USC Retirement Savings Program
PAUSE ON USC CONTRIBUTIONS TO RETIREMENT ACCOUNTS
Due to the financial crisis brought on by the effect of COVID-19 on university operations, costs, and expenses, USC has announced a temporary pause on the university’s contributions to employee retirement accounts for most employees (see below) during calendar year 2021. The pause will not begin until January 1, 2021.
This pause does not affect Keck Medicine of USC employees. The university is developing a separate clinical financial plan to close gaps in the health system.
During the 2021 pause, your contributions will continue to be deducted from your paycheck unless you make a change through Workday. You can start, stop, or change your contributions at any time with changes effective the next pay period. Please remember the USC contribution does not count toward the IRS annual contribution limit (for example, for calendar year 2020, employees under 50 can contribute up to $19,500, and employees 50+ can contribute up to $26,000 to their 403(b) retirement accounts, via the basic 5% contribution plus any additional supplemental contributions).
All information below, except for the 2021 pause in USC contributions for affected employees, remains in effect.
USC is committed to supporting your retirement savings by making a 10% employer contribution when you contribute 5%, and to providing you with as many options as possible to maximize your retirement savings opportunities. And to build even higher income for your retirement years, you can make additional supplemental contributions. Your employment at USC is covered by Social Security, so Social Security benefits also may be part of your retirement income.
The USC Retirement Program matches your pre-tax or Roth contributions up to 5% of your eligible earnings. The university also makes a 5% non-elective contribution whether or not you contribute. This means that the university will make a total 10% contribution if you make a 5% employee contribution.
|You||USC Match 100% Vested||USC Non-Elective*||USC Total||Grand Total (You+USC)|
|*The USC non-elective contribution is subject to a four year graded vesting schedule (25% per credited year of service) for employees hired on or after January 1, 2012. You will earn a year of vesting credit for each calendar year in which you are credited with at least 1000 hours of service. Each year of vesting credit earns you 25% ownership in the non-elective portion of the USC contribution. The USC matching contribution, the portion that matches one-to-one your 1–5% contribution, is structured to meet the IRS 401(m) “safe harbor” criteria and is 100% vested at all times. (VESTING: An employee’s right to receive a present or future pension benefit is vested when it is no longer contingent upon the employee remaining in the service of the employer. Vesting of both employee and university contributions is immediate if you were hired before January 1, 2012.)|
Faculty and staff employees (who are at least 21 years of age) may enroll in the basic retirement plan and begin making contributions which will be matched by USC after completing one year of
employment regardless of the number of hours worked. Benefits will track your eligibility and notify you approximately 30 days prior to your eligibility start date. (Note: You may begin making
contributions to the supplemental retirement plan as soon as you become a university employee.)
You choose the percentage of your eligible earnings you want to contribute, and the university will match your contribution. Although the university encourages you to maximize your retirement savings and participate at the highest possible level, if you decide you are not able to contribute to your retirement plan, USC will still contribute 5% (the “non-elective contribution”—see chart, above).
Contributions are invested by your choice of investment providers from the selection offered by the university to manage the investment of the retirement plan contributions. Each provider offers a wide variety of investment options:
You can change your contribution level, your investment funds and your investment provider at any time—you do not have to wait for open enrollment. You also can transfer monies between providers and between investment funds at any time subject to limitations on the frequency and amount of transfers set by the investment and the investment providers.
Along with deciding the percentage you will contribute, you may also choose to have your contributions made before taxes are calculated, giving an immediate tax benefit, or as an after-tax Roth contribution which gives a future tax benefit providing you meet all the criteria when you withdraw the funds.
You also need to designate your beneficiaries.
If you do not enroll before you are eligible to participate, a retirement account will be established for you under the plan's default provisions—the 10% USC contribution/5% employee pre-tax contribution level and investment in the Vanguard Target Retirement Fund most appropriate for your estimated retirement age (assuming a retirement age of 65). However, you can change this default enrollment at any time, effective with the next pay period.
You may leave your money in the USC retirement plans after you terminate employment. You are not required to take money out of the account until the IRS requires you to do so at age 70½. The USC plan does not require taking the 70½ IRS-required minimum distribution from your retirement plan as long as you are still actively employed at USC; however if you do not take the required minimum distributions following termination, USC will direct the provider to automatically distribute a payment to you to meet this obligation. If you have retirement accounts from other employers or IRAs, you will need to check with those plans to determine when they will require you to take a minimum distribution. We suggest you contact your provider to discuss options and any possible restrictions.
Once you have left USC, contact your investment provider to discuss your options and request the applicable forms. After completing the forms and having your spouse's signature notarized (if applicable), submit the paperwork to Benefits (contact the HR Service Center for help). Benefits will forward the documents to your provider on your behalf. However, we recommend waiting one pay cycle from your termination date to start this process, to allow all final contributions to post to your account. Also, your withdrawal paperwork cannot be processed until Workday no longer shows you as active employee and specifies a termination date.
In some cases, funds may be accessed early - see our In-service distributions page for details.
Extensive information is available online from each of the participating investment providers. In addition, you can make an appointment with a retirement counselor from your investment provider to review your asset allocation, determine if you are saving enough to meet your retirement goals, and evaluate your distribution options at retirement. Appointments are available every month at both UPC and HSC. See the Retirement guidance page for details. If you need copies of any of the documents below, contact the HR Service Center.
USC Retirement Savings Program Summary Plan Description
Important Notice about the USC Retirement Savings Program 2020
Default Investment Notice for the USC Retirement Savings Program 2021
Authorization to release information
USC Tax Deferred Annuity Plan 2019 Summary Annual Report
USC Defined Contribution Retirement Plan 2019 Summary Annual Report
Support staff retirement plan documents
The Participant Fee Disclosure Notice, required by the Department of Labor, was developed to help ensure that participants (and also employees who are not participating or not yet eligible to participate) receive sufficient information regarding their plan and the investment options available to them.
USC has directed TIAA, one of the vendors available under the USC Retirement Savings Program, to collect this data from all of the vendors and present their information in a combined notice. This publication contains information that can help you make informed decisions about any account you may have in the retirement plan and includes:
- Fees and expenses related to plan accounts
- Participant rights under the plan
- Rules related to providing investment direction
- Details about the plan's investment options, including investment-related fees and restrictions
For most participants, this notice will be provided annually. The most recent disclosures:
If you have any questions regarding this notice, please contact the USC Retirement Administration Office at email@example.com.