If you have money in a prior employer’s retirement plan, you may want to consider rolling that money into your current retirement account at Penn.
A rollover is a tax-advantaged transaction in which you move money from one retirement plan to another. Rather than cashing out your account and incurring income tax and possibly a 10% early withdrawal penalty, you can do a direct rollover and avoid both. That could have a major impact on your lifetime effort to save for retirement.
Rollover Contributions to a Penn Retirement Plan
If you are an active Penn employee, you can make a rollover contribution to one of Penn’s retirement plans from the following retirement plan types: 403(b), 401(k), 401(a), governmental 457(b), non-contributory IRA (must contain rollover money only, no out-of-pocket contributions), and lump-sum payouts from a pension plan (which must be done within 60 days of receiving the payment). Only pre-tax and Roth money can be rolled into Penn’s plans, not after-tax money.
It is generally most advantageous to make rollover contributions to Penn's SRA Plan, because that plan allows in-service withdrawals earlier (age 59 ½, rather than age 70 ½ for the Basic and Matching Plans), as well as loans and hardship withdrawals.
Rollover Distributions from Penn’s Retirement Plans
Once you leave Penn or become eligible for a distribution*, you can do a rollover distribution from Penn’s retirement plans to your new employer’s retirement plan (assuming it accepts rollover contributions) or an IRA. See the Accessing Your Plan Money page for more details.
*Hardship withdrawals cannot be rolled over.
Rollovers Between Penn and UPHS' Retirement Plans
Because UPHS (and all their affiliates) are part of the University of Pennsylvania, regulations affect when money can be rolled over between their respective retirement plans. If you're an active employee of either Penn or UPHS (or one of their affiliates), regulations do not permit rollovers between their Plans. Once you're separated from service from all University of Pennsylvania affiliates, you are then permitted to do rollovers between Penn and UPHS' Plans.
How to Initiate a Rollover
To initiate a rollover contribution into Penn's plan, or a rollover distribution out of Penn's plan, contact the TIAA Retirement Call Center at 877-736-6738.
New Plan, New Rules
When you do a rollover, the money becomes subject to the rules of the new plan. For example, the new plan might have more restrictive distribution options than the former employer’s plan. Some plans, however, might have options specific to rollover contributions. Compare the plans and be sure to understand any relevant differences. If anything is unclear, ask the investment company that will receive the money to clarify it for you.
The Roth Begin Date
Any Roth money that is rolled over retains the old plan’s “Roth Begin Date.” However, the earnings on that money from that point forward will get a new Roth Begin Date based on the rollover date. The Roth Begin Date is used to determine when you satisfy the 5-year requirement for a Qualified Distribution of your Roth money.
Help Is Available
If you would like help comparing plans when considering a rollover, TIAA's retirement plan counselors are available. Make an appointment online or by phone at 800-732-8353.