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My Benefits | Tax-Deferred Annuity Plan

Tax-Deferred Annuity Plan

My Benefits

Overview

A Tax-Deferred Annuity Plan (TDA) allows you to invest in fixed and variable annuities and mutual funds in a tax-deferred account which allows you to save more for retirement outside of the university sponsored retirement plans. Your contributions into the plan will be deducted prior to or after taxes being withheld. Contributions are not matched by the university.

Eligibility

All non-student Faculty and Staff are eligible to participate.

 
 
 

Contribution Types

Tax-Deferred Annuity Plan (TDA) Pre-Tax Option

With this option contributions are deducted from your paychecks using pre-tax dollars.

  • Pre-tax contributions are deducted from your paycheck before taxes, which reduces your taxable income and the amount of taxes you pay now.
  • These deductions are subject to taxation at the time of withdrawal from your tax-deferred retirement account.
  • Withdrawing earnings prior to age 59 ½ may be subject to a 10% additional penalty tax.

Tax-Deferred Annuity Plan (TDA) Roth After-Tax Option

With this option contributions are deducted from your paychecks using after-tax dollars.

  • After-tax contributions allow you to enjoy tax-free distributions, without penalty, when you are age 59 ½ or older and you take your first distribution at least five years after your first Roth contribution to the contract.
  • Withdrawing earnings prior to age 59 ½ may be subject to a 10% additional penalty tax.

When is a Roth After-Tax Contribution the Best Option to Consider?

  • If your taxable salary will be higher in retirement than it is currently, this after-tax deduction may be beneficial.
  • For example, if your taxes at age 35 are 25% and your expect your taxes at age 65 to be 35%, you would be saving on taxes prior to retirement by using a Roth TDA.

After-Tax Contribution
Higher Taxable Income & Greater Tax Savings Later

Pre-Tax Contribution
Lower Taxable Income & Greater Tax Savings Now

Comparison of Pre-tax vs. Roth After-tax Contributions
DescriptionEnrolled in Pre-tax ContributionsEnrolled in After-tax Contributions
Your Annual Pay$45,000.00$45,000.00
Pre-tax Contribution-$10,000.00-$0.00
 = $35,000.00= $45,000.00
Tax Obligation (above amount multiplied by 27.9%)-$9,765.00-$12,555.00
 = $25,235.00= $32,445.00
Roth After-tax Contribution-$0.00-$10,000.00
Your Annual Take-Home Pay= $25,235.00= $22,445.00

Please be advised your income, tax bracket, expenses and savings may differ.

 
 
 

2020 Contribution Limits at a Glance

AgeUNI Years of ServiceContribution Limit
Under 50Less than 15$19,500
Under 50More than 15$22,500*
50 or olderLess than 15$26,000
50 or olderMore than 15$29,000*
Note: Contributions above the basic $19,500 limit count against your 15-year catch-up lifetime limit first. Only amounts above the basic $19,500 and 15-year catch-up count as age 50+ catch-up contributions. *The 15-year lifetime catch-up provision is not guaranteed. Please contact hrs-benefits@uni.edu to see if you qualify.
 
 
 

Enrollment

  1. You may contribute with Pre-Tax and/or Roth After-Tax dollars. You may elect one or both options.
    1. Vendors offering Pre-Tax TDA's
      1. TIAA
      2. VALIC
      3. Fidelity
      4. Ameriprise
      5. GALIC
    2. Vendors offering Roth After-Tax TDA's
      1. TIAA
  2. You will need to contact your 403(b) vendor(s) to establish your account and set up your investment options. Click here to view a list of vendors, their investment options and fees.
  3. Once your account is established with your vendor(s):
    1. Log into Benefits Self-Service
    2. Choose Manage My Benefits
    3. Click on the last option 'I am Enrolling in or Changing My Tax-Deferred Annuity
    4. Enter month you would like to begin contributions or make a change
    5. Click Continue
  4. Once you have selected your vendor you will then choose the amount you would like deducted from your paychecks.

    You have 2 choices: Monthly
    • The amount elected will be the same amount deducted each month unless you make a change. This amount will carry over from year to year.
      • Example: If you elect a $100 monthly contribution this amount will continue to be deducted even when the new year starts in January.
    Annually
    • You will elect an amount for the entire year.
    • The amount will be divided by the number of pay periods you have remaining in the current year.
      • Example you elect an annual contribution amount of $2400 in November and receive 12 paychecks, since there are only two months left in the year, you would have $1200 deducted from your November and December paychecks.
      • If you do not make a change, your annual elected amount will start over in January.
        Using the example above:
        • In January, your amount would adjust to reflect $2400 over the full 12 benefit deductions. You contribution amount would reduce to $200 monthly to equal a total of $2400 by December 31.
    You are allowed to change your contribution amounts on a monthly basis and changes can be effective for the current month if the request is submitted prior to payroll processing. If the request is submitted after payroll has processed, the change will be effective the following month.
  5. Complete the Benefits Self-Service request to begin your payroll deductions.

Roth contributions are included in your maximum yearly contribution limits, plus any catch-up limits, if applicable. Please consult a tax adviser for specific questions and how these contributions impact you.

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