Your Contributions to the Plans 

Your contributions, which are deducted from your paycheck, can be made on a pre-tax or Roth basis.  This allows you to choose the tax treatment that best supports your long-term goals.

Pre-tax contributions

Pre-tax contributions are tax-deferred, so you don’t pay taxes on the contributions, or on any investment earnings, until you take the money out of your account.

Example: Suppose your monthly pay is $4,000 and you contribute 5%. Your monthly contribution amount would be $200, but your net pay would be reduced by only $144 (at 28% tax bracket). Your tax savings is $56 per month, or $672 per year.

Roth contributions

Roth contributions are taken from your pay after taxes, but all earnings are tax-free if they are taken as a Qualified Distribution (you must be at least 59 ½ years of age, and you must have made your first Roth contribution to the plan at least five years ago).

 

Annual Limits on Employee Contributions

The Internal Revenue Service specifies annual limits for the maximum amounts you can contribute to the retirement plans in any calendar year.

  • Employee Contributions: Your combined pre-tax and Roth contributions (for the Matching and Supplemental plans combined) generally cannot exceed $18,000 in 2017.
  • “Catch-up” Contributions: If you turn 50 anytime during the year, you can contribute an additional $6,000 in 2017.

The IRS limits the amount of annual compensation that can be considered when calculating employer contributions. The Annual Compensation Limit for 2017 is $270,000.

 
Calendar YearAgeGeneral LimitCatch-Up Contribution*Maximum Annual Total*
2017Up to age 49$18,000N/A$18,000
 Age 50 or more$18,000$6,000$24,000

 

Penn’s Contributions

If you are eligible for the Basic and Matching Plans, Penn will begin making contributions to those plans after you complete “one year of service”. One year of service is defined as having worked 1,000 hours in your first year of employment, or in any calendar year after that.

Penn’s contributions are pre-tax.

Basic Contributions

Penn makes regular, automatic contributions to your Basic Plan account as long as you are eligible, regardless of whether you make your own contributions. These basic University contributions are a percentage of your base salary, according to your age as of January 1 of each year.

Penn’s match

If you make contributions to the Matching Plan, Penn will match your contributions dollar-for-dollar (subject to the IRS contribution limits discussed above).

Total Potential Contributions

Your AgeUniversity Basic ContributionMatching University ContributionTotal Potential University ContributionTotal Potential Employee + University Contribution
21 - 291.5%Dollar-for-dollar match on employee contributions up to 5%6.5%11.5%
30 - 39 3% 8%13%
40 or over4% 9%14%

Maximize Your Contributions

  • If you want to maximize your contributions, contact the Retirement Call Center at 877-PENN-RET (1-877-736-6738) for help in calculating how much you need to contribute.
  • If you stopped your contributions because you reached the maximum early in the calendar year, you’ll need to call 877-PENN-RET in early January of the following year to have your contributions restored. To ensure your contributions will restart in time for your January pay, please call in the first two weeks of January.

Contact Us

Retirement Call Center
(877) 736-6738