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403(b) and 457(b) Plans

Ways to Save More

The 403(b) and 457(b) Plans offer additional ways to save for the future. You can contribute to one or both plans in addition to your participation in either the TRS PlanORP, or ERS

If you want to boost your retirement savings, consider contributing to the 403(b) Plan or 457(b) Plan, or both. These plans provide options for deferring pre-tax and after-tax income for retirement saving. 

All exempt employees and nonexempt employees (except for student workers) may enroll in the 403(b) Plan and/or 457(b) Plan at any time during employment. For more information, review the Universal Availability Notice.

How the 403(b) and 457(b) Plans Work

The 403(b) Plan and 457(b) Plan are supplemental retirement plans that allow you to save up to the IRS limits for additional savings. The balance you’ll have at retirement is determined by your contributions, plus accumulated earnings on those amounts. The plans generally work the same; the major difference is in how the plans consider and penalize withdrawals.

 Watch a video that describes the differences.  To learn more, review the following Plans at a Glance information


  • Plans at a Glance
    Feature403(b) Plan457(b) Governmental Plan
    Details of plan403(b) Plan User Guide457(b) Plan User Guide 
    Eligibility All exempt employees and nonexempt employees (except for student workers) may enroll at any time during employment. All exempt employees and nonexempt employees (except for student workers) may enroll at any time during employment.
    2021 contribution limits

     $19,500

    Additional $6,500 if you’re age 50 or over

     $19,500

    Additional $6,500 if you’re age 50 or over

    Investment options To learn more about your investment options, go to OneUsgConnect. Click Research Your Investments within Retirement@Work. To learn more about your investment options, go to OneUsgConnect. Click Research Your Investments within Retirement@Work.
    Benefit at retirement Account balance accumulated at the time of retirement. Account balance accumulated at the time of retirement.
    Vesting You are immediately 100% vested in your contributions plus any investment earnings (you retain immediate ownership interest). You are immediately 100% vested in your contributions plus any investment earnings (you retain immediate ownership interest).
    Loans

    Loans are permitted.

    You can have two loans outstanding at a time, a general purpose loan, where loan proceeds are not for a principal residence; and a residential loan, where loan proceeds are used to purchase your principal place of residence.

    Loans are permitted.

    You can have two loans outstanding at a time, a general purpose loan, where loan proceeds are not for a principal residence; and a residential loan, where loan proceeds are used to purchase your principal place of residence.

    Withdrawals
    • Withdrawals are permitted after a distributable event occurs (e.g., retirement, death, disability, severance from employment)
    • In-service withdrawals are allowed at age 59½
    • If you’re no longer working for USG, you must begin receiving distributions by April 1 following the later of year of retirement or attainment of age 70½, if you were born on or before July 1, 1949, or age 72, if you were born after July 1, 1949
    • Hardship withdrawals are permitted
    • Early withdrawals before age 59½ are subject to a 10% penalty tax
    • In-service withdrawals after age 59½ can be used for TRS  service purchase
    • Withdrawals are permitted after you’re no longer working for USG
    • If you’re no longer working for USG, you must begin receiving distributions by April 1 following the later of year of retirement or attainment of age 70½, if you were born on or before July 1, 1949; or age 72, if you were born after July 1, 1949
    • Distributions for unforeseen emergencies are permitted
    • Early withdrawals before age 59½ are not subject to the 10% penalty tax
    • In-service withdrawals after age 59½ can be used for TRS service purchase
    • In-service withdrawals are allowed at age 59½
    Rollovers/transfers Rollovers and transfers permitted from any eligible retirement plan, including 401(k)s and IRAs. Rollovers and transfers permitted from any eligible retirement plan, including 401(k)s and IRAs.

Choose pre-tax or after-tax contributions

You can set aside money by contributing pre- and/or after-tax monies from your pay.

  • Pre-tax contributions lower your taxable income and could reduce your current income taxes. With pre-tax contributions, you defer taxes on interest and earnings until you withdraw your money. You’ll pay taxes when you withdraw money from your account, and federal withdrawal restrictions apply.
  • After-tax contributions to a Roth account mean that you’ll pay income taxes on your contributions now, but qualified distributions from a Roth account are tax-free. Generally, a qualified Roth distribution is a distribution that is withdrawn after the end of the five-year period beginning with the first year in which a Roth contribution was made to the plan, and is withdrawn after age 59½ or due to death or disability.
  • Investing Your Account Balances

    USG has partnered with the following three retirement plan provider(s) to manage your 403(b) and/or 457(b) accounts and offer the plan’s investment choices:

    • AIG Retirement Services
    • Fidelity Investments
    • TIAA

    You can allocate your contributions to one or more of these retirement plan providers.

    Each of these providers offers USG’s enhanced, four-tiered investment menu, featuring a wide array of fund options, interactive financial planning tools and high-quality customer service to help you create a diversified retirement portfolio. To learn more about your investment options, go to OneUsgConnect. Click Research Your Investments within Retirement@Work.

How to Enroll

Enroll at OneUSGConnect.usg.edu, click the Retirement@Work link in the Manage My Benefits section, and follow the prompts to complete your enrollment.

  1. If you want to contribute to one or both voluntary plans, choose how much you’d like to contribute per pay period as a dollar amount, percentage, or the maximum contribution amount; then indicate when you want contributions to start.
  2. If you don’t want to contribute to either voluntary plan, click on the link in the blue box Continue to ORP vendor selection without additional contributions.
  3. Choose if you want to direct all contribution types (pre-tax and Roth) to the same investment provider(s). Then enter the amount that should go to each provider.
  4. Open an account with the investment provider(s) you selected and choose your investments to complete the enrollment process.

More About Your Brokerage Options

For experienced investors seeking maximum flexibility, USG offers a self-directed brokerage option that allows you to select from a wide array of mutual funds, individual stocks and Exchange-traded funds (ETFs) for employee contributions. The self-directed brokerage options vary by plan and retirement plan provider, so be sure to check with the retirement plan provider that you select to learn what investment options are available. You can use this feature to add diversification above and beyond USG’s core investment offerings.

Review these brokerage guides: