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403(b) Tax Sheltered Annuity
Frequently Asked
Questions
1. Who is
eligible?
Eligibility
is determined by your District, so please contact JEM or
your District Benefits Office to find out who is eligible
under your District’s Plan.
2.
What is
the ESC Region 10 403(b) Administration Plan?
The 403(b)
Plan and is a tax–deferred supplemental retirement plan sponsored
by your District. ESC Region 10 has implemented 403(b) plan administrative
services through a competitive proposal process. These services are
available to any Texas public school district or other education
agency through an interlocal agreement. The District's Plan is
authorized by the Internal Revenue Code (IRC)
Section 403(b) and is subject to specific Internal Revenue
Service regulations and other requirements. The Plan allows employees to
voluntarily contribute a portion of their compensation on a
pre-tax basis. The amount invested plus earnings is not
taxable until withdrawn from the Plan.
3.
How is the ESC Region 10 403(b) Administration Plan provided to
participants?
ESC
Region 10 and your participating District contract with
JEM Resource Partners (JEM) to
provide administrative, and communication
services to participants. JEM is the main contact for
participants. You can find out how to contact JEM by choosing "Contact Us" from the menu.
4.
How does the Plan work?
You elect the
amount you wish to defer from your gross salary each pay
period. The amount you elect to defer is withheld from your
paycheck each pay period before taxes.
5.
Who contributes?
You. There
are no employer contributions under this Plan.
6.
How do I enroll?
You may join the Plan at any time by choosing 'Login' on
the left-hand menu and clicking "New to the system? Enroll Now!".
You will need your Social Security Number and the plan password
provided on the Summary Plan Description for your district. The
Summary Plan Description can be found on our website by choosing
'Plan Description' from the left-hand menu.
7.
What is the contribution amount?
You decide the amount that you want to contribute. Please
keep in mind that there are limits imposed under the Internal Revenue Code. The maximum amount you can
contribute during each calendar year is up to 100% of your includable compensation or the maximum listed
in the table below, whichever is less.
Maximum Yearly Contribution
|
Year
|
Maximum
|
|
2008 |
$15,500 |
Catch-up contributions in 403(b) plans operate
under the following rules:
- At age 50, you become automatically eligible to contribute an additional $5,000 per year.
- If you are not 50 years of age or older, and have 15 years of service with your current employer, and
have not contributed more than an average of $5,000 per year, you may be eligible to contribute an additional
$3,000 per year, depending on your use of the age 50 catch-up.
- The lifetime limit for Catch-up contributions based on years of service is $15,000.
- For your convenience, JEM has provided a Maximum Allowable Contribution form, to aid you in calculating
your Catch-Up contribution. It can be found by clicking 'Forms' from the left-side menu.
8.
How are my Plan contributions invested?
Your contribution will be remitted to the available
investment providers based on the percentage allocation you choose.
Specific investment elections will need to be chosen through
the investment providers. For more information about specific products you will need to contact your
investment provider.
9.
What are my
investment option choices?
Specific investment elections will need to be chosen through
the investment providers. For more information about the investments available in a specific product you
will need to contact your investment provider.
The Texas Teachers Retirement System (TRS) is authorized by
the Texas Legislature to determine 403(b) vendors and products that are available to public school employees. You are not allowed to select
a vendor or product not authorized by TRS. Certain "grandfathering" applies. If you have any questions about this please contact JEM.
10.
How do I make changes to my elections?
If you are
changing your elections for the first time, you will need to enroll by choosing 'Login'
on the left-hand menu and clicking "New to the system? Enroll Now!". You will
need your Social Security Number and the plan password provided on the Summary
Plan Description for your district. The Summary Plan Description can be found on
our website by choosing 'Plan Description' from the menu. The elections you make
during the enrollment process will take the place of your current elections.
If you have
already enrolled on our system, you can make future changes online by
clicking the 'Login' button on the menu and accessing your account.
The following transactions can be made online:
• Contribution Amount
• Investment Provider Allocation Percentages
By January 1, 2009 you will be able to initiate distributions or transfers online.
11. How do I keep track of my account?
Investment providers who choose to cooperate fully with
the information sharing requirements of the plan will have information available for you
by logging in to your account.
Investment providers who do not fully cooperate with the information sharing agreements of the plan
may display zero balances. You will need to contact those investment providers for more infomation.
All funds are ultimately invested at the investment providers and you may still need to contact them for certain information
12.
Are
there fees to the participants in the Plan?
JEM is the Administrator and handles the ongoing administration of the Plan for monthly fees equal
to $1.50 per month.
You will need to contact your investment provider to determine their fees. Fees for allowable vendors and products are also displayed
on the TRS website.
13.
When can
I withdraw money from my account?
14. What are my
distribution options?
-
Receive a lump sum distribution (subject to ordinary income tax)
-
Rollover your account balance to an Individual Retirement Account (IRA) or other tax qualified vehicle.
-
Transfer your account to another Plan.
-
Some vendors and products allow payments in the form of a monthly annuity or periodic payments.
15.
What happens if I leave employment?
The Internal
Revenue Code allows distribution of funds upon termination of service with the participating
employer under the options listed above.
16.
When am I required to withdraw my money?
The later of when you retire or reach age 70½.
17.
What happens to my money when I die?
Your
designated beneficiary(ies) will receive the full value of
your account. Your beneficiary(ies) must contact JEM to
apply for a distribution.
18.
Are loans available under the Plan?
See your Plan Description, available from
the left-side menu, to find out if loans are allowed in your plan. Keep in mind that your
investment provider may not allow loans, although your plan permits them.
For further information on loans, please contact JEM at 800-943-9179.
19.
How can I
change my salary reduction?
You can change
your salary reduction at any time online by logging on to your account.
20.
How can I stop my
salary reduction?
You can stop your
salary deferrals at any time online by logging on to your account.
You may begin contributing again to the Plan at any time online by logging on to your account
21.
How can I move my funds
to another company?
If the company is an
active vendor in the Plan, depending on vendor rules and restrictions, you may be able
to "exchange" your funds into a different annuity or investment account with another vendor.
22.
How can I get more
information?
To get more
information about the Plan or enrolling in the Plan,
please
contact JEM at 800-943-9179,
or visit the other areas of this website.
Updated: September 9, 2008 |
