Emory University Retirement
Savings Plan
Key Decisions
Sue Fillon
Benefits Manager, Customer Service
May 20, 2011
Retirement Plans: Key Decisions
Objective:
This course was developed to assist faculty and staff of Emory University
in making the key decisions by providing information on retirement benefit
programs, including the tools and resources available.
Course Outline:
 How much to save
 Roth vs. Traditional 403(b)
 Selecting a vendor
 Making investment elections
 Other savings opportunities
 Resources
 Enrolling and election changes
Retirement Plans: Key Decisions
 Experts say you will need 70% to 100% of your pre-retirement income
to maintain your life style in retirement
 How much income will you need in retirement?
 Your retirement life style
 People are retiring earlier and living longer
 Healthcare – it’s estimated that a 65 year old couple retiring today
would need $200,000 for out of pocket medical expenses not
covered by Medicare
 Where are the sources of your retirement income?
 Social Security
 Employer retirement plans
 Personal savings and investments
Contributions
Eligibility for Your Own Contributions

Eligible employees regularly scheduled to work 20 or more hours per
week are eligible to contribute

Employees are always 100% vested in their contribution.
Eligibility for Emory’s Basic 6% and Matching Contributions

One year of service during which you work 1,000 hours

Age 21
- or
Certify participation and employer contribution in 401(k), 403(b) or
similar plan immediately prior to joining Emory and waive the wait
Vesting for Emory’s Contribution

3 years of continuous service

Contributions prior to 1/1/2007 are 100% vested after 5 years
Pre-tax or Roth
403(b) Savings Plan

Pre-tax contributions

Allows you to postpone paying taxes
until you retire and begin distributions
Roth 403(b)

After-tax contributions

Pay taxes now at your current tax rate
and do not pay taxes when you begin
distributions (not even on the investment
gains)
Employees can
contribute to both, but
combined maximum
cannot exceed IRS
limits each year.
2011 Limit is $16,500,
plus additional $5,500 if
over age 50.
Considerations

Expected income tax rate in retirement

Affordability of pre-tax contribution
Whether your contribution is pre-tax or Roth, the Emory contribution
is taxed as income at withdrawal
Vendor Selection
 Emory offers investment options through three retirement vendors:
 Fidelity

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Actively managed funds
Extensive research division
Excellent tools
Medium fee levels
 TIAA-CREF
 Academic, medical, cultural and research fields
 Annuities
 Known for on-site advice
 Vanguard




Client owned
Low fees
Indexed funds
Loans not available
Four Ways to Invest
Lifecycle Investments
Funds managed for you by providing “ready-mixed” investments
Investments are
 allocated and invested based on projected retirement timeline
 gradually reallocated to conservative assets as you become closer
to retirement
Funds assume a retirement age of 65
Core Investments
 Select and combine Core investments to create a well-diversified
retirement portfolio
 Asset Classes:
 Money Market
 Fixed Income (Bonds)
 US Equities (Domestic)
 Non-US Equities (International)
Four Ways to Invest
Expanded Investments
 Provide a greater choice across the major asset classes – even
more then Core Investments
 Selecting funds in the Expanded investment category enables a
portfolio that is tailored to your individual retirement goals
The Mutual Fund Brokerage Window
 Provides investments choice and flexibility of a brokerage account
 Allows you to access mutual funds beyond those in the Core and
Expanded investment options
 Create customized retirement portfolio to match personal goals,
time frame, and risk tolerance
 Monitor portfolio and make adjustments as your needs change
 Funds available through the brokerage window are not selected or
monitored by Emory in any way
All investments involve a level of risk; therefore, before making any
investment decisions, it is recommended that you speak with your
selected investment vendor(s) or your personal financial advisor.
Managing Risk
Types of Risk

Market Risk

Your investment return fluctuates, fear of losing money

Accumulation Risk

You may not have enough money to retire when you
choose
Investing for retirement is about managing these two risks

Diversify – invest your money across the risk spectrum

The amount of market risk you can accept should decline with
age

Do it yourself of choose an investment option that does it for you
Managing Risk
Money
Market
Stable
Value
Bond
Categories to the left
have potentially more
accumulation risk and
less market risk
Balanced
Domestic
Equity
International
Categories to the right
have potentially less
accumulation risk
and more market risk
Specialty
Tips
1. Save through your plan at work
 Once you set your payroll deduction, you don’t have to think about it,
your contribution is made automatically
 Once you are eligible, Emory makes a basic 6% contribution and
provides an additional 3% match when you contribute 2% of your
salary
 Consider increasing your contribution when you get a pay increase,
when your car payment ends or when you get a bonus
Tips
2. Invest smart, but keep it simple
 Some people fear losing money and so avoid investing in stocks.
They actually give up long term growth potential.
 Targeted funds are the easiest way for you to balance your portfolio
since the investments automatically shift from more aggressive to
more conservative as you approach retirement.
 Asset allocation funds provide an easy way to a balanced portfolio.
You select the goal of the fund, growth, income, etc.
Tips
3. Resist the urge to tinker
 Best results usually happen when the investments are left alone
 Look at the results annually and rebalance your portfolio every year
or two. You don’t have to do this if you are in a targeted or asset
allocation fund
 Leave this money for your retirement
Accessing Funds
If you need your 403b funds prior to retirement





In-Service Withdrawal

Age 59 ½ or older, taxable – no penalty and do not have to
be repaid
Plan Loans

Fidelity and TIAA CREF Only

Must be repaid, not taxable – no penalty, unless defaulted
Hardship Withdrawals

Requires a plan loan be taken FIRST

Can’t participate for 6 months following

No repayment, however penalty and taxes apply
Age 70 ½ - Minimum Required Distributions
Disability or Death
Enroll or Change
Now
Online!
 403b Retirement Plan
 Log On to the Employee Self-Service at https://leo.cc.emory.edu, click on Self
Service to expand your available selections.
 Select Benefits and then click 403(b) Savings Plan Election.
 From here you can choose to:
 Make elections and vendor selections by clicking the button, “Click here to
enroll, change or stop 403(b) elections”
 Calculate your maximum allowed contributions by clicking the button, “Click
here to model 403(b) maximum contributions”
 After selecting your elections, click the Submit Elections button. Print a copy of this
page for your records.
 Once you have successfully enrolled, contact the vendor(s) you have selected and
make your investment elections.
 Default elections
 Vanguard (if no record keeper is selected)
 Lifecycle Investments (if no investments are selected)
 Don’t be a Defaulter!
Additional Savings Opportunities
2011 HSA Limits
Individual $3,050
Family $6,150
Catch Up (55+) $1,000
Health Savings Account (HSA)

You must be enrolled in a High Deductible Health Plan

Emory contributes Annually

You can earn additional contributions by completing incentives,
up to $300 per year ($600 if covering a spouse or SSDP.)

You can contribute Pre-tax.


You own all contributions!
Contributions are not forfeited like an FSA, they can be used for
future expenses and accumulate.

Contributions are invested with JP Morgan.

HSA is portable if you leave Emory – you can take it with you.

If over 55, “catch up” contributions to the HSA are permitted.

Convenience of a debit card or checks to pay for eligible
expenses.
HSA contributions must be used to reimburse/pay eligible
medical, dental or vision expenses, or IRS penalties will apply.
Additional Savings Opportunities
Path2College 529 Plan
 College savings plan sponsored by the State of Georgia
 Tax advantages
 Funds may be used for education at any eligible school nationwide
 In addition to tuition costs, expenses for books, fees and supplies may
be eligible
 Path2college529.com for more information
 Set up through direct deposit with Emory Payroll
Additional Savings Opportunities
457(b) Savings Plan

Pre-tax contributions

Up to IRS Limits annually (2011 limit is $16,500)


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Contributions can be made in addition to the 403b contributions
No Emory Match
Participation is limited to those earning 25% more than the IRS highly
compensated threshold. (2011 limit is $137,500)
Catch up contributions permitted in last three years prior to Normal
Retirement Age (65).
No loans, no hardship withdrawals permitted.
Participant has 90 days from separation to make a one time irrevocable
decision on when to take a distribution. After 90 days the money will be
distributed in five equal installments over 5 years.
Resources
 Retirement Counseling
 Fidelity, TIAA CREF and Vanguard all offer on-site counseling and advice throughout
the year. Representatives can provide information on investing and diversification.
Sessions are provided at no cost and are conducted by salaried, not commission paid
individuals. Call or go online to schedule.
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Take Care – Discover Your Retirement Options
Quarterly Statements from vendors
Investment Performance Chart
Vendor web sites
Website Tour
http://www.hr.emory.edu/eu/benefits/index.html
Legal Notice
Emory reserves the right to terminate, suspend, withdraw, amend or
modify the Plan in whole or in part at any time. Further, Emory reserves
the right to terminate or modify coverage for any group of employees,
active or retired and their dependents or a class of dependents at any time.
Every effort has been made to depict accurate information. In the event a
discrepancy has been made, the Summary Plan Document (SPD) or
contract for fully insured products will prevail. SPD’s can be located online
or a printed version may be requested by contacting the Benefits
Department.
The Benefits Department is located at 1599 Clifton Road, NE. The main
line telephone is 404-727-7613. Hours of operation are Monday – Friday
from 8am to 5pm.
Closing

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You are responsible for your retirement savings
Elections and changes can be made at any time
Use the resources and tools available
If we can be of assistance, contact:
Benefits Office
1599 Clifton Road, 1st Floor
404-727-7613
www.hr.emory.edu/benefits
Questions & Feedback…