Supplemental Retirement Plans

403(b) and 457(b) plans are tax-deferred retirement plans available to employees of public educational institutions such as Wright State University. These plans allow you to make pretax contributions (“deferrals”) by convenient, payroll deduction in order to save money for your retirement. These deferrals are then deposited into the account that you set up with an approved provider. The plan comparison chart can give you a better idea of what these different plans offer.

Pre-tax amounts deferred into a 403(b) or 457(b) account, and any earnings on those deferrals, are generally not taxed until you make a withdrawal from the account following a distributable event as described below.

The 403(b) and 457(b) plans were created to encourage long-term savings; however, you will want to discuss with your selected vendor the various distribution options between the two plans.  Distributions can be available in the event of hardship, unforeseeable emergencies, death, or disability. Also, a distribution from the 403(b) option is available when you reach age 59 ½ and from the 457(b) option once you sever employment.  Both have required minimum distributions (RMD) after employment, currently once you obtain 73 years of age. Also, the 403(b) plan allows loans and there is a federal tax penalty for distributions prior to age 59 ½.

Participating in one or both of these plans can provide a number of benefits, including the following:

• Lower taxes today

You contribute before income taxes are withheld – which means you're currently taxed on a smaller amount.

• Tax-deferred growth and compounding interest

In these plans, your interest and earnings accrue tax deferred. That means interest on your interest also grows tax deferred. The compounding interest allows your account to grow more quickly than saving in a taxable account where interest and earnings are generally taxed each year.

• Take the initiative

Contributing to either one or both of these supplemental retirement plans can help you take control of your future. Other sources of retirement income, including state pension plans and, if applicable, Social Security, rarely replace a person's final salary upon retirement. That's why it's up to you to make sure you'll have enough money for retirement.

If you are not currently participating in one of the plans, you may want to consider making pre-tax contributions to one of these plans. The plan comparison can give you a better idea of which is a better option for you.

In order to do so, you will need to determine which company you would like to invest your contributions with. You will need to contact the investment provider directly to obtain and submit all necessary paperwork to open the account. A list of approved investment providers can be accessed at https://www.wright.edu/human-resources/benefits/retirement/tax-deferred-annuities.

After establishing the account, you will need to make an election regarding how much of your compensation you wish to defer to the plan. In order to set-up your deferral, you need to register with the Retirement Manager System (WSU’s Third Party Administrator). Please review the information provided in the following section on how to contribute.

To start your contributions, or make a change to the amount you already contribute, you must submit deferral elections via the Retirement Manger System (WSU’s Third Party Administrator). The Retirement Manager System can be accessed at https://www.myretirementmanager.com/?wsu. Additional information including a customer service number and quick reference guide for registration with Retirement Manager is available at https://www.wright.edu/human-resources/benefits/retirement/retirement-manager.

Deferrals can be changed at any time throughout the year. However, all changes must be made in Retirement Manager System before the established deadlines. Per IRS guidelines, deferral changes to 457(b) plans must be made prior to the beginning of the month in which the contribution would be made. For a listing of deadlines for 403(b) and 457(b) changes, please visit https://www.wright.edu/administration/payroll/schedule.html.

For 2024, you may elect to contribute up to $23,000 in either a 403(b) or a 457(b) account, or both for a total of $46,000.  An additional catch-up contribution may be permitted if you attain age 50 at any time in 2024.  You may then make an additional contribution known as a “catch-up contribution” into either a 403(b) or a 457(b) account for an additional amount of $7,500 each, or a total of $15,000 for both.

Questions regarding this information can be directed to hr_benefits@wright.edu.