As of January 2006, IRS code allows plans to offer a Roth 403(b) option (or, for 401(k) plans, a Roth 401(k) option), in which after-tax contributions can be contributed via payroll deduction to the same kinds of investments as the pre-tax deductions.

Although the Roth 403(b) provision, part of the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 200, has now been made permanent, at the present time the UW payroll system cannot accommodate the accounting and tracking which woud be necessary to implement the provision.

Most employers are not offering this option because of potential problems. For example, right now only a few Big Ten schools plan to offer this option in their 403(b) plans beginning in 2009.

The TSA Review Committee has endorsed the Roth 403(b) option, but recognizes that the University of Wisconsin cannot accommodate it now. It is hoped that the UW may be able to add this option when the UW moves to a new payroll system in a few years.

While the UW TSA Program does not offer the Roth 403(b), employees may contribute the full amount to both the TSA Program and an IRA — either a traditional or a Roth IRA. All UW TSA investment companies offer both types and can answer questions you may have about them.The IRA contribution limit in 2008 is $5,000 for those under 50 and $6,000 for those 50 and older. For additional information on an IRA, contact any of one of the UW TSA providers.

This document was last revised on August 18, 2008