Glendale Union HSD 403b Special Pay What is a 403b Special Pay? - - PDF document

Glendale Union HSD 403b Special Pay

What is a 403b Special Pay?

• Additional benefit that allows the district to handle post-

employment compensation like sick leave in a tax advantaged manner.

• Contributions to the plan are not subject to Social Security
• r Medicare taxes
• This is a savings 7.65% for the employee
• Federal and state taxes are deferred until monies are

distributed from the account

403b Special Pay Specifics

• The district is required by the IRS to define the eligible

employee group.

• Employees that are part of the group cannot opt out of the

plan.

• Employees that are not part of the group cannot opt into the

plan.

• Group design was developed to minimize potential early

withdrawal penalties.

403b Special Pay Eligibility

• Must qualify for sick leave and/or vacation pay as defined in

the appropriate salary schedule AND

• Have $2000 or greater in post-employment compensation

AND

• Meet either of the following age requirements
• Be age 54 and 11 months or greater in the month of retirement

and retire with the Arizona State Retirement System

OR

• Be age 59 and 5 months or greater in the month of termination of

employment from the district

I’m not eligible, what happens?

• Sick leave/vacation payouts occur as defined in the

appropriate salary schedule

• Would be subject to Social Security and Medicare taxes
• Can choose to be paid directly

OR

• Choose to contribute monies to a 403b/457b
• Federal and state taxes deferred for pre-tax 403b/457b
• Roth 403b/457b subject to federal and state taxes

I’m eligible, what happens to my $?

• Security Benefit was selected as the provider for the districts

403b Special Pay

• Phoenix Union HSD and Glendale Union HSD selected Security

Benefit through a competitive bid process

• Eligible employees can choose to
• Keep monies in the plan

OR

• Roll monies to another plan

OR

• Cash out of the plan
• There are no surrender charges associated with this plan

I’m eligible, what’s next?

• When you decide to retire, contact Brad Nassif at 623-435-

6085 to determine approximate value of post employment compensation

• Complete section 1 of enrollment form
• Located on district website under Employee Resources then

Payroll (login required)

• Complete enrollment with Steve James of Security Benefit
• Phone 480-284-6554
• Email sjames@stevejamesfinancial.com

When will contributions occur?

• 403b Special Pay contribution will occur within the first or

second pay day after retirement

• 403b Special Pay contributions are not indicated on

employee pay stub

• A letter will be sent along with the pay stub confirming the

contribution and the amount

What about ASRS Deductions?

• Regardless of whether or not an employee is eligible for the

403b Special Pay, ASRS deductions will occur under the following circumstances

• ASRS Member prior to January of 1984 and ASRS using

5 year average in determining retirement benefit OR

• Active Service Purchase Agreement where employee

chose to use termination pay towards any unpaid balance

A note on 403b Limits

• During the current calendar year, amounts invested in pre-tax

403b’s, Roth 403b’s, and 403b Special Pay all have an effect

• n the maximum limits that can be contributed
• If going to Smartschools Plus or another private company

and contributing to a 401k, make sure that providers are aware of the total amounts contributed to 403b’s

• If going to another school district, make sure those providers

are also aware of the total amounts contributed to 403b’s

??? Question ???

Thank You