This Page Contains Information Relevant to State Employees

What is a tax year?

• The State's tax year consists of payments issued from January 1 through December 31. For most State employees this consists of the December through November pay periods. Annual 403(b) contributions are consequently calculated for November through December of each year. For instance, tax year 2008 consists of pay periods December 2007 through November 2008.

How much can I contribute to my 403(b) plan each year?

• The lesser of $15,500 or 100% of adjusted gross income.

Do 403(b) plans have catch—up options?

• Yes. The "Catch up" contribution amount over and above the maximum deferral limit for individuals with 15 or more years of service with the same employer is $3,000 per year for up to 5 years, for a lifetime maximum of $15,000.

  The "Catch up" contribution amount over and above the maximum deferral limit for individuals aged 50 or more is:

  Year 403(b) Amount:

  • 2002 $1,000
  • 2003 $2,000
  • 2004 $3,000
  • 2005 $4,000
  • 2006 $5,000
  • 2007 $5,000
  • 2008 $5,000

  See the "Program Guide for Participants" for more information.

When is the earliest I can withdraw my funds?

• Age 55 if retired or separated, or age 59 ½ regardless of employment status. In the case of hardship, defined as "immediate and heavy financial need," the penalty of suspension from participation in the plan is 6 months.

Can I receive my TSA funds if I separate from service?

• Yes. If you separate from service, you are entitled to the value of your account. You may receive a lump sum payment; transfer savings to another 403(b) program; roll your account over to an IRA; or leave funds in the account to accumulate interest.

  If you elect to defer a portion of your lump sum payment upon separation into the next tax year, you may have your 403(b) contribution withheld from that payment upon request.

Can I transfer funds to or from another employer’s 403(b) plan?

• Yes. You can directly transfer or rollover TSA funds to/from another employer's 403(b) plan or to an IRA. You can also transfer funds from a 401(k) or 457 plan without any tax penalty. Consult with the company involved and your tax advisor on specific options available.

Can I transfer between funds within the CSTSA program?

• Yes, as long as the investment companies involved agree to transfer/accept the funds. Watch-out for surrender changes and additional fees. See the Program Guide for Participants for additional information.

When must I begin distributions?

• Age 70 ½ or by the April 1 following the calendar year of your retirement. If you are not retired at age 70 ½, you may continue to contribute to the plan.

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Last Modified: January 2008