TO: NBER Employees
FROM: Kelly Horak
DATE: December 6, 2021
RE: IMPORTANT Tax-Deferred Annuity Plan – Election
Procedures
This is a follow up to the open enrollment option for the Tax Deferred
Annuity Plan, 403(b) Plan, that was included in the open enrollment for the
benefit plans. Please note if you are signing up for the first time, you
need to complete the attached Salary Reduction Agreement Form (Form). You
also need to complete the Form if you are changing the amount of your
contribution for the plan year.
It is time for annual enrollment under the NBER’s Tax-Deferred Annuity Plan
(TDA
Plan). All NBER employees are eligible to participate in this plan, which
provides a tax efficient way to save for retirement.
To participate in the TDA Plan, an employee enters into a salary reduction
agreement with the NBER.
*IMPORTANT NOTE: You are not required to file a new Salary Reduction
Agreementfor 2022 if you wish to continue to participate on the same basis
as you did in2021. However, if you want to take advantage of the new
contribution limit of$20,500 (up from $19,500 in 2021), you must file a new
Agreement.*
If an employee elects to make pre-tax contributions, the employee’s taxable
income is reduced by the amount elected, which the NBER then deposits into a
TIAA annuity contract and/or a custodial retirement account with Vanguard,
as
directed by the employee. Pre-tax contribution amounts are taxed when
distributed; earnings in TDA accounts are tax-deferred and are also taxed on
distribution.
If an employee elects to make after-tax Roth contributions, the employee’s
taxable income is not reduced. The amount elected is withheld and deposited
into a TIAA annuity contract and/or a custodial retirement account with
Vanguard, as directed by the employee. Amounts contributed as after-tax
Roth
contributions, as well as the earnings on such amounts, are not taxed when
distributed, provided that the distribution meets the rules for qualifying
Roth
distributions.
The designation of your contribution as a pre-tax contribution or after-tax
Roth
contribution is irrevocable for amounts contributed to the TDA Plan; your
election may only be changed for contributions made after the change. The
Summary Plan Description describes in more detail the operation and
features of
the TDA Plan.
The IRS contribution limit for TDA plans for 2022 is $20,500. If you will
be 50
or older at any time in 2022, you are also eligible to make additional
catch-up
contributions of up to $6,500 (unchanged from 2021). You must make separate
elections for regular salary reduction contributions and catch-up
contributions.
These IRS limits are combined limits that apply to all your elective
pre-tax and
after-tax Roth deferral amounts. If you make contributions to more than one
employer’s plan during the year (e.g., another 403(b) or a 401(k) plan) your
contributions to these plans are aggregated with your elective
contributions to
the Bureau’s TDA Plan for purposes of these limits. I strongly advise you
speak
to a representative at either Vanguard (tel # 800-523-1188), or TIAA (tel
#800-842-2888) before you decide how much you would like to contribute to
the
TDA plan.
If you would like to participate in the TDA Plan, please contact Mui Cheung
at
(617) 588-1412 or email at mcheung_at_nber.org for an enrollment package or for
more information. The deadline for new enrollments for the first 2022
payroll
is December 10, 2021. Unless you are notified otherwise or you wish to
change
or revoke your agreement, the salary reduction agreement in effect for 2021
will
be carried over to 2022. As noted above, if you wish to change your Salary
Reduction Agreement for 2022, you must complete and file a new form
(attached).
You may also enroll or make changes at a later date, as described in more
detail
in the Summary Plan Description at:
http://www.nber.org/retirementplan/NBERRetirementSPD.pdf
Received on Mon Dec 06 2021 - 13:24:30 EST
