Comparing the Plans
The 457(b) Savings Plan has similar features and benefits to the Boston University Retirement Plan and the Supplemental Retirement and Savings Plan. However, there are some legal differences between the Boston University Retirement Plan, the Supplemental Retirement and Savings Plan, and the non-qualified 457(b) Savings Plan, as described in the following chart:
BU Retirement Plan and Supplemental Retirement and Savings Plan |
457(b) Savings Plan |
|
Voluntary pre-tax contributions |
Any amount, up to the IRS limit currently $23,500 if you are under the age of 50 and $31,000 if you are age 50 or older | Any amount, up to the current IRS limit of $23,500 |
Roth contributions |
Permitted | Not permitted |
Age 50 catch-up contributions |
Permitted | Not permitted |
Investments |
Participant-directed investments. Fidelity Brokerage is available. | Participant-directed investments. Fidelity Brokerage is not available. |
Loans |
Permitted from the Supplemental Retirement and Savings Plan only | Not permitted |
In-service withdrawals |
Permitted from Supplemental Retirement and Savings Plan account balance if at least age 59½ or certain conditions of financial hardship |
Not permitted |
Rollovers to the Plan |
Yes, permitted from another employer’s eligible plan | Not permitted |
Rollovers from the Plan |
Yes, permitted to another employer’s eligible plan or an IRA | Only permitted to another employer’s 457(b) plan |
Payment options |
Lump sum, annuity, or installments over a period of years, depending on investment fund | Lump sum or installments over a period of up to 5 years. Participant must finalize payment election within 120 days of termination |
Payment commencement |
Any time following employment termination, at participant’s direction | Participant must finalize payment election or defer payment to a later date within 120 days of termination of employment |
Benefits must commence by
|
Yes, unless participant is actively employed by Boston University | Yes, unless participant is actively employed by Boston University |
Penalty for distribution prior to age 59 1/2 |
Yes, generally a 10% tax penalty applies to early distributions (certain exceptions may apply) | No penalty |
Protection of plan assets |
Assets protected from Boston University credit risk | In the event of Boston University insolvency, plan assets would be subject to claims of Boston University creditors |