WEBVTT Kind: captions Language: en 00:00:00.299 --> 00:00:01.299 Congratulations! 00:00:01.299 --> 00:00:07.700 You’re now part of an Iowa community college and that means you have a choice of retirement plans. 00:00:07.700 --> 00:00:13.090 This video will explain the difference between your two options: the Defined Benefit program, 00:00:13.090 --> 00:00:17.000 called Iowa Public Employees’ Retirement System, or IPERS, 00:00:17.000 --> 00:00:22.650 and the IACCT Defined Contribution Retirement Plan, administered by TIAA. 00:00:22.650 --> 00:00:26.400 As a newly eligible employee, you have 60 days from your eligibility date 00:00:26.400 --> 00:00:29.319 to decide which plan is best for you. 00:00:29.320 --> 00:00:33.620 If you don’t make the decision yourself, you will be automatically enrolled in IPERS. 00:00:33.620 --> 00:00:37.600 Once you are in IPERS, that decision is irrevocable, meaning you can 00:00:37.600 --> 00:00:40.600 never switch to the IACCT TIAA plan. 00:00:40.600 --> 00:00:46.100 Because the decision you make cannot be changed, it’s important to understand the difference now. 00:00:46.179 --> 00:00:49.800 Both plans are sound financial options for saving for your retirement, 00:00:49.800 --> 00:00:52.000 but they do have differences. 00:00:52.000 --> 00:00:55.350 Only you can decide which one is best for you. 00:00:55.350 --> 00:01:00.429 IPERS is a defined benefit plan, meaning the amount of money you’ll receive in retirement 00:01:00.429 --> 00:01:03.800 will be a fixed amount determined by the number of years you’ve worked, 00:01:03.800 --> 00:01:06.390 how much you’ve earned and your retirement age. 00:01:06.390 --> 00:01:10.200 This gives you a predictable, secure level of income for life in the form of 00:01:10.200 --> 00:01:13.070 a monthly annuity payment once you retire. 00:01:13.070 --> 00:01:15.370 Your employer contributes to IPERS. 00:01:15.370 --> 00:01:18.640 You will also make an ongoing contribution to the plan. 00:01:18.640 --> 00:01:22.640 Your contributions are deducted from your pay on a pretax basis. 00:01:22.640 --> 00:01:27.210 All the investment choices are handled by IPERS, and investment returns do not affect 00:01:27.210 --> 00:01:29.640 the amount you get in retirement. 00:01:29.640 --> 00:01:35.000 These plans reward your long-term service to your community college and may be a good option, 00:01:35.000 --> 00:01:37.670 but there is an important thing to consider: 00:01:37.670 --> 00:01:41.100 The contributions made by the community college don’t become “vested”— 00:01:41.100 --> 00:01:48.820 or belong to you—until after seven years of employment, or at age 65 and contributing to IPERS. 00:01:48.820 --> 00:01:53.780 That means if you stop working at the community college before vesting, you will not be eligible 00:01:53.780 --> 00:01:59.310 for a pension benefit and will receive only the contributions made by you, plus interest. 00:01:59.310 --> 00:02:02.750 That’s potentially a lot of money to give up. 00:02:02.750 --> 00:02:09.500 The IACCT Defined Contribution Retirement Plan is a 403(a) plan administered by TIAA, 00:02:09.500 --> 00:02:13.750 meaning the amount of money you’ll receive at retirement will depend on how much is contributed 00:02:13.750 --> 00:02:17.400 to the plan over the years, the performance of your investments, 00:02:17.400 --> 00:02:20.760 and the income options chosen at retirement. 00:02:20.760 --> 00:02:24.500 Your employer will contribute to the IACCT TIAA plan. 00:02:24.500 --> 00:02:27.700 You will also make an ongoing contribution to the plan. 00:02:27.700 --> 00:02:32.020 Your contributions are deducted from your pay on a pretax basis. 00:02:32.020 --> 00:02:36.500 Once you stop working at the community college, you can keep all of your own contributions, 00:02:36.500 --> 00:02:40.440 plus earnings, and the employer’s contributions and earnings. 00:02:40.440 --> 00:02:44.600 This means you are always 100% vested in the IACCT TIAA plan, 00:02:44.600 --> 00:02:47.470 and the entire balance belongs to you. 00:02:47.470 --> 00:02:52.600 With the IACCT TIAA Plan, you have the ability to choose your own investments 00:02:52.600 --> 00:02:58.430 to reflect your lifestyle and goals, including a variety of options and fixed or variable annuities 00:02:58.430 --> 00:03:02.060 that can still supply guaranteed lifetime income. 00:03:02.060 --> 00:03:07.350 Choosing between IPERS and the IACCT TIAA Plan is an important, irrevocable decision. 00:03:07.350 --> 00:03:12.060 In a nutshell: Both plans include employer and employee contributions. 00:03:12.060 --> 00:03:15.800 You are able to keep your contributions and associated earnings 00:03:15.800 --> 00:03:18.959 if you’re no longer employed by the community college. 00:03:18.959 --> 00:03:23.340 Both allow you to own the plan benefit too, but in the case of IPERS, only if you have 00:03:23.340 --> 00:03:29.300 seven years or more of employment, or if you are age 65 and contributing to IPERS. 00:03:29.300 --> 00:03:33.209 Both plans give you the ability to leave assets to your beneficiaries. 00:03:33.209 --> 00:03:37.000 For IPERS, this is based on income options you selected. 00:03:37.000 --> 00:03:42.240 Both plans offer fixed income in retirement that is not subject to market fluctuations, 00:03:42.240 --> 00:03:48.090 while the IACCT TIAA Plan also offers variable income based on the performance of your investments. 00:03:48.090 --> 00:03:54.600 The IACCT TIAA Plan also gives you a range of investments that suit your lifestyle and goals. 00:03:54.600 --> 00:03:58.800 While you may just be starting a new job, someday you’ll be retiring, too, 00:03:58.800 --> 00:04:01.959 so make the choice that’s right for you. 00:04:01.959 --> 00:04:06.000 If you need help deciding, contact TIAA or IPERS.