| Updated:
5/27/05
Frequently
Asked Questions about
Tax-Sheltered Annuity Plans (403(b) Plans)
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During the 2004-05
school year, California public school employees will have access
to the 403bCompare web site,
an online "information bank" of objective information
about various 403(b) vendors and the products they offer. A 403(b)
plan is an optional, tax-deferred savings plan that supplements
school employees' California State Teachers' Retirement System or
California Public Employees' Retirement System monthly retirement
benefit.
How
do I sign up?
What is the maximum I can contribute?
How do I know which company to select?
The company I want isn't on your list. How do I get
them added?
Can I contribute to more than one company?
How do I increase or decrease my contribution?
How often can I change it?
How do I cancel my TSA? How do I change companies?
I get paid a variable amount. Will my TSA contribution
always be made?
I don't get paid in July and August. Do I have
to cancel my TSA for the summer?
My
question isn't on this list. Who can help me?
How
do I sign up?
You need to
select a company from the list of tax-sheltered
annuity companies at 403bCompare
web site. You need to set up an account with the company you have
selected. Once you have set up your account with the company,
complete the district's Salary
Reduction Agreement form
and submit it to Payroll by the 10th of the month for the change
to take effect with the end-of-the-month payroll, or the 20th
of the month for the change to take effect with the 10th-of-the-month
payroll (e.g., October 10 for the reduction to begin with the
October 31 payroll, or October 20 for the reduction to begin with
the November 10 payroll).
What
is the maximum I can contribute?
This figure
varies for each employee. IRS Publication
571 shows you how to calculate this amount.
How
do I know which company to select?
The district
neither sponsors nor sanctions any of the listed
providers. It is the employees' responsibility to determine
if the financial investment provider meets their needs.
The
company I want isn't on your list. How do I get them added?
Per
California
Education Code 25113, the company needs to register
with 403bCompare. Once
they have registered there, they need to send a request on company
letterhead to Budget & Fiscal Services. We will send them
a copy of the application and the district's hold harmless agreement.
They must complete these, have a company officer sign them, and
return them to us along with a copy of their Certificate of Authority
(issued by the California State Department of Insurance authorizing
it to do business in California).
Can
I contribute to more than one company?
You can contribute
to up to three different companies at a time.
How
do I increase or decrease my contribution? How often can I change
it?
To change
the amount you are contributing to the same company, fill out
a new Salary Reduction Agreement
form ,
and put the new amount on line 4(a). This will replace your old
salary reduction agreement for the same company. You can submit
a new Salary Reduction Agreement form every month, if necessary.
How
do I cancel my TSA? How do I change companies?
To stop contributing
to the old company, complete a Cancellation
form
and return it to us. To change companies, complete the Cancellation
form for the old company, and a Salary
Reduction Agreement form
for the new company. Be sure to set up the account with the new
company before turning in the Salary Reduction Agreement form.
I
get paid a variable amount. Will my TSA contribution always be made?
The TSA contribution
will be made as long as there is enough taxable gross left after
your mandatory deductions have been made. (Mandatory deductions
may include, depending on your bargaining unit, Federal and State
taxes, PERS or STRS or PARS, Medicare, Social Security, SDI, and
American Fidelity.) If there is not enough taxable gross left,
the TSA contribution won't be made that month.
I
don't get paid in July and August. Do I have to cancel my TSA for
the summer?
No. The reduction
will resume in September. As in the previous question, the TSA
contribution is only made during months when there is enough taxable
gross.
My
question isn't on this list. Who can help me?
You can contact
Sonia Nesheiwat,
at (925) 682-8000, ext. 4076.
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