Tax-Deferred Annuities - 403(b) and 457 Accounts

The university provides all employees, with exception of student employees, the opportunity to save for retirement through pre-taxed supplemental retirement plans. A 403(b) plan (also called a tax-sheltered annuity or TSA plan) is a retirement plan offered by public schools and certain tax-exempt organizations. 457 Deferred Compensation Plans are offered by certain state and local governments and non-governmental agencies. The plans allow employees to save for retirement by contributing to individual accounts. Employers can also contribute to employees' plans. Contributions to a 403(b) or a 457 can be payroll deducted and placed into a special savings account that can be accessed at the time of retirement. Employees may elect to have up to 100% of their income (up to IRS limit) deducted and placed into a 403(b) or a 457 plan. The employee is responsible for ensuring that his/her contributions are in compliance with IRS regulations concerning tax-deferred contributions. To enroll in a 403(b) or a 457 plan see the list of participating providers.

Roth IRA

Employees may invest in a tax-advantaged Roth IRA retirement account. Employee-only contributions are made with after-tax dollars and are tax-free at the time of withdrawal. Employees investing in Roth IRAs are responsible for ensuring that their contributions are in compliance with IRS regulations. Eligibility to participate in a Roth IRA depends on several factors such as adjusted gross income, your tax-filing status, and current participation in a company-sponsored retirement plan. Also, employee and/or spouse must be working to contribute to a Roth IRA account. A financial advisor will be able to provide you with additional information on a Roth IRA. To enroll or for questions related to Roth IRA see the list of participating providers.

Roth 403(b)

Employees may invest in a Roth 403(b), this is another option to help save for retirement.  Roth 403(b) contributions and withdrawals are taxed differently than pretax 403(b) contributions.  Qualified distributions from a Roth 403(b) account at retirement are not subject to federal income tax.  The earnings set aside for a Roth 403(b) account is contributed to the plan after state and federal income tax has been withheld.  

Always consult with your personal tax advisor and/or financial advisor prior to making any decisions about your retirement.

If you have questions about Supplemental Retirement Accounts contact a Human Resources Benefits Specialist or email benefits@jmu.edu.