Voluntary Retirement Plans
403(b), and new 457(b) & Roth Plans
opportunities to invest in your future starting January 2017! You will have
the opportunity to select from a greater variety of non-VRS retirement
investment accounts facilitated by PenServ. We are offering additional 457(b)
investment options as well as post-tax Roth 403(b) and 457(b) options
with our existing vendors. Beginning in January, those participating with the
Empower Retirement 457 (formerly Great-West) can manage their per pay period
contributions through PenServ’s website. Additional information will be
distributed in January 2017.
Deferrals, 403(b) & 457(b)
retirement plans: By saving on a
Pre-Tax basis, you reduce the taxes you pay today and delay paying taxes on the
money you save. Taxes are paid when you withdraw the money from the plan. As an
employee, you may start participating at any time during your employment. Employees may contribute the maximum in BOTH
types of accounts to augment retirement savings.
Deferrals (after tax), Roth Elective Deferral: This a retirement plan that allows a participant to make
contributions with post-tax rather
than pre-tax dollars. Contributions designated as Roth Elective Deferral
contributions are subject to Federal income tax withholding since those amounts
will be currently taxed as wages.
requirements must be met for the earnings on my Roth deferrals to be withdrawn
tax free? There are basically two requirements. First the Roth
Deferral account must be in existence for 5 years. This 5-year aging begins
with the first day of the year “for which” the contribution is made. For
example, if you defer for the first time in December of 2016, your 5-year aging
begins 1/1/2016.The second requirement is that you receive the distribution on
account of: attainment of age 59 ½, death or disability. Note that the first
time homebuyer exception which applies in the case of a Roth IRA distribution does not apply to Roth Deferral
the difference between post-tax and pre-tax elective deferrals in a retirement plan?
elective deferrals will not be taxed upon distribution. Additionally, if a
distribution from a Roth Elective Deferral account meets certain requirements,
the earnings are tax-free as well. Whereas, the contributions and growth on
pre-tax contributions will be taxed at the participant’s income tax rate at the
time of distribution.
Sign Up for a 403(b), 457 and Roth Plans Administered by PenServ
the list of vendors (updated list will be provided in January 2017),
contact the vendor and open an account. If you have an existing account with
one of the vendors on our list, but wish to add a new Roth or 457, you
must contact your vendor to do so. Once that account is established, you
can then go to PenServ’s website to designate your contributions.
- PenServ website is:
http://www.penserv.com and sign up using
your vendor account information.
- For questions call PenServ: 800-849-4001
deducted from your paycheck for the 403(b) and 457(b) plan on a pre-tax
basis. Taxes are deferred until the tax
year in which funds are received by you from the plan(s).
into Roth plans are post-tax.
participant make both pre-tax elective deferrals and post-tax Roth elective
deferrals at the same time? Yes.
Participants can elect to have some of their contributions designated as
pre-tax elective deferrals and some as post-tax Roth elective deferrals. The
sum of all participant elective deferrals cannot exceed $18,000 for 2017
($24,000 if the participant is age 50 or over).
Age 50 “Catch up” (additional
contribution amount permitted)
*Important: 457 IRS annual maximum includes
any contributions you make to the VRS
Hybrid 457 plan and includes auto-escalation.
Universal Availability Notice will be posted on the RCPS Human Resources Intranet
page when issued.