(as defined in Section 403b and 457 of IRS code)
Employees of the University may elect to defer up to a maximum of $15,000 of their adjusted gross salary into an annuity, mutual fund, or Ohio deferred compensation plan. This benefit may have significant tax advantages for most Employees.
For a listing of most utilized annuity vendors and their contacts, click here.
What is a Tax Deferred Annuity (TDA)?
It is a plan that allows employees to put aside money into an investment account, which can build income for retirement.
The University of Toledo is a public non-profit organization and all permanent employees have the opportunity to participate in the valuable benefit of investing in TDAs, a benefit covered in Sections 403 (b) and 457 of the Internal Revenue Code. The Economic Growth and Tax Relief Reconciliation Acts of 2001 have increased the tax-deferred amount that can be saved for retirement. In 2006 most employees will be able to contribute up to $15,000 to a TDA plan.
When you participate in the TDA program you agree to have the University take out an amount of money you want to invest and redirect it into the annuity, mutual fund or Ohio deferred compensation that you select. Since contributions are taken from your salary before taxes are deducted, you receive an immediate tax-break. Your current taxable income is lowered for the year. Investing through the TDA only reduces your pay for income tax purposes; it does not affect how pay raises are calculated or any other benefits that are based upon pay.
You may sign up for a TDA, discontinue or make changes to your current TDA at any time during the year. To sign up for a TDA, please complete the following steps:
Simply contact the company of your choice from the approved list. This list includes investment/brokerage firms, life insurance companies, and the Ohio Public Employees Deferred Compensation. The companies authorized to offer TDA’s provide investments varying from conservative to aggressive. This allows you to select the right investment based on your individual objectives.
Decide how much you want to have deducted from each pay and how that money is to be disbursed.
Complete an application obtained from the company you have selected and submit it to them.
You or the agent should send a copy of the application along with the UT Salary Reduction Agreement (for the 403 (b) account) to the University Human Resources office.
Employees who are on a nine-month appointment will have 18 deductions per calendar year, and 12 month employees will have 24 deductions per calendar year. Deductions will begin on the pay date you indicate, if received within the payroll-processing deadline.