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New IRS 403(b) regulations took effect 1/01/2009. The UW Tax-Sheltered Annuity 403(b) Program has made several changes in order to be compliant with federal regulations. Generally, the IRS no longer permits the individual participant to self-certify that he or she is eligible for a loan or hardship withdrawal.

The UW TSA Plan is a long-term retirement savings vehicle. IRS regulations limit the access you have to your savings. You may withdraw your contributions only when you leave employment with the UW System, reach age 59 ½, or become disabled. However, you can borrow against your TSA funds. Hardship withdrawals are not available.

Loans

Loan services are available from Fidelity, T. Rowe Price, TIAA-CREF and Ameriprise/RiverSource. As of 5/06/2013, loans are now available from Lincoln. Loans are not available from Dreyfus. If you invest in Dreyfus, you can get a loan by first transferring your money to one of the other companies, although that could take a month to accomplish.

To initiate a loan, contact your TSA company. Each company has its own loan procedure. In the UW TSA Program up to two outstanding loans are permitted at any time, either both from the same company or one each from different companies.

Under IRS regulations, the maximum amount you may borrow is the lesser of $50,000 or one-half of your account balance. If you had an outstanding loan balance within the last 12 months, that balance may reduce the amount you can subsequently borrow. You must start to repay your loan right away, and it must be fully repaid within five years unless the loan is used to acquire your principal residence.

Hardship Withdrawals Not Available

Hardship withdrawals are not available from contributions invested with the University of Wisconsin TSA 403(b) Program. In order to take a hardship withdrawal, the participant must have exhausted ALL other remedies – including taking a loan. Since we allow loans in our plan, this meant that virtually no one would have been able to take a hardship withdrawal anyway – you would have to take a loan first.

Updated 5/07/2013.