BENEFITS
 

SUPPLEMENTAL TAX DEFERRED ANNUITY/INVESTMENT (TDA) PROGRAM
 IRS Code Section 403(b)

A  Tax Deferred Account (TDA) or Tax Sheltered Investment (TSI), is a supplemental 403(b) non-Optional Retirement Program (ORP) plan offered by Texas public institutions of higher education to Teacher Retirement System of Texas (TRS) and ORP participants. The voluntary TDA program offers employees an opportunity to save pre-tax dollars through ORP-type investment products via payroll deduction, but provides no employer matching contributions.

There are federally established limits on the amount of tax deferred contributions that an employee can make per tax year, including a limit on contributions to a TDA and also a limit on all contributions to “defined contribution” accounts. Because ORP and TDA are both “defined contribution” accounts, ORP participants sometimes cannot contribute as much to a TDA as TRS members because TRS is a “defined benefit” plan. 

The general maximum contribution limit for most TDA participants is the general limit shown below.  Higher limits apply to participants who are at least age 50 and to participants with at least 15 years of service with Collin College.

Maximum Contribution Amounts Per Tax Year Schedule

Note: It is possible for a highly compensated ORP participant earning over $200,000 year to have lesser TDA maximums due to high ORP employee and employer contributions.

More information about specific TDA companies and their investment product choices is available from the authorized company representative upon request.  See the list of companies and reps on the “Collin College Authorized TDA Representatives” list for contact information.

How do you decide which company and/or which investment products to enroll in?

A.  Call a representative of an authorized company/vendor and discuss your options with them.  Here are examples of questions to ask:

• How have the vendor's annuities and/or funds performed overall, or how has a specific annuity/fund performed over the last 1, 5, 10, and 25 years?

• Regarding a particular annuity or mutual fund product, how risky is the fund?

• What fees would I have to pay if I invest in your products, such as expense fees, account management fees, and surrender charges if I want to move my money after 1, 5, 7, 9, or 15 years?

• What withdrawal options will I have upon retirement?

• What withdrawal limitations will I have upon retirement?

B.  Review information on the vendor's website if available and/or ask a vendor rep to mail you a packet of information about their company and investment options.

C. Review annuity company ratings with insurance/credit risk rating service companies such as Moody's and Standard & Poor's:

• www.moodys.com

• www.standardandpoors.com

D.  Review mutual fund ratings with companies such as Morningstar:

• www.morningstar.com

 

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