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Tax Sheltered Annuity (TSA) - 403B Plan (Optional)
As an employee of MCCCD, you are
eligible to participate in a tax sheltered retirement program
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You are building up a retirement fund. |
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Your contributions are taken out
before you calculate federal and state taxes. At the end |
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Your contributions build up
interest and this interest accumulates on a tax deferred |
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Your contributions are automatically made through the convenience of payroll reduction. |
Elective deferral
limits for the
403(b) plan: $15,500.
Maximum “catch-up” contribution for those age 50 or older: $5,000.
This means that employees over age 50 are eligible to contribute
$20,500 on a pre-tax basis to their TSA.
Withdrawals may be made under certain conditions:
1) if you are 59 1/2 or older
2) if you die, become disabled, or can prove financial hardship
3) if you separate from service with your employer on or after age 55.
All distributions will be taxed as
ordinary income when received. There is a 10% IRS penalty for
distribution prior to age 59 1/2 except if the distribution is made:
a) upon death or disability,
b) in the form of lifetime monthly income,
c) in the form of a series of equal periodic payments made based on your life expectancy, and
d) upon your separation from service and your reaching age 55.
MCCCD implemented guidelines which
ensured the financial stability of the companies offering
TSA products to employees of Maricopa Community Colleges. Only companies that
meet MCCCD
guidelines will be permitted to prepare TSA contracts for our employees. The
Employee Benefits
Office maintains a list of these available companies.
1) Obtain the list of qualified TSA companies from the Employee Benefits Office.
(An employee can have more than one active TSA.)
2) Select a company from the list:
(a) contact one of the agents listed, and
(b) sign a contract with that company to begin the TSA
3) Complete MCCCD’s Salary Reduction Agreement to indicate:
(a) the payroll date you want your TSA deductions to start,
(b) the amount you want to contribute, and
(c) the name of the TSA company you selected
TSA deductions will begin within 30 days of receiving the signed
and completed Salary Reduction
Agreement. Deductions will continue from year to year unless you submit a new
Salary Reduction
Agreement changing the amount, company, and/or stop the deductions.
Last modified: August 12, 2008
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