New rules impact 403(b) choices
By Greg Cieslewicz
As a Wisconsin public school employee, you can save for retirement with a 403(b) (sometimes referred to as a tax-sheltered annuity or TSA). A 403(b) is a great way to add to your nest egg and fill any retirement income needs not met by your Wisconsin Retirement System pension and Social Security benefits.
Making the right choice
If you choose to participate in your employer’s 403(b) plan, it is up to you to choose investments that will best meet your financial objectives. Finding the right plan can be challenging, especially if your district has many providers – some have more than 40.
However, the IRS recently overhauled its 403(b) regulations. To meet new requirements, districts are apt to significantly reduce the number of providers they make available to their employees.
This allows districts to clean up their provider lists and eliminate plans that are not in the best interest of employees. Fewer choices can make it easier to enroll, as studies show that too many options can be confusing.
Our advice
Ask questions. Because the stakes are high – this is your financial future we’re talking about – you need to know what’s inside your 403(b) plan. There are countless stories of investors who suffered avoidable losses because they didn’t ask basic questions before they started investing. Start by reading Bob Moeller’s article titled “What to look out for with a TSA” from the October 2007 issue of OnWEAC in Print (go to www.weac.org/News/columns.htm).
Moeller provides a list of 10 questions to ask any 403(b) provider before you buy. And don’t forget to compare answers from commercial providers to your union-created 403(b) plan offered through WEA Trust Member Benefits. Our answers can be found at www.weabenefits.com.
Other online resources to help you choose the right 403(b) include:
Convenient and tax advantaged
Contributions to a 403(b) are conveniently payroll deducted and offer tax advantages. If you contribute on a before-tax basis, you reduce your taxable income now and defer taxes until you withdraw money in retirement. Conversely, after-tax or Roth contributions are taxed now, but qualified withdrawals, including earnings, are tax-free.
Olympians help Trust promote healthy schools
Chronic diseases, such as heart disease, diabetes, and cancer account for seven of every 10 deaths and adversely affect the quality of life of 90 million Americans.
Chronic diseases are among the most common and costly health problems, but some are also among the most preventable. Adopting healthy behaviors such as eating nutritious foods and being physically active can prevent or control the devastating effects of these diseases.
That’s why for the third straight school year, the WEA Trust is partnering with the Wisconsin Department of Public Instruction (DPI) on Movin’ and Munchin’ Schools, a program designed for public school employees, students, and their families. It helps schools organize innovative and fun approaches to healthy eating and exercise.
Through the Trust’s promotional efforts, participation in the program has increased by more than 30%, to 36,500 children and adults.
“This is yet another example of the Trust’s commitment to our members and Wisconsin public schools. Working together, we can make progress in instilling a culture of healthy lifestyle choices,” said Fred Evert, WEA Trust executive director. Wisconsin Olympians Casey FitzRandolph and Suzy Favor Hamilton are honorary chairpersons for Movin’ and Munchin’ Schools. FitzRandolph, a three-time Olympic speed skater and gold medalist, and Favor Hamilton, a three-time Olympic runner and seven-time U.S. national champion, hope to get even more schools participating.
“Programs such as Movin’ and Munchin’ help kids set healthy goals,” FitzRandolph said. Favor Hamilton added, “Programs like this make it easier for families to eat well and be active and to make those good habits part of their everyday life.”
All participating schools are considered by DPI for awards of up to $500 to use for improving their nutrition and physical education programs. If the school has a Trust health plan and at least 50% of the school staff participates, the Trust will match DPI’s award.
For more information, check the Web site www.movinandmunchin.com.
Clarification:
Social host liability
primarily for minors
In the November issue of OnWEAC in Print, an article on this page discussed liability issues if you are a social host at an event where alcohol is being served.
The article stated that a new Wisconsin statute holds social hosts liable when serving alcohol to others – adults and minors – if a person being served subsequently injures a third party. That is not accurate.
While the Wisconsin statute applies liability for serving alcohol to minors, it does not hold liable those hosts serving alcohol to persons of legal drinking age.
Under Wisconsin statute 125.035, social hosts are immune from liability for injuries to third parties arising from the provision of alcohol to adults, with two rare exceptions: When the social host forces the consumption on another or when the host misrepresents that the beverage served is alcohol-free.
WEA Trust Member Benefits apologizes for any confusion that arose from our previous article. If you have any questions on this topic, please call Member Benefits at 1-800-279-4010.
Information on the products and services that Member Benefits offers to public school employees can be found online at
www.weabenefits.com.
Eye on Insurance columns
Posted December 14, 2007