Pursuant to the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA),
the annual Deferred Compensation and Voluntary Tax Sheltered Annuity (VTSA)
limits will increase effective January 1, 2003 as follows:
457(b) Deferred Compensation: The Deferred Compensation annual contribution limit increases from the lesser of $11,000 or 100% of includible compensation (2002 calendar year limit) to the lesser of $12,000 or 100% of includible compensation (2003 calendar year limit). The Deferred Compensation special catch-up limit increases from $22,000 (2002 calendar year limit) to $24,000 (2003 calendar year limit). The special catch-up limit is twice the general deferral limit, and is only available to employees who are within three years of normal retirement age. The Deferred Compensation catch-up provision for participants who are 50 years of age or older (Benefit Plan 457DEC) increases the annual contribution limit from $12,000 (2002 calendar year limit) to $14,000 (2003 calendar year limit). Please note that the two different catch-up provisions cannot be used concurrently. 403(b) Voluntary Tax Sheltered Annuity (VTSA): The limit on annual contributions for Tax Sheltered Annuities is the lesser of 100% of includible compensation or $40,000. The contribution limit used for calculating mandatory employee and employer contributions remains at $200,000 for calendar year 2003. The limit on elective deferral will increase from $11,000 (2002 calendar year limit) to $12,000 (2003 calendar year limit). The catch-up provision for participants who are 50 years of age or older increases the elective deferral limit from $12,000 (2002 calendar year limit) to $14,000 (2003 calendar year limit). Additionally, there is a 15-year catch-up provision which may allow employees with 15 or more years of service to contribute up to an additional $3,000 annually. Employees may be able to use both the age 50 and 15-year catch-up provisions at the same time. The Act repeals the coordination requirements for employees who participate in both a 457(b) - Deferred Compensation Plan and a 403(b) - Tax Sheltered Annuity plan. Employees eligible for both plans will be able to defer the full amount to both plans. Regent's institutions are responsible for applying the maximum VTSA formulas for their employees. DB:JJM:rdb
|
|||||||||||||||||||||||||||||||
