403(b) Roth Frequently Asked Questions

This is an after-tax retirement benefit that allows you to pay taxes now on the money you set aside instead of paying taxes at the time of withdrawal.

You will benefit from the Roth 403(b) if:

• You have a longer time until retirement. This gives you longer to accumulate tax-free earnings.
• You are a highly compensated employee who is not eligible for a Roth IRA.
• You want to leave tax-free money to your beneficiaries.

You might not benefit if you are:

• Someone who expects Social Security to be main source of retirement income and tax rate are likely drop in retirement.
• A worker earning between $20,000 and $50,000 who qualifies for certain valuable tax credits, such as the earned income tax credit.

No. Unlike Roth IRA’s, there are no maximum income limits for Roth 403(b) contributions.

If you are currently contributing to the 403(b):

1. Log On to the Employee Self-Service at http://leo.cc.emory.edu, click on Self Service to expand your available selections.
2. Select Benefits and then click 403(b) Savings Plan Election.
3. From here you can choose to:

a. Make elections and vendor selections by clicking the button, “Click here to enroll, change or stop 403(b) elections”
b. Calculate your maximum allowed contributions by clicking the button, “Click here to model 403(b) maximum contributions”

4. After selecting your elections, click the Submit Elections button. Print a copy of this page for your records.
5. Once you have successfully enrolled, contact the vendor(s) you have selected and make your investment elections.

If you would like more information about the Roth 403(b) offerings, you can call or visit the retirement vendor websites.

Fidelity	(800) 343-0860
Vanguard	(800) 523-1188
TIAA CREF	(800) 842-2888

If you are contributing for the first time with the vendor:

1. Log On to the Employee Self-Service at http://leo.cc.emory.edu, click on Self Service to expand your available selections.
2. Select Benefits and then click 403(b) Savings Plan Election.
3. From here you can choose to:

a. Make elections and vendor selections by clicking the button, “Click here to enroll, change or stop 403(b) elections”
b. Calculate your maximum allowed contributions by clicking the button, “Click here to model 403(b) maximum contributions”

4. After selecting your elections, click the Submit Elections button. Print a copy of this page for your records.
5. Once you have successfully enrolled, contact the vendor(s) you have selected and make your investment elections.

Yes. The plans allow you to elect a combination of both pre-tax and Roth after-tax deferrals. This is on the 403(b) authorization form you submit to the Benefits Department for payroll deduction.

The combination of traditional pre-tax and Roth after tax deferrals in both the Emory University and The Emory Clinic 403(b) plans cannot exceed IRS limits. For 2007 the 402(g) elective deferral limit is $15,500 or $20,500 if you are 50 or older in 2007

Unlike pre-tax contributions, Roth after-tax contributions do not reduce your taxable income. Therefore if you elect Roth after-tax contributions, your net pay is reduced due to additional tax withholdings. See the following example

Hypothetical example: Assume eligible gross compensation is $60,000 per year or $5,000 per month with a 25% federal tax withholding rate.

Yes, the same investment options are available for Roth after-tax contributions.

The account must have been established for at least 5 years, and the withdrawal must meet one of the following conditions:
a. Be taken after age 59 1/2
b. Be as a result of permanent disability or death

If a distribution of your Roth after-tax account is made before it has met the Qualified Distribution criteria, the amount of the distribution that represents income on the employee’s account is includable in gross income. The amount that represents your designated Roth contribution is not taxable.

Penalties for early withdrawal still apply.

No, the rules governing when you can take a payment from the plan have not changed. Please see the Summary Plan Description for more detailed information.

You have the same distribution options for your Roth 403(b) balance as you do for your 403(b)pre-tax balance. Please note that Roth 403(b) accounts may only be rolled over into another Roth 403(b) account or a Roth IRA.

Emory University Benefits

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Disclaimer

Emory reserves the right to terminate, suspend, withdraw, amend or modify the Plan in whole or in part at any time. Further, Emory reserves the right to terminate or modify coverage for any group of employees, active or retired and their dependents or a class of dependents at any time.