The University offers three kinds of Tax-Deferred Plans: 403(b), 401(k) and 457. The differences are outlined in the side-by-side Comparison Chart. The information contained herein is not intended to recommend that an employee participate in the Tax Sheltered Annuity (TSA) or Savings Plus Program (SPP), nor will it give employees investment or tax advice.
What is a Tax-Sheltered Annuity (TSA) Program 403(b)?
The CSU 403(b) Tax Sheltered Annuity (TSA) Program transitioned to Fidelity Investments April 1, 2016.
The CSU 403(b) Tax Sheltered Annuity (TSA) Program is a voluntary program that allows eligible CSU employees to save toward retirement by investing pre-tax contributions in tax-deferred investments in either annuities or mutual funds, under Internal Revenue Code (IRC) Section 403(b). TSA contributions are made solely by the employee through payroll deductions, prior to federal and state taxes being calculated. Consequently, these pre-tax contributions result in reduced taxable income for participating employees.
TSA enrollments, deferral changes and fund investment selections are designated by employees via Fidelity Investments (Group Plan Number 50537) online or by calling (800) 343-0860 effective April 2016. All salary reduction changes (stop, start, increase and/or decrease) are managed by the employee.
The cutoff day to make changes is the 5th of each month, or the next business day by 9:59 pm if the 5th falls on a holiday or weekend.
How do I enroll?
Go to the plan Administrator’s official website: http://netbenefits.com/calstate
There are three steps to complete your enrollment which should only take approximately 15 minutes. You’ll begin by entering your social security number, the plan ID is already checked.
Annual Contribution Limits
Currently, two IRC limits apply: the IRC Section 402(g) "elective deferral limit" and the IRC Section 415(c) "percentage of compensation" limit. Currently, the contribution limit is 100% of adjusted gross income (up to $53,000), or a maximum of $18,000 per year.
Contributions to a 403(b) plan are not offset by contributions to a 457 plan. Employees can maximize contributions in both of these plans. For example, a participant could elect to contribute up to $18,000 to a 403(b) plan AND up to $18,000 to a 457 plan, for a total contribution of up to $36,000.
Contributions to a 403(b) plan are offset by any contributions to a 401(k) plan in the same tax year. Currently, employees contributing to both a 403(b) and 401(k) plan are restricted by IRS regulations to a combined total of $18,000.
Additional Catch-Up Provisions
Under IRC Code Section 402(g)(7), employees that have at least 15 years of service (full-time equivalent) with the CSU and have not maximized the annual contribution limits during this time, may be eligible to contribute an additional $3,000 per tax year for up to five years, for a total of $15,000. To take advantage of this additional catch-up allowance, proof of 15 years of service (annual CalPERS statement) and a completed Maximum Contribution Allowance Worksheet are required. The Worksheet below can calculate your annual maximum contribution amount based on information you provide.
Please note: if the employee has contributed more than $5,000 per year or a total of $75,000 for the last 15 years, they may not be eligible for the 15 year catch-up.
Please complete the Worksheet listed below.
The age 50 catch-up is an age based catch-up allowance under IRC section 414(v). This provision allows employees that are or will turn age 50 by the end of the current tax year (December 31) to contribute an additional $6,000 to a 403(b) plan or to a 401(k) plan and also contribute an additional $6,000 to a 457 plan.
If an employee qualifies for both of the 403(b) catch-up provisions, additional contributions will be first applied to the 15 year catch-up allowance and then to the age based catch-up provision.
See specific 457 and 401(k) plan restrictions at Savings Plus.
What is Savings Plus?
"Savings Plus" is the name of the 401(k) plan and 457 plan available to most State of California employees, including employees of the Legislature, Judicial, and California State University (CSU) system. These plans allow you to invest in your future by building a retirement savings account using payroll deductions that go into investments you select from the diverse Savings Plus fund lineup.
Information regarding the 401(k) and the 457 plans administered by theState of California(not CSU), can be obtained from Savings Plus Program website at www.savingsplusnow.com
You are eligible to enroll in a Savings Plus 401(k) and 457 plan if you:
- Are currently employed by the State of California or the California State University (CSU) system, and you are eligible for membership in CalPERS, the Legislators' Retirement System, or the Judges' Retirement System.
- Separate from State and CSU system employment and return to service as a "rehired annuitant" (The term "rehired" annuitant, used in the CSU system, is also known as "retired annuitant" among State employees).
- Are in the Alternate Retirement Program (ARP).
ScholarShare College Savings Trust
Vendor: TIAA - CREF Tuition Financing, Inc.
Telephone: 866-842-2905 x5405
The Scholarshare Program is based upon the Internal Revenue code that will allow you to place money in a trust for your family's college expenses.
- The money you contribute is invested based upon your needs and investment philosophy.
- A minimum of $25 allows you to open a ScholarShare Account
- You can contribute as little as $15 per pay period.
- Qualified withdrawals are free from Federal and State Income Taxes.
Other Savings Plans
U.S. Savings Bonds
- The principal and interest are paid when the bond is cashed.
- Bonds are sent to employees as they are purchased.
- Can be replaced if lost, stolen or destroyed.
Membership in a credit union enables you to save conveniently, to borrow at low interest rates and repay loans through payroll deduction. You will need to show your Coyote One Card or a current paystub to open an account. For information on additional perks of credit union membership please refer to the following credit union sites: