Benefits

What is a Voluntary Retirement Plan and why do you need one?

By Annie Lara

Kayla knows she wants to retire someday and feels like she is in pretty good shape. She’s a UHD employee that participates in the Teacher Retirement System of Texas (TRS) and also contributes social security. What she doesn’t know is that those are not enough to adequately retire.

Unfortunately, being enrolled in TRS and contributing to Social Security only gets you about 70% of the way toward retirement. UHD employees like Kayla need to find ways to fill that gap. So what options are available?

That’s where the Voluntary Retirement Plan comes in. A Voluntary Retirement Plan is a financial investment that can close the gap and even lower your taxes. Even starting a small investment can be beneficial to your retirement.

So what is a Voluntary Retirement Plan?

There are two types of tax-deferred annuities involved with the Voluntary Retirement Plan the 403b and 457. They are payroll deducted and only what you contribute: the University doesn’t match.

403b Program

With a traditional 403b program, contributions are excluded from taxable income until distribution. The 403b program is offered to all benefits-eligible employees. Investments are handled by companies that have contracted with the University.

  • Contributions are employee only
  • Can be made pre-tax or post-tax.
  • Minimum monthly contribution is $25 and annual maximum of $19,500
  • If you are 50 years of age or older, you can contribute an additional $6,500
  • You may enroll in a TDA at any time, but may only change carriers twice per year
  • Penalty of 10% taxes when you take the money out before 59
  • All benefit-eligible employees

Companies offering 403b programs with UHD employees can be reached virtually at this time. The following include:

  • AIG (Valic)

713-254-4228 or joshua.levy@aig.com

713-569-9049 or cynthia.brumfield@valic.com

  • VOYA

713-881-8743

https://bredawnr.timetap.com/

  • TIAA

800-732-8353

https://shared.tiaa.org/public/publictools/events/meetingatworkplace

  • Fidelity

800-381-5710

https://digital.fidelity.com/prgw/digital/wos/

457 Plan

Texa$aver, offered through ERS, provides competitively priced investment products.

The 457 plan is offered to all benefits-eligible employees. Investments are managed by Texa$aver.

  • Contributions are employee only
  • Contributions can be made pre-tax or post-tax.
  • Minimum monthly contribution is $20 and annual maximum is $19,500
  • If you are 50 years of age or older, you can contribute an additional $6,500
  • You can change your distribution arrangement as many times as necessary
  • No penalty for taking money out if you take out before 59 ½
  • All benefit-eligible employees

Look here for a comparison of 403b and 457 plans to see which is best for you!


Taking the first step!

Speak with an advisor! They can look at your whole retirement and pension plan and give you guidance.

These personalized meetings are a great opportunity for new and seasoned employees to:

  • Open new accounts
  • Enroll in the 403b/457
  • Review their accounts including contribution amounts and investment options
  • Advise on retirement strategies and planning
  • Check their beneficiaries

Contact ESO’s Benefits Team, they are ready to help you. Volunteer Retirement Plans can start at any time. For more information on retirement programs, visit ESO’s Benefits Team.

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