Tax Sheltered Investment Program (403b, Roth) FAQ

Is there a tax sheltered investment plan?

Yes, monies can be deducted from your paycheck on a pre-tax basis (403b) or a post-tax basis (Roth 403b). The pre-tax option reduces the amount of income that is taxed resulting in a higher net pay. The funds become taxable to you upon distribution at retirement. For the Roth post-tax option, taxes are withheld on earnings and the contributions and earnings at retirement are not taxable to you.

Is there a matching contribution by the employer?

No, the plan is voluntary and employee funded.

Is there a maximum amount that can be contributed per year?

Yes, the 2020 maximum is $19,500 per year. For taxpayers over 50 years, an additional $6,500 can be contributed for a total of $26,000.

Is there a penalty for early withdrawal?

Yes, there is a 10% penalty in addition to 100% of the amount received becoming taxable in the year withdrawn. There is no penalty if you have reached 59 1/2 years or in the event of death or permanent disability.

Can I rollover my funds when my employment ends?

Yes, you can transfer your funds to another tax deferred Company plan or to an Individual IRA upon separation from employment.

Can I borrow monies from my account for qualified purchases?

No, the plan does not allow loans from the invested funds.

Where are the funds invested?

The Consortium has an Open Architecture Plan through Lincoln Financial and has numerous funds to choose from. CAHC is not responsible for any investment decisions.

Who do I contact to set up an account?

Contact the Capital Area Health Consortium at 860-676-1110 or Michael Tran at mitran@uchc.edu.