Employers' Pensions and Benefits Administration Manual (EPBAM)
   

 

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Additional Contributions Tax-Sheltered
(ACTS) Program


 
Contents
 
 

What is the ACTS Program?

 
 

Who is eligible to participate?

 
 

Who are the present participating investment providers?

 
 

What are the guidelines governing carrier operations on campus?

 
 

What are the employer's responsibilities?

 
 

What ACTS forms must be processed by the employer?

 
 

What are the payroll guidelines that should be used for deductions?

 
 

When and how should ACTS money be remitted?

 

 

What is the ACTS Program?

The Additional Contributions Tax-sheltered (ACTS) program allows eligible employees to obtain supplemental tax-sheltered annuities with the same investment providers available to Alternate Benefit Program (ABP) participants. Contributions for ACTS investments are voluntary and would be in addition to the contributions required by mandatory membership in a State-administered retirement system.

Eligible Employees

Employees of the county colleges, State colleges and universities, the Commission on Higher Education, the Department of Education, and the Office of Student Assistance, are eligible to participate in the ACTS Program, as long as they normally work 20 or more hours per week.

Participation in the ACTS Program is also open those employees listed above who are now receiving retirement allowances from a State pension system and would otherwise be barred from joining another State pension system.

It is the employee's responsibility to initiate the enrollment process by securing information and/or forms for enrollments.

Current Investment Providers

The following providers are currently approved by the Division of Pensions and Benefits to offer annuity investment accounts for ACTS members (as of April 1, 2004):

 

ING Life Insurance and Annuity Co.
581 Main St., Fourth Floor
Woodbridge, NJ 07095
877-873-0321

 

MassMutual (formerly The Hartford)
Gitterman & Associates Wealth Management, LLC (financial advisors)
70 Wood Avenue South, 3rd Floor
Iselin, NJ 08830
(848) 248-4405

 

AXA Equitable
(AXA Equitable Life Insurance Company)

333 Thornall Street, 8th Floor
Edison, NJ 08837
1-866-752-0072

 

Teachers Insurance and Annuity Association/
College Retirement Equities Fund (TIAA/CREF)

Village Blvd, Suite A
Princeton, NJ 08540
1-800-842-8412

 

MetLife (formerly Travelers - CitiStreet)
Mack Cali IV
581 Main Street, Sixth Floor
Woodbridge, NJ 07095
1-800-545-0108
(732) 602-0500

 

VALIC
135 Route 202/206, Suite 13
Bedminster, NJ 07921

(908) 470-4110


You can give employees a copy of Fact Sheet 34, The Additional Contributions Tax-sheltered (ACTS) Program (All Funds), which outlines the program and gives the names, addresses and phone numbers shown above.

Worksite Visits by the Investment Provider Representatives

Employers are reminded that each carrier must be given equal access to worksites and staff. The carriers are always responsible for making prior arrangements with each human resource office before appearing on campus (see Provider Guidelines below).

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Provider Guidelines

The following guidelines apply to the provider:

  1. The providers must register their representative(s) with each employers' benefits office prior to contacting eligible employees. Registration is to include name, address, office, and telephone number of the representative(s).

  2. The provider must advise and receive approval from each employer's benefits office for all worksite contact with plan participants.

  3. Provider representatives may not solicit business for plans or services outside the ACTS Program, e.g. disability insurance or life insurance, unless they are authorized to market such products by the employers.

  4. The provider must not sell or otherwise distribute mailing lists developed for the ACTS Program.

  5. The provider must visit eligible employers at least once annually.

  6. Customized literature published by the investment providers for eligible employees is subject to the review and edit of the Division of Pensions and Benefits prior to distribution.

  7. The investment provider is responsible and accountable for the accuracy of all program materials and presentations.

  8. The investment provider's representatives must provide complete, clear, and concise investment descriptions including administrative costs to the participant, investment objectives, risk level, performance history, and independent rating analysis when available.

  9. The investment provider representatives must adhere to these guidelines. Abuses may lead to the reevaluation of the provider's approval status.

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Employer Administrative Responsibilities

Employers must designate an individual(s) who is responsible to function as the providers' worksite point of contact; coordinate worksite marketing; advise carriers of any unique characteristics of the employer; and investigate complaints or policy infractions.

The employer will determine the frequency of informational seminars and the arrangements will be coordinated with the benefits manager. The employer will distribute the investment providers representatives' names and telephone numbers to eligible employees, and decide if it is appropriate to provide eligible participants' names and addresses to the carriers. Employees may initiate contact if additional information is needed.

Employers may develop additional guidelines as they deem appropriate subject to the approval of the Division of Pensions and Benefits. With respect to participant complaints and marketing violations, incidents must be reported to the employer's benefits office and/or the Division of Pensions and Benefits for investigation and resolution.

The benefits office of each eligible employer is responsible for:

  1. Informing eligible employees of their ability to participate in the ACTS Program. The employees can obtain detailed information on investment options by contacting carriers individually;

  2. Overseeing the investment providers' contact with their employees;

  3. Disseminating publications and providing products/services information to employees through orientation programs and informational meetings, which may include presentations by the investment providers;

  4. Establishing guidelines for the number of times in a year participants can switch investment providers or change the percentage of allocation among the investment providers. (Participants employed by the Commission on Higher Education, the Department of Education, and the Higher Education Student Assistance Authority are permitted to change their choice of investment providers, or the percentage of allocation among investment providers, twice during the calendar year.), and;

  5. Timely processing of the Provider Election and Allocation Form and the Salary Reduction Agreement. (Please note that many county colleges and State colleges and universities of New Jersey have their own internally-developed forms for use with the ACTS Program.)

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Employer Processing of ACTS Forms

There are two forms that the employer is responsible to file on behalf of the participants*:

*Many county colleges and State colleges and universities of New Jersey have their own internally-developed forms for use with the ACTS Program. See note below regarding the establishment of filing and processing procedures, and use of forms by county colleges and State colleges and universities.)

State Agency Provider Election and Allocation Form

Once an employee establishes an account with the provider (or providers) of choice by contacting the carrier directly, the employer must provide the employee with the Provider Election and Allocation Form. This form indicates the investment provider is authorized to receive the participant's voluntary tax-deferred contributions and shows the allocation of contributions. This form must be completed and filed with the employer each time the participant desires to change any investment carrier, or the percentage of allocation among multiple carriers. ACTS employers have the discretion to establish guidelines for the number of times in a year their participants can switch investment providers or change the percentage of allocation among the investment providers.

State Agency Salary Reduction Agreement Form

The Salary Reduction Agreement (SRA) establishes a contract between the employee and the employer whereby the employee's eligible earned base salary will be reduced by voluntary contributions beyond those required by mandatory membership in any State-administered retirement system. The reduction shall not exceed the employee's statutory exclusion allowance under Section 403(b), or the limitations of Section 415 and the regulations thereunder of the Internal Revenue Code.

  • The rate of salary reduction must be stated as a percentage of the employee's includable compensation (base salary minus required deductions under payroll guidelines). 

  • No fractional percentages will be permitted for employees of the Commission on Higher Education, the Department of Education, and the Higher Education Student Assistance Authority. 

  • State agencies' employees paid through Centralized Payroll are permitted to change their rate of salary reduction once per calendar quarter. 

  • State colleges and universities and county colleges may establish their own policies regarding the number of salary reduction agreement changes allowable per year. 

  • State colleges and universities and county colleges may establish their own policy regarding whether fractional or whole-number percentage deductions will be allowed.

  • Suspension of contributions does not constitute a change. 

  • To change the rate of salary reduction, a participant must file a Salary Reduction Agreement.

Maximum Exclusion Allowance

Although it is the responsibility of the investment carriers to compute the maximum exclusion allowance for ACTS participants upon request, it is the ACTS employers' responsibility to ensure that the employees' contributions do not exceed the statutory exclusion allowance under Section 403(b) or the limitations of Section 415 and the regulations thereunder of the Internal Revenue Code.

Employers under the State Centralized Payroll System must certify both the Salary Reduction Agreement and the Carrier Election and Allocation forms. These forms must be forwarded to the ACTS Program office at the Division of Pensions and Benefits. The employer and participant will receive confirmation copies with an effective date of deductions.

The benefits offices of State colleges or universities or county colleges must determine their own filing and processing procedures, and the format of their Salary Reduction Agreement and Provider Election Forms.

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Payroll Guidelines

The Division of Pensions and Benefits offers the following payroll guidelines to assist your location in the payroll functions involving deductions.  The State's Centralized Payroll Office follows this priority order.  For example purposes, the base salary considered here is $40,000.

EXAMPLE:
 

Base Salary

$40,000

 
 

Less Pension 414(h) = Mandatory Pension Deductions

(1,200)

 
 

Adjusted Net Salary

38,800

 
 

Less Section 125 = Pretax Medical Expenses

(1,000)

 
 

Adjusted Net Salary

37,800

 
 

Less TSA - 403(b) = ACTS 

(2,000)

 
 

Adjusted Net Salary

35,800

 
 

Less Deferred Compensation - 457 = Tax-Deferred Supplemental Retirement Account

(2,000)

 
 

Wages Subject to Federal Income Tax 

$33,000

 

Remittances

In accordance with recent federal statutes, all 403(b) money withheld on behalf of an employee must be remitted and credited to the member's account within five working days after any pay date.  It is very important for both the member and the employing location to process any transfers and reports of 403(b) money in a timely way.  

Each provider has its own procedures for remitting employee contributions.  Any questions should, therefore, be directed to the providers.

All records of member contributions are kept locally with the employer (except for State agencies covered by Centralized Payroll).

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Last Updated: April 8, 2013