The Tax Sheltered Annuity (TSA) Program is a voluntary program that allows
eligible CSU employees to save toward retirement by investing pre-tax contributions in
tax-deferred investments. TSA contributions are made solely by the employee through payroll
deductions, prior to federal and state taxes being calculated. In order for eligible employees to take advantage of the tax savings via payroll deduction, a 403(b) account must be established with one of the TSA companies on CSU's authorized list.
The Internal Revenue Code (IRC) establishes specific limits that govern the
amounts an individual can contribute to a 403(b) plan. As a result of the federally mandated
Economic Growth Tax and Reconciliation Relief Act (EGTRRA), effective January 1, 2002,
contribution limits and provisions for 403(b) plans were significantly revised. Currently,
two IRC limits apply: the IRC Section 402(g) "elective deferral limit" and the IRC Section
415(c) "percentage of compensation" limit. Currently, the contribution limit is
100% of adjusted gross income (up to $51,000), or a maximum of $17,500 per year.
Additionally, contributions to a 403(b) plan are not offset by contributions to a 457
plan. For example, a participant can elect to contribute up to $17,500 to a 403(b) plan AND up to $17,500 to a 457 plan, for a total contribution of up to $35,000.
As a result of the Internal Revenue Service (403(b) guidelines that became effective in 2009, the CSU:
- Implemented a Master Administrator (VALIC) for day to day administration; and
- Consolidated fund sponsors and fund options.
Employees are allowed up to five (5) TSA deductions from the following fund sponsors:
- AIG Retirement
- Fidelity Investments
TSA enrollments and deferral changes are designated by employees via Retirement Manager, an online process through AIG Retirement, the Master Administrator. The Retirement Manager online process replaced the 403(b) Salary Reduction Form. All salary reduction changes (stop, start, increase and/or decrease) are managed by the employee in Retirement Manager. Fund investment selections are made through the fund sponsor(s).
For additional information regarding this program, including maximum contribution amounts, catch-up allowances, and administration of the TSA program, please refer to the Technical Letters.