Retirement Plans
What is a 403(b) or 457(b)?
A 403(b) plan is a tax-deferred (pre-tax) retirement savings plan made available to employees of governmental and certain non-profit organizations. Contributions to the plan are invested in mutual funds, bond funds, annuities, or other investment vehicles and grow tax free until withdrawn.
What does "tax deferred" mean?
Under a tax-deferred retirement plan, you are not paying taxes on your contribution or investment earnings now, but are delaying any possible tax liability until you retire (or withdraw money from your 403(b) account). Depending on your future tax bracket at time of withdrawals, this delay could result in much less tax liability.
What is the difference between a 403(b) and 457(b) plan?
| 403(b) | 457(b) |
| Withdrawing funds prior to age 59½ incurs a 10% early withdrawal penalty levied by the IRS. | No 10% penalty for early withdrawal. |
| Attainment of age 59½ qualifies as a distributable event that permits you to withdraw funds from your account. | Attainment of age 59½ does not qualify as a distributable event. |
| There are many vendors who offer 403(b) plans within your district. | The FBC Plan may be the only 457(b) option within your district. |
| 403(b) plans may permit you to exceed the $16,500* annual contribution limit if you have at least 15 years of service with our current employer. | No 15 years of service catch-up option. |
| No catch-up for entering your final 3 years of services of service prior to retirement. | 457(b) plans may allow you to exceed the $16,500* annual contribution limit if you are entering your final 3 years of employment prior to retirement. |
What is FBC (Fringe Benefits Consortium)?
The Fringe Benefits Consortium Deferred Compensation Program (FBC), serves the San Diego and Riverside Departments of Education, is a retirement plan designed to help educators build and grow their savings in order to achieve their retirement dreams. The FBC also works closely with school districts to help ensure and maintain compliance with IRS regulations.
What is the benefit of enrolling in a TSA?
Just a little planning and research during your working years can pay off in a much more rewarding retirement.
What is 403bcompare?
A no-cost Web site, administered by the California State Teachers' Retirement System, that serves as a 403(b) retirement products information bank. It includes information about 403(b) products, such as performance, fees, etc. Check out www.403bcompare.com for additional information and approved vendors.
How do I enroll in a TSA?
Go to www.403bcompare.com website. Click on "My Employer" (left hand column) type "San Diego Community College" in the blank box under "Enter Full or Partial Employer Name" and click "search." Click on San Diego Community College District, and the click "Set As My Employer." Select "All" on the right hand side to see a complete list of Approved Vendors for the San Diego Community College District. Click on the Vendor for contact information, Office Locations, and Product List. Contact and complete enrollment packet with Vendor directly.
What do I do after I set up a new TSA?
After you have set up a new TSA with your selected company you would then need to complete a Salary Reduction Agreement and a 2009 Maximum Contribution Worksheet. These forms must be completed and submitted to the Benefits Office at least 15 days before your selected payroll date.
How do I change the amount that I contribute to a TSA?
To change the amount that you contribute to your TSA you must complete a Salary Reduction Agreement and submit to the Benefits office at least 15 days prior to your payroll date.
What is my annual TSA deduction amount?
You are limited to the amount you may contribute to the 403(b) plan each year. Generally, you may contribute up to $16,500* per year. However, various "catch-up" options may allow you to contribute more than $16,500*. If you are over age 50 you may contribute an additional $5,000*. There is also a catch-up option available to employees with at least 15 years of service with their current employer. The 15-years of service catch-up could enable you to contribute up to $3,000* additional per year.
May I transfer money between a 457(b) or 403(b) plan?
While employed, you may transfer your 403(b) or 457(b) assets to an account of the same type at a plan-approved vendor.
When will I be able to withdraw the money in my account?
- 403(b) – You will be able to receive a cash, lump-sum distribution or rollover your 403(b) assets when you terminate employment, retire, reach 59½ years of age or become 100% disabled. Your beneficiary will receive the distribution of your assets if you die. While you are still employed, you are also eligible to take out a plan loan or may qualify for a financial hardship in certain circumstance.
- 457(b) – You will be able to receive a cash, lump-sum distribution or rollover your 457(b) assets when you terminate employment or become 100% disabled. Your beneficiary will receive the distribution of your assets if you die. While you are still employed, you are also eligible to take out a plan loan or may qualify for an unforeseeable emergency withdrawal in certain circumstance.
Who do I contact at the District if I have questions?
You may contact the Benefits Office at 619-388-6587 with any questions you may have regarding your TSA deductions, required forms, payroll timelines, or any other questions or concerns.
* Amount is based on Annual maximum due to IRS regulations. If you have any questions please contact our office at 619-388-6587.