How much money will you have when you retire? If you open a Crozer-Keystone TSA account, you may wind up with more than you think.

TSAs, or Tax Sheltered Annuity accounts, allow Crozer-Keystone employees to contribute pretax dollars into an account through one of two fund providers. Combined with your CKHS retirement package and Social Security benefits, TSA funds can help you spend your golden years in comfort and security.

“There are a lot of advantages that come with opening a TSA account,” says Elizabeth MacCartney, CKHS pension administrator. “One of the biggest is that you’re able to contribute pretax dollars and delay paying taxes until you withdraw the funds. Once you’ve retired, you may move into a lower tax bracket, which means you’ll pay less in taxes than you would if you had received the money in your paycheck.

“And of course, another major benefit is that your TSA will be ready and waiting for you when you retire and need the money. With the matching funds that Crozer-Keystone contributes, you can accumulate a significant amount to supplement your CKHS and Social Security benefits.”

Crozer-Keystone offers TSA plans (also called 403(b) plans) through two providers, Fidelity Investments and TIAA-CREF. Through payroll deduction, employees enrolled in the plan can contribute any amount over $25 per pay to the account, up to $15,000 per year.

“Through our employer matching plan, employees contributing to the TSA Plan will receive an employer matching contribution to their accounts every March,” MacCartney says. “Employees who have been with the system for less than 10 years will receive 50 percent of the first $2,000 contributed (up to $1,000 per year), and employees who have been with the system 10 years or more will receive 50 percent of the first $4,000 contributed (up to $2,000 per year). Since the match is made every year, it’s a great way to build up funding for your retirement.”

Unlike other savings and benefits plans offered through Employee Benefit Services that are available only during the October open enrollment period, TSAs can be opened at any time throughout the year.

Should your TSA funds be needed before you retire, the plan allows employees to take loans from their accounts. The loan amount and interest are paid back into the account by the employee. Hardship withdrawals are also available, although funds obtained through these withdrawals are subject to federal income taxes and a 10 percent penalty if the account holder is under the age of 59½.

Beginning in 2006, Crozer-Keystone began automatically enrolling new benefit-eligible employees into the Fidelity TSA plan, starting with an initial enrollment of 2 percent of their yearly wages. New employees were allowed to opt out of the plan, or to change the amount of their contribution, by contacting Fidelity. Fidelity also allows employees to select an automatic increase option, in which contributions can be increased by a percentage point on a yearly basis, at any date the employee chooses. So far this year, over 80 percent of those automatically enrolled have either remained enrolled at the 2 percent level or increased their contributions. 

The plans also offer a “catch-up” provision in which account holders aged 50 or over can contribute an additional $5,000 per year to the plan. Employees with 15 years or more of service with CKHS can also contribute $3,000 a year for up to 5 years — a total of $15,000.

Employees who contribute to TIAA-CREF or Fidelity TSA accounts can select which funds to invest in, or can invest in default “life cycle” funds that start aggressively and become more conservative as the account holder gets closer to age 65.

“It’s best to start investing in a TSA account when you’re young,” MacCartney says. “That allows you to get the maximum benefit for your investment and then ease into retirement with investments in secure, stable funds. But it’s never too late to start, and you can always increase your contributions and reallocate your funds at any time.”

To learn more about investing in a TSA account, or about other investment plans offered through Employee Benefit Services, go online at www.crozerbenefits.org,

go directly to either Fidelity Investments at www.mysavingsatwork.com/atwork.htm,

or TIAA-CREF at www.tiaa-cref.org. You can also call the Employee Benefits Answer Line at (610) 595-6380 or 19-6380, or contact Liz MacCartney at (610) 595-6368 or 19-6368.