5314 Procedure – Tax-Deferred Annuities

TAX-DEFERRED ANNUITIES

Employees may elect to defer a portion of their salary or wages to pay for a tax-deferred annuity provided that five or more employees request the District to enter into an agreement with an authorized insurance company or mutual fund (both hereinafter referred to as the “Service Provided”).  The Service Provider must be licensed to do business in the State of Washington. The following procedures are established for this purpose:

  1. An employee may elect to participate in any approved tax-deferred annuity program by completing the District’s salary reduction agreement. No substitutions will be accepted.  The salary reduction agreement must be signed by the employee and an authorized licensed agent of the Service Provider or registered investment advisor.  The agent or registered investment advisory must register with the District by signing a District Agent Hold Harmless Agreement and submitting a current Washington State Insurance License (if applicable).
  1. The salary reduction agreement will remain in force until a new salary reduction agreement is submitted or employment is terminated. Salary reduction agreements submitted by the 15th of the month will be included in that month’s payroll.  Payroll reduction will not be made if there are insufficient earnings to make a complete reduction.
  1. An employee must submit a Maximum Exclusion Allowance (MEA) calculation with each salary reduction agreement. If the salary reduction agreement is a cancellation or a reduction in the tax-deferred annuity amount then a MEA will not be required.  The MEA must certify that the salary reduction does not exceed the maximum exclusion allowable for the employee under the applicable law.  The District will require that a MEA calculation be submitted on a yearly basis for employees contributing more than the maximum 402(g) limit (currently $10,000), or utilizing “catch-up provisions” or special elections.  If a MEA is not submitted by November 1st the Salary Reduction Agreement may be terminated.  The accuracy of the MEA worksheet must be certified and signed by the employee and an authorized Service Provider, agent or registered investment advisor.
  1. The employee is responsible for completing the appropriate application for participation with the Service Provider. The District will not be held liable for any loss that may result from the application process not being completed before the contributions are sent.
  1. The District’s payroll office shall maintain a list of currently available tax-deferred annuity programs. Employees shall have access to this information upon request.

 

Adopted: 04/23/99
Revised: 04/23/99