To allow regular and term employees to divert portions of their current pre-tax earnings into a deferred income plan through payroll reduction service.
Regular and term employees may elect through routinely scheduled payroll reductions to divert portions of their pre-tax earnings into an IRS Code 403(b), 401(k), or 457 tax-deferred income plan or a combination of these plans. Enrollment in any of these plans allows an employee to set aside a portion of current earnings and receive the value of these earnings at a later date, usually after retirement. Income diverted in this manner, plus any accrued interest, is not taxed until actually received.
Enrollment in the deferred income program is voluntary. The University of Tennessee does not encourage nor discourage participation. If the decision is made to participate in the 403(b), the employee is responsible for evaluating and selecting a company and for entering into a contractual agreement with that company. The university does not investigate, evaluate, or endorse any of the tax-deferred income investment options.
To participate in any of these plans, enrollment forms must reach Benefits and Retirement Services no later than the last day of the month before the month of the deferral. Participants may change their reduction amounts, begin participation, or cancel participation as often as once per month provided the changes are within the allowable IRS limits.
Each fall, a summary of the maximum amount an employee can defer for the following calendar year is provided to all employees currently or previously participating in a 403(b), 401(k) or 457 plan. If an employee exceeds the statutory limitation for maximum deferrals during a calendar year, Benefits and Retirement Services will reduce or suspend the deferral.
The university provides a $50 per month match on the 401(k) subject to availability of funds. For biweekly employees a $25 reduction will be made from each biweekly check with a maximum of $600 per year being matched. Reduction amounts for biweekly employees will be limited to the amount of that biweekly check less other deductions.