6531 Tax Sheltered Annuities

  • 2000 6531

    Personnel

    SUBJECT: TAX SHELTERED ANNUITIES

             The Board of Education authorizes staff participation in tax sheltered annuities under Section 403(b) of the Internal Revenue Code and shall provide for payroll deductions for such participation.  Any company selected by members of the staff must be approved by the Board of Education.  The approved TSA vendor list is available in the business office and no new TSA vendor will be approved without a request from at least five employees.

             The Board of Education shall determine criteria which shall serve as the minimal requirements which a firm must comply with in order to participate in the tax shelter annuity program.  Each firm must comply with IRC 403(b) and also abide by all other relevant laws and regulations set forth by the State of New York and its relevant agencies, and must be licensed to provide tax sheltered annuities in New York State.

             The School Business Official and/or payroll clerk are authorized to approve, on behalf of the Board of Education, applications from employees for agreements with the School District for reductions in contract salary, the amount of such deduction to be remitted to the company specified by the employee in the agreement for the purpose of purchasing a tax sheltered annuity which qualifies for the purposes of Section 403(b).

             Every deduction from the employee’s salary must be made through the proper salary reduction authorization agreement signed by the employee, the agent, and the school representative.  The deduction will become effective, as soon as possible, based on the current payroll schedule.  The District will accommodate two requests for changes to employee TSA contributions during the year.

             The District will require a maximum exclusion allowance (MEA) from each employee wanting to exercise the “catch-up provision” or the “special elections” allowed by the IRC.  Failure to provide this calculation will prevent an employee from exercising this option.  The District will not allow for the “frontloading” of contributions based on anticipated earnings for the calendar year.

             All tax sheltered annuity agreements, and any changes thereafter, under Section 403(b) of the Internal Review Code must be filed using a standard District generated form that includes a hold-harmless agreement.

             Failure on the part of any vendor and/or agent to comply with this policy will be sufficient grounds for denying any future participation in this 403(b) program.

    Section 403(b) of the Internal Revenue Code of 1954, as amended

    Education Law Sections 1604(31-a), 1709(34-a), 1709(35) and 3109

    General Municipal Law Sections 93-b and 93-c

    Adopted:  5/8/00