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News

Updated December 2, 2008

Department of Employee Trust Funds
July 29, 2008

ETF to Discontinue Accepting 403(b) Additional Contributions

Employees eligible to make tax-deferred contributions (a.k.a., Internal Revenue Code section 403(b) funds) to supplement their retirement savings should be aware that, effective January 1, 2009, the Wisconsin Retirement System (WRS) will no longer be an investment option.

The ability to contribute tax-deferred dollars to the WRS until the effective date of change is limited to employees of educational institutions whose employers enrolled in this program before May of 1982. However, the Department of Employee Trust Funds (ETF) has determined that it is unable to comply with numerous recent changes in federal plan requirements. Therefore, ETF will no longer accept 403(b) additional contributions.

If you currently have 403(b) additional contributions credited to your WRS account, the funds will continue to earn interest until such time as you are eligible to withdraw the deposits. Withdrawals are subject to the same terms under which the contributions were made (i.e.; withdrawals require termination of all WRS participating employment).

As an alternative supplemental tax-deferred retirement savings program, you may want to consider the Wisconsin Deferred Compensation (WDC) Program. The WDC is authorized under Internal Revenue Code Section 457 and as such, the recent federal changes to plan requirements are not applicable. For more information about this issue, contact your employer’s benefits and payroll office. Find out more about the WDC.

 

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