Virginia Western Community College is a tax-exempt public education institution eligible to offer a retirement savings program as described under section 403(b) of the Internal Revenue Code (commonly referred to as a “403(b) Plan”). This notice is to make you aware of the 403(b) Plan and provide enrollment information.
Under the 403(b) Plan, employees may contribute on a pre-tax basis to a 403(b) account, in which any investment earnings grow tax-deferred until they are distributed. The employee is responsible for investigating and selecting an investment service provider (a “vendor”) and choosing the investments offered by the vendor. Virginia Western is only authorized to conduct business with 403b providers that have a current agreement on file between the college and the provider which has been approved and filed with Fringe Benefit Management Corporation.
Understanding the tax and investment consequences of the custodial account or annuity selected is your responsibility. You may seek investment, legal, or tax advice if desired. IRS Publication 571 (Tax Sheltered Annuity Programs for Employees of Public Schools) is available at www.irs.gov for further information and reference.
Who is eligible to participate: Generally, all full-time employees are eligible to participate in the 403(b) Plan. Persons occupying an elective or appointive public office are one exception; they are not employees performing services for a public school unless such office is one to which an individual is elected or appointed and only if the individual has received training, or is experienced, in the field of education. In addition, regular part-time education employees, adjunct faculty and other employees who routinely work 20 or more hours per week are eligible to participate in the 403(b) Plan but are not eligible for a cash match.
Cancellation by the Employee: You have the right to cancel your future 403(b) contributions at any time. To do so, contact Human Resources and complete any required form(s) to discontinue salary reductions.
Termination of Payroll Deduction: In certain circumstances the college may automatically stop your 403(b) contributions. If your contributions will exceed the IRS annual contribution limit, we will automatically terminate payroll deductions to prevent excess contributions. If the college is notified it has no record of your account, deductions will be stopped until the problem is resolved.
Annual Contribution Limits: The contribution limit, set annually by the IRS, and is $20,500 for the year 2022. As a catch-up provision, you may contribute $27,000 for 2022 if you have at least 15 years of service and/or you are at least 50 years of age by the end of the year. Note that employees may max out the annual contribution limit in both a 403b and the 457b but there will be only one cash match for eligible employees. The cash match for 2022 remains at .50 on your $1.00 up to $40.00/month max or $480/year. The minimum payroll deduction is $10 per pay.
Authorized Investment Providers for Virginia Western Community College: Ameriprise Financial, AXA Equitable, TIAA, and VALIC.
Required Forms: To initiate payroll deductions to a 403(b) account you must execute a Salary Reduction Agreement (SRA). The SRA should be completed by you with your agent, and returned to Human Resources for processing. There are other documents, which are to be executed between you and the vendor. If you are eligible for the cash match, a cash match agreement form must be completed.
This notice should not be regarded as tax or legal advice. The college cannot provide you with tax or legal advice. Virginia Western Community College does not endorse, recommend or guarantee the 403(b) investments offered by the provider.
Please contact Human Resources if you have questions.