Tax Deferred Annuities
Tax Deferred Annuities
The University offers additional retirement savings options. Employees may elect to enroll in the 401(k), 457, or 403(b). Contributions to the plans are subject to the IRS Annual Limit. Under current tax law, these plans provide opportunities to defer a portion of your income, the taxes on that income, and any interest earned until such time as you receive the funds, which usually occurs after retirement. In addition, employees who are separating from service may elect to make a tax deferred contribution from their unused annual leave payout. Participation in these programs is available to all regular faculty, staff, and residents, on a voluntary basis.Ìý Residents are not eligible for the employer match.Ìý
Contributions
Minimum contribution is $20 per month (401k, 457) and $25 per month (403b) up to the IRS annual limit. UT provides a 401k match up to $50. TCRS Hybrid members also receive an additional 5% employer contribution to the 401k (employee participation is not required).
Enrollment
All new employees (hired for the first time 6/30/14 or after) are auto enrolled in the pre-tax 401k at 2% of base salary. Employees can opt out at any time. Notifications are mailed to first time new hires within 60 days of hire date with instructions on how to enroll or opt out. The 401k or 457 enrollment is processed online via the website or call 1.800.922.7772 for assistance. Returning or transferring employees may need to manually restart contributions via the Retire Ready TN website. Employees interested in the 403b may complete enrollment at any time in DASH.
Residents
Residents are eligible to contribute to the 401k, 457 or 403b. Contributions are not automatic and do not have an employer match. ÌýUpon onboarding, Residents will receive information from the 401k/457 vendor Empower Retirement. Residents should contact the Benefits office if they wish to enroll in the 403b.
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Overview of Plans
401k (pre-tax)
401(k) pre-tax contributions are tax deferred until money is withdrawn. Distributions from this plan are subject to ordinary income tax and if taken prior to age 59 ½, they may be subject to an additional 10% federal early withdrawal tax.
401k (Roth)
Under the 401(k) Roth, you pay taxes on the money today and do not pay taxes when you withdraw the funds. However, if withdrawn prior to the required 5 year holding period or age 59 ½, income taxes and a 10% federal early withdrawal tax will apply.Ìý
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457 (pre-tax)
457 pre-tax contributions are tax deferred until money is withdrawn. Distributions from this plan are subject to ordinary income tax.
457 (Roth)
Under the 457 Roth, you pay taxes on the money today and do not pay taxes when you withdraw the funds.
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Empower Retirement Contact:
Charlton Gutierrez | Retirement Plan Advisor
Mobile: 901.623.6917 |Ìý Charlton.Gutierrez@empower.com
403(b)
The 403(b) is an additional way to save for retirement. This plan does not include an employer contribution, and employees can enroll and make adjustments through DASH at any time. Employees will select either TIAA or VOYA as their provider. If you are contributing to both a 403(b) and a 401(k), the total combined contributions must not exceed the annual limit.
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Enrollment
To enroll or update your 403b contributions, log into the system. Select Benefits, Make Changes, Continue.Ìý Make sure to submit your changes.
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403(b) Pre-tax
Pre-tax contributions are made from gross earnings.Ìý Distributions from this plan are subject to ordinary income tax and if taken prior to age 59 ½, may be subject to an additional 10% federal early withdrawal tax.
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403(b) Roth
Post-tax or Roth contributions are made from earnings after taxes. Qualified distributions are tax free.Ìý Qualified distributions are made at age 59 1/2 or older after 5 years of account establishment.