There are two supplemental tax advantage retirement savings plans available to Illinois State University employees: the 403(b) plan and the 457 plan. Generally, all common law employees of the University who receive compensation reportable on a Form W-2 are eligible to participate in the Plan, so long as the employee elects to contribute at least $200 each year. The only employees not eligible to participate in the Plan are non-resident aliens with no U.S. source income.
Plan participants who are (or will turn) 50 years of age during the calendar year are also eligible to make catch-up contributions up to $6,000 above the annual statutory limit, for an annual maximum contribution during 2016 of $24,000. For highly compensated employees, eligible earnings are limited to $265,000 for the purposes of providing contributions as a percent of salary.
In the Illinois State University Supplemental Retirement Plan, your contributions with the Traditional 403(b) are pretax dollars and have the potential to accumulate tax deferred and are taxable upon distribution. Contributions to the Roth 403(b) are made with after-tax dollars. Therefore, the monies in a Roth 403(b) will be tax-free upon distribution after five or more years after the initial contribution and you attain age 59 1/2 or older.
Employees enrolling for the first time should select one or both vendors and select the enrollment and general information link(s). Once an account is established with one or both vendors, employees will need to complete the ISU 403(b) Plan Payroll Deduction Form.
Employees who are already enrolled with one or both 403(b) vendors and who wish to make a change in the amount being deducted will need to log in to iPeople, select Self Service > Benefits Summary > 403(b). There employees will be able to change the contribution percentage. Employees who wish to stop their contributions for a time should enter a zero in that field.
The State of Illinois Employees' Deferred Compensation Plan is a supplemental tax-deferred retirement plan for state employees Once distribution begins, the distributed monies are fully taxable as ordinary income for federal tax purposes. The funds are never taxed by the State of Illinois.
Any questions can be directed to a Retirement Consultant in Human Resources at (309) 438-8311.