taken by the State Centralized Payroll Unit and the autonomous
State colleges and universities are forwarded to the designated
ABP carriers on a timely basis. According to federal law,
all 403(b) contributions must be credited to the member's account
within five business days of the payroll date.
who use the State Centralized Payroll Unit will have employee
and employer contributions reported to the ABP carriers by the
Division of Pensions and Benefits.
State colleges and universities need to forward all monies to
the appropriate ABP carriers, and submit a report to the Division
of Pensions and Benefits using the Employer
Contributions Report. The Employer Contributions Report
provides the salary and membership data necessary to secure the
State's 8% employer contribution.
1995, a participant's regular 5% employee contribution has been
treated as federally tax-deferred under Section 414(h) of the
federal Internal Revenue Code. Therefore, the 5% member
contribution is excluded from federal income tax under a Tax-Deferred
Annuity (TDA) program. This permits participants to defer
a higher maximum under IRC Section 403(b) and further reduce federal
income taxes owed.
carriers are required to furnish a statement of account to every
participant on a quarterly basis. The statement must indicate
the balance of the account with respect to the value of the contributions
credited to the participant's account.
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