Otterbein University offers the opportunity for employees to plan for their long-term security through its 403(b) defined contribution retirement program.
The University currently makes available to all qualified employees, a retirement program administered by the Teacher Insurance Annuity Association and University Retirement Equities Fund (TIAA-CREF).
As part of its comprehensive compensation package, the University will contribute to a retirement fund for eligible participants. The University contributes 5% of base pay effective the first of the month after hire and 10% after ten years of service. There is no matching requirement by the employee, and employees are immediately and 100% vested (ownership) of both the University’s contributions and his/her own contributions.
Employee Pre-Tax Contributions
Upon hire, eligible employees are given the opportunity to make their own pre-tax contributions up to the maximum amount allowed by IRS regulations. While the University’s 5% and 10% contributions are generous, they are not sufficient on their own to provide the amount of retirement income that most individuals will need. The University strongly encourages employees to contribute as much as they can since this is a defined contribution plan, which generally pays off in relationship to how much and how soon in a career that money was contributed.
In addition to 403(b) savings, the employee and the University each pay taxes for Social Security and Medicare. Social Security tax is withheld from employees’ wages at a rate of 6.2%. Medicare is withheld at a rate of 1.45%. These are added together and referred to as FICA (Federal Insurance Contributions Act) payroll taxes. Automatic deductions are made from each employee’s paycheck and the required contribution is made by the University.
Social Security pays benefits when you retire at age 62 or over, becomes disabled, or die, if eligibility requirements are met. Medicare is a federal health insurance program for persons age 65 and over, and certain disabled persons. It generally has two parts - hospital insurance and medical insurance.
For more information about social security, go to www.ssa.gov. For more information about Medicare, go to www.medicare.gov. Download the 403b Plan Summary Plan Description.