Employer resource articles

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Read articles of interest for district administrators, payroll coordinators, and other district administrative staff.

Articles are available from the past year and are sorted by quarter based on the Benefits NewsBrief email for Wisconsin public school district employers. If you would like to be alerted to timely articles, please sign up at the Benefits NewsBrief subscription page.

April 2019

January 2019

October 2018

July 2018

April 2019 articles

>>Encourage young employees to start saving for retirement >>Tips to keep your plan running smoothly
>>Want help supporting your employees’ financial wellness? >>Avoid 403(b) contribution delays
>>Employer resources available >>Do you have staff retiring this year?

Encourage young employees to start saving for retirement

One of the concerns younger employees have about saving for retirement is the ability to access those savings for other things that come up in their life. Many of these employees may not be aware of the options and flexibility that may be available in a Roth IRA. And, if your plan offers a contribution match, how much money they may be leaving on the table. Here is some information to share with your employees to help allay their concerns and encourage them start saving for retirement.

Saving with a 403(b)

If you offer a match in your 403(b) program, make sure your employees know to take advantage of that “free” money by contributing as much as needed to secure the matching contribution. Your plan may offer hardship or loan features that may calm an employee’s nerves about their inability to access their retirement savings. It is important to educate your employees about saving for their retirement, about the benefits of not touching their retirement savings until retirement, and the impact of taking a loan and/or hardship from their retirement savings—but we don’t want fear of the unknown to stop them from contributing.

Saving with a Roth IRA

Another good option, in addition to a 403(b) plan, is a Roth IRA. An individual can withdraw his or her annual contributions tax-free and penalty-free before retirement if he or she chooses to do so. A Roth IRA from Member Benefits offers low fees, 24/7 account access, convenient automatic contributions through electronic transfer of funds (ETF) or payroll deduction (where available), as well as personal consultations to help individuals develop a plan that is right for them. Share our online brochure, “To Roth or Not to Roth in Your IRA”, or give us a call at 1-800-279-4030 for more information.

Another great resource for your employees is this infographic: Are you Jack or Jill? Learn the value of saving for retirement sooner than later

Source: Retirement Plans for Young People: Know Your Choices, Morningstar

Tips to keep your plan running smoothly

There are a number of things you can do to prevent errors in your 403(b) plan. Here are some tips to keep it running efficiently:

1. Watch for law changes. Keep your plan up-to-date with the law. WEA Member Benefits offers free services that can help you make important decisions regarding your plan. Call us at 1-800-279-4030, Extension 8579, for more information.

2. Review your plan. Avoid letting plan errors grow into costly headaches by fixing them when they are small. Consider scheduling regular checkups and self-audits. Contact us to schedule a Compliance Plan Review. We have been able to uncover several potential compliance issues through these meetings with school districts.

3. Watch for common mistakes. Some of the most common include:

  • Neglecting to follow the terms of the plan document. Be sure you’re aware of what is allowed and not allowed in your plan document.
  • Not including the proper employees. Check your plan document to see if any employees are excluded.
  • Forgetting to give employees required information. Make sure you are distributing a Universal Availability Notice to all eligible employees each year. Request a sample plan document packet.
  • Failing to deposit employee deferrals and/or employer contributions in a timely manner.
  • Failing to limit employee deferrals and employer to the proper limits.

4. Monitor third-party administrators and vendors who work with your plan. Remember, you are ultimately responsible for what happens with your plan.

  • Make sure the correct data is getting to those who operate your plan, especially with employment and compensation records.
  • Monitor the plan investments (this can be done in conjunction with the plan’s vendors).
  • Make sure any fees charged by vendors and/or third party administrators are appropriate.
  • Ensure plan contributions and distributions are made properly and in a timely manner.

Want help supporting your employees’ financial wellness?

According to the 2018 PLANSPONSOR Defined Contribution Survey, two-thirds of 403(b) sponsors agreed with this statement: “Our organization has a responsibility to improve the ‘financial wellness’ of our employees.” Chances are, you agree. Member Benefits can help your district by offering your staff free financial information and education. We do it because retirement security is more than just a savings plan—access to financial education is also key. We offer, at no cost to your district:

  • Financial wellness plans to evaluate your current benefit offerings, explore ideas to better engage your staff, and provide financial education.
  • 30-minute financial consultations for your staff with a Member Benefits Consultant.
  • Financial seminars.

Share our free resources with your employees such as:

If you would like to learn more about what Member Benefits can offer your district, give us a call at 1-800-279-4030 and ask for a Worksite Benefit Consultant.

Avoid 403(b) contribution delays

If we receive a payroll roster created on our website through yourPLAN ACCESS with a future date on it, we cannot apply the contributions to the employees’ accounts until that day—even if we have the funds.

For example, during June, the payroll rosters are created for June 15, June 30, July 15, July 31, August 15, and August 31. A check or ACH is then sent to our bank for the total of all those payrolls and dated August 31. Our system will not be able to apply those funds until the date listed on the submitted payroll, which is August 31.

If you would like to create multiple payrolls that do not cross calendar years, and submit them all at once so the funds are applied immediately to the accounts, simply use the current date for those payrolls when you enter the information in our system. This ensures that we can put all the contributions into the accounts as soon as the funds arrive.

Employer resources available

Have you explored the Employer Resources section of our website? Find payroll coordinator resources, order enrollment booklets, access employee status templates, or sign up for the Benefits NewsBrief quarterly email.

Do you have staff retiring this year?

Member Benefits needs to know if any of your staff have retired so we can determine if they can take distributions from their 403(b). This is especially helpful if the member contacts us to start taking withdrawals.

Email retirement@weabenefits.com, call 1-800-279-4030, Ext. 8567, or go into yourPLAN ACCESS to make sure you inform us of staff retirement dates.

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January 2019 articles

>>Mutual fund share class changes >>Universal Availability Notice
>>403(b) fee cap change >>Maximum allowable employee 403(b) contributions for 2019
>>New reporting options in yourPLAN ACCESS >>yourPLAN ACCESS information on demand

Mutual fund share class changes

To ensure the quality of our retirement programs, Member Benefits regularly reviews investment options. We review a variety of factors to ensure we continue to offer high quality, low-cost investments. We also look to provide members with access to an appropriate number of investment types.

Starting February 1, 2019, at 8 a.m. and finishing around February 5, 2019, we will be changing the following mutual funds from investor share class pricing to institutional share class pricing. The new share class pricing provides lower operating expenses, thereby lowering the expenses charged by the mutual fund company.

 Current Mutual Fund Share Class New Mutual Fund Share Class beginning February 1, 2019
Fidelity Contrafund (FCNTX) (Investor Shares) Fidelity Contrafund (K6) (FLCNX)(Institutional Shares)
Fidelity Contrafund (FCNTX) (Investor Shares) Fidelity Contrafund (K6) (FLCNX)(Institutional Shares)
T. Rowe Price Growth Stock (PRGFX)(Investor Shares) Fidelity Contrafund (K6) (FLCNX)(Institutional Shares)

Participants utilizing these funds have been notified directly of this change. They may call us to request a prospectus and fact sheet to be mailed to them, or they can download the forms at weabenefits.com/investments. We are advising participants to read the prospectus carefully and consider the fund’s investment objectives, risk, and charges and expenses before investing. The prospectus contains this and other information about the investment company.

Please note that on February 1 at 8 a.m. CT, payroll processing will be unavailable and may not be restored until the end of the business day on February 6.

Please contact a Member Service Representative at 1-800-279-4030, Extension 8567 if you have any questions regarding payroll processing.

Universal Availability Notice

Every year around the plan’s effective date, each plan sponsor must distribute a Universal Availability Notice to each eligible employee on an annual basis to remain compliant with the 403(b) regulations. Failure to meet this requirement may cause the 403(b) plan to be disqualified. Disqualification of the plan means that each employee’s account under the plan could be immediately taxable.

We make a point to remind districts regularly of the universal availability requirement for 403(b) plans because it is one of the most common errors uncovered in IRS audits of 403(b) plans. Many plan sponsors don’t understand what the universal availability requirements are, how to communicate them to their employees, and what the IRS views as satisfying the written meaningful notice requirement.

Here are suggestions to assist plan sponsors to meet the universal availability requirements:

  • Reach all eligible employees in good faith—not just full-time employees. The regulations require that all eligible employees be notified of their ability to participate in their employer’s 403(b) plan.
  • Provide notices multiple times and in multiple formats. Meaningful notice is required at least once per calendar year and multiple notices may be necessary to reach eligible employees hired throughout the year. Use several communication approaches—in W-2 envelopes, internal email, employee mail slots, pay envelopes (for substitutes, coaches, etc.)—and send out the universal availability notice as appropriate.
  • Document the process used. The IRS will ask how you satisfied this requirement.
  • Monitor and document the actual hours worked by employees. If you use the 1,000-hour rule to exclude certain employees from participation, you must monitor and document the actual hours worked by all employees, not just the employees of the excluded group. Simply noting that an employee is part-time does not satisfy the requirement.

Common questions about universal availability requirements for 403(b) plans

What happens if universal availability requirements are not satisfied?

If universal availability requirements are not satisfied, one correction option is the Compliance Resolution System (EPCRS), which has a safe harbor correction procedure that requires an employer to make a contribution to the 403(b) accounts of all eligible employees who were not notified of the option to defer salary.  The contribution known as a Qualified Non-Elective Contribution (QNEC) must be made in the amount of 3% of compensation. The employer must ensure that the plan permits employer contributions or is amended to accept employer contributions, even if this is the only employer type contribution that is being made to the plan.

What can I do to avoid having to correct a plan failure?

The best way to avoid having to correct this type of plan failure is to set up an internal procedure to notify eligible employees. At minimum, all eligible employees should be notified at least once per year.

Member Benefits can provide employers with a sample notice. Please contact our office at 1-800-279-4030.

403(b) fee cap change

The annual fee cap for the WEA TSA Trust 403(b) program has increased from $300 to $500 annually. The 0.35% annual administrative fee remains unchanged and the $25 minimum fee assessed to accounts with no activity also remains unchanged.

The WEA TSA Trust 403(b) program last increased their fees in 2010. Member Benefits is very conscious of the fees members pay for their retirement savings accounts. Our costs to operate the program have increased over the past nine years, and we have taken many steps to decrease our costs over that time.

Raising the fee cap is an equitable way to spread out cost increases among all members and allows us to maintain our low 0.35% administrative fee.

If any of your employees have questions about the fee increase in our 403(b) program, please have them contact us at 1-800-279-4030.

Maximum allowable employee 403(b) contributions for 2019

The 403(b) standard elective deferral limit for 2019 is $19,000 or 100% of compensation (whichever is less) for employees under age 50. This is a voluntary salary reduction contribution.

The 15 years of service catch-up provision—Employees with 15 years or more of service with the same employer may qualify for an additional salary deferral up to $3,000 per year over the $19,000 standard elective deferral limit. The maximum lifetime limit for this provision is $15,000.

The age 50 and older catch-up provision—In 2019, employees over age 50, or turning age 50 by year’s end, may choose to defer an additional $6,000 over the $19,000 standard elective deferral limit.

An employee may be eligible to take advantage of both catch-up provisions simultaneously if the employer plan allows. When an employee is eligible for both, any additional deferrals apply to the 15 years of service provision first and thus reduce the aggregate lifetime limit provision.

Please review your salary reduction agreements and/or vendor agreements to ensure they do not give your employees the false impression that they have a choice between the age provision and the service provision. Contributions in excess of IRS limits may result if the provisions are applied incorrectly. We recommend that employees who wish to contribute more than the standard elective deferral limit and have 15 or more years of service complete a Contribution Limit Calculation form. For districts that have a third-party administrator, it may be the case that they will calculate the limits for the employees.

All of the above limits apply to before-tax AND after-tax (Roth) 403(b) contributions. Participants may contribute to one or both but the limit represents the maximum combined contribution.

Employee Elective 403(b) Contribution Limits

Calendar year  Salary Reduction Contribution Limit 15 Years of Service Catch-Up  Age 50 and Over Catch-Up  Possible Maximum 
2019 $19,000 $3,000 $6,000 $28,000
2018 $18,500 $3,000 $6,000 $27,500

An employee’s total elective deferrals made to all of their 403(b), 401(k), and SIMPLE IRA accounts cannot exceed the annual $19,000 limit.

New reporting options in yourPLAN ACCESS

There are scores of new reports waiting for you on the updated yourPLAN ACCESS. You may now receive automatic updates of changes made by participants to their deferral contribution, address, or even participant balance by age group. Reports may be scheduled or done ad hoc.

Contact us at 1-800-279-4030 if you have questions.

yourPLAN ACCESS information on demand

Visit the yourPLAN ACCESS landing page to watch instructional videos how to use the updated yourPLAN ACCESS website.

The videos cover salary deferral and remittance processing instructions. Watch for another video on how to import a remittance file in the near future.

Let us know if you have something else you’d like to see! Send an email to memberbenefits@memberbenefits.com with your suggestions.

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October 2018 articles

>>Good things coming your way for 403(b) plan documents >>Employee-paid long-term care insurance program
>>A quick who’s who for you >>New Web site coming your way
>>Employee termination dates >>Prevent excess 403(b) contributions

Good things coming your way for 403(b) plan documents

WEA Member Benefits has started working with districts, CESAs, and technical colleges across the state to convert their plan documents to an IRS pre-approved plan document. By adopting a pre-approved document, schools districts and other tax-exempt entities that sponsor retirement plans under Section 403(b) of the Internal Revenue Code will receive an IRS advisory letter that their plan document satisfies the IRC 403(b) written plan requirement.

The IRS is allowing employers the opportunity to restate their plan document, using a pre-approved plan document, back to January 1, 2010. By adopting a 403(b) pre-approved plan by the March 31, 2020 deadline, the Program allows an eligible employer to retroactively correct defects in the form of its written 403(b) plan back to the first day of the plan’s remedial amendment period, which is the later of January 1, 2010 or the plan’s effective date. The employer’s adoption of a pre-approved 403(b) plan that has a favorable advisory letter may correct defects in the prior written 403(b) plan document.

Over the course of the next year we will be meeting with and updating the plan documents for the employers who currently use our plan document services. If you would also like to take advantage of this no-cost service, please contact one of our Plan Administration Consultants at 1-800-279-4030, Option 3.

Employee-paid long-term care insurance program

Since 1998, we have educated over 25,000 public school employees, retirees, and their families about the often-devastating consequences of not being insured for long-term care (LTC).

Almost no one is asking your staff: “If you need long-term care in the future, how will you pay for it?”

Depending on their perspective about LTC and long-term care insurance (LTCi), we offer a broad array of solutions to meet their needs, which include unique staff and spousal discounts as well as liberal underwriting.

We make it easy for districts to offer this important benefit:

  • Direct billing to staff, not payroll deducted.
  • With registrations of 10 or more employees, district seminars and individual consulting sessions can be offered.
  • Online and phone enrollment, guided by our specialists.
  • Weekly webinars available.

Our webinars have answers to frequently asked questions:

“We’re on a tight budget.”

Learn about current costs for home health care, assisted living, and nursing home facilities; how little health insurance and Medicare cover; and details on our most popular solution for couples and singles with limited budgets.

“I have health and/or weight challenges.”

New in 2018-19! Our new AM Best A+ insurer uses a different logic for deciding who qualifies for coverage. This enables many more applicants to be approved, including those that have been turned down by one or more LTC insurers. Prescreening is available.

“I’m concerned about protecting our assets.”

New in 2018-19! Repositioning a small portion of your savings can usually protect a significant amount of your assets. In most cases, you or your estate gets most of your premium back even if you never need LTC. Some plans have premium guarantees, limited-time pay options, or the ability to insure two people for a discounted premium.

“I don’t understand how the LTCi policy my parents bought 20 years ago works, HELP!”

New in 2018-19! Some of your older staff have parents and younger staff have grandparents with LTCi policies they bought 20-30 years ago that they will soon need to access. Unfortunately, no one in the family knows the basics of how one qualifies for benefits or how to access their policy.

For more information on our district LTCi Program, please call 888-247-5905 and ask for Howard Rubin, Program Administrator.

A quick who’s who for you

There is often confusion between WEA Member Benefits and other independent organizations that also serve the Wisconsin education community. One main difference is that Member Benefits provides elective/voluntary benefits to individuals, not groups.

The distinction is important for you and to your employees to know to avoid frustration from wasting time contacting the wrong organization or going to the wrong address.

We share a quick rundown of who’s who within the arena of organizations serving the Wisconsin public school community. Share this PDF with your staff.

New Web site coming your way

Member Benefits is upgrading the yourPLAN ACCESS portal December 1-2. Expect a communication in your email box soon! The new site will feature robust reporting, easy to understand online payroll submission, and the ability to easily share documents with plan participants using the WEA TSA Trust as their vendor.

Please let us know who should receive the new log on credentials. You may call a Member Service Representative at 1-800-279-4030, Extension 8567 or e-mail retirement@weabenefits.com.

Employee termination dates

The new school year brings new staff participating in your district’s retirement plan. Are you also keeping track of those who retired or were terminated? Make sure we know about staff employment changes so we can determine if they are allowed to take distributions from their 403(b). It’s easy to do through the yourPLAN ACCESS web portal and make any changes necessary.

Keep in mind that if an employee returns to the district in any capacity, it is the school district’s responsibility to update the employment status. If you have any questions regarding how to update the employment status, please call 1-800-279-4030 to speak with a Member Service Representative.

Prevent excess 403(b) contributions

Remember that the IRS limits for 403(b) contributions are based on the calendar year rather than the school year. As year-end approaches, be sure to review those participants contributing substantial amounts which may put them near the limit, and also review the total annual amount they will be deducting.

If contributions are made that put them over the limit, those contributions will need to be returned and corrections made to the employee’s payroll. This situation can become even more complicated if the corrections are made after the new calendar year has begun.

Employee Elective 403(b) Contribution Limits

Calendar year Salary Reduction Contribution Limit 15 Years of Service Catch-Up Age 50 and Over Catch-Up Possible Maximum
2018 $18,500 $3,000 $6,000 $27,500

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July 2018 articles

>>Have you reviewed your 403(b) approved vendor list recently? >>WRS contribution rates to decrease
>>NEW! Personal investment account opportunity >>Payroll office staffing changes
>>Updated 403(b) application >>Plan document updates

Have you reviewed your 403(b) approved vendor list recently?

If not, now is the time! Before the 403(b) regulation changes in 2009 that increased compliance requirements for plan sponsors, some districts had 20 or more vendors. It is now more common to see districts with one to five approved vendors.

Compliance of your 403(b) program ultimately falls on you as the plan sponsor, not on your vendors. If no one is utilizing a vendor in your list, now is a good time to deselect that vendor. Fewer vendors makes your 403(b) easier to administer as there is less oversight on your part.

To deselect a vendor, you must follow a formal process which includes the following:

  • You must have your plan document updated by your plan document creator. You are not allowed to simply remove a vendor from the approved vendor list you hand out to employees.
  • When any amendment is completed, you must notify all of your vendors so they can administer your plan per your plan document and approved vendor list.
  • A deselection notice must be sent to a deselected vendor.

Member Benefits offers a plan document service at no cost to your district. We specialize in 403(b) plans and can help you make sure your plan document is compliant.

Please contact one of our Plan Administration Consultants at 1-800-279-4030, Option 3, for more information and assistance.

WRS contribution rates to decrease

The Wisconsin Retirement System (WRS) contribution rate will decrease slightly from 13.4% to 13.1% in 2019. Employers and employees generally split the cost equally, so each will contribute 6.55% of payroll toward the pension.

In addition, the Employee Trust Fund Board approved 2019 rate reductions for the employer-paid Accumulated Sick Leave Conversion Credit programs and Duty Disability program.

What does your staff need to do?

Rate changes start January 1, 2019, so take note. Generally, the adjustment will not have a significant impact on take home pay. However, the rate reduction is an opportunity for staff to evaluate their savings strategy and increase their contributions in other retirement savings accounts, such as an IRA or 403(b). Share this Paycheck Comparison Calculator so they can learn the impact of the rate change on take home pay and consider redirecting that amount to other savings before it gets mixed in with their day-to-day budget.

If your staff would like to talk to someone about how much they need to save for retirement, they can set up a personal phone consultation with a consultant from Member Benefits or call 1-800-279-4030.

NEW! Personal investment account opportunity

Let your staff know about this new option! We are now scheduling appointments for those interested in personal investment accounts (also referred to as a nonretirement investment account).

These accounts present investment opportunities outside our 403(b) and IRA programs.

To learn more about the basics and how to make an appointment, visit weabenefits.com/pia.

Payroll office staffing changes

District payroll staff play a key role in administering the district’s 403(b) plan. We rely on you to make our communications to you and our participants as smooth as possible.

If there have been personnel changes, please let us know. Call 1-800-279-4030 or e-mail retirement@weabenefits.com with the name, phone number, and e-mail address of the person who would be our best contact should we have any questions. We appreciate your help.

Updated 403(b) application

The 403(b) application has been updated with our new mutual fund investments. Please toss any applications you currently have that are dated prior to July 2018.

Feel free to call us at 1-800-279-4030 to request current copies or download a PDF copy of the 403(b) application. The PDF includes the two-page application and the risk profile questionnaire, which is required for anyone choosing the model portfolio option.

Plan document updates

Please let us know if there have been any changes to your plan documents. This includes updated vendor lists, restrictions on when salary reduction forms can be submitted, removal of a third-party administrator, etc. We need a copy of the new information so we can comply with the stipulations that are listed and provide correct information to your employees participating in the 403(b).

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