Tax Sheltered Annuity (TSA) Annual Fee Deduction: What is "TSA Fee?" and What does it mean to defer 100% of salary?
January 20, 2012
If you are currently contributing to the TSA 403(b) Program, your first paycheck in 2012 had a "TSA Fee" of $15.00. For unclassified employees this was the January 3 paycheck, and for classified employees this was the January 12 paycheck.
In years past, the fee was deducted on the paycheck payable in March in a batch process. With the new payroll system, it became possible to deduct the fee automatically on the first paydate of the year. Employees who start contributing after their first 2012 paycheck will have the $15 fee automatically deducted at the time of their first 2012 TSA contribution. This is a great improvement from the old payroll system, which required staff time to run the batch process and manual entry for every employee who began deferrals after the March deduction.
The TSA fee is deducted only once a year for each employee who contributes to the program. This very low administrative fee is used to defray costs of managing the program, including staying in compliance with IRS regulations.
With HRS, employees are able to defer a percentage of salary to their TSA 403(b) account up to 100% of salary.
Warning! If you defer 100% - either on the Salary Reduction Agreement or through the online process - your paycheck will be $0.00. Please be sure this is what you really intend.
Once you begin a 100% deferral, your paycheck will continue to be $0.00 until you have reached the 2012 maximum allowable contribution, which is $17,000 ($22,500 for employees age 50 or older). If you have 15 or more years of service with the University of Wisconsin, you may have an additional "catch-up" opportunity allowing extra contributions of up to $3,000 per year to a cumulative maximum of $15,000 over five or more years. Your campus benefits staff can determine if you are eligible for this.
If you want to defer the 403(b) maximum for the year and have questions about how much that is per payroll, please contact your campus benefits staff.
Source: UW System Administration
Categories: Tax