General Roth Information

Roth 403(b) Contributions Available for the First Time in 2006

Effective January 1, 2006, a new type of contribution became available to 403(b) TSA accounts. These are called Roth 403(b) contributions and, unlike Traditional 403(b) elective deferral contributions, Roth contributions are subject to Federal and State income tax withholdings. On the other hand, qualified distributions from Roth 403(b) accounts are tax-free, both original contributions and the earnings thereon. There is a five-year waiting period from the initial contribution to a Roth account and other distribution eligibility requirements before distributions become eligible for tax-free treatment (age 59 1/2, severance from employment, death, disability, or hardship).

Your Employer May Not Offer the Roth 403(b) Contribution Option

Employers that currently sponsor Traditional 403(b) Programs are not required to allow participants to make Roth contributions. Among CCC client School Districts, ESDs, and Colleges, some already allow or plan to allow the Roth option and others do not. Visit the Employee Entrance section of this website to determine if you will be able to make Roth 403(b) contributions. If your Employer allows Roth 403(b) contributions, then the Salary Reduction Agreement has been enhanced to incorporate Roth contribution elections.

Some Vendors Will Not Offer the Roth 403(b) Contribution Option

Early indications are that roughly half of the vendors for various CCC School District, ESD, and College clients will offer the Roth contribution option. If you are interested in making Roth contributions, first check to make sure that your Employer allows Roth contributions by visiting the Employee Entrance, and then further click on the specific vendor to see if that vendor will accept Roth contributions.

Useful Roth Contribution Links

You may find it helpful to review some of the websites listed below. Check this list periodically, since additional links will be provided as they become available. Most information about Roth contributions on the Internet deal with Roth 401(k) accounts, but the rules associated with Roth 401(k) and Roth 403(b) are almost identical, so articles about Roth 401(k) accounts are generally helpful in understanding Roth 403(b) accounts.

• 401khelpcenter.com Roth Analysis Tool
• Advisor.com Article July 2005
• Advisor.com Article November 2005
• Corbel Comparison of Traditional and Roth 403(b)
• Invesmart Article

Roth vs Traditional Comparisons

• CNNMoney.com Article (01-10-2008)