Pre-Tax Programs
403(b) Tax Deferred Annuities

TSA Retirement Savings and Providers [403(b)]

Listed below are available providers for the voluntary retirement savings through tax-deferred savings, as permitted under Section 403(b) of the Internal Revenue Code.  The 403(b) plan is available for non-profit institutions, as well as teaching and religion organizations.  Additionally, this plan was referred to as a Tax Sheltered Annuity (TSA); annuities and mutual funds are available.  SJC does not endorse any 403 (b) provider/product; nor is SJC able to provide any investments/tax advice; nor is SJC responsible for any investment gain/loss.  Before selecting a 403(b) provider/product, each employee should review the products of several annuity providers; each employee should also obtain independent professional investment/tax advice with respect to a specific annuity contractor and/or products appropriate for the employee.  Be sure that you understand the penalties for premature withdrawals of account balances, and obtain in writing offers to provider any “bonuses” for enrolling with a particular provider.
 
Employees must obtain from their 403(b) provider(s) or personal tax advisor information regarding such regulatory requirements as maximum contributions, required distributions, etc.; taxes, penalties, fines and interest incurred for regulatory violations are the sole responsibility of the employee.  SJC does not assume any liability for regulatory violations.  403(b) participation exceeding $700 per month and/or 16% of salary require that a Maximum Exclusion Allowance (MEA) calculation be performed by the employee’s 403(b) provider or personal financial advisor and be submitted with the salary reduction agreement; without a required MEA, the salary reduction agreement will not be implemented.
 
CAUTION:  Before rolling over a 403(b) account to another 403(b) provider, you should verify with your current agent or provider, whether such a transfer will result in cash surrender penalties, reducing your account balance.
 

The SJC approved 403(b)/TSA provider list is:

Company Name San Juan College Rep. Toll Free Number
AIG/Valic Nila McAnally 1-800-826-4919
Ameriprise Financial Sean O'Kane 1-800-842-3344
AXA Equitable Life Ins Lynda Turner 1-800-777-6510
Horace Mann Debby Schwarz 1-800-999-10-30
ING Sherry Flynn 1-866-327-4599
MET Life Gilbert Arevalos 1-800-824-2673
Symetra Life Ins Brian Main 1-877-796-3872
TDAmeritrade   1-800-431-3500
TIAA-CREF Sean Heslin 1-866-842-2905
USAA Cash Analysis Melinee McComas 1-800-531-8292

 

 

HOW TO SHOP FOR A 403(b) TAX SHELTERED ANNUITY PROVIDER

Tax sheltered saving means that a person is saving money on a “before tax” basis.  You will delay until a later date the payment of income taxes on any amount of income that you contribute to a tax sheltered account. That said, if your employer offers you more than one company who deals in tax sheltered annuities, you should look at the products carefully.

Things to watch for:

  1. Are you investing in a fixed or variable annuity? A fixed annuity is invested primarily in government securities and high-grade corporate bonds.  They offer a guaranteed rate of return.  Variable annuities enable to you to invest in a selection of funds.  These are tied to market performance and give you a choice of mutual funds to invest in.

  2. Annuities with withdrawal penalties.  Annuities allow you to withdraw either your interest savings or up to 15% a year without a penalty.  If you rollover your funds to an approved entity, like ERA, you will pay no taxes or other penalty.

  3. Fees.  It is important to understand the level of fees paid to the brokers that market annuities.  If there is a front load fee attached to an annuity, you will have to pay a fee each time you put money into the annuity.  A back-end load will cost you when you take money out of an annuity.  There are many no-load funds available to invest in.