The A&M System maintains a list of authorized TDA vendors who offer a variety of investments, and most provide a number of funds in which you can invest. You are responsible for choosing an investment vendor and/or investment products, and you are responsible for any gains or losses on your account(s). You may change your vendor or investments as often as you like.
The Texas A&M University System offers you the opportunity to make Roth after-tax contributions to your Texas A&M University System Tax-Deferred Annuity (TDA) Plan. This allows you to:
- Designate elective deferrals as after-tax Roth contributions to your plan
- Receive tax-deferred growth on any earnings
- Potentially reduce the taxability of Social Security income benefits
- Enjoy tax-free distributions, provided:
- Distribution is made five years after Roth contributions were first made to plan and
- You are age 591/2 or older
- Distribution is made on account of your disability or death (distributions may be subject to plan provisions)
- Transfer your retirement assets income tax free to your beneficiaries
- Distribution is made five years after Roth contributions were first made to plan and
Your Roth after-tax contributions are included in your maximum contribution limits, plus any catch-up limits, if applicable. Your plan's Roth 403(b) option offers the same benefits, rights and features that you currently have in your retirement plan, including investment choices. Your contributions and any accumulations you have are tracked separately to ensure that they are not commingled with any pre tax or employer contributions you may have.
Distributions
With the regular TDA, you pay no current federal income tax on your contributions. You pay regular income tax on withdrawals from your account. With a TDA, you also pay a 10% penalty tax if you withdraw your money before age 59 ½ unless you withdraw due to disability, death, or separation from service after age 55 and elect an annuity payout.
With a Roth TDA, you do pay federal income tax on your contributions, but you do not pay taxes on distributions, including any earnings. If you leave A&M System employment, you can roll your funds to a Roth IRA or another employer's Roth 403(b) plan.
Distribution Options:
Separation from Service — If you leave A&M System employment before retirement, you may leave your account invested, but you may make no further contributions. Or, you may withdraw your funds and pay taxes (regular TDA) and the penalty tax (both types of TDAs), or you may roll your account balance into an eligible retirement plan at a new employer or an individual retirement account.
59½ in Service — You generally can withdraw funds, attributable to elective deferrals, from your account while still employed once you have reached age 59½.
Disability — As permitted by the plan, you can withdraw elective deferrals and earnings from your retirement plan while employed by your institution but not working due to a disability. To qualify you must be totally and permanently disabled, and the deferrals and earnings must have been credited to your plan on or after January 1, 1989.
Hardship Distribution — If your plan permits, you can withdraw your elective deferrals (but not earnings) due to financial hardship while still employed. Generally, you must show an immediate, significant need that cannot be met with other resources, including loans from your retirement plan.
Minimum Distribution Option — Generally, you must begin taking minimum withdrawals from your account by April 1 following the year in which you turn age 70½ or retire, whichever is later. This can help you defer the minimum required distribution while keeping you in compliance with federal regulations.
Retirement Loan — Some retirement plans allow you to borrow funds from your account. Generally, under the Internal Revenue Code the maximum loan allowed from all your employer's plans is up to $50,000 or 50% of your vested accumulation, whichever is less. (This may be further limited by the terms of your contract.) Borrowing funds from your retirement plan is a nontaxable event as long as you repay your loan in full.
Rollover — If you have had an IRS-defined "triggering event," and your plan allows withdrawals, you can roll over your accumulations to another retirement plan that will accept them or to an Individual Retirement Account (IRA). Direct rollovers - from one account to another - are nontaxable and not reported as income to the federal government. Your plan's rules specify when you are eligible for a distribution. Talk to your benefits office for details.
While you are employed with the A&M System, you may withdraw funds from your account only for one of the above reasons unless you have a financial hardship as defined by federal law. This includes major unreimbursed medical expenses, college costs for immediate family members and purchase of your primary home. Some investment vendors allow you to borrow from your account.
The Texas A&M University System TDA & Roth Plans allows you to receive a cash withdrawal. This may be restricted by the terms of your TIAA-CREF contracts. Taxes and penalties may apply.
In the event of a discrepancy between this website and the plan documents, the plan documents preside.
For additional information and guidance, contact your MetLife Resources Representative.
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