2009 403(b) TSA and 457(b) DCP Announcement

Supplemental Retirement Saving Opportunities - The 403(b) TSA and 457(b) DCP Plans

Lane Community College offers two excellent programs through which you may contribute a portion of your current income into supplemental retirement savings accounts.  Such contributions reduce your current taxable income, and thus allow you to save more then you could from after-tax income, with the same resulting spendable income.  Morover, it may be reasonable to expect that you will be in a lower tax bracket when you retire and begin to withdraw these funds.  Lane's supplemental retirement savings programs are offered under Section 403(b) and 457(b) of the Internal Revenue Code, and are called the Tax-Sheltered Annuity (TSA) Plan and the Deferred Compensation Plan (DCP), respectively.  With only a few exceptions, all employees are eligible to contribute to both programs by first establishing investment accounts and then submitting salary reduction agreements to the appropriate office.

Dramatic Changes Take Effect January 1, 2009

The IRS published Final 403(b) Regulations during July of 2007 that dramatically changed the way 403(b) Plans must be structured and administered.  As a consequence, both LCC and all of the Vendors for its 403(b) Plan must follow burdensome and expensive new rules. Several companies that have traditionally offered 403(b) investment products have vacated the 403(b) market entirely as a result. Other companies that plan to remain in the 403(b) market are removing their products as investment options in some smaller plans. Lane Community College has adopted the services of Carruth Compliance Consulting, Inc. (CCC), an Independent Third Party Administrator (TPA), to provide compliance and administration services for 403(b) plans. CCC provides a dedicated section of its website to Lane Community College, which is designed to provide everything you need to know about your 403(b) Plan. You should review information about your 403(b) Plan at www.ncompliance.com. 457(b) Plans will continue to be administered by Lane Community College.

Maximum Contribution Limits for 2009

403(b) TSA Plan:

• The basic elective deferral limit for 2009 is the smaller of $16,500 and 100% of your compensation.
• If your 50th birth date occurs on or before December 31, 2009, you are eligible to defer an additional $5,000, provided your compensation is large enough to allow the extra deferral.
• Finally, if you will have at least 15 years of full-time equivalent service with Lane Community College by December 31, 2009, then you may be eligible to contribute up to an additional $3,000 during 2009.

457(b) DCP Plan:

• The basic limit for 2009 is the smaller of $16,500 and 100% of your compensation.
• If your 50th birth date occurs on or before December 31, 2009, you are eligible to defer an additional $5,000, provided your compensation is large enough to allow the extra deferral.
• If 2009 is one of the last three years preceding the calendar year of your chosen “normal retirement age,” you may be eligible to contribute up to $33,000 (twice the $16,500 basic limit) to the 457(b) DCP under a limited catch-up provision of the applicable law.

Contributing the Maximum Allowable Amount:

Most employees do not feel that they are able to contribute their maximum allowable amounts to the TSA and DCP Plans. However, any amounts you are able to contribute will help to ensure a more comfortable retirement income for you, when your TSA and DCP contributions with earnings are combined with Social Security and State Retirement Plan benefits.

If you are in a position to consider contributing the maximum allowable amounts and would like to know your limits for 2009, please contact Lane Community College’s consultant listed below.

Plan Information Is Available

Comprehensive information about LCC’s supplemental retirement saving opportunities is available on the web, including enrollment procedures, information about authorized vendors, and Salary Reduction Agreement forms. If you are starting contributions to a new vendor, you must establish an account with that vendor prior to submitting a Salary Reduction Agreement form.

Lane Community College
Human Resources Department
Phone: 541.463.5586
www.lanecc.edu/hr

Carruth Compliance Consulting, Inc
Email: cccinfo@ncompliance.com
Phone: 503.968.8961
Toll-Free: 877.222.3090
www.ncompliance.com
[Electronic mail (email) is preferred]