Tax-Sheltered Annuity 403(b) Program

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Plan Summary

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The UW Tax-Sheltered Annuity (TSA) 403(b) Program is a supplemental retirement savings program authorized by section 403(b) of the Internal Revenue Code. Through the TSA Program you can invest a portion of your income for retirement on either a pre-tax basis, an after-tax basis (Roth), or a combination of both. Participation in the UW TSA Plan is voluntary. You make the entire contribution; there is no employer match.

UW TSA 403(b) Program investment options include a wide array of mutual funds and fixed and variable annuities managed by six investment companies:

  • TIAA-CREF
  • Fidelity
  • T. Rowe Price
  • Dreyfus
  • Ameriprise/RiverSource Life Insurance
  • Lincoln National Life Insurance

See the TSA Quick Guide for company information, including contact information and website links.

The TSA Review Committee provides oversight of the program.

Eligibility

All University of Wisconsin employees, including rehired annuitants, student hourlies and graduate assistants — with the exception of some employees-in-training, fellows, and interns — are eligible to participate. Eligible employees can enroll at any time.

Fees

The 2013 TSA Program fee is $12.00 per year. The program fee helps cover the University’s cost to administer the program. It is automatically deducted from your paycheck when you have your first TSA deduction and each January thereafter. You only pay the fee in years in which you contribute to the plan.

Enrollment

Enrolling in the TSA Program is as easy as 1 – 2 – 3!

  1. Select one or more investment companies that can help you meet your future retirement needs with the flexibility you need to manage your account.
  2. Sign up with your selected investment company(ies) either online or with a paper application. If you choose Lincoln or Ameriprise/RiverSource, you will work directly with an agent. To contact a Lincoln agent, call (608) 231-2231 or (800) 967-2046; for Ameriprise, call (888) 947-2872.
    • When you sign up, you will need to provide the company with information about yourself, your beneficiary(ies) and your investment choices.
    • If you need help choosing your investments, call the company – See the TSA Investment Companies for contact information.
    • Individual counseling sessions, workshops, and webinars may be beneficial. See Education for more information.
  3. Fill out the Salary Reduction Agreement (SRA) to indicate how much you want to contribute to your investment company(ies) every pay period. Submit the SRA to your local benefits office.

IMPORTANT: Your investment company account must be set up before the company receives your first salary deferral.

How to Enroll Online

Enrolling online is quick, convenient, and immediate! Use the links below to enroll with the company(ies) of your choice. Be sure you understand your investment choices before enrolling, and ask the company representative about anything you do not understand.

If you have questions, please contact your local benefits office.

How to Enroll via Paper Application

Download the paper application for the company(ies) of your choice. Mail the completed application directly to the company address listed on the application. Please mail your application at least 14 days before submitting your Salary Reduction Agreement to your benefits office.

If you have questions, please contact your institution benefits office.

Contribution Limits

2013 Minimum Contribution Limits

  • $8.00 per biweekly paycheck
  • $20.00 per monthly paycheck

2013 Maximum Annual Contribution Limits

  • If under age 50 in 2013: $17,500
  • If age 50 or older in 2013: $23,000 (eligible for a $5,500 additional catch-up if you will be 50 or older at any time in 2013)

Special 15-Year Rule Catch-up

You may contribute an additional $3,000 per year ($15,000 max over a minimum of five years) if:

  • You have 15 years or more of service with the UW; and
  • Your TSA contributions average less than $5,000 per year over the course of your UW employment.

Check with your institution benefits office to see if you qualify.

Your TSA 403(b) contribution limit is reduced dollar for dollar by contributions you make to any of the following voluntary retirement savings plans: 401(k), SIMPLE IRA, SIMPLE 401(k), salary reduction SEP IRAs, and Federal Thrift Savings.

Participation in either the UW TSA 403(b) Program or the Wisconsin Deferred Compensation 457 Program will not affect your eligibility to contribute to a personal IRA, either traditional or Roth.

Investments & Returns

The University strives to provide you with the best resources and programs to meet your individual investment needs. The UW TSA 403(b) Program offers six different investment companies and the ability to contribute on either a pre- or post-tax (Roth) basis. Two investment companies also provide low-cost share classes.

The fees and expenses of the investments you select have an impact on the overall returns of your investment portfolio so the University reviews the investment options available to you, and works with our companies to make sure you have the lowest fees and expenses possible. None of the mutual funds in our plan have sales commissions or broker, marketing or advertising fees.

Click on the headings below to learn more about the investment companies available, the differences between pre-tax and post-tax contributions, low-cost share classes and investment returns.

Investment Companies

The UW TSA 403(b) Program offers mutual funds and fixed and variable annuities managed by six authorized investment companies.

Mutual Fund Companies

TIAA-CREF is both an insurance company and a mutual fund company.

Insurance Companies – these companies use agents to help you

Pre-Tax vs. Post-Tax (Roth) Contributions

The TSA Program offers both pre-tax and post-tax (Roth) contributions:

  • Contributions deducted from your earnings on a pre-tax basis reduce your current taxable income. Both your contributions and your earnings grow on a tax-deferred basis. When you withdraw money from your account, it is taxed as regular income to you in the year you receive it.
  • Contributions deducted from your earnings on a post-tax (Roth) basis are included in taxable income in the year they are made, but the account balance and earnings are not taxed when you take the money out in retirement (subject to certain restrictions). Only TIAA-CREF, Fidelity, T. Rowe Price, and Lincoln offer the Roth option.

Low-cost share classes

Each investment company incurs operating expenses when it manages your investments. These expenses are taken out of the fund’s assets and affect the overall rate of return. The measure of what it costs an investment company to manage its funds is referred to as an expense ratio. Typically, the lower the expense ratio, the greater the rate of return to you – the investor.

TIAA-CREF and Fidelity offer funds with institutional (low-cost) share classes to UW TSA participants. Fidelity refers to these low-cost share classes as “K share” classes. Due to the amount of money invested in these companies by UW employees, you qualify to purchase these low-cost shares through the TSA Program.

Both TIAA-CREF Institutional class and Fidelity K class share funds have the same management team and investment objectives as the funds in other share classes but the expense ratios are lower. You cannot invest in low-cost share classes in your personal retirement investments outside of the UW TSA program.

All the Fidelity Freedom Funds and TIAA-CREF Lifecycle Funds (pre-diversified target retirement date funds) are available as part of the lower share class offering. The other Fidelity and TIAA-CREF funds, including those being offered with the lower share classes, are noted on the ”UW TSA Investment Returns” below.

UW TSA Investment Returns

The investment returns below provide a list of the investment products that are authorized for UW employees under the TSA program. Except as otherwise noted, the data contained in the reports have been provided by the investment companies based on 12/31/12 information. Every effort has been made to ensure the accuracy of these reports. The UW cannot guarantee complete accuracy and assumes no responsibility for the information supplied by the companies or financial losses incurred by employees participating in the TSA Program.

Except for fixed annuities, your TSA investments are not guaranteed. You could lose money. When selecting investments, consider spreading your money among different kinds of assets. Some funds such as target retirement date funds and asset allocation funds are already diversified. Remember, past performance is no guarantee of future results.

Investment Returns (06/30/13)

Selected Investment Returns is a partial list of the investment options available to you, sorted into the most important investment categories to help you choose funds for a diversified portfolio.

Education

There are many tools to help you learn about investment choices and how to meet your savings goals, including counseling sessions and seminars with representatives of the investment companies, TSA Basics seminars and online webinars. Click on the options below to learn more.

Counseling Sessions and Group Seminars with Investment Company Representatives

Would you like to start investing or make some adjustments in your investments but aren't sure how? Are you worried about stock market volatility? Do you want to be sure your investments are well diversified? Several of our TSA investment company representatives are available for one-on-one counseling sessions. This is a free service our investment companies provide. The sessions tend to fill up fast, so don't put off calling. You must make an appointment with the individual company in advance. You can find company contact information on the TSA Quick Guide.

See the 2013 TSA Company Schedule for dates, locations in your area, and contact information.

TSA Group Seminars

UW System Administration staff provides a seminar that helps you learn about the TSA 403(b) Program and the basics of investing. If you are in the Madison area and would like to attend, please see the OHRD Benefits Education website (click on TSA Basics) for dates and times and how to register.

This seminar is also available across UW System and is presented by UWSA staff or by members of the TSA Review Committee. See when this seminar will be presented at your institution.

Please contact Terry Lauber at tlauber@uwsa.edu or 608-262-1805 for more information about counseling sessions and seminars.

T. Rowe Price Webinars

T. ROWE PRICE OFFERS LIVE WEBINARS NOVEMBER 11, 12 13 AND 14, 2013

T. Rowe Price will offer two live webinars this November – Basics of Money Management and Today’s Investment Climate. These are live presentations over the web, and there will be time for you to ask questions and get your questions answered.

Basics of Money Management – With this 40-minute webinar you’ll learn some basics of smart money management. The webinar will explore setting financial goals, understanding your own thoughts about money, the benefits of effective money management, getting organized, and basics of savings and investing.

  • Monday, November 11 – 10:00 a.m. and 2:00 p.m.
  • Tuesday, November 12 – 9:30 a.m. and 2:30 p.m.

Today’s Investment Climate – This 30-minute presentation focuses on the economy, the stock market and how they relate. Topics covered are stock indices, bull and bear markets, economic indicators and federal monetary policy. Attend this program to review the market performance of the previous quarter.

  • Wednesday, November 13 – 10:00 a.m. and 2:00 p.m.
  • Thursday, November 14 – 2:00 p.m. and 6:00 p.m.

You may sign up and watch the presentations on your own computer while listening to the audio portion on your telephone. Registration link: http://rpstrowepricereg32.fugent.com/

If you do not have computer access at the time of a webinar and would like to take part, please contact your benefits office. It may be possible for them to accommodate you.

Previously Recorded Webinar
  • T. Rowe Price continues to offer Asset Allocation – Balancing Risk vs. Reward- July 2013 – This recorded webinar addresses how spreading out your investments could help you meet your long-term investing goals. You’ll discover:
    • How to invest to help balance your risk tolerance, time horizon, and financial goals and needs;
    • Why asset allocation, or the way you invest across stock, bond, and stable value investments, is a key factor in retirement planning; and
    • Resources that can help you determine if you’re investing appropriately and on track to reach the retirement you envision.

Financial Information Websites

Providing these links is for information only and does not imply an endorsement of any products or services associated with the links. These sites will open in a new window.

Loans & Distributions

The IRS regulates and limits the access you have to your retirement savings. You may withdraw your contributions (take a distribution) only when you:

  • leave employment with the UW System,
  • reach age 59 ½ – even if you are still working, or
  • become disabled.

You can take a loan from your TSA account, but hardship withdrawals are not available.

Loans

If you need access to your money and you can’t or don’t want to take a distribution, you may be eligible to take a loan from your TSA account.

Loans are available from Fidelity, T. Rowe Price, TIAA-CREF, Ameriprise/RiverSource, and Lincoln. Dreyfus does not offer loans so you will have to transfer your money to one of the companies that offer loans. This process may take up to a month to complete.

To start the loan process, contact your TSA company. Each company has its own loan procedure. In the UW TSA Program, you may have up to two outstanding loans at any time, either both from the same company or one each from different companies.

Distributions

Once you meet the eligibility criteria above, you may take a distribution from your TSA account. To access your money, contact your TSA company. Withdrawals from Fidelity can be initiated over the phone; all other companies require you to fill out their form.

Please note: the signature from the Plan Administrator is NOT required for any of the current TSA companies. Just complete and sign the form and submit it to the company.

Only companies no longer active in our Program – Wells Fargo (Strong), Scudder (DWS), American United Life, and Security Benefit Life require the signature from the UW Plan Administrator .

Taxes

The money you take out from your pre-tax TSA accounts is taxed as regular income to you in the year you receive it:

  • Withdrawals before age 59 ½ may result in tax penalties.
  • If you terminate UW employment at age 55 or older – even though you are not 59 ½ – you may take distributions from your UW TSA pre-tax accounts without being subject to the 10% tax penalty for early withdrawal.

Withdrawals from your Roth after-tax 403(b) account are tax-free as long as you meet the IRS restrictions:

  • You must have had the account open at least five years from your first Roth contribution, and
  • You must be at least 59 ½ years old.

Required Minimum Distributions

In most cases, you must begin receiving income from your TSA account by April 1 of the year after you turn 70 ½. If you neglect to take the distribution, you will incur a 50% tax penalty on the minimum amount you should have received. Your investment company will calculate your minimum required distribution upon request.

NOTE: If you are still working at the UW at age 70 ½, you do not need to take a distribution from your UW TSA until April 1 of the year following your termination of employment. (If you have accumulations from previous employers, you should begin taking distributions on those accounts by April 1 of the year after you turn 70 ½.)