There are several types of contributions that may be made to the Plan.
One type of contribution that can be made to the Plan is Employer Contributions. Each Participating Employer is allowed to decide how much it wants to contribute to the Plan on behalf of eligible employees. There is no requirement that your employer must contribute to the Plan, so you must discuss with your employer whether it will make Employer Contributions to the Plan, and if so, how much those Employer Contributions will be.
Salary Reduction Contributions
Another important type of contribution is Salary Reduction Contributions, which you make to the Plan by means of voluntary salary reduction. This type of contribution allows you to contribute a certain portion or percent of your compensation to the Plan. You choose how much you want to contribute. In order to make Salary Reduction Contributions, you must complete a salary reduction agreement indicating the dollar amount or percentage of your compensation that you would like to contribute to the Plan. You may download a copy of a salary reduction agreement or obtain one from the Board by calling (615) 731-6812, or you can call the Board’s toll-free number at (877) 767-7738.
Salary Reduction Contributions reduce your currently taxable income by the amount of your contribution, saving you current tax dollars. The idea is that, since you are not actually receiving a portion of your salary now, you are also not taxed on it now. However, non-ordained employees do pay employment taxes (FICA, FUTA and Medicare) on their Salary Reduction Contributions.
In addition to Salary Reduction Contributions, you can also make After-Tax Contributions to the Plan. These are additional contributions that you choose to contribute on an “after-tax” basis. You can make After-Tax Contributions by sending a check to the Board, or by setting up an automatic bank draft from your personal bank account. You should contact the Board if you wish to make After-Tax Contributions to the Plan by calling (615) 731-6812. Or you can call the Board’s toll-free number at (877) 767-7738.
Unlike Salary Reduction Contributions, After-Tax Contributions do not reduce your currently taxable income by the amount contributed. However, earnings on any After-Tax Contributions you make, like all earnings in the Plan, are not taxed currently.
Rollover and Transfer Contributions
If you are a participant in another retirement plan, or if you have been contributing to another 403(b) tax-sheltered annuity provider through your employer, you may also be able to make a Rollover Contribution or a Transfer Contribution to this Plan. A Rollover Contribution is a direct rollover of a distribution made from another retirement plan or an IRA into your Account in this Plan. A Transfer Contribution is a transfer directly from another 403(b) annuity provider to the Plan. There are a number of special rules and limitations on Rollover and Transfer Contributions. Therefore, if you are a participant in another retirement plan or IRA, or if you have made retirement contributions to a different 403(b) provider, you should check with the administrator or the provider for that plan, as well as the Board, to see if you are eligible to make a Rollover or Transfer Contribution to the Plan.
Contributions Are Intended for Retirement
Remember, it is generally expected that all contributions will stay in the Plan until you retire. Although it is possible to take a distribution of some of your employee contributions prior to retirement, this Plan is not intended to be used like a savings account. Rather, it is designed to provide funds for you in retirement.