Saving for Retirement - Officers Hired After July 1, 2013

Within 31 days of your date of hire you will receive an email inviting you to register for benefits via CUBES—the Columbia University Benefits Enrollment System.

Log in to CUBES, and enroll in the VRSP along with your other benefits. You can elect to make contributions on a pre-tax and/or Roth after-tax basis from 1% - 80% of your eligible earnings, up to the IRS annual limit.

If you do not make an active election to contribute to the VRSP, you will be automatically enrolled to contribute 3% of your eligible pay on a pre-tax basis. This will be reflected in the first pay period after you have worked for 60 days.

If you do not make a carrier election you will be defaulted to Vanguard. If you do not select an investment fund your retirement contributions will be invested in the Qualified Default Investment Fund closest to when you reach age 65.

If you elect to make Roth contributions within 60 days after your hire date, you will not automatically be enrolled to make pre-tax contributions. You must actively make an election to contribute pre-tax. To change the pre-tax default contribution percentage and/or carrier election, log in to CUBES.

To change the default investment fund election, log in to your account at TIAA or Vanguard. If you are automatically enrolled in the VRSP, but do not wish to be, you can request a refund of contributions that were deducted from your pay within the first 90 days after your automatic enrollment takes effect; this happens 60 days after your hire date.

In general, eligible pay for the VRSP is gross compensation reported as W-2 pay, excluding imputed income (the value of non-monetary compensation and benefits, such as employer-provided life insurance above $50,000, and certain gifts and rewards) and certain additional compensation payments. 

Roth 403(b) contributions are made on an after-tax basis from your take-home pay and are immediately vested. Contributions to the VRSP can be Roth aftertax, pre-tax or a combination of both; the combined amount is subject to the annual IRS contribution limits.

As long as the Roth contributions are left in the account for five years, you do not have to pay taxes on the earnings. You can roll-over Roth money from your former employer’s plan into your Roth account within the VRSP. The five-year clock for Roth rollovers starts from the year the first contribution was made at the prior employer.

You can make changes to your VRSP and catch-up contribution percentage elections at any time during the year in CUBES. There are no limitations.

The IRS sets a maximum contribution limit each year, which applies to combined contributions, pre-tax and Roth. Please review the table below:

When it comes to saving in the VRSP, the sooner you start, the better your chances of achieving a financially secure retirement.

That’s because your savings grow over time through compounding, meaning that any investment earnings or interest earned on your contributions will be reinvested to generate additional investment earnings, which in turn are reinvested, and so on.

Senior Officer: Grade 14 or higher; (grade 106 or higher at CUIMC); Full-Time Appointment as an Officer or an “ungraded” Officer.

Junior Officer: Grade 13 or lower; (grade 103-105 at CUIMC); Full-Time Appointment as an Officer; Title of Instructor, Associate, Assistant, Senior Lecturer, Lecturer, Postdoctoral Research Scientist, Scholar or Associate, Staff Associate or Librarian I.

^{The Social Security wage base (SSWB) is the amount of your earnings that is subject to Social Security tax each year as set by the IRS. You are always fully vested (have a right to) the University’s contributions made on your behalf to the Officers’ Retirement Plan.}

When you are hired, you will be eligible to contribute to the VRSP and can elect a contribution percentage between 1% - 80% in half percent increments (1.5%, 2%, 2.5%, etc.) up to the IRS annual maximum. Your contributions can be invested with either TIAA or Vanguard, or both.

Once you are eligible for the Officers’ Retirement Plan, you will elect either TIAA or Vanguard to invest the University’s contributions. If you do not actively make elections, certain default elections will automatically take effect. 

The VRSP and Officers’ Retirement Plan together are intended to help you build a source of income for retirement—so, in general, you cannot receive payouts from the plans while you are still working without incurring a penalty.

In special circumstances, however, you may be able to receive a portion of your VRSP savings while you are working through loans or withdrawals from the plan, as follows:

• Your pre-tax contributions (adjusted for investment performance) are available to borrow at any time through TIAA. Roth contributions are not available to borrow. However, your Roth contributions (adjusted for investment performance) will be included when determining the maximum loan amount available to you.
• Hardship withdrawals of both pre-tax and Roth savings (adjusted for investment performance) are available in limited situations through TIAA.
• You have the option to borrow money from your Voluntary Retirement Savings Plan (VRSP) and pay it back via deductions from your personal bank account. You can borrow up to 45% of your VRSP account balance to a max of $50,000. No more than two loans can be taken out at a time. Please contact TIAA and/or Vanguard directly for more information and to apply.
• Once you reach age 59½, you can withdraw up to the full balance from your VRSP account. Taxes will apply to your pre-tax savings. Investment earnings on your Roth contributions will be tax-free if it has been at least five years since you started making Roth contributions.

You can also withdraw your pre-tax savings and Roth savings (Roth investment earnings will be tax-free) if you become disabled. If you die, payment will be made to your beneficiary. Your beneficiary will be eligible to make a tax-free withdrawal of Roth investment earnings once your Roth contributions have been in the plan for at least five years.

When you leave the University, you can leave your savings in your plan accounts or receive payment of your plan accounts. You have several options for receiving payment of your plan accounts, including transferring your account to a different carrier or making a rollover into an Individual Retirement Account (IRA), Roth IRA or another employer’s qualified retirement savings plan.

You will need to designate a beneficiary for the VRSP and the Officers’ Retirement Plan. Your beneficiary will receive plan benefits if you die before the entire value of your accounts is distributed. The value of your accounts includes your contributions and Columbia University’s contributions, adjusted for investment gains and losses. To name a beneficiary, log in to the TIAA and Vanguard websites and follow the prompts.

Once you start receiving payments from the plans, the amount your beneficiary will receive will depend on the form of payment you elected. For information about forms of benefit payment, refer to the Summary Plan Descriptions (SPDs).

In general, eligible pay for the Officers’ Retirement Plan is your W-2 pay up to the IRS annual compensation limit for the year. It does not include special compensation such as:

• Guaranteed income from clinical activities (for Medical Center faculty)
• Special grants such as science and technology ventures – but not federal grants and contracts, which are included in eligible pay under the Officers’ Retirement Plan
• Allowances – such as for housing – or other non-pension eligible additional compensation earnings
• Imputed income

If a portion of your pay at Columbia University is earned from clinical activities—also known as private practice earnings or faculty practice earnings—it’s important to know that eligible earnings under the VRSP include your clinical earnings, but eligible earnings under the Officers’ Retirement Plan do not.

Because clinical earnings are considered in your eligible pay under the VRSP, your contributions may reach the IRS annual limit on pre-tax and/or Roth contributions before the end of the calendar year.

Deciding how to invest your savings may seem an overwhelming prospect. Both TIAA and Vanguard offer online resources to help you choose and monitor your plan investments. The websites are easy to use and take you step by step through basic saving and investing.

You’ll find descriptions of your investment fund options, financial planning tools and other investment information:

• TIAA: Your Retirement Benefits. Click on “Get Started” under “Goals & Savings”
• Vanguard: Retirement Insights

In addition to visiting the websites, you can call the carrier service centers. Call TIAA at 800-842-2252 and Vanguard at 800-523-1188.

The VRSP and Officers’ Retirement Plan have default carrier and investment elections that apply if you do not actively elect carriers for recordkeeping and investment of contributions.

There are two types of default that apply to both plans:

1. If you do not select a carrier for recordkeeping, Vanguard will be your recordkeeper and all contributions will be invested in the Vanguard Target Retirement Fund closest to when you will reach age 65.
2. If you select a carrier, but do not select specific investment funds with that carrier, all contributions will be invested in the default fund for the carrier, which will be either the Vanguard Target Retirement Fund or the TIAA Lifecycle Fund closest to when you will reach age 65.

Please be aware that depending on when you make your elections, payroll deductions may occur before you elect your investment funds. You can always change carriers and investment funds after the defaults are in effect.

For more information regarding the Vanguard Target Retirement Fund or the TIAA Lifecycle Fund, refer to the Qualified Default Investment Alternative (QDIA) Notices or contact the carriers directly.

You can also refer to the prospectus for each default fund, available on the carrier’s website. The prospectus contains information about the fund’s investment strategy and goals as well as its past investment performance.

It’s a good idea to periodically review your approach to saving and investing to make sure you are on track to achieve your retirement income goals.

Saving for retirement should be a priority even if your personal situation changes in a way that may affect your current expenses; for example, you marry or enter a partnership, divorce, have a baby or receive an increase in salary.

If you are early in your career, it may be beneficial to save on a Roth basis, paying taxes on your savings today when your earnings—and tax rate—may be lower than later in your career.

If you are mid-career, there are steps you can take if you aren’t saving enough for retirement. For example, you may want to consider increasing the percent of pay you contribute to the VRSP.

If you are close to retirement and will need access to your savings in the near future, consider whether your investment mix—and the risk of loss—is appropriate based on your time horizon.

It’s easy to check the status of your account balances and investment fund performance on the carrier websites. To access your accounts online with the carrier, you will need to create a user ID and password the first time you log in. You will also receive a paper statement every calendar quarter, unless you opt to receive it online.