Tax Sheltered Annuities | Policy 6531

THIS IS THE OLD POLICY. SEE BELOW FOR REVISED

Following is the policy of the District regarding Tax Sheltered Annuities:

(1) All new applications must be submitted to the District Business office by August 1 or December 5 of each year.
(2) Each new company shall have a minimum of two new or replacement contracts before being accepted as a participant in the Fonda-Fultonville Program.
(3) Increases or decreases can be made upon thirty (30) days’ written prior notice.
(4) If a contract is stopped, it may be restored for one year or more, but only in September.
(5) The District will make payments to company participants once a month and may choose to exercise the option of one company handling the distribution to other companies.
(6) Deductions in salary for teachers shall be for twenty
(20) pays for new applicants.
(7) In the case of replacement contracts, a written notice must be presented to the Business Office with a new application.
(8) No agent will solicit applicants during school hours without the authorization of the Superintendent of Schools or designee.

Section A – Authorization to Purchase Annuities

1. The Board of Education shall make tax sheltered annuity
(TSA) plans available to the staff through payroll deductions. TSA policies meeting the tax sheltered provisions of the Internal Revenue Service may be offered including fixed and variable plans.
2. The Business official will act as the Board’s representative in all matters dealing with TSA’s sold to employees through the school district. As such, (s)he will review literature to be distributed and maintain copies of all salary reduction and hold harmless agreements and Vendor Agreements for 403(B) Programs.
3. All companies will be approved by the Business Official. All vendors servicing the 403(B) Plan will complete all District created forms.
4. Failure on the part of any Vendor and/or agent to comply with this policy will be sufficient grounds for denying further sales to School District employees.

Section B – Approval of Salary Reduction Agreements

Salary reduction contributions will be universally available to all district employees, except as provided in statute:

a. Employees who cannot contribute at least $200 per year.
b. Employees who normally work less than 20 hours per week.
c. Employees who are participating in another plan of the employer (e.g., 457 Plan).

All employees entering into a TSA Salary Reduction Agreement must have on file in the District Business Office the following forms before the election will become effective:

1. A Vendor Agreement – Requirements for 403(B) Retirement Programs for each vendor which the employee wishes to contract with.
2. Salary Reduction Agreement for 403 (b) plans. Under no circumstance will this
agreement apply to prior employee earnings.
3. Statement of Understanding and Hold Harmless Agreement Regarding Tax Sheltered
Annuity Program.
4. Employees who wish to use special ‘catch-up elections’ to contribute more than the basic salary deferral for the year must provide a vendor, financial, tax or legal counsel form which shows the maximum amount of elective deferrals for the tax year.

Section C – Contact Between Employees and Insurance Agents

1. Only Vendors receiving approval of the Business Official may make printed TSA literature available to School District employees. The literature must not contain any statement which indicates that the Board of Education or the administration recommends the plan.
2. Once contacted by a School District employee, an agent of the company may meet the employee at school to discuss policy provisions. An agent may also meet the employee at school to have papers signed. In either event, agents will not be allowed to remain on school premises to solicit business from other employees.
3. Employee information, including addresses and/or telephone numbers will not be provided to company’s agents. Initial contact with the agent must be made by the employee.

Section D – Plan Distributions and Transfers

1. The District will not authorize any distributions from the TSA Plan that is restricted in
accordance with Section 403(B) of the Internal Revenue Code.
2. The District will only allow transfers directly from one product provider to another or one product to another.

Section E –Periodic Statements

The employee will be responsible for requesting periodic statements from the Vendor and for verifying the accuracy of the statements.

Tax Sheltered Annuities

Section A – Authorization to Purchase Annuities

1. The Board of Education shall make tax sheltered annuity
(TSA) plans available to the staff through payroll deductions. TSA policies meeting the tax sheltered provisions of the Internal Revenue Service may be offered including fixed and variable plans.
2. The Business official will act as the Board’s representative in all matters dealing with TSA’s sold to employees through the school district. As such, (s)he will review literature to be distributed and maintain copies of all salary reduction and hold harmless agreements and Vendor Agreements for 403(B) Programs.
3. All companies will be approved by the Business Official. All vendors servicing the 403(B) Plan will complete all District created forms.
4. Failure on the part of any Vendor and/or agent to comply with this policy will be sufficient grounds for denying further sales to School District employees.

Section B – Approval of Salary Reduction Agreements

Salary reduction contributions will be universally available to all district employees, except as provided in statute:

a. Employees who cannot contribute at least $200 per year.
b. Employees who normally work less than 20 hours per week.
c. Employees who are participating in another plan of the employer (e.g., 457 Plan).

All employees entering into a TSA Salary Reduction Agreement must have on file in the District Business Office the following forms before the election will become effective:
1. A Vendor Agreement – Requirements for 403(B) Retirement Programs for each vendor which the employee wishes to contract with.

2. Salary Reduction Agreement for 403 (b) plans. Under no circumstance will this agreement apply to prior employee earnings.
3. Statement of Understanding and Hold Harmless Agreement Regarding Tax Sheltered Annuity Program.
4. Employees who wish to use special ‘catch-up elections’ to contribute more than the basic salary deferral for the year must provide a vendor, financial, tax or legal counsel form which shows the maximum amount of elective deferrals for the tax year.

Section C – Contact Between Employees and Insurance Agents

1. Only Vendors receiving approval of the Business Official may make printed TSA literature available to School District employees. The literature must not contain any statement which indicates that the Board of Education or the administration recommends the plan.
2. Once contacted by a School District employee, an agent of the company may meet the employee at school to discuss policy provisions. An agent may also meet the employee at school to have papers signed. In either event, agents will not be allowed to remain on school premises to solicit business from other employees.
3. Employee information, including addresses and/or telephone numbers will not be provided to company’s agents. Initial contact with the agent must be made by the employee.

Section D – Plan Distributions and Transfers

1. The District will not authorize any distributions from the TSA Plan that is restricted in accordance with Section 403(B) of the Internal Revenue Code.

2. The District will only allow transfers directly from one product provider to another or one product to another.

Section E — Periodic Statements

The employee will be responsible for requesting periodic statements from the Vendor and for verifying the accuracy of the statements.

Revised 06/22/98

Form 6531 F-1: Salary Reduction Agreement for 403(B) Plans

Statement of Understanding and Hold Harmless Agreement Regarding Tax Sheltered Annuity Program

Vendor Requirements for 403(B) Retirement Programs