Mutual Fund Plan Overview
Below are some of the important features about the plan. This website is intended to be a summary of the plan provisions. In the event that a conflict exists between the information contained within this website and the plan document, the plan document provisions prevail. For more information, view the Frequently Asked Questions or contact us.
The Mutual Fund Plan gives you:
- Choices and control over how your contributions are invested in any combination of investment options offered under your plan.
- Portability of your account if the plan accepts rollovers.
- A variety of payout options at retirement.
- Loan availability. Loans will reduce your account balance, may impact your withdrawal value and limit participation in future growth potential. Other restrictions may apply.
All employees of the Milwaukee Public Schools are eligible to participate in the Mutual Fund Plan.
Contributions under the Plan are made by participants through a reduction in salary. Under the Plan, the maximum annual contribution amount is set by Internal Revenue Service (IRS) guidelines on a yearly basis. You may view the current limits here.
Your contributions are invested in your choice of any combination of the investment options available through the plan (see Investment Options for a complete list).
- One General Purpose Loan and One Residential loan are allowed outstanding at any time.
- For non-residential loans, the required minimum individual account value is $2,000. The minimum loan amount is $1,000.
- For residential loans, the required minimum individual account value is $5,000. The minimum loan amount is $2,500.
Please note: loans will reduce your account balance, may impact your withdrawal value and limit participation in future growth potential. Other restrictions may apply.
There is a variety of distribution options to choose from including:
- Lump sum
- Systematic withdrawal option
- Estate conservation option
- Life expectancy option
Distributions will be taxed as ordinary income in the year the money is received, and will be subject to an IRS 10% premature distribution penalty tax if received prior to age 59½ unless an exception applies.
You should consider the investment objectives, risks, and charges and expenses of the mutual funds offered through a retirement plan, carefully before investing. The fund prospectuses and information booklet containing this and other information can be obtained by contacting your local representative. Please read the information carefully before investing.
Mutual funds under a 403(b) custodial account agreement are intended as long-term investments designed for retirement purposes. Money distributed will be taxed as ordinary income in the year the money is distributed. Account values fluctuate with market conditions, and when surrendered the principal may be worth more or less than the original amount invested. A group fixed annuity is an insurance contract designed for investing for retirement purposes. The guarantee of the fixed account is based on the claims-paying ability of the issuing insurance company. Although it is possible to have guaranteed income for life with a fixed annuity, there is no assurance that this income will keep up with inflation. Early withdrawals, if taken prior to age 59½ will be subject to the IRS 10% premature distribution penalty tax, unless an exception applies. Amounts distributed will be taxed as ordinary income in the year it is distributed. An annuity does not provide any additional tax deferral benefit; tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does offer other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you.
For 403(b)(7) custodial accounts, employee deferrals and employer contributions (including earnings) may only be distributed upon your: attainment of age 59½, severance from employment, death, disability, or hardship. Note: hardship withdrawals are limited to: employee deferrals and ’88 cash value (earnings on employee deferrals and employer contributions (including earnings) as of 12/31/88).
The death benefit does not apply.