The federal government encourages working Americans to save more for retirement by providing both protections and restrictions for contributing to retirement plans. Under the rules in the Internal Revenue Code (IRC), both employee and employer contributions and earnings grow tax-deferred so you can maximize your retirement savings. These savings are tax-deferred meaning you get relief from paying federal income taxes until you begin withdrawing from your plan. In addition, retirement savings are protected from bankruptcy proceedings and other legal actions. In exchange for these protections, the IRC limits access to these accounts while you are still employed, and in most cases applies a penalty to retirement plan withdrawals prior to age 59 1/2.
No withdrawals or loans are available from either the UW Retirement Plan (UWRP) or the state of Washington retirement plans (PERS, TRS, LEOFF, etc). These accounts can only be accessed after all UW employment is terminated and you are separated from the plan. Contact the plan representatives for more information.
You may be allowed to access your optional retirement savings under certain circumstances. The UW Voluntary Investment Program (VIP)—a Section 403(b) optional savings plan—allows limited access by participants for loans or for what is defined in the IRC as “hardships." The rules are strict around both loans and hardships, and UW review and sign off is required before you can access the accounts. You will be asked to provide the UW with appropriate documentation to ensure that you are eligible to access the funds under the IRC rules. For more information, see VIP Loans and Hardship Withdrawals.
The Washington State Deferred Compensation Program (WSDCP), a 457(b) optional retirement savings program, is managed by the state Department of Retirement Systems (DRS). Contact DRS directly for information about accessing your WSDCP contributions prior to retirement.
Loans or hardship withdrawals can be complex and have long-lasting consequences to both your current and financial situation. Review your retirement plan rules and determine what employment restrictions apply and what taxes and penalties may apply if you withdraw your retirement funds. Then contact a Benefits Consultant at 206-543-2800 or benefits@uw.edu to receive application details and the required forms to ensure that you are eligible to access the funds.
For related information, see:
If you are leaving UW employment, see Accessing Funds Upon Leaving UW Employment.
View the Layoff Support Website for a comprehensive source of layoff support information.