Supplemental Retirement Savings-TSA 403(b)
All employees of Houston Community College may participate in a Tax-Sheltered Annuity (TSA) account to save for retirement. These accounts are subject to all provisions of sections 403(b) and 415 of the U.S. Internal Revenue Code, as amended.
FAQs
What is a TSA? A TSA is a voluntary supplemental retirement account that allows participants to tax-defer additional income for retirement, through pre-tax contributions. The program does not include an employer contribution. Participants reduce their taxable income by making pre-tax contributions from their paycheck to invest in an annuity or mutual fund with an authorized company. As investments grow, the earnings are tax-deferred until the money is withdrawn, presumably at retirement when income tax rates are generally lower.
How much can I contribute? The standard maximum annual contribution limit is $16,500 for 2009. Participants designate a per pay period contribution amount. Some vendors may require a minimum contribution, so check with the selected vendor. 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 $5,500 in 2009.
How do I enroll in a TSA? Enrollment is a two-step process:
- Contact an authorized company (contact and fee information are listed in this section of the Benefits web site) to obtain an account application. You must complete and submit the application directly to the company. Authorized companies are those listed in the 403(b) plan document.
- Download the Salary Reduction Agreement Form and Product Disclosure Form from the HCC web site. This form is where you designate the company to receive your salary deferrals and the amount of the deferral. Submit both the Salary Reduction Agreement Form and the Product Disclosure Form completed by your sales agent if purchasing a product sold only through a commissioned agent.
Can I change my contribution amount? Participants may increase or decrease their monthly contribution at the beginning of any pay cycle, as long as they stay within their annual contribution limit. Pay cycles begin on the first (1st) and the sixteenth (16th) of the month.
Can I change my TSA company? Participants may change their company for future contributions or move money from one authorized company to another. Effective 9/25/07, exchanges may only be made to companies that have signed an Information Sharing Agreement with the college.
First, participants must establish an account with a new authorized company.
Second, participants must submit a Salary Reduction Agreement to HR Benefits Department. This form will only redirect future contributions to the new company.
To move money from one TSA provider to another, participants must complete a Transaction Routing Request Form after opening an account with a new authorized company. After completion, the form is submitted to our 403(b) plan administrator, TSA Consulting Group, at the address/fax shown on the form. Contact the company from which funds are moving to understand any penalties that may be incurred as a result of exchanging the account. The participant must also complete any paperwork required of the new company in the transfer of account. All exchange, loan, hardship, and distribution paperwork is handled by the plan administrator.
How do I change my asset allocation? Participants need to contact their company to make any changes to their account, other than changing the contribution amount.
How do I cancel my TSA participation? Submit a Salary Reduction Agreement indicating a deduction amount of zero dollars to the HR Benefits Department to cancel participation. Participants should contact their company prior to cancellation to understand the account options available to them.
What happens if my employment with the college ends? Participants who leave the college have the option to roll their account into a qualified plan, such as another 403(b) plan or an IRA. Distributions are available for participants who separate from employment, pass age 59 ½ or become disabled (or due to financial hardship or death), but a 10% tax penalty applies to distributions made before age 59 ½. Income tax must also be paid on the distribution amount. Participants should contact their vendor to understand the options available to them as these vary from vendor to vendor.
Where can I find additional information about retirement planning? There are many resources in print and online with information about retirement planning and investing. One online resource is available through Great West, the Texa$aver 457 Plan record keeper, at this link: Retirement Planning. Also look for announcements about various financial and retirement programs that the Human Resource Benefits Department sponsors each year.
Links
Salary Reduction Agreement Form
Product Disclosure Form
Transaction Routing Request Form From the TSA Consulting Group home page, click on Plan Transactions on the left. Then click on the Transaction Routing Request Form link under Transaction Procedures.
