Contributions

• Selecting a Contribution Rate Option
• When You Must Choose Your Contribution Rate Option
• How Much You May Contribute
• How to Select a Contribution Rate Option
• Limitations on Annual Contributions

Selecting a Contribution Rate Option

The member-financed defined contribution component of Plan 3 provides a tax-deferred investment program that you may access any time after you separate from employment. Early withdrawal (before age 59½) may have tax consequences. The amount of retirement income you generate from the defined contribution component depends on how much you contribute and how well the investment(s) you select do in the market. You have a choice in how much you contribute.

When You Must Choose Your Contribution Rate Option

If you become a Plan 3 member by transferring from Plan 2, you must select your contribution rate at the time you transfer. If you are a new Plan 3 member, or if you are a Plan 3 member who is changing employers, you have up to 90 days to choose your contribution rate and investment program. If you do not select a rate option within 90 days, the law requires that Option A (5 percent of pay at all ages) be assigned automatically.

How Much You May Contribute

Contributions to your retirement plan are mandatory. Under federal law, once you select, or default to, a contribution rate option, it cannot be changed. Plan 3 currently offers the six contribution rate options listed below. If you do not select a contribution rate option, you will default to rate option A. Contributions are deducted from your gross salary.

There are six contribution rate options:

Note: The Employee Retirement Benefits Board (ERBB) can add new contribution rates at any time in the future. Even if new rates are added, the restrictions on changing contribution rates still apply.

Using the Take-Home Pay Estimator on this Web site will provide you with the net effect of how your take-home pay will be impacted considering the various contribution rates listed above. (****This is only for “tax-deferred” contributions.****)

How to Select a Contribution Rate Option

You must submit a completed Member Information form to your employer that specifies your contribution rate. See the step-by-step enrollment instructions on this Web site.

Limitations on Annual Contributions

Under Internal Revenue Code, Plan 3 is a qualified 401(a) program. If you are participating in tax-deferred plans in addition to Plan 3, such as a tax-sheltered annuity (403(b)), be aware that your total tax-deferred contributions are limited based on your annual taxable income. Consult the Internal Revenue Service (IRS) and/or a tax adviser for detailed information.