Tax-Deferred Versus After-Tax Roth Contributions

The Supplemental Retirement & Savings Plan gives you a choice between making your contributions on a tax-deferred or after-tax basis or a combination of tax-deferred and Roth after-tax.

Tax-Deferred Contributions
You will not have to pay any taxes (except Social Security) on the portion of pay you put into the plan. According to federal law, such tax-deferred contributions are treated as University contributions. Therefore, your contributions are not considered taxable income, and you are not required to pay income taxes on that money until you receive payment of your accounts. This will normally be after your retirement, when your taxable income and your tax rate may be lower. You may make tax-deferred contributions by entering into a “salary reduction” agreement with the University when you enroll. Your salary reduction (tax-deferred) contributions, as well as Roth 403(b) contributions, are subject to applicable Social Security tax withholdings.

Roth 403(b) Contributions (Available only through Fidelity Investments)
Your contributions will be made on an after-tax basis. Earnings on your Roth 403(b) account are tax free when withdrawn as long as the withdrawal is qualified. A qualified withdrawal is one that is taken (i) no earlier than the fifth calendar year after the year of your first Roth contribution, and (ii) after you have reached age 59½, become disabled, or die.