Retirement Programs

UTSaver DCP - 457(b)

Saving More With your 457(b) Deferred Compensation Program

Now you can save even more for retirement! When you retire or otherwise leave employment at the University of Texas System, you can defer your unused annual leave payment into retirement savings if you have a UTSaver 457(b) DCP account in place before you leave UT employment. Before your last day on the payroll, inform your benefits office that you wish to deposit all or part of your annual leave payment into your UTSaver 457(b) DCP account.

You can defer any portion of your unused annual leave payment up to the 457(b) limit. For 2013 the 457(b) limit if you are under age 50 is $17,500. If you are age 50 or older, you can defer up to $23,000.

Federal income tax will not be withheld for the amount you defer to the UTSaver DCP.  However, deductions for Social Security and Medicare will be withheld. 

Questions and Answers

Can I defer any portion of my unused annual leave into my UTSaver DCP while I am still employed?

No. Only amounts that are payable are eligible to be deferred to the UTSaver DCP.  The annual leave amounts in excess of the carryover maximum from one fiscal year to the next fiscal year are not eligible for payment. 

Can I defer my unused annual leave amount to an IRA or other non-UTSaver account upon termination?

No, you can only defer to a UTSaver 457(b) DCP account.

Can I get paid for my unused sick leave and can that payment be deferred to a UTSaver 457(b) DCP account?

Unused sick leave balances are not paid to University of Texas employees when they separate from service either by termination or retirement. Therefore, there are no funds to defer to a UTSaver account. 

Can I defer part of my unused annual leave amount to a UTSaver 457(b) DCP account and receive the remainder as a lump sum payment?

Yes, you may defer part of your unused annual leave payment to your UTSaver 457(b) DCP account and receive a check for the remainder, which will be taxable. Maximum annual deferral limits apply. 

Can I defer 100% of my annual leave payment to my UTSaver 457(b) account?

You can defer any portion of your unused annual leave payment up to the 457(b) limit. 
Federal income tax will not be withheld for the amount you defer to the UTSaver DCP.  However, deductions for Social Security and Medicare will be withheld. 
 
If I have both a UTSaver 457(b) DCP account and a UTSaver 403(b) Tax Sheltered Annuity, can I defer part of my unused annual leave to each account?

Not at this time.  Only the 457(b) DCP account is eligible to receive the deferral for unused annual leave.

What is the process for deferring my unused annual leave payment to a UTSaver 457(b) DCP account?

  1. Contact your institution’s benefit office before your last day of employment.
  2. Complete a Purchase Agreement before your last day of employment.
  3. If you do not have a UTSaver 457(b) DCP account, choose a Provider from the list of approved Providers and follow their enrollment instructions to set up an account.
  4. If you do not have a UTSaver 457(b) DCP account, complete applications and beneficiary forms and return those directly to the Provider before contributions are deducted from your annual leave payment.

 

 

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