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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 University Medical Center 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. VUMC requires most former employees with balances less than $1,000 in the Vanderbilt University Medical Center 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.
  • 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 VUMC, 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).
  • VUMC 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

Withdrawal or distribution from Fidelity accounts:

  • You may apply for a withdrawal or distribution from your Fidelity account through the Fidelity NetBenefits website or by calling Fidelity at 1.800.343.0860. 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 VUMC Human Resources.

Withdrawal or distribution from TIAA-CREF or VALIC accounts:

  1. Contact the investment company that holds your account and request a Withdrawal/Distribution Form.
  2. Be sure to fill out the form completely. If you are married, your spouse must sign in the presence of a notary public.
  3. Mail the form to: VUMC Benefits Administration, 2525 West End Avenue, 5th Floor, Nashville, TN 37203. You can also deliver in person to: HR Express, 2525 West End Avenue, 2nd Floor, Nashville, TN 37203
  4. Benefits Administration will review the application and, if approved, send it to the appropriate investment company for processing within 2 business days of the date it is received in the Benefits Office. Incomplete applications will be returned to the participant via US postal mail to the address on file with Human Resources.

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-CREF 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 percent. 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 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:

  1. 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;
  2. Costs directly related to the purchase of a principal residence for the employee (excluding mortgage payments);
  3. 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;
  4. Payments necessary to prevent the eviction of the employee from the employee's principal residence or foreclosure on the mortgage of that residence;
  5. Funeral or burial expenses
  6. 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 and 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

  1. Call the Fidelity Retirement Service Center at 1.800.343.0860 to request a hardship withdrawal.
  2. If you are married, your spouse must sign in the presence of a notary public.
  3. 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 VUMC 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.

Limited balance (De Minimis) retirement plan distributions

The following information is for former employees with balances less than $1,000 in the Vanderbilt University Medical Center 403(b) Retirement Plan.

Vanderbilt University Medical Center requires most former employees with balances less than $1,000 in the Vanderbilt University Medical Center 403(b) Retirement Plan to roll their savings over to another plan or account, or take the balance as a distribution. This policy is designed to help you keep more of the money you’ve saved working for you; even if you are no longer actively employed at VUMC or making contributions, your account will be charged a quarterly recordkeeping fee by the plan’s administrative services provider. Combining these funds with other retirement savings may help you spend less in maintenance fees overall.

VUMC reviews plan balances of former employees annually to determine whether or not they meet this minimum requirement. This policy will not apply to you if:

  • you are an active employee with VUMC,
  • you are a former employee and have a total plan balance greater than $1,000.00, or
  • you are a former employee and have any balance remaining with one or both of the legacy retirement providers: TIAA-CREF or VALIC.

VUMC’s retirement plan administrative services provider, Fidelity Investments, will mail the first notices regarding these distributions in October of each year. If you do not take action, your balance will be cashed out in December, 60 days following the initial notification.* Because your account value may change, your account balance as of 3 p.m. CT (stock market close) on the date specified in the letter will determine whether your account will be cashed out or remain in the plan (if it exceeds the $1,000 minimum). It is not based on the account value when the letter was sent.

Example notification

Action steps

If you are notified you must take a distribution, you may choose to do one of the following within 60 days of the notification:

  • Roll over your balance to another qualified retirement plan, such as a new employer’s 401(k) or 403(b) plan,
  • Roll over your balance to an Individual Retirement Account (IRA),
  • Request a cash distribution.* If you do not take action by the deadline listed in your notification, this option will be selected by default for you and you will be sent a check for the balance of your account, minus applicable taxes and penalties.

* Taxes and/or penalties may apply. Review the letter carefully, consult your personal tax advisor, or contact Fidelity Investments for more information.

Quick Reference

Employment Status Vendor where account is held Plan Balance Action Needed
Terminated Fidelity only Less than $1,000
  1. Review letter.
  2. Contact Fidelity Investments for questions/action steps.
  3. Take action on your account.
Terminated Fidelity only $1,000 or more No action required
Terminated TIAA-CREF and/or VALIC, with or without a balance at Fidelity Any No action required
Active Any Any No action required

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