What is an SRA hardship withdrawal?
If you have an SRA with TIAA-CREF and/or Fidelity, you may withdraw your accumulations while you are still working for the University if you have a qualifying financial hardship. There are no provisions for such a withdrawal for contributions made to the Basic Retirement Plan.
SRA Hardship Withdrawal Forms Packet and Q&A Fact Sheet

What qualifies as a hardship?
There are four Internal Revenue Code (IRC) qualifying events for taking a hardship withdrawal:

1. Expenses for tax-deductible medical care for the employee, spouse, or dependents if they exceed 7.5% of adjusted gross income;
2. Costs directly related to purchase of a principal residence (excluding mortgage payments);
3. Tuition, related educational fees, and room and board for the employee, spouse, or dependents for the next 12 months of post-secondary education;
4. Funds necessary to prevent eviction of the employee from the principal residence or foreclosure on the mortgage of that residence.

What if I don’t meet the criteria for a hardship?
Consider taking an SRA loan if you do not meet the definition of a qualifying hardship.

How much can I withdraw?
Internal Revenue Code (IRC) regulations allow you to withdraw the value of your contributions only. You may not withdraw any interest or earnings your contributions have made.

Is there an IRS penalty for doing so?
Cash withdrawals made prior to age 59½ are generally subject to an IRS 10% early withdrawal penalty. You should consult with a qualified tax advisor for complete details.

Do I have to pay income tax on the withdrawal?
Yes, you will have to pay income tax on the amount you cash out. Hardship withdrawals are not subject to the mandatory 20% federal income tax withholding that applies to other types of cash withdrawals. Income tax withholding is optional; you may choose zero withholding, or a percentage of your choice. If you do not specify a preference on your withdrawal form, the investment carrier will withhold 10% by default.

Does a hardship withdrawal affect my participation in the UM plan?
Yes. Internal Revenue Code guidelines mandate that you cannot make any elective deferrals (voluntary contributions) to your employer’s retirement plan for a minimum of six months if you take a hardship withdrawal. This means your participation in the plan is suspended for at least six months:

• Your 5% contribution and the University 10% matching contribution will be canceled.
• Any additional contributions you make to an SRA will also be canceled.

If you are a compulsory participant in the retirement plan (age 35 or older, two or more years of service, and a 100% appointment), you will be enrolled in the Reduced Benefit Option:

• Under this feature, the University provides a lower contribution of 5% instead of 10%, and no employee contributions are taken on earnings up to the Social Security wage base ($94,200 in 2006).
• On earnings exceeding the wage base, you are required to contribute 5% and the University match increases to 10%.

How do I enroll again in the plan after the six-month suspension?
You must submit a new Salary or Annuity Option Plan Agreement to restart your participation in the plan. You are not automatically re-enrolled after six months; your participation will only be reinstated when the Benefits Office receives your completed form.

You may submit the Salary or Annuity Option Plan Agreement at the time of your hardship withdrawal, and your reenrollment will be processed in the month you specify after the six-month suspension ends. This will allow you to complete both transactions at the same time and minimize the time spent out of the matching plan.