UTSaver 403(b) Tax-Sheltered Annuity

What is the UTSaver 403(b) Tax Sheltered Annuity (TSA) Program?

The UTSaver 403(b) TSA is a supplemental retirement savings program that allows participants to tax-defer additional income for retirement, through pre-tax contributions. These contributions are in addition to contributions made to the mandatory retirement program. The program does not include an employer contribution. Participants reduce their taxable income by making pre-tax contributions from their paycheck to invest in a fixed or variable annuity or mutual fund with an authorized company.

As investments grow, the earnings are tax-deferred until the money is withdrawn, presumably at retirement when income tax rates are generally lower.

How much can I contribute?

• For 2008, you can contribute 100% of your TSA eligible compensation or $15,500 per year, whichever is less.
• If you are age 50 or older, you may contribute an additional $5,000 in 2008.
• If you have 15 years of UT System service, and previous deferrals have averaged less than $5,000 per year, you may defer an additional $3,000 above the annual maximum.
• The additional deferral may not exceed a lifetime maximum of $15,000.

How do I get started?

You may elect to start participation in the TSA Program effective the first day of any month, provided all forms have been properly submitted to the Office of Employee Benefits before the first day of the month.

• Contact Charles Marrs at (512) 499-4662 and request a calculation of your contribution limit.
• Review and select a vendor(s) from the list of authorized vendors. You may select more than one vendor for your UTSaver TSA participation.
• Complete an account application(s) with the vendor(s) you have selected.
• Log onto UTRetirement Manager and select "TSA Enroll/Make Changes."

May I change my contribution amount?

• You may increase, decrease, or stop contributions as often as you like.
• To change or discontinue your contribution, Log onto UTRetirement Manager and select "TSA Enroll/Make Changes."

May I change vendors?

• You may transfer between investment options and vendors at any time.
• To change vendors, log onto UTRetirement Manager.
• To change investment options within the same vendor, contact your vendor directly.

What happens if I separate employment?

• You have the option to leave your funds in the existing 403(b) account or roll your account into a qualified plan, such as another 403(b) plan, a governmental 457 plan, a 401(a) plan, or an IRA.
• Distributions are available for participants who separate from state employment (or due to financial hardship or death), but a 10% tax penalty applies to distributions made before age 59 1/2.
• Income tax must also be paid on the distribution amount.
• Contact Charles Marrs at (512) 499-4662 to better understand your available options.

For your protection, you should not sign any transaction forms relating to application, transfer, or withdrawal of any TSA contributions based solely on assurances from a company representative, broker, or agent if you have any doubts about the transaction.

Lack of knowledge or deceptive practices by a representative, broker, or agent could be costly to you in terms of money, taxes, and penalties. The UT System can not assume any responsibility either for investment terms or for tax status. There is no guarantee of the tax rate that will be in effect at the time of an employee's retirement.

Questions?

If you have any questions, contact:

Charles Marrs, Retirement Program Analyst
Office of Employee Benefits
(512) 499-4662
cmarrs@utsystem.edu

Faye Godwin , Manager of Retirement Programs
Office of Employee Benefits
(512) 499-4664
fgodwin@utsystem.edu

or visit the website: http://www.utretirement.utsystem.edu/homepage.html.