Frequently
Asked Questions
1. Am I eligible to participate in the Plan?
You are eligible to participate in the Plan anytime after you are hired. You may elect to have your compensation reduced by a specific percentage or dollar amount, and have that amount contributed to the Plan as a salary deferral. To enroll in the Plan, you must log into your account and complete the enrollment steps. Click here to log into your account.
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2. Can I withdraw money from my account while working?
You may receive a distribution from the Plan prior to your termination of employment if you satisfy certain conditions. These conditions are described below. However, this distribution will reduce the value of the benefits you will receive when you retire. Any in-service distribution is made at your election and will be made in accordance with the forms of distribution available in the Plan.
You may request an in-service distribution under the following circumstances:
- After attaining age 59 ½
- After incurring a Disability
- After incurring a Hardship
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3. Can I withdraw money from my account in the event of a financial hardship?
Yes, if you satisfy certain conditions. This hardship distribution is not in addition to your other benefits and will therefore reduce the value of the benefits you will receive at retirement.
A hardship distribution may be made to satisfy certain immediate and heavy financial needs that you have. A hardship may only be made for payment of the following:
- Expenses for medical care (described in Section 213(d) of the Internal Revenue Code) previously incurred by you or your dependent or necessary for you or your dependent to obtain medical care
- Costs directly related to the purchase of your principal residence (excluding mortgage payments)
- Tuition, related educational fees, and room and board expenses for the next twelve (12) months of post-secondary education for yourself, your spouse or dependent
- Amounts necessary to prevent your eviction from your principal residence or foreclosure on the mortgage of your principal residence.
- Payments for burial or funeral expenses for your deceased parent, spouse, children, or dependents
- Expenses for repair of damage to your principal residence that would qualify for a casualty deduction under section 213(d) of the Federal Reserve Code (without regard to whether the loss exceeds 10% of adjusted gross income)
If you have one of the above expenses, a hardship distribution can be made only if you certify and agree that all the following conditions are satisfied:
- The distribution is not in excess of the amount of your immediate and heavy financial need. The amount of your immediate and heavy financial need may include any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distributions.
- You have obtained all distributions, other than hardship distributions, and all nontaxable (at the time of the loan) loans currently available under all plans maintained by your Employer.
- That your salary deferrals will be suspended for at least six(6) months after your receipt of the hardship distribution.
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4. Can I borrow money from my account?
Yes, loans are permitted in accordance with the Plan’s established loan procedures. The Plan will calculate the maximum loan limit based only on your account balances held by Union Bank.
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5. What is the difference between the Traditional 403(b) and Roth 403(b)?
Traditional 403(b) contributions are made on a pre-tax basis, meaning you are not currently taxed on your compensation that is contributed to the plan. At the time you elect to take a distribution (withdrawal) from the Traditional 403(b) account, you will be taxed on both the contributions to the plan and any earnings on those contributions.
Roth 403(b) contributions are made on an after-tax basis, meaning you pay taxes at the time you make the contribution. At the time you elect to take a distribution (withdrawal) from the Roth 403(b) account, you will not owe any tax on the contributions (you have already been taxed on them) and further if the distribution is a "qualified distribution" you will not pay any tax on the earnings associated with the Roth 403(b) contributions.
If you receive a "qualified distribution" from your Roth 403(b) account, the entire distribution (your contributions and earnings on those contributions) will not be taxed. A qualified distribution is a distribution that satisfies the "5-year" rule and is made after your attainment of age 59 1/2, death, or disability. The 5-year rule is met if five calendar years have passed since you first made a contribution to your Roth 403(b) account.
You are allowed to contribute to both the Traditional and Roth 403(b) at the same time. When completing the enrollment/change form, print the percentage contributed to the Traditional and the Roth 403(b) and that election will remain in place until you direct payroll differently at some point in the future.
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