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Elective Deferral Contributions
To begin elective deferrals, you must submit a Salary
Reduction Agreement to your employer specifying the monthly dollar amount
or percentage of salary by which your salary is to be reduced while the
Salary Reduction Agreement is in force. Also, the Salary Reduction Agreement
specifies the investment company or companies into which your deferrals
are to be deposited and how the total deferral is to be apportioned
among these companies. To change your elective deferral amount, your elective
deferral percentage, your selected investment company or companies, your
apportionment of deferrals among these companies, or your division of
your contribution to a particular company between Traditional and Roth
contributions, you must submit a new Salary Reduction Agreement
to your employer.
Employer Paid Contributions
In some instances employers will enhance total compensation packages by
making employer discretionary contributions to the 403(b)
program on behalf of certain employees, ordinarily for upper level administrators.
Employees receiving such benefits must sign participation agreements that
specify the investment company or companies into which such contributions
are to be deposited and how the total contribution is to be apportioned
among these companies. To change the selected investment company or companies
or the apportionment of contributions among these companies, the employee
must submit a new participation agreement to the employer.
Reapportioning Contributions
As described above under Elective Deferrals and Employer Paid Contributions,
reapportioning contributions among selected investment
companies is accomplished by submitting a new Salary Reduction Agreement
or a new participation agreement to your employer. An
online version of your employer's Salary Reduction Agreement is available
within your school district's section of this CCC website. You may complete
the form online, print it, sign it, and submit the completed form to the
appropriate District office.
Redividing Contributions
As described above under Elective Deferrals, redividing
contributions to a specific investment company between Traditional and
Roth contributions is accomplished by submitting a new Salary Reduction
Agreement to your employer. An online version of your
employer's Salary Reduction Agreement is available within your school
district's section of this CCC website. You may complete the form online,
print it, sign it, and submit the completed form to the appropriate District
office.
Reallocating Contributions
Initially monthly contributions apportioned to a specific investment company
are allocated among the company's investment funds as
specified in the application for annuity contract or custodial account.
Such allocations may be changed by the participant in various ways, depending
on the company involved (online via the company website, by telephone,
or by reallocation form). Reallocating contributions is a transaction
that is handled directly between the participant and the investment company.
The employer is not involved. Check the Authorized Vendors page on your
District's section of this CCC website for availability of an online form.
Internal Transfers
After contributions have been made to various accounts or funds of a particular
investment company, accumulated balances may be transferred
to other 403(b) accounts or funds of the same company. Such transfers
may be accomplished by the participant in various ways, depending on the
company involved (online via the company website, by telephone, or by
transfer form). Internal transfers are transactions that are handled
directly between the participant and the investment company.
The employer is not involved. Check the Authorized Vendors page on your
District's section of this CCC website for availability of an online form.
Currently it is not possible to transfer money from a Traditional 403(b)
account to a Roth 403(b) account.
External Exchanges and Transfers
After contributions have been made to various accounts or funds of a particular
investment company, accumulated balances may be exchanged or transferred
to 403(b) accounts of a different investment company. Such transfers are
authorized by Revenue Ruling 90-24, strengthened by the new 403(b) Regulations,
and generally require coordination of effort between the two companies
involved. The new 403(b) Regulations distinguish between contract
exchanges within the plan and plan-to-plan transfers.
For our purposes, both types of transactions will be referred to simply
as transfers.
Ordinarily the company transferring the funds requires the participant
to submit a transfer request form. In addition, the transferring company
requires a letter of acceptance from the company receiving the transferred
funds. Finally, the transferring company requires verification that the
receiving company has entered into an Information Sharing Agreement (ISA)
with the Employer or the Employer's representative (e.g., with a Third
Party Administrator on behalf of the Employer). Of course, an account
must be established at the receiving company before an exchange or transfer
is possible. This is done by submitting an application to the receiving
company. External transfers are transactions that are handled
directly between the participant and the two investment companies involved.
Neither the Employer nor CCC is involved, except that CCC makes available
on its website the facts that the Employer allows exchanges/transfers
and that the receiving vendor has entered into an ISA with CCC.
Check the Authorized Vendors page on your District's section of this CCC
website for availability of online forms. Currently it is not possible
to transfer money from a Traditional 403(b) account to a Roth 403(b) account.
Internal Rollover Distributions
Once account balances become eligible for distribution, they may be rolled
over into different types of eligible retirement plans (IRA,
401(a), 401(k), 457(b), etc.). If a particular company provides investment
vehicles for a different eligible retirement plan type, it may be possible
to rollover 403(b) account balances into another type of plan within the
same company. Generally, such rollover distributions require completion
and submission of appropriate company forms. Internal rollover
distributions are transactions that are handled directly between the participant
and the investment company. The employer is not involved. Check
the Authorized Vendors page on your District's section of this CCC website
for availability of online forms. Currently it is not possible to make
a rollover distribution from a Traditional 403(b) account to a Roth 403(b)
account. On the other hand, if money in a Traditional 403(b) account is
eligible for distribution, then it may be rolled over into a Traditional
IRA and then transferred to a Roth IRA. However, taxes must then be paid
on the amount rolled over from the Traditional IRA to the Roth IRA.
Caution - To be an eligible distribution, one of the following
criteria must be met:
- Attainment of age 59 1/2
- Severance from employment
- Death
- Disability
External Rollover Distributions
Once account balances become eligible for distribution, they may be rolled
over into different types of eligible retirement plans (IRA,
401(a), 401(k), 457(b), etc.). It may be possible to rollover 403(b) account
balances into a different plan type account of a different investment
company. Generally, such rollover distributions require completion and
submission of appropriate company forms for both companies. External
rollover distributions are transactions that are handled directly between
the participant and the two investment companies. Neither the
Employer nor CCC is involved unless the distributable event is severance
from employment before age 59 1/2. In this latter situation, the Employer
must certify that employment has been severed. Check the Authorized Vendors
page on your District's section of this CCC website for availability of
online forms. Currently it is not possible to make a rollover distribution
from a Traditional 403(b) account to a Roth 403(b) account. On the other
hand, if money in a Traditional 403(b) account is eligible for distribution,
then it may be rolled over into a Traditional IRA and then transferred
to a Roth IRA. However, taxes must then be paid on the amount rolled over
from the Traditional IRA to the Roth IRA.
Standard Distributions
Once account balances become eligible for distribution, they may be distributed
to the participant or the designated beneficiary. Generally, such distributions
require completion and submission of an appropriate vendor company form.
Distributions are transactions that are handled directly between
the participant and the investment company. The employer is not
involved. Check the Authorized Vendors page on your District's section
of this CCC website for availability of online forms.
403(b)
Hardship Distributions
Click on the above link for the rules that apply to 403(b) hardship distributions.
Hardship distributions are optional features that may or may not be
allowed in an Employer's 403(b)
TSA Plan. Your Employer's 403(b) Plan Document will specify whether
or not hardship distributions are allowed in your 403(b) Plan. Some
403(b) annuity contracts and custodial accounts have hardship distribution
provisions and others
do
not. However,
the Plan Document takes precedence over provisions in the underlying
annuity contract or custodial account agreement. An immediate and heavy
financial need of the participant may justify a hardship distribution,
even when the participant would not otherwise
be
eligible for a distribution.
The hardship distribution rules may also be found on the Policies & Procedures
page on your District's section of this CCC website. Generally, such
hardship distributions require completion and submission of an appropriate
company
form. Prior to January 1, 2009, hardship distributions are transactions
that are handled directly between the participant and the investment
company.
However,
in certain circumstances the employer must be notified that a hardship
distribution has been made, because elective deferrals must be suspended
for six months following certain types of hardship distributions. After
December 31, 2008, all hardship distribution applications in CCC Client
Districts will be processed by CCC. Keep in mind that hardship distributions
are not allowed in
the plans
of CCC Plan Document Service Only Client Districts.
Check the Authorized Vendors page on your District's section of this
CCC website for availability of online forms.
457(b)
Hardship Distributions
Click on the above link for the rules that apply to 457(b) hardship distributions,
which are more accurately described as "unforeseeable emergency" distributions.
The rules are significantly different for hardship distributions in 403(b) and
457(b) plans.
Loans
Click on the above link for the rules that apply to loans. Loans are
optional features that may or may not be allowed in an Employer's 403(b)
TSA Plan. Your Employer's 403(b) Plan Document will specify whether
or not loans are allowed in your 403(b) Plan. Some 403(b) annuity contracts
and custodial accounts have loan provisions and others do not. However,
the Plan Document takes precedence over provisions in the underlying
annuity contract or custodial account agreement. The loan rules may
also be found on the Policies
& Procedures page on your District's section of this CCC
website. Prior to January 1, 2009, loans are transactions that
are handled directly between the participant and the investment company.
After December 31, 2008, all loan applications in CCC Client Districts
will be processed by CCC. Keep in mind that loans are not allowed in
the plans of CCC Plan Document Service Only Client Districts. Check
the Authorized Vendors page on your District's
section
of this CCC website for availability of online forms required for processing
loans.
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