Whether you participate in the Optional Retirement Program (ORP) or the Teacher Retirement System (TRS), you are eligible to contribute additional pre-tax contributions into a Tax Deferred Account (TDA) or a Deferred Compensation Program (457).  Both types of plans are supplemental retirement savings plans that you can contribute to in order to supplement your regular retirement through TRS/ORP.  Neither plan receives a state contribution, so the benefit is the tax sheltering of your contributions until retirement age (or withdrawal of your account after termination of employment, if prior to retirement).  In each or both plans you may tax shelter up to 100% of gross annual income each year, up to a maximum of $15,500 for 2007. 

The advantages of a TDA or 457 are (1) a portion of current income can be sheltered from income tax; and (2) interest or earnings on the annuity accumulate tax-free until the participant makes withdrawals.  Withdrawals cannot be made until the employee turns age 59½, separates from service, or retires.  The TDA and 457 should be regarded as programs for savings funds to help supplement retirement, not as temporary savings vehicles.  Federal income tax is paid on the money during the year in which withdrawals are made.

The TWU TDA plan is governed by IRS Code, Section 403(b).  The TWU 457 plan is administered by CitiStreet as part of the ERS Texa$aver program and is governed by IRS Code, Section 457(b).

A Maximum Allowable Contribution (MAC) or Maximum Contributions Calculation (MCC) must be individually figured for each employee maximizing contributions to the TDA and/or 457 plan(s). 

TDA Enrollment

Contributions to a TDA will be deposited only with companies approved by TWU.  Review the list of TWU Authorized Carriers for ORP/TDA and select a company.  Contact the company to discuss investment options and to obtain their contract application form.  A completed Purchase Agreement and a copy of the 403(b) company's contract must be submitted to enroll in or make changes to a 403(b).  Applications for Fidelity and TIAA-CREF are available in the TWU Office of Human Resources (OHR).

Upon receipt of a Purchase Agreement and/or company contract, the OHR will make 403(b) participation or changes are effective with the next month's payroll period.

For more information concerning the Tax Deferred Account, contact one of the TWU ORP/TDA Authorized Carrier representatives. 

457 Enrollment

Contact the 457 program administrator CitiStreet to review their investment options and to enroll.  The program administrator sends a report to the OHR on the first of each month to communicate changes for that month's payroll period.

For more information concerning the 457 Program, call CitiStreet at 800-634-5091 or visit their website at:  http://www.texasaver.com/.