403(b), 457(b), and Roth 403(b) Opportunities

As an employee of Henry Ford Community College, you have the opportunity to contribute to 403(b) and 457(b) tax sheltered annuity plans. There are also some Roth 403(b) options. With regard to the 403(b) plans for the 2011 calendar year, the maximum you may contribute is either 100% of your compensation or $16,500, whichever is less. If you are over the age of 50 there is an annual ‘catch- up” provision that enables you to contribute an additional $5,500. Employees who have 15 years of service may contribute an additional $3,000 per year, up to a $15,000 lifetime maximum. Since this lifetime catch up has restrictions based on prior year contributions, eligibility of this must be verified by your 403b vendor and/or Tax Advisor. The 15-Year Rule yields different results for different individuals. With the exception of the annual $3,000 lifetime catch up, the contributions on 457(b) plans are identical to 403(b) plans. (Maximum of $16,500 plus an additional $5,500 if over the age of 50)

The above amounts are the same as they were in 2010. There are no changes.

If you already contribute to a 403(b) and/or 457(b) and wish to make changes, you will need to complete a “Tax Shelter Deduction Change Form” available from the Payroll Office.

If you do not currently participate, but would like to, please contact Human Resources or Payroll for a listing of companies approved for payroll deduction. After contacting the company and setting up your account, a “Voluntary Salary Reduction Agreement Form”, available from Payroll, must be completed and submitted to Payroll before deductions can occur. We must also have verification from the selected vendor indicating that the account is set up and active.

Although we cannot offer advice unique to your circumstances regarding these investment opportunities or the tax consequences of them, if you have any general questions, please do not hesitate to contact the Payroll Office.