K-12 Education

Teachers, administrators, and staff at K through 12 public schools are able to save money for retirement using a variety of supplemental retirement plan options.  These include 403(b) and 457(b) tax deferred plans.


Tax-Deferred Contributions and any Earnings

By deferring compensation, you have the opportunity to:

  • lower your current income taxes because you postpone paying taxes on contributions and any investment earnings until you withdraw them at retirement;
  • enjoy the advantage of tax-deferred compounding; and
  • potentially accumulate more for retirement than you would with an after-tax retirement plan, because more of your money can work for you.

An Voya Financial®-affiliated insurance company has been chosen as a variable annuity provider for the program. Variable annuities are long-term investment contracts issued by insurance companies, designed to invest for retirement. They offer the opportunity to allocate contributions among fixed and variable investment options that have the potential to grow income tax deferred, with an option to receive a stream of income at a later date.

Fund management fees and other fund operating expenses will apply. Fees depend on the investment option chosen. Please refer to the Contract Prospectus Summary for individual fund fee information.

In addition, a Mortality and Expense Risk Charge applies to on all variable investment options.

403(b) vs 457(b)

One of the main differences between a 403(b) and 457(b) plan, is that the 457(b) plan allows for withdrawals upon separation of service from the employer.  The 403(b) plan allows for withdrawals after the age of 59 1/2.  Withdrawals prior to that age may be subject to an IRS 10% premature distribution penalty tax.

Roth 403(b)

Some school districts also have a Roth 403(b) option.  A Roth 403(b) allows participants to make after-tax contributions to a designated Roth account under a 403(b) plan.

Distributions from the Roth 403(b) will be tax-free for federal income tax purposes if they are Qualified Distributions. To be a Qualified Distribution, the following criteria must be met:

1) The funds must be held for a 5-year holding period, measured from the earlier of (A) the first year that contributions were made on behalf of the participant to any Roth 403(b) account in the employer’s plan, or (B) if a direct rollover contribution was made to the Roth 403(b), the first year a Roth contribution was made to another plan with a designated Roth account from which the direct rollover contribution originated or the first year of a Roth in-plan conversion AND

2) the distribution must be due to attainment of age 59 1/2, death, or disability.

 

Contribution Limits

The annual limit on elective deferrals for 2019 is the lesser of 100% of your compensation or $19,000 per year (adjusted annually in $500 increments). Exceptions to this general rule do exist and should be investigated.  In addition, if you are an employee who is age 50 or older, you may take advantage of the “Age 50+” catch-up provision, allowing you to contribute an additional $6,000 of pre-tax dollars in 2019.


Variable annuities offered through a retirement plan are long-term investments designed for retirement purposes. Early withdrawals taken prior to age 59½ may be subject to an IRS 10% premature distribution penalty tax. Money distributed from the annuity will be taxed as ordinary income in the year the money is received. Account values fluctuate with market conditions, and when surrendered the principal may be worth more or less than its original amount invested. Tax deferral is provided by your employer’s plan and the annuity does not provide any additional tax deferral benefit. Annuities may be subject to additional fees and expenses to which other tax-qualified plan funding vehicles may not be subject. However, annuities provide features and benefits such as lifetime income payments and death benefits which may be valuable to you.

You should consider the investment objectives, risks, charges and expenses of the variable product and its underlying fund options carefully before investing. The contract and fund prospectuses contain this and other information. You may obtain a prospectus by contacting your Voya representative or the Company at the address listed below. Please read the prospectus carefully before investing.

Insurance products, annuities and retirement plan funding issued by (third party administrative services may also be provided by) Voya Retirement Insurance and Annuity Company. Securities are distributed by Voya Financial Partners, Inc. (member SIPC), One Orange Way, Windsor, CT 06095-4774. These companies are wholly owned, indirect subsidiaries of Voya Financial, Inc. (NYSE: VOYA). Securities may also be distributed through other broker-dealers with which Voya Financial Partners, Inc. has selling agreements.