Montana University System 403(b) Retirement Plan
As a Montana University System (MUS) employee, you are eligible to participate in the MUS' voluntary supplemental 403(b) retirement plan allowing you to contribute and invest pretax dollars. The amount invested, plus interest credited on any fixed options, and any gain on the variable options, is not taxable until you withdraw the funds at a future date. Values may increase or decrease based on the investment performance of the mutual fund(s) you select. The 403(b) plan does not have an employer contribution, but is an additional way for MUS employees to achieve retirement readiness. Employees can enroll in the plan by completing Salary Reduction Agreement on the Pension and Retirement page and returning it to your campus Payroll or Human Resources/Benefits office and setting up an online account through the MUS' recordkeeper, Teachers Insurance And Annuity Association (TIAA).
The MUS 403(b) also has a Roth option which means you can make after-tax contributions to the plan. After-tax contributions and the earnings are tax free upon withdrawal in retirement, provided certain conditions are met.
The MUS encourages participants to consult with their tax advisor regarding your situation and how pre-and post-tax contributions can be beneficial.
MUS employees can participate in the Montana Public Employees’ Retirement Administration’s (MPERA) 457 Deferred Compensation Plan.
How does the plan(s) work?
You elect the amount you wish to defer from your gross salary each pay period and choose investment options. The amount you elect to defer is withheld from your paycheck before taxes. Because pre-taxed investments reduce the amount of federal and state tax withheld, your net salary is not reduced by the total amount you defer. You can start, stop, and change contributions to the 403(b) plan at any time.
Roth after-tax contributions are taken from your paycheck after taxes have been deducted, so they do not lower your current taxable income. However, you may take distributions of your contributions without paying taxes. Earnings may also be withdrawn tax-free if certain conditions are met.
How much can I defer?
Under the Internal Revenue Code (IRC), the annual deferral limit is the less of 100%
of “includable compensation” or the applicable dollar limit. The applicable dollar
limit for 2023 is $22,500. As a MUS employee you can contribute up to the limit for
both the 403(b) and 457 plans, which means for 2023 you could have contributed a total
of $45,000 ($22,500 to the MUS 403(b) plan and $22,500 to MPERA's 457 plan). Your
403(b) and/or 457 contribution limits may need to be coordinated with other certain
Additional Age-50+ Catch-up Provision allows those that are 50 or older to make additional catch-up contributions except during years when regular catch-up contributions are being made. The additional catch-up amount that may be deferred is $7,500 for 2023.
Additional 15 Years of Catch-up Provision allows those that have worked at the MUS for at least 15 years and, have not elected to make pre-tax contributions up to the maximum limits for prior years, can make additional contributions above the 403(b) contribution limit. To determine eligible contributions please see the MUS 15 Years of Service Worksheet on the Pension and Retirment page. The 15 years of service catch-up must be used before the age-50+ catch-up for the year.
When can I join the plan(s)?
You can join at any time. Please contact your campus Human Resources/Benefits office for more information.
What happens if I leave the MUS?
The IRC allows distributions of funds only upon retirement, separation from service with the participating employer, or attainment of age 70 ½. At the time you sever employment, you may:
- Keep your money invested in the plan(s) and, if desired, continue to manage your money within the offered investment options. However, you will not be able to continue to make contributions.
- Roll your money into another qualified retirement plan. Be sure to confirm that the new plan will accept your rollover. If you are under 59 ½ years old, you may also have to pay a 10% additional income tax for early distributions depending on the retirement vehicle. Please contact a tax professional before making a final decision.
- Withdraw your money in an elected and defined method, subject to ordinary income tax.
What if I need to withdraw some of my funds while still working?
The 403(b) plan allows for in-service distribution for: age 59 ½, hardship and/or disability. Loans may also be allowed. Loans are subject to being repaid with interest by you to your investment account and usually must be repaid within five (5) years. A hardship withdrawal may be subject to tax. All loans and hardship withdrawals must meet specific criteria and be approved by the plan administrator. For more information, please contact TIAA. The MUS also recommends contacting your financial or tax advisor before making a final decision.
When can I withdraw my money without penalty?
With a 403(b) plan, you can withdraw your money when you retire or when you turn 59 ½ even if you are still working. You must begin taking withdrawals by age 70 ½. Federal and state taxes will apply.
What are MUS legacy 403(b) plans?
In February 2018 the MUS launched a new MUS 403(b) plan with an enhanced investment lineup and record keeping services provided by TIAA. Contributions, new accounts, and loans through MetLife, VOYA, and Valic ceased from that point forward. MUS legacy 403(b) plans can be rolled into the new MUS 403(b) plan with recordkeeping services through TIAA. Loans are not permitted from MUS legacy 403(b) plans. If you need to contact these legacy vendors, please see the below contact information:
Take advantage of the guidance, education, and tools the MUS 403(b) recordkeeper, TIAA, offers to help maximize your retirement savings. Please contact your campus Human Resources/Benefits office, visit the MUS 403(b) website, or call 1-800-842-2273 for more information or to schedule a one-on-one consultation.
Disclaimer: If there are any discrepancies between this website and the provisions of Supplemental Retirement plans, the Plan Documents will prevail.