403(b) Voluntary Retirement

  • Memo From:    Robert Gröeber, Assistant Superintendent, Administrative Services

    Date:    October 20, 2008

    Voluntary Retirement Plan Update – 403(b) Third Party Administrator

    In July 2007, the IRS issued new regulations for 403(b) voluntary retirement plans also known as Tax Sheltered Annuities or TSA’s.  The new regulations take effect on January 1, 2009 and require that all organizations that operate 403(b) plans adopt a formal Written Plan document.  The new regulations require increased control and responsibility for transactions between employees and the vendors within the plan.  In order to meet these new regulations, the District has contracted with CalSTRS and the CalSTRS 403(b) Comply program to administer the District’s Written Plan.  CalSTRS has collaborated with JEM Resource Partners to assist in the administration of the 403(b) Comply program.  The District’s Written Plan will go to the Board for approval on October 28, 2008.

    During the month of November, we will be providing information to CalSTRS/JEM regarding our employee’s current 403(b) vendors and payroll contributions.  In order to have a smooth transition, no contribution changes will be allowed beginning on October 24th through November 26th so that CalSTRS/JEM can enter employee information into their system and process the November 403(b) contributions.  On December 1, 2008, a website will be available for employees to make changes to their December 403(b) contributions.

    The attached notice from JEM lists important changes to the administration of the District’s 403(b) plan.  Some of the key changes and enhancements are listed below:

    • All contribution changes will be done online through a secure Internet website
    • Only vendors that agree to follow the District’s 403(b) plan will be authorized to accept contributions
    • Soon employees will be able to see their account balances with the vendors in the plan through the website

    In addition to the changes noted above, the vendor name abbreviation printed on the pay stub will be changed to read “403(b)” beginning in November.  Employees with multiple 403(b) accounts will have their contributions combined since CalSTRS/JEM will collect the total amount and send the appropriate disbursement to each 403(b) vendor.

    It is important to note that employees are still free to utilize any vendor or Financial Advisor they choose, as long as they are listed in the District’s plan.  A complete list of vendors will be available on December 1, 2008.  Plan provisions such as transfers, loans and hardship withdrawals are unchanged. 

    We appreciate your patience as we work through the transition period.  If you have any questions, please contact Nathan Hernandez at 730-7534 or nhernandez@visalia.k12.ca.us. Additional information can be found on the VUSD Administrative Services intranet site (when logged on to the VUSD network) http://admin.vusd.org/finance/finance_services.php .  Thank you for your cooperation!

    Follow this link to reach the Visalia Unified list of 403(b) Vendors and add or make changes to existing 403(b) accounts from the JEM website (will be active after December 1, 2008). 

    Web Resources:

    www.403bcompare.com - research all authorized vendors and allowable investment products for California.