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 hildren’s
offers employees two ways to save for retirement: the Corporation
Pension Plan, and a Tax-deferred Annuity and Investment Plan (403b).
The Pension Plan is a fund that the hospital contributes money
to on an annual basis for its regular employees, while employees
contribute to their own 403(b). Although Children’s does not contribute
or match employees’ 403(b) contributions, it’s a good way to invest
money that will earn interest. It offers several investment choices
from three financial companies so employees can choose where to
invest their money at different risk levels.
Children’s Benefits Manager, Tom Sherr, recommends
saving for your retirement as soon as possible. “If you start early,
the interest on the contributions will help prevent you from having
to contribute more later in life,” he says.
According to Sherr, only 25 percent of Children’s employees are
enrolled in the 403(b) plan. “Many people are counting on Social
Security for their retirement years, but it will only cover about
a third of what people need,” says Sherr. “So people need to be
prepared to supplement it with additional savings.”
To learn more about retirement investing:
- Representatives from the three 403(b) financial companies are
available onsite once a month to offer advice, answer questions,
or help you build a retirement portfolio.
- The Benefits Department sponsors financial advisors for brownbag
lunch seminars on basic money management and more complex financial
strategies three to four times a year.
- Departments can request that a Benefits staff member attend
their departmental meeting to give a brief presentation on retirement
plans. For more information on any of these options, call ext.
5-7790, or see the Children’s Benefits page on the intranet: web2.tch.
harvard.edu/hr/benefit/csounseling.html.
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403(b) or pension
What’s the difference? |
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403(b) |
Pension Plan |
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Who contributes? |
Benefits-eligible employees |
Children’s Hospital
Boston |
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How much? |
Up to $13,000/year, or
Age 50+
up to $16,000 |
Between
5 and 12 percent of your annual salary, based on your age
and years of service at Children’s.
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How does it
get started? |
Employees must fill out
Children’s
TDA form AND the investment
company’s enrollment form.
You can enroll the 1st of any month. |
Automatically started by
the Benefits Department on January 1st and July 1st, following
one year of employment. Employees are vested after three years.
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Who is eligible? |
Regular employees who are
benefits
eligible. |
Regular employees, with
three years of service for vesting.
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How/When is
it taxed? |
Tax-deferred. Money is
taken from
your paycheck before taxes. You will
pay taxes and penalties if you withdraw
it before age 59 1/2.
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Taxes are taken upon distribution. |
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What happens
if I terminate
employment? |
You can: 1.take
a cash distribution
(may be subject to a penalty), 2.do a
rollover into another qualified plan,
or 3.leave your investment with the
current investment company.
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You will receive a pension
package mailed to your home within 30–45 days. There will
be options for you to take a distribution. |
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