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Supplemental Retirement Plans

As an employee of the University of North Georgia you are permitted to participate in a 403(b) (Tax Sheltered Annuity) and/or 457(b) (Deferred Compensation Plan) supplemental retirement program on a voluntary basis.

There is no match from USG to either plan. Participation in these supplemental plans is voluntary and would be in addition to TRS or ORP, not a replacement to either.

Contributions begin the following month after payroll authorization.

Each plan has its own advantages. Employees may split deferrals between the plans or even contribute as much as the law allows to both plans.

Comparison of 403(b) vs. 457(b)

The following table provides a summary of the benefits and features of each plan.

Characteristic for 2016 403(b) TSA (Tax Sheltered Annuity) 457(b) DCP (Deferred Compensation Plan
Basic contribution limits for voluntary-only plans 100% of includible compensation, up to $18,000, indexed thereafter. Same as 403(b).
Definition of includible compensation Compensation for most recent one-year period of full-time equivalent service, not reduced by deferrals. Calendar year compensation reduced by all pre-tax contributions, including cafeteria plan contributions and voluntary deferrals.
Plan-specific catch-up contribution provisions 15-year rule removed effective 7/1/2013.
Up to twice the applicable dollar limit for employees within three years of normal retirement age. Limited to the total of underutilized contribution limits in prior years of service with this employer or another employer within the state when a plan was available to the employee.
Age-based catch-up contributions $24,000, indexed thereafter. For employees age 50 and older. Same as 403(b).
Combining plan-specific and age-based catch-up contributions Yes (allowed). No (not allowed).
Eligibility for in-service distributions from employee contributions Permitted at age 59-1/2. Unrestricted for pre-1989 balance in annuity contracts. Not permitted until age 70-1/2.
Eligibility for distributions after retirement Penalty-free access to funds at age 55 if no longer working at UNG. Penalty-free access to funds upon termination at UNG, regardless of age.
In-service hardship withdrawals Financial hardship standard. Unforeseeable emergency standard: stricter than financial hardship standard.
Minimum distribution requirement Required at age 70-1/2. Can aggregate all 403(b) accounts and take distribution from any one or more accounts. Required at age 70-1/2.
Distribution options (check with individual vendors to see which options are available through that vendor. Other distribution options may be available).
  • Lump Sums
  • Lifetime Annuities
  • MDO
  • Systematic Cash Withdrawals
  • Lump Sums
  • Lifetime Annuities
  • MDO
  • Systematic Cash Withdrawals

Definition of Terms:

Lump Sums: Lump sum distributions are subject to ordinary income tax. They are also subject to an early withdrawal penalty if taken before age 59½. Employees/Retirees who are using this method to meet the minimum distribution requirement should ensure that the amount taken out each year satisfies this requirement.

Lifetime Annuities: Guarantees income for life to either one or two people. In most cases any annuity paid out over the owner's or owners' actuarially calculated lifetime(s) will satisfy the minimum distribution requirement.

RMD / MDO: 

  • Required Minimum Distribution Option - After Age 701/2.
  • Minimum Distribution Option - Automatically pays out the smallest amount that will satisfy the employee's annual minimum distribution requirement.

Systematic Cash Withdrawals: A series of cash withdrawals taken during the calendar year (semi-monthly, monthly, quarterly, semi-annually, or annually). Employees/Retirees who are using this method to meet the minimum distribution requirement should ensure that the amount taken out each year satisfies this requirement.

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