Retirement Savings Plan
We are pleased to offer employees the opportunity to participate in the Springfield City School District Retirement Savings Plan. The opportunity for eligible employees to participate is offered on a voluntary basis.
What is a 403(b) Plan?
A 403(b) Plan allows eligible employees the opportunity to save for retirement. Amounts contributed to the Plan are contributed on a tax-deferred basis. This means that the contribution is not subject to federal income tax or, in most cases, state income tax until distributed by the plan. This tax deferral also applies to any earnings on the contributions. Because the Plan is intended as a means of saving for retirement, distributions are limited to certain events.
Who is eligible to participate?
All employees are eligible to participate in the Plan, except student teachers and student workers.
How much may be contributed to the Plan?
The amount that may be contributed to the Plan is set by federal tax law. The limit set is an annual contribution limit.
For the 2022 tax year, the contribution limits are:
Basic salary deferral limit for all employees $20,500
Additional Contribution for age 50+ catch-up $ 6,500
*An additional catch-up contribution will be permitted for employees with 15 years of service with the employer. This additional catch-up limit requires the completion of a worksheet to determine eligibility for the additional catch-up contribution. The contribution limit for this is $3,000.
When is a distribution allowed under the Plan?
The 403(b) Plan is intended as a source of retirement income so there are withdrawal restrictions on the funds, including earnings. A withdrawal or distribution may be taken only for the following reasons:
Attainment of the age 59 ½
Severance from employment
Total and permanent disability
*After tax Roth 403(b) contributions are not permitted under the Plan.
*Hardship distributions are not available under the Plan.
*Loans are not permitted under the Plan.
Who are the approved investment option providers under the Plan?
The attached list indicates the providers that are approved investment option providers under the Plan. If you are not a current 403(b) Plan participant and you wish to participate in the Plan, you will need to contact a provider listed and complete the proper paperwork to establish an account with that entity. You must also complete a salary reduction agreement authorizing your employer to reduce your salary for the contribution amount.
Difference between a 403(b) and 457 Plan