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Texa$aver Accounts

    1. Texa$aver is a voluntary retirement savings program offered through ERS. Texa$aver can help you save for your future today.

      Many financial experts agree that you will need 70-100% of your income to maintain your current way of life in retirement. And while you may receive money in the form of a pension and Social Security benefits when you retire, that may not be enough. The ERS retirement plan does not provide automatic annual cost of living adjustments (COLA). And while you may receive money in the form of a retirement annuity and Social Security benefits when you retire, that may not be enough.

      That's where the Texa$aver 401(k)/457 Program comes into play.

    2. Along with your pension and Social Security income, you can save through the Texa$aver Program to have the additional income you need when you retire. A balanced financial plan is like a three-legged stool. All three legs are needed to provide stable income security in retirement, including: 

      • Your State retirement payment (annuity);
      • Social Security; and
      • Personal savings and investments (like 401(k), 457, and IRA). 

      If you were hired after January 1, 2008, you were automatically enrolled in the 401(k) plan at 1% of your salary. You are invested in a Target Date Fund that is closest to the year you turn 65. You can change the amount you are contributing, your investments or cancel at any time.

    3. Planning for your retirement is essential; the average person spends 18 years in retirement and needs at least 70-120% of their pre-retirement income to continue the same quality of life during retirement. It is never too early or too late to begin saving. As you can see by looking at the chart, the sooner you start saving, the more you will have when you retire.

      • Investing compounds over the years.
      • Contributions to Texa$aver are deducted from your monthly paycheck before income taxes are taken out. This lowers your taxable income for the year.
      • Low investment fees keep more of your retirement money working for you.
      • Texa$aver offers you investment products that are competitively priced compared to many retail mutual funds.
      • 24 hour access to your account on the Texa$aver website .
      • Great resources are available through the financial education information .
      • No paperwork needed transfer your assets among Texa$aver's investment products.
    4. Sign into your account  on the Texa$aver website  to enroll in or make changes to your 401(k) or 457 Plan any time of the year.

      1. Choose between the 401(k), 457, or both accounts, if offered by your employer.
      2. Decide how much should come out of your paycheck before taxes each month. Use the Texa$aver Resource Center to help you decide. Review the minimum/maximum contributions per year.
      3. Choose your investments. The Texa$aver Advisor Service can help with your choices.

      If you do not have internet access, you can enroll/make changes by calling Texa$aver at (800) 634-5091 or mailing in your form (401(k) form or 457 form).

      Important Note:  As part of the enrollment process, make sure you designate a beneficiary  for your account in the event of your death.

    5. Participants have access to objective, personalized investment advice through the Texa$aver Advisor Service. Financial advisors can provide advice about investing your Texa$aver account money. They can help you build a personalized profile of your financial resources and a plan to help you meet your retirement goals. Advisors can build a profile of your financial resources and a plan to help you meet your retirement goals.

      Managed Account Service is available for an additional fee of 0.0375% for accounts. Fees decrease as account balance increases.

    6. The Wells Fargo Advantage Dow Jones Target Date FundsSM offer a simple solution to investing for retirement.  Choose the Target Date Fund closest to your anticipated retirement year and let the Fund do the rest of the work for you. With a single decision, you'll get a fund that is:

      • expertly managed, 
      • well diversified across a range of asset classes and investment styles, 
      • invested based on your time frame until retirement (becoming more conservative as you move to retirement), 
      • each month the Fund is automatically balanced between stocks, bonds, and cash.  

      Quarterly you receive a statement to monitor the performance and review the investment strategy you chose.  

    7. You can contribute as little as 1% of your paycheck per month to your 401(k) account, and as little as $20 per month to your 457 account.

      Maximum contributions are $18,000 per year (per account).

      If you are age 50 or older by year-end, you are automatically eligible to participate in the Age 50 and Over Catch-up.  If you contribute the maximum amount, you can make an additional $6,000 "catch-up" contribution annually.

    8. First, decide whether it is a direct or indirect rollover. Use the forms located on the Texa$aver website. You can also call (800) 634-5091 for help with rollovers.

      Direct Rollover

      A direct rollover is when a distribution from your former employer is made to your Texa$aver 401(k) or 457 Plan. This lets you avoid a 20% withholding by the IRS. Follow these steps:

      1. Complete the appropriate Incoming Transfer/Rollover Request form, sign it, and mail it to the address on the form. Include a copy of your statement from your former employer's retirement plan.
      2. Once you receive an approval letter, complete your previous employer's required form using the payment instructions indicated in the approval letter.

      Indirect Rollover

      An indirect rollover is when you get a check from your previous employer 401(k) or 457 Plan. The previous employer usually withholds 20% of this check for federal income tax. Follow these steps:

      1. Complete the appropriate Incoming Transfer/Rollover Request form.
      2. Sign the form and mail to the address on the form. Include a copy of your statement from your previous employer's retirement plan and the check for the amount you are transferring.
      3. To avoid an IRS penalty, mail the rollover distribution check within 60 days of receipt. 
    9. The Texa$aver 457 plan also allows you to double your annual contribution limit if you are within 3 years of retirement age. Keep in mind you cannot use the Special 457 Catch-up in conjunction with the Age 50 catch-up.

      In the last 3 years prior to retirement, you may defer up to double the normal Section 457 contribution limit. Visit the Texa$aver website for annual limits and more information.

    10. Texa$aver participants benefit by paying low group-based fees. Participants do not pay any load fees and pay low administrative. Texa$aver fees are already lower than the industry standard. Fees are clearly noted on your statement.

      Some participants in the Texa$aver 401(k) / 457 Program will pay lower fees starting February 1, 2014. In its annual review of the Texa$aver program, ERS determined that revenues from current fees are more than enough to cover the program's costs. ERS therefore recommended reducing fees for certain accounts, and the ERS Board of Trustees approved the new fees at its December 2013 meeting.

      Please visit the Texa$aver website  for more information about account fees.

    11. Texa$aver has a variety of distribution options to suit your financial needs when you retire or leave employment. You can change your distribution arrangement as many times as necessary. You must start taking distributions once you reach age 70½.

      You can initiate a distribution after you leave employment by submitting a distribution form. Use the Distribution/Direct Rollover Request form available from the Texasaver website. Payout options include:

      • periodic payments;
      • partial distributions;
      • roll over part or all of the balance into another qualified plan or an IRA; or
      • take all of the money as a lump-sum distribution. 

      You are encouraged to talk with your tax advisor or financial planner before deciding to take your distribution. 

      Generally, taxes are withheld at 20% of any amount you withdraw from your account. 

    12. Yes, withdrawal options are available while you are still employed. You must exhaust your 401(k) loan and/or 457 loan options (if applicable) before you can apply for a financial hardship withdrawal. 

      401(k) Financial Hardship Withdrawals can be taken for any of the following reasons:

      • pay for non-reimbursed medical expenses;  
      • purchase of your primary residence; 
      • prevent eviction from or foreclosure on your primary residence; 
      • qualified post-secondary education expenses; 
      • funeral expenses for family member; and 
      • principal residence repair. 

      457 Unforeseeable Emergency Withdrawals can be taken for any of the following reasons:  

      • illness or accident; 
      • loss of property due to casualty; 
      • prevent eviction from or foreclosure on your primary residence; 
      • pay for non-reimbursed medical expenses; and 
      • funeral expenses for family member. 

      Note: Distributions are subject to federal income taxes.

    13. You must begin taking distributions from your account at age 70½ (if you are retired). The required minimum distribution is calculated separately for each Plan using your account balance as of the last day of the previous year.

      1. If you have turned 70½ in the calendar year, you will have until April 1 in the following calendar year to take your required minimum distribution.
      2. If you are still employed, and you have already begun taking your required minimum distribution, you may choose to stop receiving distributions until you retire.
      3. If you have retired and do not take the required minimum distribution in a given year, you will be penalized 50% of the amount that should have been distributed.

      You should consult with your own tax advisor or the IRS to discuss the best way to comply with the rules based on your individual financial needs. Contact Texa$aver to set up your plan.

    14. You do not have a penalty for withdrawals taken from your 401(k) account if you are age 59½ or older. However, a 20% tax on your withdrawal will be withheld if the funds are not rolled over to an IRA or other qualified plan. Funds that are rolled over will not be subject to tax at that time. For more information or withdrawal assistance, contact Texa$aver.

      If you're under age 59½, you may have to pay an additional 10% when you file your tax return. If you are still working when you are 59½, you can take money out of your 401(k).  

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