Voluntary Tax-Sheltered Contribution Programs

Voluntary Additional Contributions Tax-Sheltered program (ACTS) and ROTH Option Annuity Plans

All employees may enroll in our voluntarily tax shelter plans by allocating a portion of salary from federal income taxes while saving for retirement.  If an employee enrolls in a pre-taxed 403(b) or 457 NJSEDCP plans. Federal income tax is not due on deferred amounts until a distribution is received from the account.  In addition, employees can also enroll in a ROTH option for both 403 (b) and 457 plans.  The ROTH option allows employees to contribute after tax dollars with an investment vendor and withdrawals are tax free.

403(b) and 457 Deferred Tax Plans

Plan Type – Pre-tax contributions

Voluntary investment program that provides traditional pre-tax contributions separate from and in addition to your mandatory pension plan.  The contributions are deducted from your paycheck before current federal taxes are taken out.  These contributions grow tax-deferred until withdrawn.

403 (b) and 457 ROTH Option

Plan Type - ROTH After-tax contributions

ROTH contributions are made on an after-tax basis so the amount you contribute is included in your W-2 in the year you make your contribution. Since you already paid income tax on your ROTH contributions, a withdrawal of your ROTH contributions is always 100% federal income tax free. Once your distribution is 'qualified', you can take ROTH earnings from your account free from federal income tax. ROTH contributions combine the saving and investment features of a traditional deferred compensation plan with the tax-free distribution features of the ROTH IRA.

Additional ROTH information:

• Tax-free earnings accrue
• Distributions of ROTH contributions and earnings are tax-free in retirement (if the ROTH account is held for at least five years and distributed after age 59 1/2).
• Employee Pre and After- Tax Contribution Maximum: 
  • Under age 50, $23,000 in calendar year 2024; Age 50 and over, a catch-up contribution of $7,500 for a total contribution of $30,500 in calendar year 2024.
• Note: IRS maximum amount is combined for those with an existing 401K and 403B contribution. 

How to Enroll:

For 457 NJSEDCP Pre and Roth option (available only with Empower)

• To login to your existing account and also find additional information about the 457 NJSEDCP plan, please visit the Empower website.

  To enroll and create a 457 plan account, visit here and enter 006149 as the plan number and 000004 as the sub-plan number.

For 403 (B) and ROTH Option

• Establish a 403 (b) account directly with your selected investment carrier
• Complete the Salary Reduction Agreement Form on Highlander Nexus. 

How to Make Changes:

• For the 457 plan, visit Empower website and log into your account
• For the 403 (B) plan, complete a new Salary Reduction Agreement Form on Highlander Nexus. 

NOTE: Amounts withdrawn from pre-tax contributions, as well as earnings on ROTH contributions that are not qualified, are subject to ordinary income taxes.  Withdrawals before age 59 ½ may also be subject to a 10% federal income tax penalty and plan restrictions. The university encourages you to consult your individual legal or tax advisor with any specific questions.