457(f) Retirement Plan
The George Washington University Benefit Restoration Plan, or 457(f) Plan, is designed to restore or replace certain benefits that cannot be provided under the GW 401(a) Plan due to IRS compensation limits.
Staff or faculty members who are eligible for the 401(a) Plan, and whose salary exceeds the IRS Annual Compensation Limit for qualified plans, are eligible for the 457(f) Plan. For 2023, the salary limit an employee needs to exceed is $330,000.
Once eligible, employees are entitled to receive a restoration benefit equal to the difference between the benefit that they would have received under the 401(a) Plan if no limits on compensation existed, and the amount that GW contributed to the 401(a) Plan (your “Restoration Benefit”).
Contributions to the 457(f) Plan are funded by GW. Each December, eligible employees are notified of their eligibility and contribution amounts. To understand how the 457(f) Plan works together with your GW 403(b), 401(a) and 457(b) plans, please review the Four-Plan Comparison (PDF).
The Restoration Benefit is provided through two vehicles:
- 457(b) contribution: To the extent that an employee has not reached the salary deferral limit to their 457(b) plan during the year, any remaining amount up to the limit will be credited with the Restoration Benefit. Employees will be immediately 100% vested in any amounts that GW credits to their 457(b) account as a Restoration Benefit, and contributions to the account will not be taxable until distributed.
- 457(f) contribution: Any remaining Restoration Benefits that cannot be credited to the 457(b) plan due to contribution limits will be contributed to a 457(f) account at Fidelity. Amounts credited to the 457(f) account will not be taxable until a participant becomes vested. Once vested, the benefit will be included in taxable income and GW will allocate a portion of your benefit to the taxes it must withhold upon vesting.
GW contributions credited to an emloyee's 457(b) account are 100% vested.
GW contributions credited to a participant's 457(f) account are subject to a vesting schedule. Active employees become vested in any contributions credited to their 457(f) account the later of:
- Their attainment of age 50, and
- The completion of five consecutive years of service at the university.
Note: In the event employment at GW ends prior to vesting, amounts credited to the employee's 457(f) account will be forfeited.
457(f) Plan contributions will be deposited into an account at Fidelity. You may direct contributions to your 457(f) account for investment in any of the fund choices offered under the plan. See the 457(f) Enrollment Guide (PDF) for a list of available investment options.
- Vesting Distribution: on the date an active employee becomes vested, a distribution will be made from the account equal to the tax withholding that is due as a result of vesting.
- Separation of Service Distribution: a lump sum distribution of vested amounts will be made within 90 days after employment with the university ends.