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More questions answered on retirement plan

Following is another in a series of question-and-answer articles about the changes in the MIT Retirement Plan.

Has MIT changed its matching contributions to the 401(k) Plan?

Although employees may now contribute 20 percent of pay up to a maximum of $10,000 to the MIT 401(k) Plan, the Institute will continue to match employees' contributions dollar-for-dollar up to 5 percent of pay.

How can I get help using 1-877-MIT-SAVE (1-877-648-7283)?

You will find that the MIT Retirement Self-Service Center is quite user-friendly, and provides meaningful guidance as users navigate the system. Should you require additional assistance, there are recorded help messages throughout the system. In addition, while using the system you may request the assistance of a customer service representative. The Benefits Office staff on campus and at Lincoln Laboratory is happy to assist if you should ever experience problems while using the phone system.

How can I find out how much I have in the 401(k) Plan?

The 1998 MIT Retirement Plan Statement of Benefits will be mailed to members of the plan by early March. After April 1, you can look forward to receiving 401(k) Plan statements quarterly, instead of annually. Statements of Benefits in the MIT Basic Plan will continue to be distributed annually.

Is it true that I now may contribute 20 percent of pay to the Supplemental 401(k) Plan?

Yes. Employees now may contribute up to 20 percent of pay to the Supplemental 401(k) Plan, but the contributions cannot exceed the IRS annual pre-tax contribution limit, which is $10,000 for 1999. Therefore, employees with a salaries of $50,000 or less may contribute up to 20 percent.

However, if you are also contributing to a TDA/403(b) account at MIT (or at another institution), you may have to stop your TDA/403(b) contributions if you elect to contribute the maximum to the 401(k) Plan. You can increase your 401(k) contributions and stop your MIT TDA/403(b) contributions by calling 1-877-MIT-SAVE (1-877-648-7283).

Can I take out a loan from the 401(k) Plan?

No, 401(k) loans are not available yet. However, later this year loans will be available. Loans will be repaid through payroll deduction, generally in regular payments over five years.

The maximum loan will be the lesser of $50,000 or 50 percent of your account balance. The Benefits Office will provide additional details on the 401(k) loan provision as they become available.

What is the difference between the 401(k) Plan and the TDA/403(b) Program?

Both are retirement savings and investment programs available at MIT. Employee contributions to both programs are made before taxes by salary reduction. Before retirement, both programs offer employees the same tax advantages. However, their investment options and contribution limits differ. MIT matches the first 5 percent of pay contributed to the 401(k) Plan, but does not match TDA/403(b) contributions.

A version of this article appeared in the January 27, 1999 issue of MIT Tech Talk (Volume 43, Number 17).

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