Employee Matters

This column is prepared by staff from the Office of Human Resources. E-mail questions to benefits@ohr.wisc.edu or call 262-5650. For more information, visit http://www.bussvc.wisc.edu/ecbs/ecbs.html.

What is the UW TSA plan?

A Tax-Sheltered Annuity (TSA) plan is a retirement savings program authorized by section 403(b) of the Internal Revenue Code. It allows eligible UW employees to set aside a portion of their income on a pre-tax basis for retirement. The plan is for supplemental retirement savings and participation is voluntary.

Why should I invest with the TSA Plan?

Here are five important reasons to participate:

It’s an easy way to accumulate additional savings you will need to supplement your retirement income.
Your contributions reduce your current taxable income. You save on taxes while saving money for retirement.
Both your principal and your earnings grow on a tax-deferred basis.
It is a flexible, low-cost program with a wide array of investment options.
It’s portable. You can take your savings with you if you move to a different employer.

How do I sign up?

Sign up with an approved UW TSA plan provider and complete and send in a Salary Reduction Agreement. For information visit http://www.uwsa.edu/hr/benefits/retsav/tsaenroll.htm, e-mail benefits@ohr.wisc. edu, or call 262-5650.

How does the Pension Protection Act of 2006 affect the TSA Plan?

Much of the act, signed into law in August, is concerned with the way defined benefit plans are funded; however, certain provisions do affect our UW TSA 403(b) plan.

The provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), which were scheduled to sunset in 2010, have been made permanent.

Dollar limits on contributions, benefits and compensation for years 2007 and following will be based upon indexing
Catch-up contributions will continue to be available after 2010.
The “saver’s tax credit,” for qualified retirement savings contributions, formerly set to expire Dec. 31, is now permanent and will be indexed to inflation. This can be a great benefit for low- to moderate-income employees. For more information, visit http://www.uwsa.edu/hr/benefits/retsav/savers.htm.

The act also permanently extends the tax-advantaged benefits of 529 College Savings plans (EdVest), previously set to expire in 2010, making that program attractive.

What are the limits for the TSA plan?

You may contribute as little as $8 biweekly or $20 per month. The maximum contribution is $15,000 and $15,500 for 2007.

If you are 50 or older, you may contribute an additional $5,000 for a total of $20,500 in 2007. Some employees who have worked 15 years or more for the university may also be eligible for a service catch-up. Check with the Employee Compensation and Benefits office 262-5650 or benefits@ohr.wisc.edu.

How do I increase my deferrals for 2007?

Fill out a new Salary Reduction Agreement, available from your benefits office or at http://www.uwsa.edu/hr/sra.htm. To be effective for the first pay date in 2007, forms are due Dec. 10. Send them to Employee Services, 21 N. Park Street, Suite 5101, or fax them to 262-8436. Questions? Call 262-5650.