University of Southern California

Important information for employees hired after January 1, 2012

The USC Retirement Savings Program makes matching USC contributions that equal 100% of your matched pre-tax or Roth employee contributions that do not exceed 5% of your eligible earnings. The university also makes a 5% non-elective contribution whether or not you contribute. This means that the university will make a total 10% contribution if you make a 5% employee contribution.

You	USC Match 100% Vested	USC Non-Elective*	USC Total	Grand Total (You+USC)
5%	5%	5%	10%	15%
4%	4%	5%	9%	13%
3%	3%	5%	8%	11%
2%	2%	5%	7%	9%
1%	1%	5%	6%	7%
0%	0%	5%	5%	5%
*The USC non-elective contribution will be subject to a four year graded vesting schedule (25% per credited year of service) for new employees hired on or after January 1, 2012. You will earn a year of vesting credit for each calendar year in which you are credited with at least 1000 hours of service. Each year of vesting credit earns you 25% ownership in the non-elective portion of the USC contribution. The USC matching contribution, the portion that matches one-to-one your 1–5% contribution, is structured to meet the IRS 401(m) "safe harbor" criteria and is 100% vested at all times. (VESTING: An employee's right to receive a present or future pension benefit is vested when it is no longer contingent upon remaining in the service of the employer.)

Program Overview

The USC Retirement Savings Program is designed to help the university's faculty and staff maximize their retirement income. Both the employee matched contributions and the university's contributions are on a sliding scale to provide more flexibility and choice for your retirement planning. Retirement income is based on the amount of funds contributed to your retirement account adjusted by any earnings, expenses, gains or losses. When you retire, you can choose benefit payments from a broad range of payment options. (Vesting of both employee and university contributions is immediate if you were hired before January 1, 2012.)

Staff and faculty employees (who are at least 21 years of age) may enroll in the retirement plan and begin making contributions after completing six months of employment in which they work at least 500 hours.

The plan allows you to choose the percentage of your eligible earnings you want to contribute, and the university will match your contribution. Although the university encourages you to maximize your retirement savings and participate at the highest possible level, if you decide you are not able to contribute to your retirement plan, USC will still contribute 5% (the "non-elective contribution"). Following is the sliding scale for university and employee contributions:

USC will contribute 10% toward an employee's 5% contribution.

USC will contribute 9% toward an employee's 4% contribution.

USC will contribute 8% toward an employee's 3% contribution.

USC will contribute 7% toward an employee's 2% contribution.

USC will contribute 6% toward an employee's 1% contribution.

USC will contribute 5% toward an employee's 0% contribution.

Contributions are invested by your choice of companies from the selection provided by the university to manage the investment of the retirement plan contributions. Each company offers a wide variety of investment options:

• Fidelity Investments plan.fidelity.com/usc.rsp
• Prudential Retirement www.uscpru.com
• TIAA-CREF www.tiaa-cref.org
• Vanguard www.vanguard-education.com/usc

Note that you can change your contribution level, your investment funds and your investment company at any time – you do not have to wait for open enrollment. You also can transfer monies between companies and between investment funds at any time subject to limitations on the frequency and amount of transfers set by the investment and insurance companies.

Along with deciding the percentage you will contribute, you may also choose to have your contributions made before taxes are calculated, giving an immediate tax benefit, or as an after-tax Roth contribution which gives a future tax benefit providing you meet all the criteria when you withdraw the funds. You also need to designate your beneficiaries, which you will do on eTrac following the instructions to complete an enrollment and beneficiary form for the investment provider you have chosen.

If you do not enroll on eTrac before you are eligible to participate, a retirement account will be established for you under the plan's default provisions—the 10% USC contribution/5% employee pre-tax contribution level and investment in the Vanguard Target Retirement Fund most appropriate for your estimated retirement age (assuming a retirement age of 65). However, you can change this default enrollment at any time, effective with the next pay period.

Questions?

Brochures about the retirement program and the wide range of investment options are available from the benefits office as well as on the benefits website. Extensive information is also available online from each of the participating companies. You can make an appointment with a retirement counselor from your investment company to review your asset allocation, determine if you are saving enough to meet your retirement goals, and evaluate your distribution options at retirement. See Schedule your personal retirement consultation on this site for details. Appointments are available every month at each campus.

Supplemental Contributions

The supplemental component of the USC Retirement Savings Program helps you increase your retirement income by allowing you to invest your own contributions in a retirement account. You decide the amount you want to contribute within IRS limits. In 2012, participants may defer up to $17,000 in income or up to $22,500 for employees over age 50. The total dollar amount of your own contribution (your 5% matched contributions, both pre-tax and Roth, plus your supplemental contributions) to the USC Retirement Savings Program (but not the university's contribution) counts toward your annual IRS limit. Vesting of your contributions is immediate.

Your contributions are invested by the same companies selected by the university to manage the matched investment of the USC Retirement Savings Program. Each company offers a wide variety of investment options.

The supplemental component is available to all faculty and staff, full time and part time, and students with FICA eligible earnings. You may elect to make supplemental retirement contributions as soon as you become a university employee. Enroll on eTrac, choose your investments and complete enrollment and beneficiary information for the investment provider(s) you select.

These options are always available; you do not have to wait for open enrollment. You can make changes to the amount of your contribution (including stopping contributions) at any time. You can change your investment allocation at any time. You also can transfer monies between companies and between investment funds at any time subject to limitations on the frequency and amount of transfers set by the investment and insurance companies.

More information about supplemental contributions and the wide range of investment options is available from the benefits office. Extensive information is also available from each of the participating companies online. See the vendor directory.

457(b) Plan

USC offers a 457(b) deferred compensation plan to a select group of management and highly compensated employees.

• You must be an eligible faculty or staff employee with eligible earnings of more than $191,000 in 2010 earnings for 2011 participation
• The plan is governed by Internal Revenue Service, Department of Labor and California securities rules that impose specific limits on the eligibility criteria for this plan
• Contact the benefits office if you meet these basic criteria and are interested in deferring additional income