CSU Tax Sheltered Annuity (TSA) Program

TSA Overview

The CSU 403(b) Tax Sheltered Annuity (TSA) Program is a voluntary program that allows eligible CSU employees to save toward retirement by investing pre-tax contributions in tax-deferred investments in either annuities or mutual funds, under Internal Revenue Code (IRC) Section 403(b). TSA contributions are made solely by the employee through payroll deductions, prior to federal and state taxes being calculated. Consequently, these pre-tax contributions result in reduced taxable income for participating employees.

The Internal Revenue Service (IRS) finalized new 403(b) regulations that are effective January 1, 2009. As a result of these new guidelines, the CSU is required to make changes to the administration of its TSA Program. Major changes include:

• Implementation of VALIC (formerly AIG Retirement) as the Master Administrator for day to day administration; and
• Consolidation of fund sponsors and fund options.

Effective January 1, 2009, employees will be allowed up to five (5) TSA deductions from the following fund sponsors:

• VALIC (formerly AIG Retirement) (Group Plan Number 01412001)
• Fidelity Investments (Plan Number 50537)
• ING (Plan Number vfr597) (Kit #140550)
• MetLife (Plan Number 1009800-01)
• TIAA-Cref (No plan number needed)

In addition, TSA enrollments and deferral changes will be designated by employees via Retirement Manager, an online process through AIG Retirement, the Master Administrator. The Retirement Manager online process replaces the 403(b) Salary Reduction Form.  All salary reduction changes (stop, start, increase and/or decrease) will be managed by the employee in Retirement Manager.  Please view the Retirement Manager Cutoff Dates chart to help you find the cutoff dates for any changes made in Retirement Manager.  Fund investment selections will be made directly through the fund sponsor(s) and employees can open a 403(b) account by accessing the specific websites provided in the above links.

Enrollment Materials:
TSA Brochure
TSA Enrollment Booklet
VALIC Insert
Fidelity Investments Insert
ING Insert
MetLife Insert
TIAA-CREF Insert

Additional information regarding the Tax Sheltered Annuity Program can be found on the Systemwide Benefits Portal.

Eligibility

Generally, all CSU employees are eligible to participate in the 403(b) program with the exception of certain student classifications and Special Consultants.

How Do I Enroll?

TSA enrollments are initiated through Retirement Manager, AIG Retirement’s enrollment web site for CSU participants.  Retirement Manager will allow you to indicate the dollar amount you wish to allocate to each fund sponsor.  Once you enroll through Retirement Manager, you will need to set up an account with each fund sponsor to elect how that fund sponsor invests your contributions.  Fund investment selections will be made directly through the fund sponsor(s) and employees can open a 403(b) account by accessing the specific websites provided in the above links.  For detailed enrollment instructions, refer to the How To Enroll document.

What is the minimum amount I can contribute?

You must contribute a minimum of $15 per month per company.

Download the Net Pay Calculator spreadsheet to help do paycheck calculations. This tool may be useful to you if you are considering changing your tax sheltered annuity deferral amounts.

What is the maximum amount I can contribute?

Currently, two IRC limits apply: the IRC Section 402(g) "elective deferral limit" and the IRC Section 415(c) "percentage of compensation" limit. For the 2009 tax year, the contribution limit is 100% of adjusted gross income (up to $49,000), or a maximum of $16,500 per year.
Contributions to a 403(b) plan are not offset by contributions to a 457 plan. Employees can maximize contributions in both of these plans. For example, for tax year 2009, a participant could elect to contribute up to $16,500 to a 403(b) plan AND up to $16,500 to a 457 plan, for a total contribution of up to $33,000.

Contributions to a 403(b) plan are offset by any contributions to a 401(k) plan in the same tax year. Employees contributing to both a 403(b) and 401(k) plan are restricted by IRS regulations to a combined total of $16,500 for the 2009 tax year.

Additional Catch-Up Provisions

Under IRC Code Section 402(g)(7), employees that have at least 15 years of service (full-time equivalent) with the CSU and have not maximized the annual contribution limits during this time, may be eligible to contribute an additional $3,000 per tax year for up to five years, for a total of $15,000. To take advantage of this additional catch-up allowance, proof of 15 years of service (annual CalPERS statement) and a completed Maximum Contribution Allowance Worksheet are required. The Worksheets below can calculate your annual maximum contribution amount based on information you provide. See below:

Maximum Contribution Allowance Worksheet - 2009 version

The age based catch-up allowance under IRC section 414(v). For 2009, this provision allows employees that are or will turn age 50 by the end of the current tax year (December 31) to contribute an additional $5,500 to a 403(b) plan or to a 401(k) plan and also contribute an additional $5,500 to a 457 plan.

If an employee qualifies for both of the catch-up provisions, additional contributions will be first applied to the 15 year catch-up allowance and then to the age based catch-up provision.

Sac State Financial Advisor Contact Information

Additional Information

Additional information regarding maximum contribution amounts, catch-up allowances, and administration of the TSA program, along with comparison information with the 401(k) and 457 plans, can be found on the following Comparison Chart.  You may also contact the campus Benefits Office.

403(b), 457, and 401(k) Comparison Chart - 2009 version

Information regarding the 401(k) and the 457 plans administered by the Department of Personnel Administration (DPA) Savings Plus Program can be obtained from their website at www.sppforu.com.