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Retirement

Supplemental Retirement Information

Supplemental Retirement Accounts (SRAs)
The LSU System provides the opportunity for employees to participate in supplemental retirement accounts (SRAs) (also referred to as tax-sheltered annuities or tax-deferred annuities) through payroll deduction. The LSU System, in compliance with the 403(b) regulations, adopted a formal tax-deferred annuity "plan" or "plan document" effective January 1, 2009. Participation is totally voluntary and the LSU System does not make any matching contributions.

This summary is not intended to advise employees on any investment risks or tax issues arising from investing in any of these options. The intent is to answer many of the most commonly asked questions regarding these types of accounts. Employees may wish to contact their tax advisor or legal counsel for assistance in determining the best option.

Benefits of an Supplemental Retirement Account (SRA)
An SRA allows employees to set aside a portion of their salary before federal and state income taxes are paid. This deferred salary (before-tax deductions) is placed into an investment account of your choice. Participating in an SRA allows employees to delay payment of taxes on the money invested and any interest that money has earned until later, typically at retirement.

Sample Benefit Calculation
[Employee Pay] - [Before-tax Deductions] = Taxable Income
[Taxable Income] - [Income Tax Withholding and Other Deductions] = Spendable Pay

Example: Assuming contributions of $100/Month or $1200/year

With 403(b) or 457(b)

Without 403(b) or 457(b)

Annual Salary (Gross Pay)

$30,000

$30,000

Less 403(b) or 457(b) Savings

- $1,200

N/A

Less Retirement Contribution (8%)

- $2,400

- $2,400

Taxable Income

$26,400

$27,600

Less Federal Tax*

- $3,960

- $4,140

Less Medicare Tax

- $435

- $435

Less After Tax Savings

N/A

- $1,200

Remaining Spendable Pay

$22,005

$21,825

*Assumes federal tax bracket of 15%. Savings will be even greater for person in higher tax brackets.

Contributions
The maximum amount that may be tax-sheltered is determined by federal law and is set by the IRS each calendar year. Employees age 50+ may be eligible to contribute an additional amount as described in the "Catch-Up Provision." To request a calculation, contact Human Resources.

Types of SRA Programs offered at LSU Shreveport
1) 403(b) Plan:  The federal government has made it possible for "not-for-profit" healthcare organizations, education institutions, and charitable agencies to allow their employees to tax-defer income through the Internal Revenue Service Code Section 403(b).

2) 457(b) Plan: The federal government also allows for government entities to allow their employees to tax-defer income through the Internal Revenue Service Code Section 457(b).

Both programs offer annuity contracts and mutual fund investment options. The LSU System cannot guarantee the success of the SRA products or the level of service. It is recommended to fully review the product prior to participation.

403(b) PLAN
The 403(b) plan (through ING, TIAA-CREF, VALIC or MetLife) offers LSU System employees several options in terms of where they can invest their money. Employees also have numerous funds available to diversify their retirement portfolio. Termination of employment with the LSU System allows employees to roll their funds over to an IRA or other qualified plan. Early withdrawal penalties will be assessed if withdrawals are made prior to obtaining age 59½.

Administrators of the 403(b) Supplemental Retirement Accounts
ING



 TIAA-CREF


VALIC


Metlife

     
               

Click on images above to be taken directly to the website!

403(b) Enrollment and/or Inquiries
For employees who are interested in opening a 403(b), except for with TIAA-CREF, contact the applicable plan representative.  Contact information is listed below. The representative will set up a meeting to complete the enrollment paperwork. Employees interested in opening a 403(b) with TIAA-CREF:
Click here for the TIAA-CREF enrollment form.
Click here for the Salary Reduction form.
Return the completed enrollment form and salary reduction form to Human Resources (AD 109).

403(b) Plan Representatives
ING: Donna Causey, 318-469-1933 or donna.causey@ingfp.com
TIAA-CREF: Matt Robertson, 1.800.842.2006 or mrobertson@tiaa-cref.org
VALIC: Steve Tucker, 318-423-2232 or steve.tucker@valic.com
MetLife: David Paul, 318-212-8924 or jdpaul@metlife.com

Investment Calculators
Click here for ING's "Tools & Calculators"
Click here for TIAA-CREF's "Tools and Calculators"
Click here for VALIC's "Tools and Calculators"
Click here for MetLife's "Retirement Toolbox"

Want an alternative to ING's 403(b)?

ING offers an EZ-Enrollment Retirement Program. It's a simplified "one-and-done" investment solution, providing a simple straightforward investment for your retirement account. Simply choose the ING Solution Portfolio that tracks closest to the year of retirement and ING's professional investment managers do the rest.

Click here for to learn more and to enroll in ING's EZ-Enrollment Retirement Program.
Click here for the ING EZ Enroll Fund Performance

To adjust contributions to an active 403(b), submit a salary reduction form.
Click here to the 403(b) Plan Document

2) SRA:  457(b) Plans
The 457(b) plan (through the State of Louisiana Deferred Compensation Plan / Great West Financial Services) offers LSU System employees one option through the State of Louisiana Deferred Compensation Plan, the exclusive provider. Termination of employment with the LSU System allows employees to roll contributions over to an IRA or other qualified plan or receive a cash distribution without an early withdrawal penalty.

Administrator of the 457(b) Louisiana Deferred Compensation Plan

Great West FinancialGreat West

457(b): Enrollment and/or Inquiries
For employees who are interested in opening a 457(b) Deferred Compensation supplemental retirement account, please complete the enrollment form and salary reduction forms.  Links are provided below.
1) Enrollment Form
2) Salary Deferral Agreement 
Please turn in the completed forms to Human Resource Management (AD 109).

457(b) La. Deferred Compensation Representative: Beau Bordelon, 318.453.8624, beau.bordelon@gwrs.com

Select the following links to update beneficiary and personal information:
Beneficiary Election Form
Personal Information Change Request

Other 457(b) Plan Resources
Click here to view the 457(b) Plan Document
Click here to review investment performance
Click here for additional information

Once the supplemental 457(b)/Deferred Compensation account is open, employees may start, stop, increase, or decrease their contributions as necessary. To adjust contributions to an existing 457(b) account, complete and return the Salary Deferral Agreement to Human Resources (AD 109).

Benefits of a 403(b) and/or a 457(b) Plan
- Determine annual contributions (subject to the plan minimum and IRS maximum limits)
- Choose types of investments for contributions
- Tax-shelter applicable leave payouts (upon retirement or termination of employment)
- Increase, decrease, stop or resume contributions at any time
- Select from a variety of settlement options upon termination
- Choose from a variety of policy / contract options:
      - An immediate lump-sum cash settlement
      - An annuity settlement
      - Installments for a selected period
      - A survivor annuity
- Designate a beneficiary and select an installment or annuity settlement for the death benefit. If a selection is not made, the named beneficiary may choose. 

Annuity Contracts
There are two types of annuity contracts: 1) fixed annuities and 2) variable annuities.

Fixed annuities provide a guarantee of principal and a guaranteed rate of return. Fixed annuities also provide for fixed periodic payments at retirement and a specific rate of return for a certain period of time. At retirement, employees can select from several payment options, depending on the investment contract or policy chosen.

Variable annuities invest mainly in stocks, bonds, and money market funds and do not have a fixed rate of return or a guarantee of principal. The amount of money received at retirement or monthly retirement payments will vary, depending on the investment performance of the fund. This type of investment relies on growth over a period of time to increase the value of the fund. There are no guarantees that accounts will grow; the value of accounts can go up or down with the investment performance of the fund.

Some of the companies offer a combination of both fixed and variable annuities. Employees may specify the percent or amount of each deposit that is to be invested in each account.

Mutual Funds
The custodial accounts available through the mutual fund companies are very similar to the variable annuity option described above.

The value of an account can go up or down with the investment performance of the fund.

WITHDRAWING MONEY FROM YOUR SRA
While Actively Employed
The main purpose of the SRA is to help provide employees with long-term financial security through current tax-efficient savings. In exchange for the tax breaks the IRS gives employees government regulations limit withdrawals while during employment. In addition, some investment companies have policy or contract restrictions that may include fees or interest penalties for early withdrawal. Be sure to review the company's policy before making a decision. Withdrawal forms may be requested from each investment company or its representative.

There are instances in which employees may be eligible to withdraw this money in the event of a hardship. In order to qualify for a hardship, employees must have a verifiable, immediate, and heavy financial need. The withdrawal must be necessary to meet the need; in other words, employees are unable to meet the need from any other source. In this case, employees can withdraw only your contributions, not the earnings on them. Employees who withdraw money from their 403(b) SRA before 59 ½ must pay a 10% penalty tax on the amount withdrawn unless the distribution meets one of the following requirements:

- It is due to termination of employment on or after age 55;
- It is in the form of substantially equal payments for life or life expectancy, after termination of employment;
- It is due to disability or death;
- It is for non-reimbursed medical expenses to the extent allowed to be itemized on income tax return (more than 7.5% of adjusted gross income)
- It is a payment to an alternate payee directed by a qualified domestic relations order (QDRO).

403(b) Withdrawal Election form should be submitted to Human Resources to apply for a withdrawal.

After Termination
After employment terminates with the LSU System, contributions to the SRA will stop. The deposits and earnings accumulated can be withdrawn and paid (or named beneficiary upon former employee's death). Contract or policy withdrawal restrictions will apply.

Distributions made that are not part of a series of substantially equal payments made over a period of 10 years or more, or that are not required to be made under the IRS minimum distribution rules, may be rolled over to an IRA. Employees may also elect not to defer any tax liability. Any withdrawals that are not directly rolled over to an IRA or another SRA will be subject to tax withholding of 20%.

Former employees who are not yet 59 ½ and do not meet any of the criteria explained under the governmental restrictions will have distributions subject to a 10% penalty tax according to IRS regulations. This penalty tax is in addition to any contract or policy withdrawal restrictions that may apply.

In the Event of Employee's Death
In the event of an employee's death, the named beneficiary must contact the investment company or its representative to receive withdrawal information.

When an employee enrolls in an SRA, he/she will be given a beneficiary designation form that contains all the information for beneficiary election. Employees who wish to change their designation of beneficiary will need to contact the investment company or its representative.

Required Minimum Distributions
403(b) and 457(b) SRA Plans must begin by April 1 of the year following the later of these two events:  attainment of 70 ½ years of age or upon retirement.