Contributions to the Plans

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Determining Your Contribution Amount

You can use this conversion table to estimate the dollar amount of contributions for any percentage between 1% and 5%.

Choose How To Contribute

You can make contributions from your paycheck on a pre-tax or Roth basis, depending on the tax treatment that best fits your goals.

Pre-tax contributions
These are deducted before taxes, so you don’t pay taxes on the contributions or their investment earnings until you withdraw the money.

Example: If you earn $4,000 per month and contribute 5%, $200 goes into the plan, but your take-home pay drops by only $144 (assuming a 28% tax rate), saving you $56 per month or $672 per year.

Roth contributions
These are made after taxes, but all earnings can be withdrawn tax-free as a Qualified Distribution—if you’re at least 59½ and have held Roth contributions in the plan for at least five years.

    Annual Limits on Contributions

    The Internal Revenue Service sets annual limits on the maximum amount you can contribute to the retirement plans each calendar year. Please see the table below for the current limits.

    Limits on Retirement Plan Contributions
    Contribution Type 2025 2026
    Elective employee contributions, ages 49 and below $23,500 $24,500
    Elective employee contributions, ages 50-59 and 64 and above $31,000 $32,500
    Elective employee contributions, ages 60-63* $34,750 $35,750
    Annual compensation limit for employer contributions** $350,000 $360,000
    *In 2025, Penn's retirement savings plan adopted the new super catch-up permitted by the IRS for employees ages 60-63.
    **The IRS limits the amount of annual compensation that can be considered when calculating employer contributions. For 2025, the annual compensation limit is $350,000.

    Excess Deferrals

    Although Penn's payroll system stops your contributions once they reach the annual IRS limit, you may still have excess deferrals if you also contributed to another employer's retirement plan in the same year. If this occurs, you must request a corrective distribution of the excess. You can learn more about excess deferrals and how to request a corrective distribution here.

    Penn's Contributions

    If you are eligible for the Basic and Matching Plans, Penn makes employer contributions to those plans for you. Penn’s contributions are pre-tax.

    Basic Contributions

    Penn makes regular, automatic contributions to your Basic Plan account as long as you are eligible, even if you do not make your own contributions. These basic University contributions are calculated as a percentage of your base salary based your age as of January 1 each year.

    University Match Contributions

    If you contribute to the Matching Plan, Penn will match your contributions dollar for dollar, up to the IRS contribution limits.

     

    Total Potential Contributions
    Your Age University Basic Contribution University Match Contribution Total Potential University Contribution Total Potential Employee + University Contribution
    21-29 2.5% Dollar-for-dollar match on employee contributions up to 5% 7.5% 12.5%
    30-39 4% " 9% 14%
    40 or over 5% " 10% 15%

    If Your Contributions Reach a Limit Early

    You may reach an IRS or Plan contribution limit earlier than expected if your Supplemental Plan contributions outpace your Matching Plan contributions. This can occur, for example, when your pay changes (such as a salary increase, other pay adjustment, or a summer research position) and you don’t adjust your salary deferral agreement accordingly. The Plan does not allow refunds when an employee reaches a contribution maximum early. The Plan is governed by its legally binding Plan Document and is audited to ensure compliance.

    Once your contributions reach an IRS or Plan limit, the payroll system will stop the relevant contributions for the remainder of the year. Contributions will resume the following year based on your existing salary deferral agreement at the time the contributions were stopped, unless you update your agreement before contributions restart.

    To change your salary deferral agreement, please follow these steps:

    1. Go to Penn's Saving for Retirement webpage. In the blue 'Enroll or Make Changes' box, click on the TIAA.org link to be taken to your TIAA account webpage.
    2. Select Accounts, then in the drop down under Quick Links select Manage Contributions.
    3. Select Manage Contributions again (next to your UPenn accounts).
    4. Select Manage Contributions.
    5. Follow the steps to set your contribution percentage.

    If you have any difficulties navigating the webpages, please call the TIAA Retirement Call Center at 877-736-6738.