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Tax-Sheltered Annuity Program (TSA) 403(b)

Overview

The CSU 403 (b) Tax Sheltered Annuity (TSA) Program is a voluntary program that allows eligible CSU employees to save toward retirement by investing pre-tax contributions in tax-deferred investments in either annuities or mutual funds, under Internal Revenue Code (IRC) Section 403 (b). TSA contributions are made solely by the employee through payroll deductions, prior to federal and state taxes being calculated. 

Annual Contribution Limits

Currently, two IRC limits apply:

  1. The IRC Section 402 (g) "elective deferral limit"; and
  2. The IRC Section 415 (c) "percentage of compensation" limit.

Currently, the contribution limit is 100% of adjusted gross income (up to $53,000), or a maximum of $18,000 per year.

Contributions to a 403 (b) plan are not offset by contributions to a 457 plan. Employees can maximize contributions in both of these plans. For example, a participant could elect to contribute up to $18,000 to a 403 (b) plan AND up to $18,000 to a 457 plan, for a total contribution of up to $36,000.

Contributions to a 403 (b) plan are offset by any contributions to a 401 (k) plan in the same tax year. Currently, employees contributing to both a 403 (b) and 401 (k) plan are restricted by IRS regulations to a combined total of $18,000.

Transfers

If you have balances with MetLife, TIAA, VALIC, VOYA or other legacy fund sponsor, and would like to transfer your 403(b) account, contact Fidelity for Information and guidance.

Change or Reallocation of TSA Contributions

TSA enrollments and deferral changes are designated by employees via Fidelity NetBenefits, or by calling 800-343-0860. All salary reduction changes (stop, start, increase and/or decrease) and fund investment selections are managed by the employee via Fidelity NetBenefits. The minimum deduction amount is $15 per month.

The cutoff day to make changes is the 5th of each month, or the next business day by 9:59 PM if the 5th falls on a holiday or weekend.

Catch-Up Provisions

Under IRC Code Section 402 (g)(7), employees that have at least 15 years of service (full-time equivalent) with the CSU and have not maximized the annual contribution limits during this time, may be eligible to contribute an additional $3,000 per tax year for up to five years, for a total of $15,000. To take advantage of this additional catch-up allowance, proof of 15 years of service (annual CalPERS statement) and a completed Maximum Contribution Allowance Worksheet are required. The Worksheet can calculate your annual maximum contribution amount based on information you provide.

Please note: if the employee has contributed more than $5,000 per year or a total of $75,000 for the last 15 years, they may not be eligible for the 15 year catch-up.

The age 50 catch-up is an age based catch-up allowance under IRC Section 414 (v). This provision allows employees that are or will turn age 50 by the end of the current tax year (December 31) to contribute an additional $6,000 to a 403 (b) plan or to a 401 (k) plan and also contribute an additional $6,000 to a 457 plan.

If an employee qualifies for both of the 403 (b) catch-up provisions, additional contributions will be first applied to the 15 year catch-up allowance and then to the age based catch-up provision.

See specific 401(k) and 457 plan restrictions by visiting the Savings Plus 401k and 457 Program website.

Loans and Hardship Withdrawals

Participants can have one outstanding loan at any time with Fidelity or from an existing CSU 403(b) account with one of the following legacy vendors: Ameriprise, AXA Equitable, Lincoln, National Life Group, TIAA and VALIC.  The minimum loan amount is $1,000. If an employee has defaulted on any prior CSU TSA 403 (b) Program loan, a new loan will not be permissible.

Retired and separated employees are not eligible to take a loan.