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    403(b) Retirement Plan

  • What is an annuity?

    An annuity is a contractual agreement between you and an insurance company. In return for the deposits you make during your working years, the company promises to pay you monthly payments for a designated period of time.

  • What is a 403(b) (7)?

    In 1974, along with other code changes, paragraph (7) was added to Code Section 403(b). While previously 403(b) participants were limited to choosing between fixed and variable annuities, Section 403(b)(7) added a third investment option - mutual funds having custodial arrangements with a recognized financial institution. For the first time, participants were able to take advantage of the financial opportunities of mutual fund accounts, including the popular "no load" funds.

  • Who is eligible?

    Eligibility is determined by your District, so please check on your employer Summary page at to see if any employee is excluded from participating in the District's Plan.

  • You should consider a TDA (Tax Deferred Annuity) if:
    • You pay substantial amounts of federal income taxes.
    • You are in a dual income family.
    • You are single, with no dependents.
    • You are investing money on an after-tax basis for long-term goals.
    • You have sufficient emergency funds.
  • What does tax deferred mean?

    Your contributions are deducted from your paycheck before taxes, thereby reducing your taxable income, which may reduce the federal and state income tax you pay each year. These deductions are still subject to FICA (social security) tax. Your balance and investment earnings grow tax deferred until you take the money out of retirement. At that time both your contributions and earnings are taxed as income.

  • Is there a tax credit if I have a low salary?

    Yes. If you participate in your 403(b) plan or other eligible retirement plan, you can receive a tax credit up to 50% on your contributions (up to $2,000). Eligibility for the credit was based on your Adjusted Gross Income (AGI). Please check with a tax advisor to determine if you are eligible.

  • How do I enroll?

    To establish a TDA plan, you must complete an application and a salary reduction agreement form; which, in effect, reduces your taxable salary. Your agent will be responsible for providing the application to the vendor and the SRA (salary reduction agreement) must be sent to First Financial Administrators. Your employer will reduce your paycheck by the amount you designate and will contribute that portion to the plan.

  • Can I invest with a vendor of my choice?

    In order to participate in the 403(b) plan, you must invest with one of your employer's approved vendors.

  • What is the contribution amount I can defer each year?

    You decide the amount that you want to contribute. Please keep in mind that there are limits imposed under the Internal Revenue Code. The maximum amount you can contribute during each calendar year is up to 100% of your includable compensation or for 2015 the maximum of $18,000 or whichever is less.

  • When am I eligible for catch-up contributions in 403(b) plans?

    At age 50, you become automatically eligible for the 50+ catch-up contribution of an additional $6,000 per year.

  • How are my plan contributions invested?

    Your contribution will be remitted to the investment providers based on the amount you chose on your salary reduction agreement.

  • What funds do I chose?

    Specific investment elections will need to be chosen through the investment providers. For more information about specific products or the available investments you will need to contact your investment provider.

  • Are there fees to the participants in the plan?

    You will need to contact your investment provider to determine their fees. Fees for allowable vendors and products are also displayed on the TRS website for the state of Texas.

  • When can I withdraw money from my account?
    The IRS prohibits withdrawal of elective contributions and earnings on those contributions except for:
    • attainment of age 59 ½
    • death
    • disability
    • separation from services
    • financial hardship (contributions only)
    If money is withdrawn for one of the above reasons, ordinary income tax must be paid. In addition, the contract itself may impose withdrawal or surrender charges. Also, a 10% tax penalty may be imposed by the IRS if you have not attained age 59 ½. If you qualify for a hardship withdrawal, your contributions must be suspended for 6 months following the withdrawal.
  • What are my distribution options?
    • Receive a lump sum distribution (subject to ordinary income tax)
    • Some vendors and products allow payments in the form of a monthly annuity or periodic payments.
    • Rollover your account balance to an Individual Retirement Account (IRA) or other tax qualified vehicle.
    • Transfer your account to another Plan.
  • When must I begin receiving a distribution from my TDA plan?

    Generally, the IRS requires that a participant must begin receiving retirement benefits no later than April 1 following the year in which the participant reaches age 70 1/2. However, if still employed by an eligible employer, the participant may defer making withdrawals until retirement/separation from service.

  • What happens to my money when I die?

    If you die before taking an annuity and your named beneficiary is your spouse, your contract may stay in force on a paid-up status with your spouse as the contract holder. Your spouse may choose any form of distribution that was available to you, such as lump sum distribution or annuitization. Your spouse would also have the option of a rollover to a 401(a), 403(b), governmental 457(b) plan, or IRA.

  • Can I rollover or withdraw my 403(b) account if I leave employment with the district?

    Yes. Your money is always 100% yours and can be rolled over into your new retirement plan when you leave employment. If you withdraw your money, taxes will be due on the distribution and there may be an IRS pre-mature distribution penalty if you are not age 55 when you separate service.

    If you change jobs, there are several options:

    • Transfer the money into your new employer's retirement savings plans
    • roll it into an IRA
    • Leave it where it is
    • Take a lump sum payment (penalties, taxes and other fees may apply)
  • When can 403(b) money be accessed without penalty?

    You can withdraw from your 403(b) without incurring a penalty when you reach age 59 ½, or if you retire at 55 (or later) or if you become disabled or die.

  • Are loans available under the plan?

    Policy loans are permitted by law. The maximum loan amount is generally 50% of account value, not to exceed $50,000, and must be repaid in five years or it will be considered a taxable distribution. Insurance companies are not obligated to offer a loan provision. Check with your Plan to see if loans are allowed,, choose school.

  • How do I take out a loan?

    Once you know if loans are available you will complete the loan application from the vendor you want to take a loan from. Submit the completed application to First Financial to be reviewed and signed.

  • How do I apply for a hardship?

    Check with your plan to see if hardships are allowed. If allowed, you must complete the hardship application (see forms) and provide documentation supporting the hardship. A financial hardship withdrawal will affect you in two additional ways:

    • Your contributions must be suspended for 6 months following the withdrawal.
    • Your contributions for the year following this 6 month period will be subject to certain limitations.
  • What if I get a divorce?

    A withdrawal and distribution to an "alternate payee" is permitted if all or part of the account is awarded to an ex-spouse by a Qualified Domestic Relations Order.

  • How often can I change my salary reduction?

    You can change your salary reduction at any time by completing a new salary reduction agreement. Click the forms button for a new salary reduction agreement.

  • Can I stop my salary reduction?

    You can stop your salary deferrals at any time by completing a new salary reduction agreement. Click the forms button for a new salary reduction agreement.

  • Can I move my funds to another company?

    If the company is an active vendor in the Plan, you may be able to "exchange" your funds into a different annuity or investment account with another vendor.

  • How can I get more information about the investment companies?

    To get more information about the investment companies, go to, choose school, the school vendor list and it will give you the website and phone number for each available vendor.

  • 457 Retirement Plan

  • What are unique advantages of a deferred compensation plan?

    At early retirement or severance of service from your employer, distribution of the Plan can be made to you without the 10% IRS penalty tax usually associated with early distribution from other retirement plans, such as IRA's, 403(b) annuities or 401(k) plans.

    Most Deferred Compensation Plans offered are "Benefit Responsive" plans. This means there are no withdrawal or surrender charges when an employee receives benefits. Benefits are paid at death, disability, approved unforeseen emergency, retirement or severance from service.

    You can select from a wider choice of investment options for the Deferred Compensation Plans including fixed annuities, variable annuities, and mutual funds.

  • What is a deferred compensation plan?

    It is a voluntary salary reduction plan allowing eligible employees to defer current taxable income during peak earning years and accumulate funds for retirement. savings.

    These funds are set-aside for you as before-tax dollars reducing your current income tax liability and provides, through payroll deduction, the easiest way to accumulate savings for the future. Earnings on these funds are also tax deferred.

  • How are contributions made?

    You decide how much of your compensation you want your employer to contribute into the plan on your behalf, within limits established by the federal government.

  • Are there any limits to how much I can defer each tax year?

    Yes, for the year 2015 the lesser of $18,000 per year or 100% of includible yearly compensation.

  • I am contributing $9,500 into my 403(b). Can I participate in the deferred compensation plan?

    Yes, as long as your income permits, you may contribute up to the maximum in each plan as there is no longer a coordination of benefits.

  • I am putting $10,000 a year into a 403(b) TDA and earning $35,000 per year. How much can I defer under the 457 Deferred Compensation Plan?

    Let's assume a gross salary of $35,000 and look at the following calculation:

    Gross Salary...-$35,000
    Less TRS:(6.4%)...-2,240
    Adjusted Gross Salary...- $32,760
    Maximum 457 allowed (2010)...-17,000
    Total Contribution...-$27,000

    The above example is based on and employee who earns $35,000 and contributes $2,2208.33 per month, ($27,000.00 annually), to a 403b, 403(b)(7) or 457.

  • How often can I make changes once I have started contributing to the plan?

    You may increase, decrease, stop or re-start your deferrals during the calendar year as often as provided by your Deferred Compensation Plan, usually on an annual basis.

  • When are funds available from the plan?

    Distribution could be made at the time of any of the following:

    • Death
    • Disability
    • Approved Unforseen Emergency
    • Normal retirement
  • What choices do I have regarding payout options when I become eligible, at retirement or serverance from service?

    You can elect from the following:

    • Single lump sum of the entire account balance
    • Installment payments over a selected fixed period, such as 5, 10 years
    • Installment payments guaranteed for your lifetime or guaranteed over joint lifetime with your spouse
    • When you elect early retirement, payout can be deferred until a normal retirement age (not beyound age 70 1/2)
    • Account portability (transfer to TRS, IRA 403b, etc.)
    • Partial withdrawals
  • Can I take the funds without the 10% penalty tax usually associated with an IRA, 403(b) annuity or 401(k) pension plan if I terminate employment service before age 59 1/2?

    If you have already started receiving periodic payments, any remaining guaranteed payments will be made to your beneficiary at least as rapidly as the method in effect at your death.

    If you die before receiving any payments and your named beneficiary is your spouse, your spouse may choose to receive the money at a future date (not beyond age 70 ½) or any one of the same payout options shown in Question 9.

    • Single lump sum of the entire account balance
    • Installment payments over a selected fixed period, such as 5, 10 years
    • Installment payments guaranteed for your lifetime or guaranteed over joint lifetime with your spouse
    • When you elect early retirement, payout can be deferred until a normal retirement age (not beyound age 70 1/2)
    • Account portability (transfer to TRS, IRA, 403b, etc.)
    • Partial withdrawals
  • How often do I receive a statement of account for my deferred compensation plan?

    Quarterly statements of accounts will be provided which show the value of your account as of the end of each quarter.

  • How do I enroll?

    The only way to enroll is through an authorized representative of the program administrator, (First Financial Administrators, Inc.). Enrollment or changes in the program may be made during any open enrollment period as designated by your employer

  • Can I choose where the money is invested?

    Yes. You may choose to have your contributions invested in any of the funding alternatives approved by your employer.

  • How do I get more information?

    To get more information about the program or enrolling in the program, please contact the authorized representative from First Financial Securities of America.

  • 3121 Social Security Alternative

  • What is the Premier Plan?

    The Premier Plan is a retirement program chosen by your employer for all part-time, seasonal and temporary employees. Your employer established this Plan because they are not participating in the federally sponsored program (FICA). Under this plan, you will defer a set percentage of your salary into this Plan.

  • What is a 3121 FICA Alternative plan?

    A 457/3121 FICA Alternative Deferred Compensation Plan is a tax-favored retirement program only available to governmental employers. 457 is the Internal Revenue Code Section that explains the required operation of the program. This is offered to non-TRS eligible employees.

  • Why do I have to participate in this plan if I didn't sign up for it?

    This plan is mandatory (a condition of employment). Your employer has the option to have all its part-time, seasonal and temporary employees contribute to Social Security OR an alternative retirement plan.

  • Is this plan legal?

    Yes. Section 3121 of the Internal Revenue Code allows governmental entities the option to provide their employees with Social Security OR an alternative plan. Your employer has chosen to implement the Premier Plan. This Plan allows you to earn interest on your contributions, and take your money when you retire or one year after severance from service, unlike Social Security.

  • How do I request a distribution from the plan?

    You must have a "qualifying event". Examples of a qualifying event are: *Severance from employment, no contributions to the Plan for a period of at least 2 years (such as converting to full-time for 2 years) with the amount being under $5000.00, retirement, or reaching age 70 ½ years old. If you meet one of these conditions, you may request a Distribution Request Form from MidAmerica (800-430-7999 or to complete and return to MidAmerica for processing. The processing period normally takes 60-90 days. *If you have terminated employment, a waiting period of one year will apply before you're eligible to complete the paperwork. This waiting period is in place to ensure that we have posted all of the contributions to your account and ensure that you are not returning to work for the District.

  • Why does the process take 60-90 days?

    Your paperwork goes through different entities and a series of steps including allocation of interest, authorization from the employer and recordkeeping for tax purposes. We then issue checks once a month. Your check will have the Mid America check logo.

  • Why does the district have to authorize my distribution?

    To ensure that you are in fact eligible to take a distribution. There may be a portion of your account that you are not eligible to withdraw if you have only had a status change.

  • Is this plan subject to the minimum distribution rules?

    Yes, it is. Participants who are no longer employed at the School District must start receiving minimum distributions from the Plan by April 1 of the year following the year in which a participant turns age 70 ½. If a participant has returned to work at the same District, they will have the option of whether to take a minimum distribution.

  • Will this plan accept rollover contributions?
    Yes, if the funds are from another 457 Plan.
  • Why do I have to be terminated to withdraw these funds?
    This is a requirement by the Internal Revenue Code in order to receive favorable tax treatment in the program, for example, deferral of taxation on your contributions and earnings.
  • Can I get my SSA plan money while I am still working?
    Only if your Employer is using a 457 Deferred Compensation Plan and you have not made a contribution for over 2 years.
  • How does this plan affect my IRA?
    By participating in this plan, you are considered by the IRS to be an "active participant" in a retirement plan maintained by your Employer. Therefore, your contributions to an IRA will be limited. However, your spouse may still be able to contribute to an IRA. We recommend that you consult with your tax advisor to see if he/she may be able to make a contribution.


  • Why can't this money be rolled into a Roth IRA?
    Once you have a qualified event, some, or all of your money may be able to be rolled into a ROTH IRA; however the amount may be subject to taxation. We recommend that you consult your tax advisor before choosing to roll your money into a ROTH IRA.


  • How is the interest credited? Who determines the interest rate?
    Interest is credited daily by AUL and posted to your account on a monthly basis. The interest rate is determined by AUL and is based on current market conditions, the rate they can earn on fixed income investments, like bonds, as well as the rate that other fixed annuities are paying. Please remember there is a guaranteed rate of 3%.
  • What information can you give me on the investment provider and the investment?
    The investment provider is AUL, a highly respected global organization rated AAA by A.M. Best.
  • What if I withdraw my account balance prior to age 59 1/2 years old?
    Your plan is a 3121/457 Plan, there are no penalties for withdrawing prior to age 59 ½ years old.
  • Am I required to take a distribution once I have terminated with the District? Is there a penalty if I decide to leave my funds in the account after I have terminated?
    No and Yes, there is a $.75 monthly fee on inactive accounts (those having no contributions for 1yr). The fee would begin to be assessed on the 13th month from your last contribution.


  • I am already receiving Social Security Benefits, why do I have to contribute to this Plan?

    Unfortunately, contributions to the plan are mandatory. However, unlike Social Security, you will receive your money back PLUS interest, when you take a distribution.

  • Why do I have to pay 20% for taxes?
    The funds contributed to the Premier Plan are pre-tax dollars, and therefore taxable upon distribution. The Internal Revenue Service requires that we mandatorily withhold 20% for Federal Income Tax if you elect a lump sum distribution. If you choose to transfer your funds to another plan, we are not required to withhold taxes.


  • What happens to my account if I die?
    In the event that you pass away, we would determine whether or not you have a beneficiary on file. If you do, the funds would be payable to that person. If you have no beneficiary on file, the funds are made payable to your estate.


  • What if I am now a member of the Teacher Retirement System (TRS) - do I have to contribute to the Premier Plan if I do part-time work for the district?

    If you are a retired member of TRS and receiving TRS benefits then you are not required to participate in the Premier Plan.

  • Section 125 - Cafeteria Plans

  • What is Section 125?

    Section 125 is part of the Internal Revenue Code that allows employees to convert a taxable cash benefit (salary) into non-taxable benefits. Under a Section 125 program, you may choose to pay certain qualified benefit premiums before any taxes are deducted from your paycheck.

  • Is Section 125 legal?

    Yes. Even though Section 125 may sound "too good to be true", the program is legal and beneficial. The United States Congress created Code Section 125 in an effort to make benefit programs more affordable for employees. Code Section 125 was established in the Revenue Act of 1978.

  • How can Section 125 work for me?

    Your Section 125 program can make your benefits plan more affordable. You can pay for your qualified benefits with pre-tax dollars. By paying for qualified benefits before you pay taxes, you actually lower your taxable income, which means you pay less taxes. Paying less taxes usually results in more spendable income. When you take advantage of your Section 125 program, you will actually get "more for your money".

  • Do I have to participate?

    No. You are under no obligation to participate in a Section 125 program. However, you are required to sign an election form to indicate your choice.

  • How do I participate?

    If you decide to enroll in the plan, you will simply need to sign the election form to indicate your participation. At the beginning of the plan year, your paycheck will indicate that the Section 125 program has gone into effect.

  • Can I enroll in a Section 125 program whenever I want?

    Your employers Section 125 plan is an annual plan. You must enroll in the Section 125 plan during the eligible enrollment period or during the plan year if you experience a qualifying event or change in family status.

  • What are pre-tax dollars?

    Pre-tax dollars are the premiums you pay for qualified benefits under your Section 125 program. These premiums are deducted from your gross earnings - before taxes are taken out.

  • Who is offering me this plan?

    Your employer is offering this Section 125 program and has endorsed it to provide you with an enhanced employee benefits package.

  • What if I want to make a change during the year or I terminate employment?

    The IRS allows changes to be made in the event of a 'change in status' qualifying event such as birth, death, marriage or divorce or a change to your or your spouse's employment. If you terminate, your contributions cease when you stop getting paid.

  • Flexible Spending Accounts

  • What is a flexible spending account and how does it work?

    A flexible spending account is a benefit offered by your employer to help you pay for eligible health or dependent care expenses on a pre-tax basis. You can make monthly contributions to either a medical reimbursement and/or a dependent daycare account.

    Elections for the plan year are made prior to the beginning of the plan year.

    Annual elections remain in effect for the entire plan year. The only way to make a change is to have an eligible change in family status such as marriage, divorce, birth or adoption of a child, death of a spouse or child, or your spouse or dependent child losing or gaining employment. The election change must be consistent with the change in family status.

    Flex plans have a "use it or lose it" rule. If a participant contributes more than he is able to use on eligible charges incurred during the plan year, or grace period at the end of a plan year, if offered by the employer, any funds left in the account at the end of the plan year are forfeited to the employer.

    If applicable, your taxable income will be reduced for Social Security purposes; therefore, there may be a corresponding reduction in Social Security benefits.

  • What is the maximum amount I can contribute to my flexible spending account plan?

    Your plan sponsor determines the maximum benefit that may be elected for a medical reimbursement plan. Please note that due to the current Healthcare Reform, the medical reimbursement annual maximum is $2,600.00.

    A dependent daycare account has a calendar year maximum of $5,000.00 for a married couple or $2,500.00, if married but filing separate tax returns.

  • Can I roll over funds from my FSA to the next plan year?

    Employers that offer FSA programs that do not include a grace period will have the option of allowing employees to roll over up to $500 of unused funds at the end of the plan year.  If your employer offers the 2½ month grace period, you may not carry over any funds.

  • What is the 2½ month grace period?

    If your employer elects to sponsor the grace period, you have an additional 2½ months at the end of your current plan year (if unused funds are remaining in your account) to continue to incur eligible expenses to use these funds.

  • What is eligible for reimbursement under the unreimbursed medical plan?

    Medical, dental, vision, and prescription charges such as co-pays, deductibles, co-insurance, lab fees, chiropractic services, etc. are eligible for reimbursement. Charges must be incurred during the plan year and while actively participating in the plan. Cosmetic surgery, expenses incurred prior to the plan year or after termination from your employer, prepayment of services, insurance premiums, teeth whitening, and over -the-counter drugs without a prescription are all ineligible charges. Basically, eligible expenses include charges incurred for the diagnosis, cure, and treatment for you, your spouse, and eligible dependents to age 26.

    Eligible expenses »

  • If my employer offers a First Financial Benefits Debit card, do I have to send in receipts for services I pay for with my card?

    The IRS requires flex debit card transactions to be substantiated so First Financial Administrators, Inc. may send a request by mail for an itemized receipt or an explanation of benefits,( EOB), which can be obtained from your healthcare provider. We ask that every time you use your flex debit card you request an itemized receipt at the point of swipe in case documentation is requested.

  • What happens if I fail to submit the requested itemized receipts for documentation?

    If the documentation is not received within the allotted time frame, usually 60 days, your flex debit card privileges will be suspended until the documentation is received and the charge(s) can be substantiated. Your card will remain inactive for each subsequent plan year you elect flex coverage or until the requested documentation is received.

  • What happens if I use my First Financial Benefits Debit card to pay for an ineligible expense?

    The IRS requires you to either pay back the ineligible amount or submit eligible receipts that you have not previously submitted for payment to offset the ineligible charge. If you submit a payment for the ineligible charge, it is deposited into your account to use for other eligible charges incurred during the plan year. Should your card be inactivated for the ineligible transaction, it will not be reactivated until the issue is resolved. Should you submit claims for reimbursement with a pending ineligible charge, those charges will first be applied to offset the pending ineligible amount prior to receiving reimbursement.

  • What is a Dependent Care Flexible Spending Account?

    A Dependent Care FSA allows you to pay for day care expenses for your qualified dependent/child with pre-tax dollars while you (and your spouse) are working, seeking employment, or attending school as a full-time student (at least 5 months during the year).

    Eligible dependents must be claimed as an exemption on your tax return. These dependents can include step-children, grandchildren, adopted children, or foster children. In a divorce situation, you must have custody of the child in order for the child to be considered an eligible dependent. Under IRS regulations, eligible dependents are further defined as: under the age of 13 and/or physically or mentally unable to care for themselves, such as a disabled spouse, disabled child, or elderly parents that resides with you and are tax dependents.

    Eligible dependent care expenses are those expenses you must pay for the care of a dependent so that you and your spouse can work. The care may be provided in your home or at a licensed center outside of your home. If the care is in your home, the service cannot be provided by another child of yours under the age of 19, by your spouse, or by your dependents.

    Common eligible expenses for Dependent Care are day camps, before and/or after school care, babysitters, day care centers, nursery and nursery school. Common ineligible Dependent Care Expenses are registration fees, kindergarten, care for child while not working, pre-school, books and supplies, and food/activity expenses if separate from cost of care. You can visit our website here: Eligible Expenses for a complete listing of eligible charges.

  • How do I submit claims for reimbursement?

    To obtain a reimbursement from your account, you must complete a reimbursement voucher, which can be obtained from our web site, , and submit an itemized receipt or an explanation of benefits (EOB). Our mailing address and fax numbers are on the voucher. Unreimbursed Medical accounts are pre-funded; therefore, you are eligible to receive reimbursement up to your elected contribution from the beginning of your FSA plan year. Dependent Care FSAs are not pre-funded; therefore, you will only receive reimbursement up to your year-to-date contributions from payroll deductions. The remainder of the reimbursement request is paid when additional funds are received from payroll deductions. 

  • How do I access my account information?

    You may access your account information by clicking the link below to log in on our website. You may also contact our Flex Customer Service Department at 1-866-853-3539, Monday through Friday, 7:00 am to 5:00 pm, CST.

    Log In to my Account

  • Customer Support

  • I’ve forgotten my password information. Can you send it to me?

    If you have forgotten your password, click on the link below. You will be directed to a page where you will select "employer" from the drop down list. This will take you to the login page. Under the Submit button, you will see a link for Password Help. Click on the link and follow the instructions to set up your new password.

    Forgot your password?

  • Billing

  • Can I pay my insurance premium online or by phone?

    All premiums with the exception of COBRA are paid through payroll deduction and employer submission. COBRA payments must be submitted by personal check. We cannot accept payments online or by phone at this time.

  • How do I submit my COBRA payment?

    Please mail your check made payable to “First Financial” with “COBRA” written in the memo line to: COBRA Department, First Financial Administrators, Inc., PO Box 670329, Houston, TX 77267-0329.