The University does not contribute toward these plans. Faculty and staff can choose to participate in one or both of these plans up to annual tax year limits established by the IRS. The IRS tax year contribution limits for each plan are separate.

What is a 403(b) Plan?

A 403(b) Supplemental Retirement Savings Plan is available to employees of public educational institutions and certain nonprofit organizations. All faculty and staff are eligible to participate through payroll to the tax- deferred Voluntary 403(b) plan offered at Cleveland State University.

The IRS establishes plan limits for pre-tax contributions each tax year. 403(b) plans were created to encourage long-term retirement savings. Generally, distributions are available only when a participant reaches age 591⁄2 or separates from employment. However, distributions can also be available in the event of financial hardship, death or disability and meet the IRS guidelines. Bear in mind, distributions before age 591⁄2 might be subject to Federal restrictions and a 10% Federal tax penalty.

Short-term needs can sometimes be met by nontaxable loans from a 403(b) plan, if available from the provider you select. This type of loan makes it possible for you to access your account without permanently reducing your balance. It is important to remember that defaulted loan amounts will be taxed as ordinary income and might be subject to a 10% tax penalty if participants are under age 591⁄2 and may prohibit future access to loans from all retirement plans sponsored by the University (eg. ARP).

Why Contribute to a 403(b) Plan?

Participating in a 403(b) plan can provide a number of benefits, including the following:

• Lower Taxes Today—Participants contribute before taxes are withheld (Federal and State of Ohio), which means current taxes are based on a smaller amount. This can reduce a participant’s current income tax bill. For example, if a participant’s Federal marginal income tax rate is 25%, and they contribute $100 a month to a 403(b) plan, they have reduced their federal income taxes by roughly $25. In effect, your contribution costs you only $75. The tax savings grow with the size of the 403(b) contributions up to the annual IRS tax year contribution limits.
• Tax Deferred Growth and Compounding Interest—In a 403(b) plan, interest and earnings accrue tax deferred. That means that interest on the earned interest also grows tax deferred. The compounding interest allows an account to grow more quickly than savings in a taxable account where interest and earnings are generally taxed each year.
• Take the Initiative—Contributing to a 403(b) retirement plan can help participants take control of their 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 is why it is important for faculty and staff to plan to have enough money saved for their retirement.

How to Start a 403(b) Contribution

Cleveland State University’s Faculty and Staff can find a list of university approved investment providers who offer a 403(b) investment plan at CSU on the myCSU Human Resources Benefits website here. Participants must contact the provider they have chosen from the list to establish an account, select investment allocations and designate a beneficiary. The University does not contribute towards this plan.

Retirement Manager

Need to enroll in a 403b Plan or change your 403b Plan election? Looking to request a loan, distribution or hardship from your 403b? If so, Retirement Manager is a web-based access point where you will perform these actions.

Retirement Manager is a convenient, secure, web-based access point where you can make certain transactions from your 403(b) (Tax Sheltered Annuity) and Alternative Retirement Plan (ARP) accounts anytime, anywhere, 24 hours a day, seven days a week.

Retirement Manager is a plan administration service that provides features for you to access your plan and coordinate transactions in a timely and convenient manner.

Retirement Manager allows you to:

• Elect or change voluntary contribution amounts or investment provider allocations under the 403(b) via an online salary reduction agreement
• View current account balances and year to date contributions
• Request loans, hardships, intra-plan transfers, in- service distributions and distributions for participants under the 403(b) Plan (Tax Sheltered Annuity)
• Request loans, intra-plan transfers, and distributions under the ARP Plan

Payroll processing and plan deadlines apply when processing your salary reduction request. For more information, click here.