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403(b) |
Code section of the Internal
Revenue Code which governs TSA plans. The terms
Tax-Sheltered Annuity and 403(b) plan are generally used
interchangeably. |
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403(b) Plan |
Retirement plan available to
employees of certain tax-exempt employers. Taxes on
eligible 403(b) plan contributions may be deferred.
Also known as a Tax-Sheltered Annuity. |
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Annuity |
Investment contract with an
insurance company. Annuities can be fixed or variable.
In a variable annuity, the performance of the underlying
investments in a portfolio will determine the value of
the annuity. A fixed annuity provides guaranteed rate
of return and a fixed benefit payable upon annuitization. |
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Catch-up Contribution |
Contribution above and beyond the
annual base contribution limit set by the IRS. Catch-up
contributions may be made beginning the year in which
you turn age 50. You may also qualify to make catch-up
contributions if you have worked for the DOE for 15 or
more years and your lifetime 403(b) contributions have
averaged less than $5,000 per year. You must complete
and submit a Maximum Allowable Contribution in order to
be eligible to utilize a catch-up. |
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Contribution |
Money deposited into your
retirement plan account. |
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Custodial Account |
Account created at a bank,
brokerage firm, or mutual fund company through which
investments in mutual funds can be made. (Please note
that the State of Hawaii DOE TSA Program does not
currently permit custodial accounts.) |
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Distributable Event |
Event which may qualify you to
receive a distribution from retirement plan account. |
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Distribution |
Withdrawal of money from a
retirement plan account. |
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Exchange |
The transfer or exchange of 403(b)
amounts between plan investment providers. You do
not need to have met a distributable event to be able to
exchange assets. Not all contracts
permit transfers. |
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Exchange Eligible Provider |
Investment provider that has established an information
sharing agreement with the employer in accordance with
the IRS' new 403(b) regulations. Only Exchange
Eligible Providers may receive exchanges of plan 403(b)
amounts. |
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Fixed Annuity |
Investment contract with an
insurance company which provides a guaranteed rate of
return and a fixed benefit payable upon annuitization. |
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Hardship |
Qualifying situation which may
enable you to receive a distribution from a retirement
plan account. Generally, a hardship hardship imposes an
immediate and heavy financial burden upon a retirement
plan participant. Hardship withdrawals usually cannot
be received unless all other options have been
exhausted. These options include: insurance, reasonable
liquidation of the employee's assets, cessation of
elective deferrals to the plan, other distributions, and
loans. |
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Maximum Allowable
Contribution (MAC) |
Maximum amount a plan participant
may defer to a 403(b) plan during a calendar year. A
participant's MAC may be determined using the Maximum
Allowable Contribution Worksheet found on the forms
page. |
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Minimum Required
Distribution |
Minimum amount you may be required
to have distributed from your 403(b) account each year
following the later of the calendar year in which you
retire or attain age 70 1/2. |
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Mutual Fund |
Investment company that pools money
from shareholders and invests in a variety of securities
including, stocks, bonds, or other financial
instruments. |
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Rollover |
Transfer of retirement plan assets
from one plan to a different plan or retirement savings
vehicle. A distributable event must have been met to be
eligible for a rollover. A rollover is generally more
flexible than a 90-24 transfer. |
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Salary Deferral |
Money withheld from your paycheck
by your employer and which is not treated as income
during the year in which it earned if the money is
contributed to an eligible retirement plan such as a
403(b) plan. |
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Salary Reduction Agreement |
Legally binding agreement between
you and your employer setting forth the terms of your
participation in a retirement plan including the amount
you will defer out of your paycheck and the investment
vehicle which will receive your contributions. |
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Tax-Sheltered Annuity
(TSA) |
Retirement plan available to
employees of certain tax-exempt employers. Taxes on
eligible TSA contributions may be deferred. Also known
as a 403(b) plan. |
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Transfer |
Means by which you may move 403(b)
money from an account with one investment provider to a
403(b) account with a different investment provider in
the absence of a distributable event. Not all contracts
permit transfers. Named after Revenue Ruling 90-24. |
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Variable Annuity |
An investment contract with an
insurance company the value of which is determined by
the performance of the underlying investments in a
portfolio. |
