As of July 1, 2006, the University of Kentucky now offers a new voluntary Roth 403(b) contribution option, in addition to existing 403(b) University of Kentucky retirement savings plans. The option is now available with American Century and Fidelity Investments and will be offered by TIAA-CREF in fall 2006. The key difference with this new offering is that Roth 403(b) contributions are taxed as normal income, unlike other mandatory and voluntary 403(b) retirement plan contributions, which are made “pre-tax.” Upon retirement, distributions from Roth 403(b) accounts would not be subject to income taxes, while traditional 403(b) contributions would. As a result, the voluntary Roth 403(b) may be appropriate for employees who wish to minimize taxable income upon retirement, while saving more for retirement overall.
With the new plan offering, you may designate all or a portion of your future voluntary deferral contributions (over and above your mandatory 5 percent contribution) as “Roth contributions.” Note: The total 403(b) limit for 2006, including mandatory and voluntary contributions, is $15,000 if you are under age 50, and $20,000 if you are over age 50. Lower limits apply for high wage earners (visit the Benefits Web site for details).
To help you make more informed decisions regarding the new Roth 403(b) option, UK Benefits home page at www.uky.edu/HR/benefits offers a variety of resources. Additionally, you may schedule an appointment with a representative from UK’s retirement carriers to learn more:
• Contact Brian Bolan of Fidelity Investments at 1-800-642-7131, or logging onto www.fidelity.com/atwork/reservations.
• Contact Heath Norton of American Century at 1-800-345-3533, option 2, extension 54999.
• Contact Bill Fuller or Matt Haas at TIAA-CREF’s Lexington office at (859) 224-6900.
To participate in the Roth 403(b), you simply need to complete a Roth 403(b) Salary Deduction Agreement and an application for the appropriate carrier(s). To obtain the forms, please visit the benefits office at 115 Scovell Hall or the HR satellite office at 317 Wethington Building. Still have questions? E-mail us at benefits@email.uky.edu.
