My Contributions To Only One Of The Investment Options Offered In The Retirement Plan?

No, if you have been employed less than 20 years, you may direct both the University contribution and your required contribution to either TIAA/CREF and/or Fidelity in the following combinations:

University Contribution		Employee Required Contribution
TIAA/CREF	Fidelity	TIAA/CREF	Fidelity
100%	0	100%	0
75%	25%	75%	25%
50%	50%	50%	50%
25%	75%	25%	75%
0	100%	0	100%

If you participated in a 403 (b) retirement plan for more than 20 years, you may direct the University contribution to TIAA/CREF, Fidelity and/or T. Rowe Price. The same pattern of choices, as listed in #3 above, is also available with this feature.

You may change the allocation of contributions at any time by simply completing a new Voluntary Contribution Election and Change Form. Please contact Human Resources for additional information.

5. What Should I Be Considering When Making Decisions On How To Allocate My Retirement Accumulations and Contributions?

There is a variety of literature as well as personal assistance, including on-campus workshops available from each of the plan options on the topic of retirement plan fund investment decisions. We urge you to avail yourself of these services. Specifically, you need to consider:

Your age and how many years remaining until your planned retirement
Your risk and tolerance factors -

Market Risk: how much time do you have to absorb the fluctuations of the market?
Inflation Risk: have you invested to obtain a yield greater than inflation?
Retirement Shortfall: will you be able to adequately replace your working income to meet retirement needs?

6. What Is Transferability?

Plan participants may transfer any of their accumulations in the retirement plan among all approved plan options available to the full extent allowable by each plan fund option, at any time. There are no fees associated with transfers and a direct transfer of your funds among any of the University's retirement plan options has no tax consequence.

7. Must I Leave Pace Or Retire To Access My Retirement Plan Accumulations?

No. The University's in-service cash policy allows a plan participant's eligibility for a cash distribution to be limited only by the restrictions imposed by the IRS. Accumulations attributable to both employee and University contributions and earnings may be withdrawn, if the following criteria are met:

Attainment of at least age 59 ¹/₂
Death or disability
Hardship

For TIAA/CREF participants, any accumulations attributable to contributions made prior to January 1, 1989 may be withdrawn at any time, for any reason. However, if you transfer your pre-1989 accumulations to Fidelity or T. Rowe Price these funds will be treated as new money and subject to the IRS restrictions cited above.

8. How Can I Access My Retirement Account Accumulations?

There are many options Pace employees now have in accessing their retirement account accumulations. While this document cannot fully describe each option, the terms used in the charts are defined as follows. Please refer to each of the plan fund options for additional information.

Annuity: An insured contract which provides guaranteed monthly income. The size of the monthly payments are related to your age and accumulations. TIAA-CREF offers two annuity choices: Lifetime Annuities and Fixed-Period Annuities.

Transfer Payout Option: Refers to the cash payment option of the TIAA investment fund. The payout is 10% per year for 10 years. The same method is used to transfer TIAA accumulations to other retirement plan fund options offered by Pace.

Hardship: A "hardship withdrawal", is for those unexpected circumstances when you may need your money before retirement. According to IRS regulations, your "hardship" must represent an "immediate heavy financial need" and there must not be "any other resources reasonably available to you to handle that financial need". The IRS has classified the following four reasons as representing an immediate and heavy financial need:

Certain unreimbursable medical expenses

Purchase of a primary residence

Payments of post-secondary education expenses for the next year

To prevent eviction from or foreclosure on your home

Interest Payment Option: TIAA's Interest Payment Retirement Option (IPRO) is like an annuity in that you get monthly payments. Unlike an annuity, these payments consist only of your current interest, your accumulation remains unchanged. Eventually, you will have to convert to a lifetime annuity.

Lump Sum and Partial Withdrawal: These cash options allow you immediate access to the accumulations in your CREF, Fidelity and T. Rowe Price accounts. Cash options are limited to the IRS requirements incorporated into our retirement plan. Cash withdrawals are subject to the minimum 20% federal income tax withholding, and will be subject to tax penalty if you are under age 59 ¹/₂.

Periodic Payments: You may elect to receive income on a regular basis in the form of periodic (fixed) installment payments. These may be started and stopped at any time. If you wish to use this method to receive income in retirement, representatives of each of the plan fund options can assist you in calculating the optimum payment schedule to meet your retirement needs.

Minimum Distribution Option: This option is not listed on the charts. This option applies to the IRS requirement that individuals at age 70¹/₂ must begin distribution of their retirement accumulations, even if still fully employed. Each plan fund option can assist you in determining the minimum distribution amount allowable by the IRS. You will normally receive a reminder notice as you approach this milestone.

Loans: You may obtain a low interest loan from your CREF accumulations in your regular retirement account, and from your TIAA and CREF accumulations in your voluntary retirement account. You may be able to borrow up to 45% of your accumulations, with up to 5 years to repay. A portion of your remaining accumulations will be held as collateral until the loan is repaid. Contact TIAA/CREF directly for more information.

9. Where Can I Obtain More Information On the Pace University Retirement Plan?

For additional information regarding investment and distribution options or if you have other questions please consult the specific plan/fund option's literature, available from your campus Human Resources office, or contact each plan directly.

TIAA/CREF (www.tiaa-cref.org) 1-800-842-2776

Fidelity Investments (www.fidelity.com) 1-800-343-0860

T. Rowe Price (www.troweprice.com) 1-800-225-5132

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