Tax Sheltered Annuity Program - 403(b)

All ACC employees may participate in the 403(b) Tax Sheltered Annuity (TSA) savings program. This plan is expressly granted by Congress in Internal Revenue Code section 403(b).  Under this provision, the amount deposited into the TSA may be a pre-tax or after-tax deduction from your current income.  On pre-tax deductions, taxes are not paid on the contributions or earnings until withdrawn, preferrably at retirement.  After-tax or Roth 403(b) deductions are taxed currently but no taxes are due later on the contributions or earnings when withdrawn, see requirements below.  The College maintains a list of authorized vendors.

Roth 403(b) Accounts

Roth 403(b) accounts allow employees to save after-tax money now and not pay taxes on their future distributions from the account. No further taxes are owned on either contributions or earnings when it is taken out of the account after 5 years and upon reaching age 59½.

Currently, six of the eight authorized 403(b) plan vendors, are able to accept employees’ Roth contributions. They are; Fidelity, Lincoln Financial, Security Benefit, TIAA, VALIC and Voya.   USAA and AmeriPrise do not accept Roth contributions at this time.

To enroll in a Roth 403(b) account, first contact one of the 6 vendors who can accept your Roth contributions to set up an account.  Contact information for the vendors is located on the ACC HR Benefits website. Then, log in to the Retirement Manager website, select “Start or Change my Contributions” and follow the prompts to set up your monthly contributions.  Finally, check your pay retainer the following month to be sure your contributions have started.

If you have any questions about the Roth accounts contact HR Benefits at hrbenefits@austincc.edu or call either Kelly Clennan at 512-223-7609 or Steve Hassel at 512-223-7617.

To start either type of 403(b) plan, employees need to:

  • Select an ACC authorized TSA vendors

  • Set up an investment account with their chosen TSA vendor (This must be done before you go to the next step)

  • Go to the ACC online enrollment system called Retirement Manager 

  • Enter how much they wish to contribute and which vendor they will use in Retirement Manager

  • Review your following paycheck to confirm that the payroll deduction has occurred and is correct. 

Employees can contribute up to the maximum annual deductions allowable by law.  The limit applies to the combined pre-tax and Roth 403(b) contributions that may be made each tax year.  

2020 $19,500
2019 $19,000
2018 $18,500
Other limitations may be applicable due to age (greater than 50), work tenure, or retirement date.  If age 50+, you may contribute an additional $6,000 ($6,500 in 2020).

Contributions to a tax sheltered annuity can be stopped at any time by submitting your change online through ACC Retirement Manager. This will be effective the first of the following month. There may be tax consequences and penalties for early withdrawals.  All elections and changes must be entered in Retirement Manager by the end of the month prior to when they are to be deducted from pay.

Contact the Office of Human Resources, Benefits Department for further information.

Advantages of a 403(b) plan

  1. All ACC employees may participate in the 403(b) plan.

  2. Your contributions are painlessly deducted from your paycheck.

  3. You decide how your money is invested through the authorized carrier.

  4. If you change employers, you can take your 403(b) funds with you.

A 403(b) plan is probably a good choice for you if you:

  • are already investing some of your take home pay

  • are not struggling from paycheck to paycheck

  • pay income taxes

  • want to save and invest for retirement

  • have an emergency fund to cover three to six months' living expenses

Additional Information

DISCLAIMER: Austin Community College assumes no responsibility for the future performance of any offered investment program. It is the employee's responsibility to select and monitor the performance of the company in the future. The employee is responsible for all tax liabilities incurred as a result of the management or dissolution of the 403(b) Plan.