You have the opportunity to use a 403(b) tax sheltered annuity to add additional value to your retirement savings plan.
A 403(b) is an employer-sponsored retirement plan, so you can’t open a 403(b) account on your own, as you can with an IRA. It is a benefit provided to you by the District. Every District employee is eligible to participate in the plan.
When it comes to saving for retirement, an employer-sponsored retirement plan offers many advantages:
Generally, you pay no federal or state income taxes on the money you put into the plan until it is time to take withdrawals. You pay no federal or state income taxes on any interest or earnings until you take withdrawals. You have the advantage of investing in professionally managed accounts available to your particular plan or you may seek the safety of a fixed annuity. Participating in an employer-sponsored plan is a quick and easier way to save towards retirement.
How much can I contribute?
In general, you may elect to contribute up to $17,500 in 2013. This amount is the general limit on what you can elect to defer under each of the 403(b) or 457(b) plans. This amount may be adjusted annually. Additional catch-up contributions may be permitted if certain criteria are met. Specifically, if you have at least 15 years of service with the Redwood City School District and/or you are at least 50 years old by year's end; you may also be able to make additional catch-up contributions. Each catch-up contribution has its own limits.
How can I Enroll?
The first step in the enrollment process is to establish a 403(b) account with one of the District’s approved vendors. You may obtain a list by clicking on approved vendors or just contact the Employee Benefits Department and request that a list be sent to you. To learn about your approved vendors, you may contact our local representative with Planwithease.com by calling 650-766-1651. You may also read about your options by going on-line at 403bcompare.com. The District has engaged the services of Planwithease.com to act as a Third Party Administrator, (TPA) for the District's 403(b) Deferred Compensation Plan. The TPA will assist the District with Plan compliance and help you with all aspects of the Plan, including vendor selection, enrollment, transfer, distributions, hardship withdrawals and loan requests. Again, their number is 650-766-1651.
Once you have selected a vendor you will need a Salary Reduction Agreement that can be obtained from Employee Benefits, our TPA or accessed on our website by clicking here. This form provides the necessary information for Benefits to initiate your 403(b) payroll deduction. Salary Reduction Agreements are accepted by Employee Benefits at any time, but are due by the end of the month prior to the effective date of your contribution to meet specific payroll deadlines. Please keep a copy of the completed form for your records. Also, be sure to read the important disclosure information on back the form before signing.
How do I change my contribution?
If you wish to terminate, change the amount of your contribution or change vendor(s) selections, you must inform the Business Office in writing by using a Salary Reduction Agreement. If you are simply changing the distribution of your contributions within a vendor, you should deal directly with them.
Employee Investment Decisions
You are responsible for choosing the investment that is appropriate for your personal circumstances. Investment choices are solely the responsibility of the employee. The District makes no recommendations and is not responsible for any gains or losses attributed to your investment, nor for any actions of the investment manager or custodian.