Withdrawals and Distributions
Each participant is entitled to receive Retirement Benefits under the options and subject to the conditions set forth in their respective contracts and applicable Laws and Regulations.
The following is a list of eligible withdrawals and distributions:
- Faculty and staff who have terminated employment with Vanderbilt can process withdrawals and distributions against their retirement account. You are responsible for paying applicable penalties (and income taxes for pre-tax contributions) on the withdrawal amount. Effective October 15, 2015, Vanderbilt requires most former employees with balances less than $1,000 in the Vanderbilt University 403(b) Retirement Plan to roll their savings over to another plan or account, or take the balance as a distribution. Click here to learn more.
- Faculty and staff who have reached the age of 59½ can process withdrawals against their retirement account. You are responsible for paying applicable penalties (and income taxes for pre-tax contributions) on the withdrawal amount. For more information on your options and things to consider, click here.
- Current faculty and staff may apply for a loan from their Fidelity account (not legacy TIAA or VALIC accounts). Loans are limited to your voluntary pre-tax contributions.
- Faculty and staff working at Vanderbilt, and under the age of 59½, are not permitted to take withdrawals from the Retirement Plan except in the case of a financial hardship as defined by the Internal Revenue Service. There are special rules and documentation requirements to process a Financial Hardship Withdrawal (see below for more information).
- Vanderbilt does not have a mandatory retirement age. However, benefits must commence for a participant under the plan, if he or she has retired, no later than April 1 following the end of the calendar year in which he or she reached age 70½. Other distributions may be made according to the terms of the retirement plan document.
The Withdrawal or Distribution Process
You may apply for a withdrawal or distribution from your Fidelity account through the Fidelity NetBenefits website at www.netbenefits.com/Vanderbilt or by calling Fidelity at 800.343.0860. Any forms that are required will be mailed to you from Fidelity and should be returned directly to Fidelity. Do not mail your Fidelity forms to Vanderbilt Human Resources.
Contact the investment company that holds your account and request a Withdrawal/Distribution Form.
TIAA/Valic (AIG) will provide guidance on how to complete your request via their online portal.
Once the forms are uploaded to their portal, the VU Benefits team will review and provide approval/denial.
How to Apply for a Loan
Current faculty and staff who are a participant in the Plan, are eligible to take a loan against their voluntary, pre-tax account balance held at Fidelity (loans are not available from legacy accounts with TIAA or VALIC). You may apply for a loan by calling Fidelity at 800.343.0860. Your application will specify the amount you wish to borrow and the duration of the loan, in whole months. If you are married, spousal consent is required.
Before requesting a loan, you should be aware of the general provisions of the loan program:
- You can have only one outstanding loan at any time.
- The minimum amount you can request is $1,000.
- You may not borrow more than 50% of your total balance in your Plan accounts (or $50,000, whichever is less) reduced by your highest outstanding loan balance(s) during the one-year period ending on the day before your new loan is made.
- The interest rate is the prime rate plus 1% The prime rate is determined using the rate published by Reuters and is updated quarterly.
- The term for repayment of the loan may not exceed 5 years (15 years for Home Loans), unless the loan is extended due to a leave of absence for military service.
- A $75.00 non-refundable loan application fee will be withdrawn from your account each time a loan is issued to you. A $25 loan maintenance fee ($6.25 per quarter) will also apply to each loan.
- Loan repayments must be made monthly on a level repayment schedule through ACH debit from your bank account.
To learn more about or request a loan, log on to Fidelity NetBenefits at www.netbenefits.com/vanderbilt or call the Fidelity Retirement Service Center at 1.800.343.0860.
Financial Hardship Withdrawals
Withdrawal of retirement benefits before termination of employment may be requested by the employee only on voluntary contributions (formerly basic and supplemental) and only in the case of a financial hardship, generally defined by the Internal Revenue Service as:
- Expenses for medical care previously incurred by the employee, the employee's spouse, or any dependents of the employee or necessary for these persons to obtain medical care;
- Costs directly related to the purchase of a principal residence for the employee (excluding mortgage payments);
- Payment of tuition, related educational fees, and room and board expenses, for the next 12 months of post-secondary education for the employee, or the employee's spouse, children or dependents;
- Payments necessary to prevent the eviction of the employee from the employee's principal residence or foreclosure on the mortgage of that residence;
- Funeral or burial expenses for a deceased parent, spouse, child or dependent.
- Expenses relating to major natural catastrophes qualifying for Code Sec. 165 casualty deduction.
Hardship withdrawals are limited to two per calendar year and can only be taken from assets held in accounts at Fidelity. Participants should call the Fidelity Retirement Service Center at 1.800.343.0860 to request a hardship withdrawal. Participants must submit appropriate supporting documentation to Fidelity prior to being approved to receive a hardship distribution. If the distribution is approved, a suspension of the participant’s voluntary contributions (and any associated match) will be implemented for a minimum of six months. The participant may choose to participate in the voluntary portion after their six-month suspension ends by logging on to NetBenefits making a voluntary contribution election.
Hardship withdrawals are subject to the terms of the applicable custodial agreement. Hardship withdrawals will be considered taxable income and are subject to a 10% penalty plus any applicable taxes.
Financial Hardship Withdrawal Process
- Call the Fidelity Retirement Service Center at 1.800.343.0860 to request a hardship withdrawal.
- If you are married, your spouse must sign in the presence of a notary public.
- Mail completed forms and copies of your supporting documentation directly to Fidelity at the address on the form. Do not mail your Fidelity forms to Vanderbilt Human Resources.
Note: The Office of Benefits Administration no longer handles hardship distribution or loan request forms. Mail these forms directly to Fidelity to the address on the form.