Contributing to the Plan

You may contribute any portion you choose of your regular weekly or monthly pay, subject to tax law limits. You have a choice of contributing to the plan in one of the following ways:

Tax-Deferred Contributions — You pay no federal or state income tax on the tax-deferred money you put into the plan or the accumulated investment earnings until you receive it.  These are referred to as “tax-deferred contributions”.

After-tax Roth 403(b) Contributions — You pay federal and state income tax on the after-tax money you put into the plan. The investment earnings accumulate tax-free and are paid to you tax-free at the time you receive it, as long as the withdrawal is qualified.

Several limits and rules apply, but the limit that will affect most participants is shown in the following table. The limits in this table apply to your combined contributions to this plan and to the Boston University Retirement Plan. Under the 2001 tax law, the contribution limit increases for several years. Also, under the same law, participants who are age 50 or older at the end of any calendar year have an increased contribution limit.

Contribution Limit
Year Under 50 Additional
Amount
50 or Older
2014 $17,500 $5,500 $23,000

These amounts are indexed for inflation each year, but only in $500 increments. The new limits will be communicated to participants after the IRS announces them for any particular year.

Other limits may apply in certain situations; the Benefits Section of Human Resources will communicate with you if any limit applies to your contributions.

You must contribute the same portion of your pay each payroll period, and you must make your contribution by salary reduction. No lump sum cash contributions are permitted. These rules are due to Internal Revenue Code regulations.

Note: Special rules and limits apply if, during a calendar year, you also participate in another plan maintained by a business you own or control. For example, if you have consulting or other self-employment income and participate in a self-employed plan to which you make contributions, the special rules may affect you. If this situation applies to you, consult a qualified tax professional for advice on how the limits apply to you.