The Central Peninsula Hospital Retirement Plan is a 403(b) Plan that consists of both participant and Hospital Contributions made on behalf of eligible employees. Please see the Plan's Summary Plan Description for more detailed information.
Contributions
Elective Contributions
All active employees, except those whose contribution would be less than $200 a year, have the option of making pre-tax savings contributions and/or after-tax Roth contributions to the Plan through payroll deduction.
The Internal Revenue Service (IRS) limits annual contributions to the lesser of the dollar amount shown below or 100% of includible compensation.
Catch-up Contributions
A participant may be able to take advantage of two catch-ups:
- 15-year catch-up. Available to certain employees who have at least 15 years of service with the Hospital and who have under-contributed in the past. If you are eligible for the catch-up, you may be able to defer up to an additional $3,000 per year, (up to cumulatively $15,000 over your lifetime) beyond the general elective deferral limit. A calculation is necessary to determine whether you can use this catch-up. For more information, please contact your local Voya Financial Professional who will, upon request, perform this calculation for you.
- Age 50+ catch-up. If you have reached age 50 by the end of the calendar year, you may defer an additional amount each year as shown below.
However, if you are eligible for both catch-ups in the same year, you must first use any amounts available under the 15-year catch-up before using the age 50+ catch-up.
You may stop making your pre-tax savings and/or Roth contributions at any time, and you may elect to recommence your contributions, or to increase or decrease the amount of your contributions, at any time by completing an Authorization for Payroll Deduction/Reduction Form and submitting it to your Human Resources Department prior to the effective date of such change.
Eligibility
To be eligible to participate in the employer contributions portion of the Plan, you must be at least 21 years old and completed a year of service with the Hospital.
If you complete at least one hour of service during the year, the Hospital will match 100% of your before-tax and Roth contributions, including any catch-up contributions, up to 3% of compensation. In addition, if you complete at least one hour of service during the year, the Hospital may choose to make discretionary employer contributions to your account.
Vesting
Elective Contributions: You are always 100% vested in your pre-tax and Roth contributions.
Employer Contributions: You become vested in your employer contributions in accordance with the following schedule:
| Years of Service Completed | Vested Percentage |
|---|---|
| 1 | 20 |
| 2 | 40 |
| 3 | 60 |
| 4 | 80 |
| 5 or more | 100 |
However, you will become fully vested without regard to the number of year of service completed if you die, become disabled or attain Early Retirement Age (age 55) while employed by the Hospital.
Withdrawals
Withdrawals are allowed only upon the following triggering events:
- Financial Hardship
- Attainment of age 62
- Severance from employment
- Disability (as defined by the IRS)
- Death
In-Service Withdrawals
Hardship Withdrawals
If you experience severe hardship for which other personal funds are not available, the Plan will allow you to withdraw the amount which you need for that emergency, provided that you obtain the consent of your spouse, if applicable, and you have available funds in the money sources that can be accessed for hardship withdrawals.
The maximum hardship withdrawal is limited to the amount in your account consisting of employee elective pre-tax savings (exclusive of earnings on such contributions). You may not withdraw Roth contributions, rollover contributions or employer contributions on account of hardship.
Hardship withdrawals will be allowed for:
- Costs directly related to the purchase of your primary residence (excluding mortgage payments).
- Unreimbursed medical expenses for you, your spouse or your dependent or unreimbursed expenses that are necessary so that you, your spouse or dependent could obtain medical care.
- Tuition, education fees, and room and board expenses for the next twelve months of post-secondary education for you, your spouse or your dependent.
- Amounts necessary to prevent your eviction from your primary residence or to prevent foreclosure on your primary residence.
- Payments for burial or funeral expenses for your deceased parent, spouse, child or other dependent.
- Expenses for the repair of damage to your primary residence that would qualify for a casualty deduction under the Internal Revenue Code (IRC).
Hardship withdrawals may not be paid back to the Plan. You will have to pay current income taxes on amounts you withdraw, and an IRS 10% premature distribution penalty tax for withdrawals prior to age 59½, unless an IRS exception applies.
To qualify for a hardship withdrawal, you will be required to:
- Provide documented proof of the hardship on an application form provided by the Plan Administrator;
- Obtain the consent of your spouse if you are married;
- Upon receipt of the hardship withdrawal, suspend your right to make elective contributions for six months; and
- Borrow the maximum amount available to you under the Plan’s loan provisions.
Death Benefit
Upon your death, your beneficiary will be entitled to receive the full value of your account under the Plan as a death benefit. If you are married at the time of your death, your spouse will be entitled to 50% of the death benefit, unless you designate another beneficiary and your spouse has consented to that designation. You may designate a non-spouse beneficiary to receive the remaining 50% of your vested death benefit without your spouse’s consent. Benefits will be paid to your beneficiary as s/he chooses. The default form of payment to your spouse is a survivor annuity providing monthly payments to your spouse for his/her lifetime.
Required Minimum Distributions (RMDs)
You are required by the IRS to begin distributions no later than April 1st following the calendar year in which you attain age 73 or retire, whichever occurs later.
Taxation
Pre-tax Contributions:
- Contributions and earnings in the pre-tax portion of your account are subject to Federal and State (if applicable) income taxes when distributed to you. Federal income tax withholding will apply to your distributions, as described below, based on whether they are eligible to be rolled over.
- If you receive a distribution that is eligible to be rolled over, a mandatory 20% will be withheld for Federal tax.
- If you receive a distribution that is not eligible to be rolled over, 10% for Federal tax will be withheld; however, you may elect to have no taxes withheld.
Amounts distributed from the Plan are subject to the IRS 10% premature distribution penalty tax if distributed prior to your attaining age 59½, unless an IRS exception applies.
IRS exceptions to the 10% premature distribution penalty tax include distributions made:
- To your beneficiary as a result of your death;
- Upon your severance from employment or retirement in the year that you are at least age 55;
- In substantially equal amounts over your life/life expectancy;
- As a result of your total and permanent disability;
- Payments made under a qualified domestic relations order (QDRO);
- For qualified medical expenses greater than 10% of your adjusted gross income;
- Due to a Federal tax levy; or
- For a qualified reservist distribution.
Roth Contributions:
For your Roth contributions, you pay taxes upfront – at your current income tax rate rather than later at whatever your tax rate would be when you retire. Distributions from the Roth portion of your account will be tax-free for Federal income tax purposes (check the State tax rules in your own State) only if you have met the IRS’ five-year holding period requirement and the distribution is due to:
- Attainment of age 59½,
- Disability (as defined by the IRC), or
- Death
Note: Distributions from the Roth contributions are subject to taxation, and potentially the IRS 10% premature distribution penalty tax, on the portion attributable to earnings if made before the above requirements for a qualified distribution are satisfied.
Loans
Loans are available to all active employees enrolled in the Plan or former employees who still have an account balance under the Plan. The Plan allows two outstanding loans at any time. In general, loans are available for a maximum term of five years. However, if you use the loan to purchase your primary residence, loans are available for a maximum of 20 years.
The minimum loan amount is $1,000. The maximum loan amount is the lesser of:$50,000 reduced by the greater of (i) the highest outstanding balance on any loan from the Plan during the 1-year period ending on the day before the date the loan is made, or (ii) the outstanding balance on loans from the Plan on the date on which the loan is made; or. 50% of your vested account balance (as of the valuation date immediately preceding the date on which the loan is approved).
Your entire account balance (not including any Roth contributions) is used to determine the amount available to borrow; however, you may only take a loan from your pre-tax contributions from your rollover or contract exchange account or employee pre-tax contributions.
If you are married, your spouse must consent to your loan request.
Please note: loans will reduce your account balance, may impact your withdrawal value and limit participation in future growth potential. Other restrictions may apply.