Update on Roth 403b Contributions

1
Update on Roth 403(b) Contributions

• Faculty Life Committee
• G. Kane Jennings (ENG) Jose Medina (AS)
• Joey Barnett (MED) Jeanette Norden (MED)
• Rich Breyer (MED) Doug Schmidt (ENG)
• Dennis Dickerson (AS) Tracy Sharpley-Whiting
  (AS)
• Ron Emeson (MED) Bonnie Slovis (MED)
• Stan Link (Blair) Robert Weller (ENG)

2
The Roth 403(b) Contribution

• In a typical pre-tax 403(b) plan, you dont pay
  income taxes on your contributions now, but you
  do pay taxes on the distributions received during
  retirement
• If you designate your contributions as Roth
  403(b), then you would pay income taxes on them
  now but not on the distributions during
  retirement

3
The Roth 403(b) Option May be Advantageous for

• Those who expect to be in a higher tax bracket
  during retirement than they are today
• Those who think that the tax rates could increase
  above what they are today
• Long-term investors who want their growth to stay
  tax-free

4
Qualified Distributions

• To ensure tax-free treatment, the distributions
  must be qualified
• Must be received after the participant reaches 59
  ½ years of age, dies, or becomes disabled
• May not be received within 5 years of the first
  Roth 403(b) contribution to the plan

5
Status of Roth 403(b) at Vanderbilt

• Vanderbilt will not implement such a plan until
  sufficient resources are in place and other
  priorities have been handled
• Education around pros and cons
• Amended plan documents
• Modified payroll and record systems
• Coordinated information exchange with the four
  investment companies (including their tracking
  systems)