Programs & Services - 403(b)

Fees for participating in the Reform Pension Plan are approximately 84 basis points of a participant’s account balance. Investment management fees vary depending on the participant’s fund election. The average RPB investment management fee is 52 basis points. (A basis point is one hundredth of a percent.)Fees include investment managers’ fees, an RPB administrative fee, custody, investment consulting and record keeping fees as follows:

Manager Fees (average weighted)	52 basis points
RPB Administrative Fee	25 basis points
Custody, Consulting and Record keeping Fees	7 basis points

The IRS places limits on the contributions that can be made to a 403(b) plan. These limits are determined by the type of contribution that is being made. There are two types of contributions that can be made to the RPB:

• Employer Contributions are made by an employer to the RPB. Employer contributions represent contributions made to the Plan that are in addition to a participant’s regular salary (and parsonage, if applicable).
• Elective Salary Deferral is a contribution made to the Reform Pension Plan as a pre-tax deduction from a participant’s pay. Elective salary deferrals are facilitated by entering into a Salary Reduction Agreement with the employer. Salary Reduction Agreements should remain on file with the employer and should not be sent to the RPB office. Participants may change their elective salary deferral amount at any time, but the participant and employer must enter into a new Salary Reduction Agreement in each instance. If the participant should leave employment with the congregation before the end of a plan year and a portion of the contribution was prepaid, the congregation may request a refund of the unearned contribution amount.

It is important to note that both employer contributions and elective salary deferrals have to be paid by the employer to the RPB because all contributions to the Plan must be made with pre-tax dollars.

There are compelling reasons to participate in the RPB pension plan, even for professionals that enter the Reform Movement later in their career. Participant contributions are made on a pre-tax basis, reducing current taxation. Income tax on contributions and earnings is deferred until the participant takes a direct retirement distribution.

Employer contributions and elective salary deferrals have different maximum contribution limits:

• Employer Contributions – For the 2013 RPB plan year, which runs from July 1, 2012 through June 30, 2013, the maximum contribution that an employer can contribute to the RPB 403(b) plan is $50,000 or 100 percent of the participant’s includable salary if the includable salary as reported to the IRS is less than $50,000. (Includable salary is the participant’s salary excluding parsonage.) If an employer’s contribution exceeds the maximum contribution limit, the overage will be applied to the participant’s RPB Rabbi Trust Account.
• Elective Salary Deferrals – The maximum amount allowable by a participant as an elective salary deferral in the 2013 RPB plan year is $17,000 or 100 percent of the participant’s includable salary if the includable salary as reported to the IRS is less than $17,000.
• Over 50 Catch-Up Provision – Beginning with the RPB plan year that participants turn 50, the elective salary deferral portion of a contribution can be increased. Participants who are 50 or older during the 2013 plan year may increase their elective salary deferral by $5,500 to a maximum of $22,500. In any case, the participant’s elective salary deferral cannot exceed their includable salary.
• Combined Limits – The combined contribution limit to the 2013 plan year is $50,000 unless the over 50 catch-up provision is utilized. If the over 50 catch-up provision is utilized, the combined maximum contribution limit is increased up to $55,500 (the $50,000 limit and a dollar for dollar increase for the over 50 catch-up amount). In any case, a contribution for a participant cannot exceed their includable salary.

The RPB reviewed its recommended contribution rates. The RPB commissioned Summit Strategies Group, its independent investment consultant, to conduct an objective evaluation. Click here to read the summary document, which includes Summit’s detailed report and other supporting documents: Evaluation of Recommended Contribution Percentages.

The Reform Pension Plan provides four objective-based funds for participants to choose from:

RPB Fund	General Objective
Capital Appreciation Fund	Seeks long-term capital appreciation
Appreciation and Income Fund	Seeks capital appreciation and income
Income Focused Fund	Seeks income and some capital appreciation
Capital Preservation Fund	Seeks capital preservation and stability of principal

Please see “Your Guide to the New Reform Pension Board Investment Choices,” which contains important details regarding each of our funds.

RPB participants must designate beneficiaries for their pension account and life insurance benefit when enrolling in the RPB. It is of utmost importance for participants to keep their beneficiary designations up-to-date. This is especially important if a participant has a change in marital status through marriage, divorce, death of a spouse, or whose situation otherwise results in a need to change his or her beneficiaries. Having out-of-date beneficiaries could result in a delay in paying benefits, and more importantly, could result in paying benefits to someone whom you no longer want to receive your pension account balance.

You can designate any person, estate, trust, organization or charity as your beneficiary. If you are married, your spouse is automatically your sole primary beneficiary unless the spouse signs off to acknowledge the beneficiary designation. If you fail to designate a beneficiary for your RPB account and for your life insurance benefit, your spouse will be the beneficiary; if you are not married and you fail to designate a beneficiary, your estate will be the beneficiary.

You can allocate portions of your RPB account and life insurance benefit to several beneficiaries by allocating a percentage of the account to each named beneficiary. You can also name a secondary beneficiary who would receive payments if the primary beneficiary was no longer alive or if the primary beneficiary declined receiving the funds.

Here is how the beneficiary designations work for RPB pension plan balances:

1. If your spouse is your beneficiary:
1. He or she would take over your account upon your death. The spouse would become the RPB participant under his or her social security number. There are no income tax issues until the spousal beneficiary takes a direct distribution of the pension account balance.
2. The spousal beneficiary would have all of the same rights as the original participant. The spousal beneficiary can utilize any of the RPB distribution options.
3. Parsonage exemptions that were declared by the original plan participant can’t be continued.
4. The spousal beneficiary would be required to take IRS Required Minimum Distributions (RMD) based on his or her age. Distributions in excess of the RMD can be taken in accordance with RPB distribution rules. Distributions must commence when the spousal beneficiary attains the age of 70 ½ if he or she is retired.
2. If your child or children are your beneficiary:
1. Your child or children would become RPB participants. If your child or children are minors, (a person not of legal age) you must have a guardian or an administrator appointed before an account transfer or payment can be made.
2. Benefits must be paid out over a period not exceeding five-years. The benefits would be taxable income to the children.
3. Children can roll over their RPB accounts to an “inherited IRA,” which would defer income taxes on their RPB accounts.
3. If a trust is your beneficiary:
1. You must send a copy of the applicable sections of the trust that apply to the RPB to the RPB office, including the signature page.
2. Upon your death, a direct distribution would be paid to the trust.
3. The payment to the trust would be taxable income, and the RPB will withhold 20% of the distribution as a Federal income tax withholding.
4. If an organization or charity is your beneficiary:
1. The RPB will pay out a distribution to an organization or trust based on your beneficiary form.
2. The RPB will withhold the appropriate income taxes from the distribution.

Click here to access the Pension Account Beneficiary Designation Form.

A note about the Life Insurance Beneficiary Form and Addendum:

Regardless of your current eligibility status for life insurance coverage, you must complete the life insurance beneficiary form and corresponding addendum when enrolling in the RPB. Your beneficiary forms will remain on file in the event that you increase your pension contribution to a minimum of 10 percent.

Click here to access the Life Insurance Beneficiary Designation Form and Addendum.

When you have completed your beneficiary designation forms, please mail your original forms to the RPB office. We cannot accept a copy, electronic scan, or fax of the beneficiary designation forms. Your original beneficiary designation form will be countersigned by the RPB Plan Administrator, and a copy of the fully executed forms will be returned to you for your records.

Please contact the RPB office if you have questions about completing your RPB beneficiary designation forms.

The Reform Pension Plan provides four objective-based funds with a focus on capital appreciation, income, a balance of appreciation and income, and capital preservation. The RPB’s Investment Committee, along with an independent investment consulting firm, performs an ongoing evaluation of the structure of the Reform Pension Plan and monitors the performance of all RPB investment managers. To learn more about our investment portfolio, please click the links below:

• RPB Investment Managers by Asset Class
• Performance Report as of March 2013
• Fund Attributes Chart
• RPB Investment Policy Statement

The RPB is deeply committed to environmental, social and governance investing. We are actively involved in socially responsible investment (SRI) through the use of shareholder initiatives, which has shown to be one of the best methods for influencing corporate behavior and actually effecting those desirable changes. The RPB does this in partnership with the Interfaith Center for Corporate Responsibility (ICCR) and Institutional Shareholder Services (ISS). As a fund managing approximately one billion dollars, we have a powerful voice, and we are guided by URJ, CCAR, and RAC resolutions. The RPB provides specific instructions to our investment managers regarding allowable or restricted investments. For instance, we instruct managers not to hold companies that invest in tobacco products or are involved with the Sudan. We actively vote all of our proxies, and all votes are made with an SRI profile, customized for the RPB to include voting against any resolution that supports anti-Israel activities. The RPB has consistently held up to 1.8% in community development bonds through our fixed income managers in accordance with URJ / RAC resolutions.

The RPB accepts rollover funds from other qualified 403(b) plans, 401(k) plans, IRAs and other tax-deferred plans. To verify that the funds are considered qualified retirement funds, participants must complete an RPB Rollover Transfer Form. Rollovers can be made via wire transfers or by checks. Rollovers will be shown separately from other RPB assets on account statements and will be subject to the same RPB rules and investment allocation choices as other RPB funds. It is important to note that money that is rolled over from sources other than URJ-affiliated congregations is not eligible for parsonage exclusion in retirement. The RPB also can’t accept rollovers from Roth IRAs.

• Rollover Form – Pension Plans
• Rollover Announcement Letter – IRAs
• IRA Rollover Form – Direct Payment from Institution
• IRA Rollover Form – Payment by Personal Check

Information on Retirement Distribution Options

The RPB Pension Plan offers several options for receiving distributions at retirement. Participants may establish a monthly distribution from their account under the Flexible Payment Option, roll over all or part of their account balance to another qualified retirement account, take a direct distribution of all or part of their account balance or purchase an annuity. Please see further information on our retirement distributions in the following descriptions and chart:

• Flexible Payment Option: The Flexible Payment Option is currently the most popular distribution option with benefits including: continued exposure to the financial markets, which could provide growth potential to a pension account, investing managed by the RPB and an account balance transfer to beneficiaries in case of death. Along with the benefits, there is a certain amount of risk with this option including: participants outliving the money in their pension accounts depending on the level of actual earnings and level of distributions, and exposure to the financial markets could result in lower balances when the markets have negative results.
• Lump Sum: The partial rollovers or direct distribution options can be taken no more than once every three years. Please read our Special Tax Noticeif you are considering a lump sum distribution.
  • Rollovers: A lump sum rollover to another financial institution carries both a potential benefit and a potential risk, since account and investment management is decided by the participant within the parameters of the entity receiving the rollover. It is important for clergy to note that if they roll money out of the Reform Pension Plan, they risk a likely loss of their parsonage exclusion exemption benefit.
  • Direct: A direct distribution carries both a potential benefit and a potential risk, since the option gives full responsibility for investment and management of the funds to the participant. The entire distribution is subject to taxation. It is important for clergy to note that if they roll money out of the Reform Pension Plan, they risk a likely loss of their parsonage exclusion exemption benefit.
• Annuity: You can purchase an annuity with MetLife through the RPB. The MetLife Guaranteed Income Program offers a range of annuities that guarantee income payments for life* including payments to a spouse/partner if this option is selected; however, the value of the payments are affected over time by inflation. Clergy should note that annuity income is eligible for parsonage exclusion.

* This guarantee is based on the claims-paying ability and financial strength of Metlife.

Please contact Ingrid Aponte, Participant Account Executive, at the RPB office to request additional information and retirement forms for the above distribution options. We will send the information and forms to you via email or postal mail. You can also schedule an in-person meeting with Ingrid to discuss your individual retirement situation.

Type of Distribution	Benefits	Risks
Flexible Payment Option	Exposure to market could provide growth potential to pension account Account balance, if any, at death is transferred to beneficiary(ies) RPB does the investing Distributions are eligible for parsonage exclusion for clergy	Participants can outlive the money in their pension account depending on the level of earnings and distributions Exposure to market could result in lower balances when financial markets have negative results
Annuities Purchased through the RPB	Distributions guaranteed for life including distributions to spouse (if elected) Distributions are eligible for parsonage exclusion	Value of distributions is affected over time by inflation Generally, no money is left for beneficiaries after the participant and spouse (if applicable) die
Lump Sum Rollovers to another Tax-Deferred Program or Personal IRA	Account and investment management is decided by the participant within the parameters of the entity receiving the rollover	Account and investment management is decided by the participant within the parameters of the entity receiving the rollover Possible loss of parsonage for clergy
Lump Sum Distributions	Full responsibility for account investment and management is with participant	Full responsibility for account investment and management is with participant Possible loss of parsonage for clergy Entire distribution is subject to taxation

Special Tax Notice

Lump Sum: The partial rollovers or direct distribution options can be taken no more than once every three years. Please read our Special Tax Notice if you are considering a lump sum distribution.

In the case of divorce, the RPB requires a Qualified Domestic Relations Order (QDRO) to divide the participant’s RPB account between the participant and his/her spouse. Before a QDRO is processed through the courts, it should be forwarded to the RPB office for review to ensure that it satisfies the RPB’s legal requirements. The RPB provides a model QDRO as a resource.Once a QDRO is filed and approved by the courts, the RPB will transfer the appropriate amount from the original participant’s account to an account set up for the ex-spouse. The ex-spouse cannot contribute additional funds to the account, but can roll the money out of the account or leave it invested with the RPB.

RPB facilitates parsonage declarations in retirement for clergy. Distributions from the Reform Pension Plan are considered as taxable income. When retirees draw on their pension accounts in retirement, they are receiving distributions of pre-tax contributions and associated earnings. Clergy can use their parsonage exemption to offset some or all of the taxable income on their distributions depending on their housing expenses. Retired clergy should check with a financial advisor to ensure compliance with the IRS parsonage rules. For specific information on retired ministers’ parsonage benefits from the IRS website, click here: Retired Ministers.

The RPB sends parsonage exemption forms to retired clergy each fall in advance of the upcoming year. The participant must confirm or lower the amount of parsonage that they declared for the past year and project the amount of parsonage that they wish to set for the upcoming year. The RPB transmits the collected information to the applicable financial institution, who then issues a Form 1099-R to the participant to reclassify the income from taxable to non-taxable. It is important to note that retired clergy are eligible to use a parsonage exemption and do not have to be associated with a congregation in retirement or need to have a title such as Rabbi Emeritus to utilize their parsonage exemption. For additional information on parsonage, including information from the “Minister’s Guide for Income Tax,” please contact the Financial Department of the Central Conference of the American Rabbis (CCAR).

The IRS requires participants who have attained the age of 70 ½ and are retired (have stopped working for an eligible Reform Movement employer) to take a required minimum distribution (RMD) from their qualified retirement plan(s) each year. The RPB advises retired participants of their RMD obligation at the appropriate time. The amount of the distribution is based on factors such as the value of the retirement account as of December 31^stfrom the previous calendar year and the age of the participant. The age of the participant’s spouse is also a factor if there is an age difference greater than 10 years.Please contact the RPB office if you have questions concerning your RMD.