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 you 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- Both your pre-tax elective deferrals and earnings grow tax-free until they are withdrawn.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 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 59½, 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 is also available through the Payroll Office or at http://www.coastal.edu/administration/hreo/payroll/403bvendors.html.
The financial advisor representing each vendor will provide you with the forms to establish the contract or account with the vendor. Once you have completed and submitted the paperwork provided by the selected financial advisor please access the CPI Participant website at https://www.cpicrs.com to complete the election process.
How much can I contribute to a 403(b) plan?
In 2013, you can make elective deferrals up to $17,500. This amount is subject to cost of living increases as set by the government and will increase over time. If you will be age 50 or older sometime during the 2013 calendar year, you are eligible to contribute an additional amount that is known as an “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 $17,500. Consequently, participants eligible to make the age 50 catch-up contributions can contribute up to $23,000 to the 403(b) plan in the 2013 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 aSouth Carolina state agency and want to utilize this additional 15 years of service catch-up contribution no action is required now; once you have exceeded $17,500 the Payroll Departmentwill request additional information from you in order to determine the amount you are able to contribute to the 15 years of service catch-up. Participants who are eligible for both the age 50 catch-up rule and the 15 years of service catch-up contribution are required to use the 15 years of service catch-up contribution first.
For more information on enrolling in a 403(b) Plan, making changes to your current deferral or vendor elections, or for other requests, please contact:
Dave Moyer, Director of Payroll, 843-349-2752?
Jill Conway, Senior Payroll Accountant, 843-349-2042