| |
403(b) Plan |
457 Plan |
| Eligibility |
Part-time and full-time ACC employees |
| Maximum Annual Deferral |
100% of 403(b) eligible compensation or $11,000* per year, whichever
is less |
100% of 457 eligible compensation or $11,000* per year, whichever
is less |
| Age 50 and over Catch-up Provision |
Persons age 50 or older: the law allows an additional
contribution above the maximum deferral limit of $1,000 for 2002,
increasing $1,000 each year up to $5,000 in 2006. After 2006, this
additional deferral will be indexed in $500 increments based upon
cost-of-living adjustments. |
| Other Catch-up Provision |
An additional amount up to $3,000 might be available if you have
15 years of service with a qualified organization and previous years'
deferrals have averaged less than $5,000. May be used in addition
to the Age 50 and over Catch-up Provision. |
Yes, an additional amount up to $11,000 might be available if
you have unused deferrals in previous years where you were eligible
for a 457 plan. May be used only in the three years ending before
the taxable year in which you attain normal retirement age (age
65). Cannot be used in a year you used the Age 50 and over Catch-up
Provision. |
| De Minimis Withdrawal (Inactive Account) |
No, but 59 1/2 withdrawal may be available. |
If account has less than $5,000 and has been inactive for two
years. |
| Loans Allowed |
No. |
No. |
| Financial Hardship / Emergency Withdrawals (Only
considered when an employee has no other resources) |
Unreimbursed medical expenses, casualty loss, or prevention of
a foreclosure or eviction. |
Unreimbursed medical expenses (if unforeseeable), casualty loss,
or sudden and unforeseeable emergency. |
| Tax Penalties** |
10% penalty tax applies to distributions made prior to age 59
1/2 unless an exception applies. |
No penalty tax on a distribution at any age after severance from
employment. |
| Distributions Available at: |
Severance from employment, financial hardship, death, or age 59
1/2. |
Severance from employment, death, at age 70 1/2 if still employed,
or unforeseeable financial emergency. |
| Distributions Must Begin: |
No later than April 1 following the year in which
participant turns 70 1/2, unless the participant is still employed. |
| Rollovers |
Yes, into another eligible retirement plan (including
an IRA) when eligible for an eligible rollover distribution. |
| Tax Credit for Lower Income Savers |
Eligible persons may receive a non-refundable tax
credit up to 50% on an annual contribution of $2,000 in elective
deferrals, in addition to the tax deferral. Generally applies to
joint filers with adjusted gross income (AGI) of less than or equal
to $50,000 and single filers with AGI of less than or equal to $25,000.
Credit is claimed on a completed Federal Form 1040. |
| *Ceiling is adjusted each year per
cost-of-living index. Amount shown is for 2002. |
| **A 50% penalty tax applies to participants
if minimum required distributions are not taken. |
The 403(b) Plan information does not apply to the Texas Optional Retirement Program (ORP).
To present information in this overview format we had to leave out some points, and even those points that are explained can't be complete. We suggest you use this overview only as a starting point to begin thinking about what provisions might matter to you. We urge you to read carefully all of the information available for each plan or contract. This overview is not tax or legal advice. If you need advice, you should consult your lawyer. For additional details, please contact the ACC Benefits Office, 512-223-7800, or the at the email addresses listed in the left column.
