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Supplemental Retirement Plans – Important Voluntary Benefit Here at Wright State University As a Wright State University full time/ part time faculty and or staff member, you and Wright State University contribute to a retirement plan that is either with the Ohio Public Employees Retirement System, State Teachers Retirement System or in the Alternative Retirement Plan. There is another opportunity for you to put monies away for your retirement. It is in a supplemental retirement plan. Supplemental Retirement Plans Here at Wright State University, two Supplemental Retirement Plans are available to you on a pre-tax basis to either a 403(b) or a 457(b) account. For calendar year 2012, you can save $17,000 per plan and if you are age 50 in 2012 or older you can save an additional $5,500 into both of these plans. What is a 403(b) plan or a 457(b) plan? A 403(b) and a 457(b) plans are tax-deferred retirement plans available to employees of public educational institutions such as Wright State University. These two plans allow you to make pretax contributions by convenient, payroll deduction in order to save money for your retirement. The 403(b) and the 457(b) plans were created to encourage long-term savings; distributions are available when you reach age 59 ½ and mandated at 70 ½ years of age. As you discuss the 403(b) or 457(b) with the vendors, you may wish to talk about distribution opportunities when you leave employment. Why contribute to a 403(b) or a 457 (b) plan? Participating in your plan can provide a number of benefits, including the following: 1) Lower taxes today You contribute before income taxes are withheld – which means you're currently taxed on a smaller amount. 2) Tax-deferred growth and compounding interest In these plans, your interest and earnings accrue tax deferred. That means interest on your interest also grows tax deferred. The compounding interest allows your account to grow more quickly than saving in a taxable account where interest and earnings are generally taxed each year. 3) Take the initiative Contributing to either one or both of these supplemental retirement plans can help you take control of your future. Other sources of retirement income, including state pension plans and, if applicable, Social Security, rarely replace a person's final salary upon retirement. That's why it's up to you to make sure you'll have enough money for retirement. If you are not currently participating in one of the plans, you may want to consider making pre-tax contributions to one of these plans. If you are currently participating in either one of these plans, you may be able to change the amount you defer for 2012.
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