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UTSaver Tax-Sheltered Annuity Program, 403(b)All employees of The University of Texas at Austin are eligible to participate in the Tax-Sheltered Annuity (TSA) Program. This program is subject to all provisions of sections 403(b) and 415 of the U.S. Internal Revenue Code, as amended by the Economic Growth and Tax Relief Reconciliation Act of 2001. What is the UTSaver Tax-Sheltered Annuity (TSA) Program?The UTSaver Tax-Sheltered Annuity Program is a 403(b) supplemental retirement program that allows you to save additional income for retirement through Traditional (pre-tax) or Roth (after-tax) contributions. Traditional (pre-tax) contributions will reduce your taxable income. As investments grow, the earnings are tax-deferred until funds are withdrawn. Roth (after-tax) contributions will allow you to make tax-free withdrawals, if qualified. They will not reduce your taxable income. The program does not include an employer contribution. Contributions are made through payroll deduction and may be invested in fixed or variable annuities or mutual funds with the approved providers. How much can I contribute?Employees can get started for as little as $25.00 per month, with a maximum annual contribution limit of $15,500 for 2007. Participants need to designate a monthly contribution amount, for which there is a $25.00 minimum. There are two catch-up provisions that may allow participants to contribute more than $15,500 in 2007. Under the Age 50+ Catch-up, participants who are at least 50 years of age, or who will become 50 years of age during the calendar year, may contribute an additional $5,000 in 2007. Under the Service Catch-up, participants with 15 or more years of University service, who have also under-contributed during previous years, may contribute an additional $3,000 per year, towards a lifetime maximum of $15,000. What incentive do I have to participate in the UTSaver TSA Program?A nonrefundable tax credit applies to annual contributions of up to $2,000 made to supplemental retirement plans. The credit is based on adjusted gross income and reduces income taxes dollar for dollar. The table below illustrates the tax credit available to eligible incomes.
How do I enroll in the UTSaver TSA Program?Contact Benefit Services to request a Contribution Limit Formula (CLF) to determine your maximum annual contribution limit. Then log on to UTRetirement Manager to enroll in the plan. Information about UTRetirement Manager and a link to the Web site are available from the UTRetirement Manager information page. Enrollment completed by the 10th of any month is effective for the same month. It is possible to choose multiple providers, but the percentages allocated to each provider must total 100%. Participants must establish an account with each provider by completing account applications, available from UTRetirement Manager, and submitting the applications directly to the provider prior to the first contribution. Failure to establish an account may result in the loss of investment benefits. Can I change my contribution amount?Participants may increase or decrease their contribution amount on a monthly basis, as long as they stay within their annual contribution limit. Contact Benefit Services for a new CLF and a new Purchase/Change Agreement. Forms submitted by the 10th of any month will become effective for the same month. Can I change my UTSaver TSA company?Participants may change their provider(s) monthly. Log on to UTRetirement Manager by the 10th of any month to make the change effective for the same month. Participants must establish an account with any new provider prior to the first contribution. Changing providers in UTRetirement Manager will redirect future contributions to the new provider. To make a full or partial transfer of existing funds to the new provider, participants must also submit a Transfer Verification Form to Benefit Services. Participants should contact the surrendering provider to understand any penalties they may incur as a result of transferring the account. The Transfer Verification Form is available in UTRetirement Manager. How do I change my investment choices?Participants need to contact their company to make any changes to their account, other than changing the contribution amount. How do I cancel participation in the UTSaver TSA Program?Log on to UTRetirement Manager to cancel participation. If the cancellation is completed by the 10th of any month, participation will be cancelled effective for the same month. Participants should contact their provider prior to cancellation to understand the options available to them. What happens if my employment with the University ends?Participants who leave the university have the option to leave the funds in the existing accounts, or roll their account into a qualified plan, such as another 403(b) plan, a governmental 457 plan, a 401(a) plan, or an IRA. Distributions are available for participants who separate from state employment (or due to financial hardship or death), but a 10% tax penalty applies to distributions made before age 59.5. Income tax must also be paid on the distribution amount. Participants should contact their company to understand the options available to them. Where can I find additional information about retirement planning?Visit the Benefit Services Retirement home page. Also look for announcements about various financial and retirement series that Human Resource Services sponsors each year.
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