The MIT Supplemental 401(k) Plan (referred to as the 401(k) Plan) helps eligible employees save and invest for retirement while receiving certain tax advantages.
MIT will match up to 5% of your pay in contributions to the 401(k) Plan. You choose how your contributions — and MIT's matching contributions — are invested. Plan services are provided by Fidelity Investments.
Temporary 401(k) Plan relief provisions as a result of the CARES Act
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) introduces temporary relief provisions related to retirement plans. MIT 401(k) Plan participants have more freedom to access funds during the current economic crisis without tax penalties. See details.
You are generally eligible for the 401(k) if your appointment is for at least 3 consecutive months and requires you to work at least 50% of a normal full time position. You will also become eligible after any calendar year in which you work at least 1,000 hours.
Who is not eligible
- teaching or research assistant
- honorary lecturer
- summer intern
- employee/faculty on an unpaid leave of absence
- post-doctoral trainee
- paid by MITemps
- student in a work-study program
- family member who is not employed by MIT
- member of the armed services assigned to MIT
Members of collective bargaining units
All the Plan provisions are subject to the terms of your collective bargaining agreement.
Benefits of the MIT 401(k) Plan
When you enroll in and contribute to your 401(k) account, you are 100% vested – that is you fully own your contributions, MIT’s matching contributions, and all interest earned on the investments you choose through the Plan.
In addition, you receive tax benefits when you contribute to your MIT Supplemental 401(k) account. You can choose when you receive your tax benefits – right away, with pre-tax contributions, or later on, with Roth post-tax contributions.
Save on a pre-tax basis and receive tax benefits now
- Your 401(k) contributions are deducted from your paycheck before taxes are applied, reducing your current taxable income and therefore your taxes.
- In retirement, you will pay federal and state income taxes on any amount you withdraw from the plan.
Save on a post-tax (Roth) basis and receive tax benefits later
- Your 401(k) contributions are taken out of your paycheck after federal and state income taxes have been applied, so they will not reduce your current taxable income or your taxes.
- In retirement, you will pay no taxes on any amount you withdraw as long as you take the distribution after age 59½ and at least 5 years after the first Roth contribution was made.
Contributing to Your MIT 401(k) Account
You contribute to your 401(k) account through deductions from your MIT paycheck. You can contribute pre-tax dollars, Roth post-tax dollars, or a combination of both. You may change your contribution preferences any time through Fidelity NetBenefits.
Your contributions (both pre-tax and Roth) are sent to Fidelity Investments at the end of each pay period. You may contribute as little as 1% and as much as 95% of your salary (within federally prescribed limits) after amounts for Social Security and Medicare taxes and health and dental insurance have been subtracted. You may start, stop, or change your deferral or investment elections at any time.
Federal law limits the amount of your pay each year that may be recognized for determining your allowable contribution. In 2020, MIT can consider only the first $285,000 of pay for calculating your allowable contributions. This means that if your annual compensation exceeds $285,000, MIT Payroll will take 401(k) deductions from your pay until your pay for the year reaches $285,000, or one of the other 401(k) program limits has been reached (see Contribution Limits below).
- Federal law sets a limit each year on how much you are eligible to contribute to your 401(k) account(s). This annual limit applies to the total of your 401(k) contributions, pre-tax and Roth post-tax, to the MIT Supplemental 401(k) Plan and any other employer’s 401(k) or 403(b) Plan. So, the year in which you are hired at MIT, the annual limit applies to all your MIT 401(k) contributions and all contributions you made to your prior employer’s 401(k) or 403(b) plan.
- In 2020, participants under age 50 are permitted to contribute up to $19,500 annually and participants age 50 and over are permitted to contribute up to $26,000 annually.
What MIT contributes to your 401(k) Plan
- MIT matches your 401(k) contributions (pre-tax and Roth post-tax combined) dollar-for-dollar up to the first 5% of your MIT pay (subject to the annual limits specified by federal law).
- MIT only contributes a match during months in which you have made a contribution
- The MIT match is provided pre-tax, and therefore is fully taxable when you withdraw your matching contributions from the plan, along with associated investment earnings.
When contributions are invested in your 401(k) account
- Your 401(k) deferral contributions are sent to Fidelity Investments following each pay period.
- MIT’s matching contributions are sent to Fidelity Investments at the end of each month.
- Both your deferral contributions and the MIT matching contributions are invested according to your elections.
Need help deciding whether to contribute pre-tax dollars, Roth post-tax dollars, or a combination of both? See our Contribution Options chart for more information.
Need Help or Have Questions?
Contact MIT Benefits or see the additional contact options below.
|Fidelity – 401(k) Plan||1-877-MIT-SAVE|
Related Documents & Forms
Plan participants who qualify as low- or moderate-income workers may receive a tax credit.