Retirement Plan Frequently Asked Questions
What is a 403(b)?
Your organization has sponsored a 403(b) retirement plan. This plan is defined in section 403(b) of the US Internal Revenue Code. A 403(b) retirement plan is specifically designed for non-profit organizations and has even more benefits for those working in organizations where some staff may have “Ministerial Status” (licensed, ordained or commissioned). Churches and Mission Sending organizations are examples. Your organization’s retirement plan allows you to put away money for retirement. This is called a Voluntary Contribution or an Elective Contribution. You organization’s plan may also include an employer contribution in the form of an Employer Basic or an Employer Matching. Contact your Plan Administrator for the details.
How do I participate in the plan?
You are eligible to participate in the plan on a voluntary basis upon hire. Your organization will notify you when you become eligible to receive employer contributions, if part of the plan. There may be an age and or length of service requirement before you can receive employer contributions. You will be provided with a User Id and Password to access the Envoy Web Portal, where you can enroll in the retirement plan.
How much money can I put into my retirement plan?
Each year the amount of money you can contribute to your retirement plan account increases. Click here to see the current contribution limits for 403(b) and 401(k) plans.
What if I am on a tight budget and do not have much to contribute to my retirement plan right now?
The most critical decision you will make is not how much you contribute, but that you begin to contribute. We see the importance of contributing something now, rather than waiting with the hope of doing more later.
How do I find out if my organization makes any employer contributions into my retirement account?
Your employer and plan administrator will inform you. Your enrollment book, provided by your employer or available on line, also details the specifics of the plan. Look for the Summary Plan Description in the booklet.
How is the money in my retirement plan account invested?
Retirement plan monies in a 403(b) plan are limited to mutual funds or annuities.
What does “No-Load” Mutual Fund mean?
A “No-Load” Mutual Fund does not have a sales charge for either putting money into the fund or transferring money out of the fund. A desirable characteristic!
What does “NAV” mean?
“NAV” stands for Net Asset Value. This term is also used to refer to mutual funds that do not have sales charges for getting into or out of the fund. It is another way to refer to a “No-Load” mutual fund.
What if I do not want to be responsible for managing my money?
One of your choices may be to have your account actively managed by a separately retained and compensated professional asset manager. Your employer may have decided to provide the option of using a professional asset manager for your account. The reasons given for using this service include:
- Lack of knowledge about investing
- Too busy, or out of the country, to pay close attention
- Want more protection from the ups and downs of the market
How often should I review my investments?
You should review your investments at least annually. You can easily do an Account Review on the Envoy Web Portal.
Do I put in money Before-tax or After-tax?
Traditionally, a 403(b) retirement plan has only allowed for money to be set aside for retirement on a “Before-tax” basis. You set aside a certain amount of money and this lowers your gross income. Federal, State (and FICA (or SECA in the case of someone with ministerial status)) taxes are assessed on a lower amount of income. January 1, 2006 brought the addition of the Roth provision to the 403(b) tax laws. If your ministry has added the Roth provision to your retirement plan, then you can set money aside on an “After-tax” basis.
Can I transfer my other retirement accounts into this retirement account?
A 403(b) retirement plan does allow for you to transfer assets from other retirement accounts such as 401(k)s, other 403(b)s or IRAs. You can review your other retirement accounts with a Service Team member to determine whether transferring your other accounts will be in your best interest.
How is all the paperwork handled?
We try to make the paperwork process as easy as possible for you. Whether we’re helping you set up a new plan or helping your participants with their individual accounts, we will work with you and your staff each step of the way to make sure everything is easy and accurate.
If you cannot receive emails or emails with attachments, please notify Envoy Financial and other arrangements will be made.
Can I get money out of my retirement plan?
Upon retiring from your organization, you can begin to take distributions from your retirement account. An Envoy Financial Advisor can help you structure those distributions in the way that is best for you. Under normal circumstances, you may not take money out of your retirement account until age 59½ or you may incur penalty taxes. Distributions before age 59½ can be made in the cases of death, disability, or financial hardship. You may also leave the money in the account to grow until it is needed or until you reach age 70½ (before 12/31/2019) or age 72 (after 12/31/2019). Some plans allow zero net cost interest loans. Check with your plan description or call Envoy Financial for clarification.
How do I change the amount of money that I am putting into my retirement plan?
Access the Envoy Web Portal using your User Id and Password. Click “Take Action” on the top menu and then select “Change Investment Elections” from the left menu. We will contact your organization and instruct them regarding your new contribution amount.
How do I change my contact information?
Access the Envoy Web Portal using your User Id and Password. Click “My Profile” on the top menu and then select “Personal Info.” from the left menu.
How do I change my beneficiary designation?
Access the Envoy Web Portal using your User Id and Password. Click “My Profile” on the top menu and then select “Beneficiaries” from the left menu.
Can I check my retirement plan account information online?
Yes, online access is available 24/7. Access the Envoy Web Portal using your User Id and Password. Click “My Account” on the top menu and then select the item you want from the left menu.
If I am still working at age 72, do I need to take Required Minimum Distributions (RMDs)
No. If you have reportable income, in other words you are still working, you do not have to start taking Required Minimum Distributions until you stop working. This is a unique provision under the 403(b) tax laws only. Click here to learn more about Required Minimum Distributions. (Due to the SECURE Act, if your 70th birthday is July 1, 2019 or later, you are not required to take withdrawals until you reach age 72.)
What happens if I leave my organization?
Envoy Financial will continue to serve your retirement planning needs. Generally, when you leave the employment of your organization, you have three choices regarding your retirement plan money:
- Leave the money invested in the current plan
- Roll it over into your new employer’s plan
- Set up an individual retirement account through Envoy Financial
It is important that you contact Envoy Financial when you change employers or retire. It is also important to update your contact information on the Web Portal when you move, change phone numbers, etc. This will assure continued and uninterrupted service.