Contributing to the Plan

You may contribute any portion you choose of your regular weekly or monthly pay, subject to tax law limits.
You have a choice of contributing to the Plan in one of the following ways:

Before-tax Contributions - You pay no federal or state income tax on the before tax money you put into the Plan until you receive it. In addition the investment earnings on all contributions accumulate tax free until withdrawal.

After-tax Roth 403(b) Contributions - You pay federal and state income tax on the after tax money you put into the Plan. The investment earnings accumulate tax free and are paid to you tax free at the time you receive it as long as the withdrawal is qualified.

Several limits and rules apply, but the limit that will affect most participants is shown in the following table. The limits in this table apply to your combined contributions to this plan and to the Boston University Retirement Plan. Under the 2001 tax law, the contribution limit increases for several years. Also, under the same law, participants who are age 50 or older at the end of any calendar year have an increased contribution limit.

These amounts are indexed for inflation annually. The new limits will be communicated to participants after the IRS announces them for any particular year.

Participants with at least 15 years of service with the University may have a further increase in the contribution limit applicable to them. The Benefits Section of the Office of Human Resources calculates the limits to assist employees when deciding how much to elect as contributions from pay to their accounts under this plan. Limits apply to tax deferred and Roth 403(b) contributions.

Other limits may apply in certain situations; the Benefits Section of the Office of Human Resources will communicate with you if any limit applies to your contributions.

You must contribute the same portion of your pay each payroll period, and you must make your contribution by salary reduction. No lump sum cash contributions are permitted. These rules are due to Internal Revenue Code regulations.

Note Special rules and limits apply if, during a calendar year, you also participate in another plan maintained by a business you own or control. For example, if you have consulting or other self-employment income and participate in a self-employed plan to which you make contributions, the special rules may affect you. If this situation applies to you, consult a qualified tax professional for advice on how the limits apply to you.