Traditional contributions to the RPB Retirement Plan are on a pre-tax basis and reduce your taxable income. We also offer Roth 403(b) contributions, which are made with after-tax money, meaning that you pay taxes on contributions, but all qualified withdrawals and earnings are tax-free.
There are limits on each type of contribution, as well as a cap on the total contributions you can make each year. The sooner you can begin contributing—and the greater the amount you put in—the more likely it is that you will meet your financial goals for retirement.
Even if you got a late start, you may be eligible to make catch-up contributions based on your age. You can make contributions from your salary on a monthly, quarterly, semi-annual or annual basis. You decide how much you want to contribute and you can change the amount as often as you like.
There are two types of contributions that can be made to a traditional pre-tax 403(b) plan:
- Employer Contributions are made by an employer to RPB and are in addition to a participant’s regular salary (and parsonage, if applicable).
- Elective Salary Deferral is a contribution made to RPB as a pre-tax deduction from a participant’s pay based on a Salary Reduction Agreement the participant completes with the employer. Participants may change their elective salary deferral amount at any time, but the participant and employer must enter into a new Salary Reduction Agreement in each instance. If the participant should leave employment with the employer before the end of a plan year and a portion of the contribution was prepaid, the employer may request a refund of the unearned contribution amount.
IMPORTANT: Both employer contributions and elective salary deferrals have to be paid by the employer to RPB.
Only your contributions can be allocated to the Roth account. The employer contributions must be allocated to a pre-tax account, and you will owe income taxes on the employer contributions and any earnings upon withdrawal.
Maximum Retirement Plan Contribution Limits
The IRS places the following maximum limits on employer contributions and elective salary deferrals:
|Pre-Tax||Roth||2019 IRS Limits Under 50||2019 IRS Limits with Over 50 Catch-Up|
|Employer||Lesser of $56,000 or participant’s includable salary|
|Employee Elective Deferrals||$19,000||$25,000|
- Employee Elective Salary Deferrals – The 403(b) Standard Elective Deferral Limit is the lesser of $19,000 or 100% of taxable compensation in 2019. This is an increase from $18,500 in 2018. Participants who are, or will be, 50 years old by the end of 2019 can defer up to an additional $6,000, for a total of up to $25,000. (This “catch-up” provision didn’t change from 2018.)
- Total Limits – The total contribution limit for employee and employer contributions to your 403(b) plan for the 2019 calendar year is $56,000 or your taxable salary for the year, whichever is less. If an employer contributes more than the 403(b) limits, those funds go into the participant’s RPB Rabbi Trust Account.
- Over 50 Catch-Up Provision – Beginning at age 50, a participant can increase their elective salary deferral amount up to a maximum of $25,000 by using the $6,000 “Catch-Up” provision if their taxable salary exceeds that amount. If a participant takes advantage of the full $25,000 deferral limit ($19,000 Standard Deferral plus the $6,000 Catch-up), the total 403(b) contribution limit increases to $62,000 in 2019. Any employer contributions that exceed this limit go to the participant’s Rabbi Trust account.
For more information, please read the IRS announcement on 2019 retirement plan contribution limits.
There are no minimum retirement plan contribution requirements.
Evaluation of Recommended Contribution Percentages
RPB commissioned Summit Strategies Group, its independent investment consultant, to conduct an objective evaluation of our recommended contribution rates. Read the summary document, which includes Summit’s detailed report and other supporting documents: Evaluation of Recommended Contribution Percentages.
Rollovers to RPB: Forms and Information
RPB accepts rollover funds from other qualified 403(b) plans, 401(k) plans, IRAs and other tax-deferred plans. We can also accept rollovers from a Roth 403(b). Rollovers can be made by wire transfer or check. Rollover information is shown separately from other RPB assets on account statements and are subject to the same RPB rules and investment allocation choices as other RPB funds.
Money that is rolled over from non- URJ-affiliated congregations is not eligible for parsonage exclusion in retirement.
To verify that the funds are considered qualified retirement funds, please contact us for the appropriate RPB Rollover Transfer Form.