Dear Colleagues,

I’m pleased to provide information and guidance on the reinstatement of the University’s retirement matching contributions. President Burwell announced on Tuesday, May 18, 2021 that in recognition of faculty and staff achievements and sacrifices during the past year, the university will restart the 2-to-1 retirement matching contributions effective July 1, 2021, a month ahead of schedule. This includes the automatic enrollment and automatic contribution features to the American University 403(b) Retirement Plan effective July 1, 2021.

If you are currently enrolled in the Retirement Plan and are eligible, or became eligible, for the retirement matching contributions since August 1, 2020

The university will automatically match 2-to-1 of the first five percent (5%) of your contributions.

• Faculty and staff paid monthly will receive their AU contributions to the Retirement Plan beginning in their July 30, 2021 paycheck.
• Faculty and staff paid bi-weekly will receive their contributions to the Retirement Plan beginning in their July 23, 2021 paycheck.

If you are currently not enrolled in the Retirement Plan but became eligible for matching contributions since August 1, 2020

The university will automatically enroll you in the American University Retirement Plan and the Plan will deduct 1% of your pay and match that 1% with an additional 2% if you were hired after May 1, 2008. These contributions will be defaulted to an account with Fidelity Investments and invested in a Vanguard Institutional Target Retirement Fund with the target retirement date closest to the year you might retire, based on your current age and assuming a retirement age of 65. You can change your investment option or service provider at any time. You may also opt out of this automatic enrollment by following the enrollment instructions below and selecting 0% as your payroll contribution amount.

• Faculty and staff paid monthly will receive their AU contributions to the Retirement Plan beginning in their July 30, 2021 paycheck.
• Faculty and staff paid bi-weekly will receive their contributions to the Retirement Plan beginning in their July 23, 2021 paycheck.

You can find additional information about AU’s retirement plan in the Faculty and Staff Benefits Manual and AU Retirement Summary Plan Description.

Eligibility for AU’s 2-to-1 Match on Contributions

You are eligible to receive the 2-to-1 matching contributions if you have worked at AU for 12 months and are normally scheduled to work at least 20 hours per week for at least 1,000 hours per year. The first five percent (5%) of your contributions are matched 2-to-1 by the university once you become eligible for the match, for a total contribution of up to 15 percent.

If you have a year of service at another 501(c)(3) non-profit or university, you may be eligible for a waiver of the one-year waiting period. A waiver form will need to be completed by the 501(c)(3) non-profit or university. To submit your completed form, follow the directions on the waiver. Your contributions will take effect one to two pay periods after you have enrolled in the Plan and Human Resources receives the waiver. AU reserves the right to suspend or reduce employer matching contributions at any time in its sole discretion.

Saving for retirement

If you are under age 50, federal tax law limits your contributions for pretax deferrals and Roth contributions to $19,500 for 2021. If you will be at least age 50 during the year, the Plan allows you to contribute an additional $6,500 in “catch-up” contributions. Tax law also limits the amount of compensation that is considered eligible for the plan; for 2021 the IRS compensation limit is $290,000.

Enrolling or changing your contributions

If you are enrolling for the first time or wish to change your contribution percentage, you may do so online at www.netbenefits.com/au, or by calling Fidelity Investments at 800-343-0860, regardless whether you have selected Fidelity Investments or TIAA as your retirement service provider. New enrollments and contribution changes will take effect in one to two pay periods after your election depending upon whether you are paid monthly or bi-weekly.

Changing your investment options

You may also change your investment options at any time by contacting your investment service provider, Fidelity Investments at 800-343-0860 or www.netbenefits.com/au or TIAA at 800-842-2252 or www.tiaa.org/american.

Need to update beneficiaries for your Retirement Plan?

Your beneficiary or beneficiaries will inherit your account in the event of your death. Identifying a beneficiary when you enroll in the Plan is critical and updating your beneficiary designation when you experience a life-changing event such as marriage, divorce, the birth of a child, or a death in the family will confirm that your account will be distributed per your wishes.

Visit our retirement webpage for instructions to designate or update your retirement plan beneficiaries with Fidelity Investments and TIAA.

Questions?

If you have questions regarding these changes, please e-mail hrpayrollhelp@american.edu, or call 202-885-3836. You may also schedule a phone or virtual consultation with our designated Fidelity Investments or TIAA consultants. Consultants are available to discuss all aspects of financial planning.

• Fidelity Investments participants: call 800-642-7131 or visit www.fidelity.com/reserve
• TIAA participants: call 800-732-8353 or visit www.tiaa.org/schedulenow

Sincerely,

Beth Muha
Assistant Vice President of Human Resources