403(b) plan

Starting early has its advantages

Your contributions (subject to plan terms)

Through payroll deduction, your plan allows you to make pre-tax contributions up to the maximum allowed by the Internal Revenue Code.

If you have an existing 403(b) tax-deferred arrangement account with a prior employer, you can transfer or roll over that account into the plan anytime (see Important message below).

Employer contributions

The plan also provides for Washington Township Health Care District to make contributions for benefited employees.

Each year, the Employer shall establish, on or before the fifteenth day of the tenth calendar month following the close of the taxable year of the Employer with or within which the Plan Year ends, the amount to be contributed to this plan.

Catch-up contributions

You are eligible for catch-up contributions if you meet the following: 

You may be able to contribute additional funds if you have 15 or more years of service and have under contributed in prior years, and/or are age 50 or older. If eligible for both catch-up contributions above, you must exhaust the 15-year catch-up first.

Roth account

You may also make after-tax contributions to a Roth Account in the plan by convenient payroll deduction. You have a choice regarding your elective contributions. You can direct all of your contributions to a traditional pre-tax account, to a Roth account or to a combination of the two. Contributions to a Roth account are after-tax. Regardless of your election, you are subject to the annual contribution limits detailed previously.

Stop/change contributions

You may stop your contributions anytime. Once you discontinue contributions, you may only start again as provided under the terms of the plan. 

Distribution options

Your plan offers many distribution options, allowing  you to tailor your benefits to meet your individual needs. Depending on plan provisions, your withdrawal options include:

• Transferring or rolling over your vested account balance to another tax-advantaged plan that accepts transfers of rollovers
• Electing systematic or partial withdrawals
• Taking a lump-sum distribution
• Choosing one of the many annuity options available
• Deferring distributions until the later of age 73 (age 72 if you were born after June 30, 1949 and before January 1, 1951 & age 70½ if you were born before July 1, 1949) or severance of employment, and allowing your account to continue to grow on a tax-deferred basis

Generally, income taxes must be paid on all amounts you withdraw from your plan. A 10% federal early withdrawal tax penalty may apply to distributions taken prior to reaching age 59½.

Consult your financial professional for more specific information.

Fixed-Interest Option^* transfer restrictions

A 20% annual withdrawal is allowed from the Fixed-Interest Option with no withdrawal charge. There are no transfer or withdrawal restrictions if one of the following conditions are met:

• Annuity payout option is selected
• Your death
• Total and permanent disability
• Withdrawal taken as a hardship under the terms of the employer plan
• Retirement or separation from service from the employer who sponsors your plan
• Elect to transfer a portion of the account value to a companion account for a loan

This restriction includes money transferred to mutual funds or to another provider.

^{* Policy Form GFA-504, a group fixed allocated annuity, issued by The Variable Annuity Life Insurance Company, Houston, Texas.}

Administrative fee

The gross annual administrative fee assessed on mutual fund assets in the plan is 0.10%. This may be offset, in whole or in part, by reimbursements received from mutual fund companies. Additionally, mutual fund annual operating expenses apply based on the mutual fund chosen. Mutual fund expenses and fund reimbursements are described in the fund prospectus.

Also, the Service Provider agrees to share revenue in the event the amount of income received from one or more of the investment companies exceed the amount necessary to administer the plan. Any excess will be allocated to the participant account as soon as administratively practicable after the close of each calendar quarter, on a pro-rata basis, according to the value and allocation of their respective accounts at that time. See the “Revenue Sharing Policy”.  

Tax-free loans

The plan is intended to help you put aside money for your retirement. However, Washington Township Healthcare District has included a plan feature that enables you to access money from the plan.

• The amount the plan can loan to you is limited by rules under the tax law. All loans will be limited to the lesser of one-half of your vested account balance or $50,000.
• The minimum loan amount is $1,000.
• All loans must generally be repaid within five years. Loans may be for a period of not less than 12 months.
•  A $50.00 processing fee for all new loans and a $50.00 per year loan maintenance fee are charged to your account.

Other requirements and limits must be met prior to borrowing money from your account. For additional information regarding loans, please see your financial professional.