The Smith College 403(b) retirement plan provides eligible faculty and staff with a significant contribution to income replacement. Smith will contribute 9 percent of eligible earnings up to a specific amount established each year (this amount is called the integration level, and for 2013 is $58,891) and 13.3 percent on earnings above the integration level.
The plan is fully funded by the college and you are not required to make any matching contributions. The college's contributions to your retirement account are fully vested (owned by you) beginning with the first contribution.
The Internal Revenue Service (IRS) allows employees of colleges, universities and certain other nonprofit organizations to allocate a portion of salary on a federal and state tax deferred basis to a 403(b) retirement account. In 2012, the option for employees to make Roth (after-tax) contributions on a voluntary basis was added as a new feature of the retirement plan. Voluntary contribution percentages may be changed at any time; participation is optional and there is no waiting period.
The decision to retire should be made after several years of careful thought and planning. Financial considerations are a major factor in this decision, and the retirement plan options may help to meet your goals.
Smith College, like other nonprofit institutions, is subject to increased oversight of its retirement plans. The college is now required to review and monitor the performance of funds available for retirement investments instead of simply offering a menu of choices. To comply with these regulations, President Christ formed a Retirement Plan Investment Committee, and the college has engaged an investment and fiduciary advisory firm to assist in the committee's work.
Retirement Plan Investment Committee
The Retirement Plan Investment Committee works with an investment or fiduciary advisory firm to establish Smith's internal governance procedures and to select and monitor investment choices. The key objectives of the committee are to:
- Ensure that decisions about the retirement plan are in the best interests of the plan participants (employees)
- Select mutual fund investment offerings
- Monitor the retirement vendors and the funds offered using measures and benchmarks in various areas affecting plan assets, including investment performance, fees and expenses
The committee members are:
Vice President for Finance and Administration, Chair
Associate Provost, Dean for Academic Development
Associate Vice President for Financial Planning
Associate Vice President for Human Resources
Associate Director for Human Resources
An overview of ING, including the company's U.S. history and frequently asked questions about the company can be found on its website, www.ing.us/about-ing.
Account statements are mailed to participants' homes quarterly.
Moving Retirement Assets to ING
You may exchange, or transfer, funds to ING from American Century, Fidelity or TIAA-CREF for no fee; however, your prior retirement vendor may have fees or withdrawal restrictions on existing contracts. We encourage you to talk with an ING representative to discuss your specific account to determine the best course of action for your situation. For instructions and information about the exchange, or transfer, process, contact one of ING's dedicated specialists during their business hours hours:
8 a.m. to 9:00 p.m., Monday through Thursday
8 a.m. to 5 p.m., Fridays
Individual Guidance Sessions
To help with your retirement planning, we recommend meeting with your retirement vendor for an individual consultation. The dates available to meet with vendor representatives on campus, along with phone numbers to call to schedule a consultation, are listed below. All sessions will be in the Office of Human Resources at 30 Belmont Avenue.
Mary Ellen Gordon is offering individual guidance sessions in 2013 on March 26, April 2, April 11, April 15, April 25, May 2, May 8, June 19 and June 27. To schedule an appointment, please call Alexy or Michelle at (877) 645-5206. Mary Ellen is also available for questions at Maryellen.firstname.lastname@example.org.
Michael Muscarella is offering individual guidance sessions in 2013 on April 1, July 16 and October 22. To schedule an appointment, please call (866) 843-5640.
To schedule an individual counseling session with Diana Valsky to discuss your retirement account, please call (800) 642-7131.
Frequently Asked Questions
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How can I receive investment and performance information?
You can access this information in a variety of ways:
- Through the website at www.ingretirementplans.com
- By calling ING toll-free, at (800) 584-6001
- Through your quarterly participant statements
What are my investment choices?
You have a menu of 32 investment options, including "target date" funds. The menu also includes a credited fixed interest account option offered under a group fixed annuity. A fund fact sheet is available at www.ingretirementplans.com for each option, and includes information on investment objectives and strategy, risks and top holdings.
You should consider the investment objectives, risks, charges and expenses of the mutual funds offered through a retirement plan carefully before investing. Fund prospectuses, containing this and other information, can be obtained by contacting the ING Customer Contact Center at (800) 584-6001. Fund fact sheets and an ING Retirement Choice II Information Booklet are available at ingretirementplans.com or by contacting human resources. Please read all information carefully before investing.
What criteria are used to evaluate the investment options?
Investment options are evaluated based on the following criteria:
- Performance (net of fees) in variable time periods
- Risk adjusted performance (Alpha and Sharpe Ratio*)
- Portfolio characteristics
- Consistency of investment style
- Portfolio manager tenure
*The Alpha is a measure of the difference between a portfolio's actual returns and its expected performance, given its level of risk. A positive Alpha figure indicates the portfolio has performed better than its beta would predict (beta is a measure of a portfolio's sensitivity to market movements). A negative alpha indicates the portfolio has underperformed, given the expectations established by its beta. The Sharpe Ratio is calculated by using standard deviation and excess return to determine reward per unit of risk. The higher the Sharpe Ratio, the better the fund's historical risk-adjusted performance. The Geometric Sharpe Ratio is calculated for the past three-year period by dividing a fund's annualized excess returns by its annualized standard deviation.
Will I lose the benefit of compound interest if I am starting a new account with ING?
No. The same tax-deferred benefit of compound interest will continue to apply as is true for all of your current retirement plan contributions.
What is a brokerage account?
The plan includes the ability to take advantage of a Brokerage Account Option through TD Ameritrade that provides access to over 13,000 open-end mutual funds, including more than 1,300 No Transaction Fee funds. (No Transaction Fee (NTF) mutual funds are no-load mutual funds for which TD Ameritrade does not charge a transaction fee. NTF funds have other fees and expenses that apply to a continued investment in the fund and are described in the prospectus. Funds held 90 days or less may be subject to a Short-Term Redemption Fee. This fee is in addition to any applicable transaction fees or fees addressed in the fund's prospectus.)
The Brokerage Account Option provides access to a broad choice of investment options, world class research, dedicated Investor Services Representatives and multiple ways to personally manage your account. This option is designed for the experienced investor who wants to independently and actively manage an even greater choice of investment options and is willing to pay additional fees and accept full responsibility for researching, selecting, monitoring and managing their investments. An annual $50 fee is assessed by ING for participants who select the Brokerage Account. Additional fees and charges will apply per transaction.
More detailed information, including an explanation of trading expenses, is available by contacting Mary Ellen Gordon, CRPC, CEBS, CFS, Smith College's ING Representative (Registered Representative of ING Financial Partners, member SIPC). Please call her directly at (860) 580-1624 or contact ING at (877) 645-5206 to arrange an appointment.
Brokerage services provided by TD Ameritrade, Division of TD Ameritrade, Inc., member FINRA/SIPC/NFA. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank.
What are target date funds?
The 12 target date funds, called T. Rowe Price Retirement Funds, are a family of funds that consist of an underlying portfolio of investment options that track to a certain date. They can simplify the investment decision-making process. You can select the T. Rowe Price Retirement Fund with the target date closest to the year you expect to retire and begin to receive your benefits. These portfolios are rebalanced periodically and, over time, migrate to a more conservative investment mix so you won't have to rebalance your account.
The principal value of the T. Rowe Price Retirement Funds is not guaranteed at any time, including at or after the target date, which is the approximate date when investors turn age 65. The funds invest in a broad range of underlying mutual funds that include stocks, bonds, and short-term investments and are subject to risks of different areas of the market. The funds maintain a substantial allocation to equities both prior to and after the target date, which can result in greater volatility.
What credited fixed interest account option is available?
The credited fixed interest account option available under the plan's fund menu is the ING Fixed Plus Account III. This is offered under a group fixed annuity contract. The current credited interest rate is 2.50 percent, expressed as an annual effective yield, and is guaranteed not to drop below 2.25 percent through 12/31/2013. It is intended to be a long-term investment for participants seeking stability of principal. Guarantees are based on the claims-paying ability of ING Life Insurance and Annuity Company. Unlike the ING Fixed Plus Account III, the investment return or principal value of the mutual funds under the plan are not guaranteed.
The ING Fixed Plus Account III is a stability of principal option (annuity). It allows you to keep a portion of your assets in an investment option that offers the stability of account balances that grow steadily without the daily fluctuations other investments may experience. The contributions you make to this stability of principal option (annuity) are credited with a stated rate of interest that is announced periodically and may vary from period to period.
How do I sign up for the Roth 403(b) contribution option?
If you are interested in making Roth 403(b) after-tax contributions to the plan, you must complete a Retirement Plan Election Form, Salary Reduction Agreement. The Roth 403(b) after-tax option is only available for salary deducted contributions to the Plan. Employer Contributions are not eligible for the Roth 403(b). The Smith College Defined Contribution Retirement Plan is a 403(b) plan. A 403(b) plan consists of tax-deferred retirement products in which employees of educational institutions and certain nonprofit organizations invest. IRS rules permit plan participants to invest in 403(b)(7) custodial accounts (which invest in shares of mutual funds) and in annuity contracts.
Fees and Expenses
What are the ongoing annual administrative expenses under the plan?
For assets in the investment options, there is an asset-based fee deducted quarterly from your account by ING at an annual rate of 0.20 percent of balances held in all investment options except the ING Fixed Plus Account III. This asset-based fee is retained by ING as compensation for the services provided. Existing assets in your plan account with TIAA-CREF, Fidelity or American Century are not subject to this ING administrative expense.
In addition, ING may receive payments from the funds or the funds' affiliates with respect to the plan's holdings. ING does not retain these fund-related payments. Instead, these payments are set aside to defray payment for plan expenses at the instruction of Smith College. Any amount not used to pay for plan expenses will be allocated to participant accounts annually. For additional details regarding this compensation, please refer to the Fund Revenue Sharing and Expense Disclosure section in the Additional Disclosure Supplement of the ING Retirement Choice II Information Booklet.
Please refer to the individual fund prospectuses as well as the fund fact sheets for the expenses associated with each option. Fund fact sheets are updated on a quarterly basis. Your actual expenses will depend on the specific funds you select.
Fund prospectuses can also be obtained by contacting the ING Customer Contact Center at (800) 584-6001. Expenses charged by the specific funds offered under the plan will be reflected in the performance information for that fund option.
The performance of each option, including that shown on the fund performance report, is net of all fund expenses. These performance data do not reflect ING's annual administrative expense of 0.20 percent. If such fees had been reflected, the performance data shown for each option would have been lower.
Note: A $50 fee is assessed annually by ING if you elect to utilize the Brokerage Account Option. Additional fees and charges will apply per transaction.
Are there any transfer restrictions or fees for transfers between the investment options?
The ING Fixed Plus Account III does not impose an annual restriction on participant transfers. However, you cannot transfer directly from the ING Fixed Plus Account III to the Fidelity Money Market Trust Retirement Money Market Portfolio* or the Brokerage Account Option (competing funds). You can transfer from the ING Fixed Plus Account III to any other fund in the menu of investment options (noncompeting funds). Once you transfer assets from the ING Fixed Plus Account III to a noncompeting fund, you may not transfer to the Fidelity Money Market Trust Retirement Money Market Portfolio* or the Brokerage Account Option (competing funds) for 90 days. If you make a transfer from a noncompeting fund to the Fidelity Money Market Trust Retirement Money Market Portfolio* or the Brokerage Account Option (competing funds), you may not make a transfer out of ING Fixed Plus Account III for 90 days. All transfers are also subject to ING's Excessive Trading Policy. Contact ING for additional information regarding these provisions.
Please note: One investment option, the Vanguard Total International Stock Index Fund-Signal Shares (Fund Number 2474), imposes a 2 percent redemption fee. Any transfers into the fund that are subsequently transferred out within 60 days are subject to the redemption fee. There are no fees or charges for other fund transfers.
*An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1 per share, there is no assurance it will be able to do so. While the fund's objective includes the preservation of capital, it is possible to lose money by investing in the fund.
Roth (After-Tax) Contributions
What are Roth contributions?
Roth contributions are made on an after-tax basis. Roth contributions and any earnings on those contributions are tax-free upon distribution if the distribution is a "qualified distribution." See more below.
How are Roth contributions different from traditional pre-tax contributions?
Traditional contributions are made on a before-tax basis, reducing your taxes at the time you make the contribution. Traditional pre-tax contributions, and any earnings on those contributions, are subject to ordinary taxes upon distribution. Roth contributions are made on an after-tax basis so the amount you contribute is included in your W-2 in the year you make your contribution. Because you already paid income tax on your Roth contributions, a withdrawal of your Roth contributions is always 100 percent federal income tax free. You must meet a few basic requirements, however, before any distribution becomes "qualified." Once your distribution is qualified, you can take Roth earnings from your account free from federal income tax.
Can I contribute both pre-tax and Roth contributions to the Smith College 403(b) Plan?
Yes. You can choose to contribute pre-tax contributions, Roth contributions, or a combination of both.
How much can I contribute to the plan if I make pre-tax and Roth contributions?
The IRS limit applies to the combined contribution amount. The limit for 2013 is $17,500. You may also be eligible to make catch-up contributions. If you will be age 50 or over as of December 31, 2013, you can contribute an extra $5,500 for a total contribution amount of $23,000 in 2013.
Can any or all of my catch-up contributions be Roth contributions?
Yes. You can choose to make your catch-up contributions as pre-tax contributions, Roth contributions, or a combination of both.
Must I make Roth contributions?
No. The choice to make pre-tax or Roth contributions is voluntary.
How do I decide which contribution type is better for me?
Choosing between pre-tax and Roth contributions is a personal decision based on your own situation and priorities. There are some questions you may want to consider:
- Do you expect your federal tax rate in retirement will be higher than it is currently?
- Are you restricted from making Roth IRA contributions due to your income level?
- Do you want to minimize your taxable income during retirement?
- Can you afford to contribute the same amount into your account and pay taxes on that amount today?
- You are encouraged to consult your individual legal or tax advisor with any specific questions. Neither ING nor any of its representatives are tax or legal advisors.
Can anyone make Roth contributions?
Yes. Any employee can make Roth contributions to the Smith College 403(b) Plan. There is no income limit on Roth contributions to the plan.
Do I need to set up another account to make Roth contributions?
No. If you are already enrolled in the Smith College 403(b) Plan, you may choose to make Roth, pre-tax, or a combination of both Roth and pre-tax contributions to your account. If you are not currently enrolled in the Plan, please contact Mary Ellen Gordon at (877) 645-5206 for enrollment information.
Can I change my pre-tax contribution election to a Roth contribution election?
Yes. You simply need to designate future contributions to be Roth contributions. Complete a new Retirement Plan Election Form, Salary Reduction Agreement and return it to human resources.
How do I keep track of my pre-tax and Roth contributions?
Roth contributions will be tracked separately both on your paycheck and in your account at ING. Roth contributions will be listed as a separate "source" of money on the participant web site and on your quarterly statement.
Are there different investment options for Roth contributions?
No. Roth contributions are treated a source of money within the plan. The same investments will be available for Roth contributions, and your existing investment direction will apply to any Roth contributions you make unless you make a change.
How are Roth contributions to the Smith College 403(b) Plan different from a Roth IRA?
The premise of contributing after-tax money now in order to receive tax-free withdrawals at retirement is the same. However, the ability to make Roth contributions to the Plan does not have any income restrictions as do Roth IRAs. The plan also allows for higher contribution amounts ($17,500 in 2013 versus $5,000 in an IRA). Unlike IRAs, Roth contributions held under the plan are subject to minimum distribution rules beginning at age 70-1/2 or at separation from service, whichever is later.
Can I roll my Roth IRA into the Smith College 403(b) Plan?
No. The law does not allow Roth IRAs to be rolled into the plan.
Can I make Roth contributions to the Smith College 403(b) and to a Roth IRA?
Making Roth contributions to the Plan does not impact your eligibility to make Roth IRA contributions. Based on your income, however, you may not be able to contribute to a Roth IRA.
Are there withdrawal restrictions on Roth money?
Withdrawals of Roth contributions and earnings are subject to the same plan distribution rules as pretax contributions and earnings.
When is a withdrawal of my Roth money a "qualified distribution"?
For a withdrawal of Roth money to become a qualified distribution it must be made after a five-taxable-year period of participation and made after you attain age 59-1/2 or older, become disabled, or die. If your withdrawal of Roth money is a qualified distribution, the earnings on your Roth contributions are not taxed upon withdrawal. Your Roth contributions are not subject to tax upon withdrawal as they were made after-tax initially.
What is a five-taxable-year period of participation? How is it calculated?
The five-taxable-year period of participation begins on the first day of the calendar year in which you make your first Roth contribution to the Plan and ends when five consecutive calendar years have passed.
What if I take a distribution of my Roth money before it is "qualified"?
If you do not do a rollover to a Roth IRA or to an employer plan that accepts Roth contributions, you will be taxed on the earnings portion of the distribution. The contribution portion of the non-qualified distribution is not taxed.
Are minimum distributions required for my Roth money?
Yes. Roth money in the plan is subject to minimum distribution rules at age 70-1/2 or separation from service, whichever is later.
What happens to my Roth money if I separate from service?
If you separate from service, the same options apply to both your Roth and pre-tax money. With your Roth money, you can:
- Leave your Roth money in the plan (subject to the plan's minimum cash-out and minimum distribution rules).
- Take a full or partial lump-sum distribution.
- Roll over your Roth money to a Roth IRA.
- Roll over your Roth money to an employer plan that accepts Roth contributions.
Do I need a password to register for the web site or access my personal account on the telephone?
For the automated voice response phone line, you need a personal identification number (PIN). Your PIN is the month and year of your birth (MMYY). We encourage you to change your PIN to one of your own preference at your earliest convenience. PINs can be changed by using our automated telephone line. Customer Service Associates cannot change your PIN.
For the website, you can sign up for online access by completing the following four steps:
- Go to www.ingretirementplans.com and choose to log in with your SSN and your PIN, which is the month and year of your birth (MMYY). Enter your profile information, including your email address.
- Create your login information, new user ID and password.
- Choose and answer your security questions.
How do I designate a beneficiary for my account with ING?
Beneficiary designations can be submitted online at www.ingretirementplans.com or by phone with an ING customer service associate, at (800) 584-6001.
Note: If you are married and designate someone other than your spouse as your beneficiary, you are required to provide a signed spousal consent form. ING will provide a form to assist you with this requirement.
When will I receive my account statement?
Your detailed account statements will be mailed to your home quarterly. You can also view your quarterly statements by accessing your account online at www.ingretirementplans.com.
Is there an alternative method available for receiving quarterly statements?
Yes. If you prefer to receive your quarterly statements electronically rather than by mail, you can choose the e-Delivery option that suits your needs by accessing your account online at ingretirementplans.com.
Will I still receive statements from the other retirement vendors?
Yes, your other retirement vendors will continue to provide you with the customer service and statements you are accustomed to receiving.
Health Insurance for Early Retirees (ERO)
Employees who retire from Smith College between the ages of 62 and 65, and who have a minimum of 10 years of consecutive service in a regular position at Smith College immediately prior to retirement, may continue to participate in the college's group health plan until age 65, with the college paying half its normal benefit. Please refer to the plan description for the Health Care Program, which can be obtained from the Office of Human Resources, for further details.
For other retiring employees, Medicare Part A (hospital insurance) and Part B (medical insurance) are available beginning at age 65.
Summary Plan Description
Retirement Plan SPD (PDF)
For questions regarding retirement benefits, contact human resources at (413) 585-2275.