403(b) Plan Universal Availability
Table of Contents
- What is a 403(b) Plan
- Who is eligible to participate?
- When can I enroll?
- How do I enroll?
- Who can assist me with completing the forms?
- What types of contributions are allowed?
- Can I contribute a flat dollar amount each paycheck?
- How can I change the amount of my contributions or stop my contributions?
- What is the maximum amount I can contribute?
- Which provider(s) will be available to receive contributions under the Plan?
- Where can I obtain more information about the Plan?
What is a 403(b) Plan?
A 403(b) Plan, also known as a tax-sheltered annuity (TSA), is a retirement plan designed for certain employees of public schools and other tax-exempt organizations, and certain ministers that allows employees to save for their retirement by saving and investing pre-tax dollars through voluntary deferrals (i.e. payroll deductions). Both the contributions and any earnings under the plan are tax-deferred until the money is withdrawn, usually at retirement when individuals tend to fall into a lower tax bracket. When the funds are withdrawn, they are subject to regular income tax.
Who is eligible to participate?
All employees of the Essex Westford School District (EWSD) and participating school districts who contribute a minimum of $200/year are eligible to participate in the EWSD Tax Sheltered Annuity Plan (otherwise known as the 403(b) Plan). Employee contributions to the Plan are voluntary. For information related to our 403(b) Plan please refer to the Summary Plan Description.
When can I enroll?
Employees can enroll in our 403(b) Plan at any time. Contributions will begin with the next payroll period following receipt of the required forms outlined below.
How do I enroll?
If you are interested in establishing a 403(b) contract within our Plan, you will need to do the following:
- Complete a Salary Reduction Agreement with the district indicating the amount of your total bi-weekly pre-tax contribution; and,
- Complete a Participant Enrollment form with the VT State 403(b) Investment Program indicating your investment selections and percentages. This initial enrollment form should be handed in with your Salary Reduction Agreement.
- If you have more than one primary beneficiary or one contingent beneficiary, please be sure to submit a Beneficiary Designation form with your enrollment form.
- Submit all completed forms to the Payroll Office located at the District Office West Campus: Essex Westford School District, Attn: Payroll Office, 51 Park Street, Essex Jct., VT 05452
Who can assist me with completing the forms?
For assistance with how to complete the forms, please contact the Payroll and Accounting office at 802-857-7039 or 802-857-7045, or Human Resources at 802-857-7048. We cannot give investment advice, but can provide you with some basic information to help you complete the forms required for participation. Participants may also contact Prudential directly for assistance in completing their forms at 877-RET-VERM (877-738-8376). The Prudential Counselor assigned to our area is Brian Ficek. He can be reached at (802)222-1798 or email@example.com.
What types of contributions are allowed?
The types of contributions allowed under our plan are outlined below. For more information related to eligibility for the Employer Matching and Non-elective Contributions, please refer to the Summary Plan Description and to your applicable master agreement and/or contract form:
- Employee Pre-Tax Salary Deferrals – All employees may make pre-tax salary deferrals (also called elective deferrals) to the plan via payroll deduction.
- Employer Non-Elective Contributions – After working two consecutive years of service for a minimum of 1000 hours each year, eligible employees (who are not eligible for VSTRS) shall receive a basic District contribution (also known as base contribution) equivalent to 3% of the employees eligible compensation, regardless to whether or not the employee is contributing.
- Employer Matching Contributions – For those employee’s eligible for the Non-Elective Contribution (outlined above) who elect to make pre-tax salary deferrals, a matching contribution of up to 3% of the employee’s eligible compensation per paycheck shall also be made by the District.
Can I contribute a flat dollar amount each paycheck?
- Hourly paid personnel, substitutes, “as needed” employees and employees eligible for employer matching contributions who elect to contribute to the Plan, must elect to contribute a percentage of each paycheck into the plan. The percentage must be stated in whole number or 1/10th of a percent increment.
- All teachers and licensed school administrators must elect to contribute a flat dollar amount (stated in whole numbers) per paycheck.
How can I change the amount of my contributions or stop my contributions?
You can make a change in your contribution amount or stop your contributions at any time by completing a new Salary Reduction Agreement (SRA) and sending it to the Payroll Office located at central office (see address above). The change will take effect the pay period following receipt of the SRA.
What is the maximum amount I can contribute?
- Basic Limit – For the 2019 calendar year, employees under the age of 50 can elect to defer a maximum of $19,000 for the year. This will be increasing to $19,500 for the 2020 calendar year.
- Age 50 Catch-Up Provision – For the 2019 calendar year, employees age 50 or older can elect to defer an additional $6,000 for the year, for a total maximum deferral of $25,000 in 2019. This will be increasing to $6,500 for the 2020 calendar year.
- Total Contributions – For the 2019 calendar year, total contributions (including basic contribution, age 50+ catch-up contributions, and employer contributions) cannot exceed the lesser of $56,000 or 100% of the employee’s compensation. This will be increasing to $57,000 for the 2020 calendar year.
Which provider(s) will be available to receive contributions under the Plan?
Except for those employees who are grand-fathered, the District's 403(b) Plan is with the Vermont State Employees Retirement System which is currently administered by Prudential. (Grand-fathered accounts are administered by Omni.) For information about the investment options available under the Vermont State Employees Retirement System, or to access your account, please visit them on-line at: vermont.retirepru.com.
Where can I obtain more information about the Plan?
For more information about the 403(b) Plan, please refer to the Summary Plan Description.
You can also contact our Prudential Investment Counselor, Brian Ficek, at (802)222-1798 or email him at firstname.lastname@example.org. The Prudential address is: 280 Trumbell Street, Hartford, CT 06103.