403(b) Plan Notice
Notice of Opportunity
to Make Elective Deferrals to the
Coastal Carolina University 403(b) Plan
You may have the right to make elective deferrals to the Coastal Carolina University 403(b) Plan. Contributing to a 403(b) plan helps to ensure that you will have funds to provide yourself with an income during retirement. A 403(b) plan allows you to contribute a portion of your compensation on a pre-tax basis or as a Roth (after-tax) contribution in order to save for your retirement. Contributions are made to the plan by payroll deduction. If you are already contributing to the 403(b) Plan, you may want to increase your deduction.
What are the benefits of contributing to a 403(b) plan?
- The pre-tax elective deferrals that you make to the plan now are not taxed until you withdraw them. This means you are lowering your taxable income now, and will potentially lower the amount of income tax you will pay on those funds at the time of withdrawal when you may be in a lower tax bracket.
- Both your pre-tax elective deferrals and earnings grow tax-free until they are withdrawn.
- Roth (after-tax) contributions are made on an after-tax basis. However, the earnings grow tax free and will be distributed tax free, if the distribution occurs after the end of the five year period that begins with the plan year in which the first contribution is made and the distribution occurs after you are age 59 ½, become disabled or die.
What do I need to do in order to start making elective deferrals?
You will need to make an election regarding how much of your compensation you wish to defer to the 403(b) plan and whether you want to have this contributed on a pre-tax basis or as a Roth (after-tax) contribution. You will also need to determine where you want to invest your contributions. The list of approved vendor(s) and their contact information can be located by visiting the CPI Participant Website at www.cpicrs.com. This list can also be obtained by contacting David Moyer, Director of Payroll, at 349-2752 or Jill Conway, Senior Payroll Accountant, at 349-2042. The financial advisor representing each vendor will provide you with the forms that will set up the contract or account with the vendor. Once you have completed the paperwork provided by the selected financial advisor please access the CPI Participant Website at https://www.cpicrs.com to complete the election process.
If you are unable to access the website or want additional information, please contact David Moyer, Director of Payroll at 349-2752 or Jill Conway, Senior Payroll Accountant at 349-2042.
How much can I contribute to a 403(b) plan?
In 2011, you can make elective deferrals up to $16,500. As this amount is subject to cost of living increases as set by the government, this amount will increase over time. If you will be age 50 or older sometime during the 2011 calendar year, you are eligible to contribute an additional amount that is known as a “age 50 catch-up contribution”. The limit on the age 50 catch-up contributions is $5,500 and can be contributed on top of the deferral limit of $16,500. Consequently, participants eligible to make the age 50 catch-up contributions can contribute up to $22,000 to the 403(b) Plan for the 2011 calendar year.
In addition to the age 50 catch-up, if you have completed at least 15 years of service with Coastal Carolina University you may be eligible to contribute up to $3,000 a year above the elective deferral limit until the amount of the cumulative annual additional contributions made using this special rule equals $15,000. If you have 15 years of service with your employer and want to utilize this additional 15 year of service catch-up contribution no action is required now, once you have exceeded $16,500 we will request additional information from you in order to determine the amount you are able to contribute to the 15 year of service catch-up. Participants who are eligible for both the age 50 catch-up rule and the 15 year of service catch-up contribution are required to use the 15 year of service catch-up contribution first.
For more information on enrolling in your 403(b) Plan, making changes to your current deferral or vendor elections, or any other questions or requests for information, please contact:
David Moyer, Director of Payroll at 349-2752
Jill Conway, Senior Payroll Accountant at 349-2042.