EMPLOYEE BENEFITS

Supplemental 401(k) Overview

The Supplemental 401(k) Plan is a tax-favored plan designed to help eligible employees save for retirement. Through payroll deduction, you may contribute any whole percentage of your salary up to 95%. However, federal law limits the dollar amount you may contribute each year. MIT matches your contribution dollar-for-dollar up to 5% of your salary. You choose how your contributions and MIT's matching contributions are invested.

Eligibility

You are generally eligible to contribute to the 401(k) Plan if you:

• Work at least 50% of the normal full-time work schedule in your department, laboratory, or center;
• Are appointed to work at MIT for three months or more; and
• Are paid by MIT.

However, certain employees, such as visitors, students, postdoctoral fellows, employees on the voucher payroll, and employees of the military assigned to MIT, are not eligible. Learn more about eligibility.

Employee Contribution and Limits

Through payroll deduction, you may contribute any whole percentage of your salary up to 95% of pay after deductions for Social Security, Medicare, and Health and Dental insurance. If you elect to contribute a high percentage of pay, be sure you have allowed for other deductions such as a Flexible Spending Account and T-Pass/Parking.

You may start, stop, or change your elections at any time.

Effective January 1, 2008, compensation cannot be contributed to your MIT Supplemental 401(k) Plan if paid to you after the end of the calendar year in which you terminate employment with MIT or 75 days if later. An example of this type of compensation is late vacation pay. Also effective January 1, 2008, severance pay is not eligible for your MIT Supplemental 401(k) Plan.

Federal law limits the amount of your pay each year that may be recognized for determining your contribution. The limit is $230,000 in 2008. MIT considers only the first $230,000 of pay for calculating your contributions. This means that if your annual compensation exceeds $230,000, MIT Payroll will take only 401(k) deductions from your pay until your pay for the year reaches $230,000.

Other Employers' Plan/Self Employment

Contributions made by you under other employers' retirement plans may affect your MIT contribution limit. If you participate (or recently participated) in another employer's plan, it is very important that you contact the Benefits Office to ensure that you do not exceed the federal contribution limit.

MIT Matching Contribution

MIT will match your contributions dollar-for-dollar up to 5% of your salary.

Timing of MIT Matching Contributions

• MIT will match your contributions, up to 5% of pay, each time you make a contribution.
• MIT's matching contributions are sent to Fidelity Investments at the end of each month. Your contributions are sent to Fidelity each pay period. Both your contributions and the MIT matching contributions are invested according to your elections.
• MIT only contributes a match during months in which you have made a contribution.
• If your contributions end before MIT's matching contributions equal the lesser of 100% of your contributions or 5% of your pay for the entire calendar year, MIT will contribute the balance of its matching contributions the following January.

Vesting

You are always 100% vested in your own contributions and MIT's matching contributions, plus all investment earnings. “Vested” means that you keep your entire 401(k) Plan account when you leave MIT.

Tax Benefits

The 401(k) Plan offers the following income tax benefits:

• Immediate tax benefit: Because your contributions are made on a "before-tax" basis, your contributions are not subject to federal or Massachusetts state income tax until you withdraw them from your account.
• Ongoing tax benefit: Investment return credited to your account is not subject to federal or Massachusetts state income tax until you withdraw it from your account.

401(k) Investment Options

You decide how to allocate both your contributions and MIT's matching contributions among the Plan's numerous investment options. You may change the investment allocation of future contributions or accumulated funds at any time.

Enrollment and Changes

You may enroll in or make changes to the 401(k) Plan at any time. Learn more about enrollment and making changes.

Withdrawals

You may elect to withdraw funds from the 401(k) Plan as a single lump sum payment or as a series of scheduled payments or as a traditional lifetime pension (an annuity). Learn more about your distribution options.

Loans

Loans are available from your 401(k) account. Learn more about 401(k) loans.

Leave-of-Absence/Sabbatical

During an unpaid leave-of-absence, neither you nor MIT will contribute to the 401(k) Plan. However, your account will be maintained and you will continue to participate in the investments you have chosen.

During a paid sabbatical, you may continue to contribute to the 401(k) Plan by payroll deduction. Contributions will be based on your salary during sabbatical. MIT will continue to match your contributions. Learn more about your benefits while on leave.

In Case of Death, Disability, or Divorce

In Case of your Death
The value of your account is payable to your beneficiary. If you are married, your sole beneficiary will be your spouse. If you are married and you designate a person other than your spouse as your beneficiary, your spouse must consent in writing to the designation. However, if you retired before your death and were receiving monthly lifetime income (annuity), a death benefit will be paid only if your form of annuity payment provides for payment after your death.

In Case You Become Disabled
If you become disabled and receive disability income benefits under a long-term disability plan of MIT, you will not contribute to the 401(k) Plan. Instead, MIT will contribute an amount equal to 10% of your pay to your account as long as you receive such disability income benefits. Learn more about your benefits while on leave.

In Case You Become Divorced
Under the terms of a Qualified Domestic Relations Order (QDRO), the 401(k) Plan may be required to transfer all or part of your account balance to your former spouse as part of a marital property settlement. In addition, a QDRO may require that all or part of your account balance be used to satisfy your child support obligations.

Copies of the 401(k) Plan's procedures and model documents pertaining to QDROs are available to you and your (former) spouse or children from Fidelity Investments by calling (877) MIT-SAVE (648-7283). TTY service is available for the speech and hearing impaired by calling (800) 259-9743.

Fidelity Investments will notify you if the 401(k) Plan receives a QDRO that affects your benefits.

Benefits Protected from Creditors

Except for the requirements of a Qualified Domestic Relations Order, your 401(k) Plan account balance may not be attached, garnished, or levied by any creditor or court.

Need More Information?

If you need additional information on the Supplemental 401(k) Plan, please contact us.

MIT expects to continue the Plan as a benefit to employees, but reserves the right to change or terminate the Plan should this become necessary or advisable.