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Tax Deferred Annuities

Tax Deferred Annuities

The University offers additional retirement savings options. Employees may elect to enroll in the pre-tax 401(k), 401(k) Roth, 457, or 403(b). Contributions to the plans are subject to the IRS Annual Limit. Under current tax law, these plans provide opportunities to defer a portion of your income, the taxes on that income, and any interest earned until such time as you receive the funds, which usually occurs after retirement. In addition, employees who are separating from service may elect to make a tax deferred contribution from their unused annual leave payout. Participation in these programs is available to all regular faculty, staff, and residents, on a voluntary basis.  Residents are not eligible for the employer match. 

Contributions

Minimum contribution is $20 per month (401k, 457) and $25 per month (403b) up to the IRS annual limit. UT provides a 401k match up to $100. TCRS Hybrid members also receive an additional 5% employer contribution to the 401k (employee participation is not required).

Enrollment

All new employees (hired for the first time 6/30/14 or after) are auto enrolled in the pre-tax 401k at 2% of base salary. Employees can opt out at any time. Notifications are mailed to first time new hires within 60 days of hire date with instructions on how to enroll or opt out. Enrollment is processed online via the Retire Ready TN website or call 1.800.922.7772 for assistance. Returning or transferring employees may need to manually restart contributions via the Retire Ready TN website. 

Residents

Residents are eligible to contribute to the tax deferred annuity plans. Contributions are not automatic and do not have an employer match. Upon onboarding, Residents will receive information from the 401k/457 vendor Empower Retirement. Residents may also contact any of the 403b vendors regarding enrollment. 

 

Overview of Plans

401(k)/401(k) Roth

401(k) pre-tax contributions are tax deferred until money is withdrawn. Distributions from this plan are subject to ordinary income tax and if taken prior to age 59 ½, they may be subject to an additional 10% federal early withdrawal tax. Under the 401(k) Roth, you pay taxes on the money today and do not pay taxes when you withdraw the funds and you don’t pay taxes on the growth of the funds either. However, if withdrawn prior to the required 5 year holding period or age 59 ½, income taxes and a 10% federal early withdrawal tax will apply. There is an up to $100 pre-tax employer match and loan option to members who qualify.

457 Plan

This plan operates similarly to a 401(k) or 403(b), only there is no 10 percent penalty for withdrawal before the age of 59 ½. There is no match provided for the 457 plan.

 

Empower Retirement Contact:

Rob Crawford | Retirement Plan Advisor
Direct: 615.564.7002  |  Mobile: 901.305.1408  |  robyn.crawford@empower.com
Schedule a Consultation

403(b)

A 403b is another option to shelter pre-tax dollars for retirement. Distributions from this plan are subject to ordinary income tax and if taken prior to age 59 ½, may be subject to an additional 10% federal early withdrawal tax. There is no employer match for this plan. If contributing to a 403(b) and a 401(k), the IRS will consider the combined contributions one yearly maximum.

Enrollment

To enroll in the 403(b) there are two steps. An enrollment change form must be completed and submitted to the Benefits office: 910 Madison Ave. Ste. 753. An account must be opened with one of the companies listed below to complete the enrollment process. 

Providers

  • TIAA: Plan #102587; 730 Third Avenue, New York, NY 10017; 800.842.2733
  • VOYA: Plan# VT0057; 800.584.6001
Dec 20, 2023