Your voluntary contributions to the plan are made automatically through the payroll system. This allows the Commonwealth to deduct your savings before income taxes are applied to your salary during each biweekly payroll. Taxes are due when you take money out of the plan.Please note that your contributions are subject to current Medicare taxes.
Maximum Contribution Amounts: The Internal Revenue Service (IRS) imposes annual limits on the amount of tax-deferred contribution you can make. The limits, which can change each year, depend on your age at each December 31.
Change Contributions: You can change the amount of your contribution at any time; simply ask your institution’s Benefits Administrator for a new Salary Reduction Agreement.
Coordinating Contributions with Other Plans: The IRS requires you to coordinate your contributions to this plan with contributions to other plans, for purposes of determining your maximum contribution amount each year. These special requirements are:
Smart Plan: Elective contributions to the Commonwealth’s Smart Plan are not coordinated with contributions to the 403(b) plan. You may contribute up to the maximum amount to each plan.
Uniformed Services: Employees whose employment is interrupted by qualified military service, or who are on leave of absence for qualified military service, may make additional tax-deferred contributions to the plan upon resumption of their employment. Contact your Benefits Administrator with questions about this feature.
The Plan accepts rollovers from other retirement plans. Amounts you roll into this plan may only be accepted by Contract Providers, and will be treated as Plan Contributions for purposes of making distributions to you.
You may exchange another contract issued under Tax Code Section 403(b) into this plan as long as the exchange otherwise meets the Internal Revenue Service’s rules governing such transactions.
Exchanges into the 403(b) plan may be made only to accounts issued by the Contract Providers. Amounts you deposit in this plan as an exchange will be treated as plan contributions for purposes of making distributions to you.