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403(b) Plan Compliance HOT Topics

Compliance: Hot topics

Presented by Kelly Behnke, Retirement Consultant

This seminar is for informational purposes only and not intended to be legal or tax advice. Consult your tax advisor or attorney before taking any action. The 403(b) retirement program is offered by the WEA TSA Trust. TSA program registered representatives are licensed through WEA Investment Services, Inc., member FINRA. The Trustee Custodian for the WEAC IRA accounts is Verisight Trust Company. Property and casualty insurance programs are underwritten by WEA Property & Casualty Insurance Company. The terms and conditions of your coverage are exclusively controlled by your written policy. Please refer to your policy for details. Certain policy exclusions and limitations may apply. Seminars are free to attend; however, if you choose to invest in the WEA Tax Sheltered Annuity or WEACIRA program, fees will apply. Consider all expenses before investing.

WHY ARE WE HERE?Our goal is to help

keep you out of IRS jail

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How long has it been since you reviewed your PLAN DOCUMENTS?

EXECUTIVE SUMMARY

WISCONSIN SCHOOL DIST

What are the hot topics?

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15-YEARS-OF-SERVICE CATCH-UP

Top 10 audit errors

UNIVERSAL AVAILABILITY NOTICE

Top 10 audit errors

CONTRIBUTION LIMITS• 402(g) limits in 2016

*$18,000*$ 3,000 (15 year of service catch-up)

*$ 6,000 (age 50 catch-up)

• 415 limit in 2016*$53,000 (elective & non-elective)

Top 10 audit errors

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MISCODING OF W–2,BOX 12

Top 10 audit errors

E - 403b pre-tax contributions

BB - 403b Roth contributions

Employee Contributions - not employer

Do NOT report IRA contributions

Top 10 audit errors

EXCESS CONTRIBUTIONS

HARDSHIPS AND LOANS• No self certification, documentation

required (for how long?)

Top 10 audit errors

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UNUSED SICK AND VACATION LEAVE PAYOUT

Top 10 audit errors

• Can’t exceed 5 years after retirement• Watch out for rehires

5 YEARS LATER…

POST-EMPLOYMENT CONTRIBUTIONS

Top 10 audit errors

• 2012 HEART and WRERA amendments

• Make sure employee handbook agrees with plan document

• SRA Restrictions• Loans/Hardships• Eligible employees

PLAN DOCUMENT

Top 10 audit errors

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ROTH 403(B) EXCESS• Roth and Pre-Tax = one limit• IRA versus 403(b)

Top 10 audit errors

• Notify vendors or TPA immediately• What to get ready

IRS audit process

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?QUESTIONS?

1-800-279-4030memberbenefits@weabenefits.com

Find us on:

This seminar is for informational purposes only and not intended to be legal or tax advice. Consult your tax advisor or attorney before taking any action. The 403(b) retirement program is offered by the WEA TSA Trust. TSA program registered representatives are licensed through WEA Investment Services, Inc., member FINRA. The Trustee Custodian for the WEAC IRA accounts is Verisight Trust Company. Property and casualty insurance programs are underwritten by WEA Property & Casualty Insurance Company. The terms and conditions of your coverage are exclusively controlled by your written policy. Please refer to your policy for details. Certain policy exclusions and limitations may apply. Seminars are free to attend; however, if you choose to invest in the WEA Tax Sheltered Annuity or WEAC IRA program, fees will apply. Consider all expenses before investing.

Contribution Limit Calculation Form

Do you know how much you can contribute to your 403(b) plan?

How do I know when to complete a Contribution Limit Calculation Form?

If you answer “Yes” to any of the questions below, you should complete this form and forward to WEA Member Benefits for processing. If you answer “No” to all of the questions, you do not need to complete this form.

1. Do you have 15 or more years of service with the same employer and would like to know if you are eligible for the 15-years-of-service catch-up contribution?

2. Will you be receiving employer contributions to your 403(b) plan?

3. Do you make salary deferral contributions to another 403(b) plan, 401(k) plan, SIMPLE plan, or SEP plan?

4. Does your employer require you to provide them with written documentation of your con-tribution limit calculation results?

The elective (aggregate total of before-tax and after-tax) contribution limit base for 2015 is $18,000. In addition, if your employer does not require you to complete at Contribution Limit Calculation and you will be age 50 or older in 2015, you may contribute an additional $6,000 without completing this form. However, if you are eligible for the 15-years-of-service catch-up, the age 50 catch-up amounts will be designated to any available 15-years-of-service catch-up before the age 50 catch-up amounts.

The Internal Revenue Code (IRC) sets limits on the amount of money you can contribute to your 403(b) account. The combined amount you can contribute before and after tax cannot exceed this limit. As a service to you, we will help you calculate the maximum amount you can contribute to your WEA TSA Trust 403(b) ac-count.

We can provide you with contribution history for your WEA TSA Trust 403(b) account, however, contribution history for 403(b) accounts with another provider need to be submitted by you each year to complete a CLC. If you have any questions about income or work history, check with your employer’s payroll department.

In addition to reporting your contribution limits, we will let you know if you are eligible for any of the catch-up elections. These elections may let you contribute more money than the IRC usually allows.

The accuracy of this calculation is dependent upon the accuracy of the information provided by the participant. Incomplete forms cannot be processed.

After completing this form, mail it to the address on back and we will send your employer a report showing your contribution limits.

If you do not have an existing account with us, please include your completed 403(b) Application.

If you have questions or need assistance completing this form, please call us at 1-800-279-4030.

Name _______________________________________ SSN _____________________________

Address _________________________________________________________________________

City, State, ZIP ___________________________________________________________________

Date of Birth ________________________ Telephone (_______) ___________________________

Employer ________________________________________________________________________

Section I —GeneralInformation

1. Tell us the year for which you want us to calculate your contribution limits. This must be a calendar year (January–December).

Calculation year: ___________

2. Tell us your yearly gross salary with your current employer (in many cases this involves portions of two school years). If you are retired, enter your gross salary for the most recent 12 months of service. If you are paid an hourly wage, calculate your annual income based on the hourly wage.* If you are electing the cash option through a Section 125 plan, add the annual amount to your annual salary.

Yearly salary with current employer:$__________________

*If you have any questions about income or work history, check with your district’s payroll coordinator.

3. Are you making contributions to a 401(k), SIMPLE Plan, SEP Plan? ❏ Yes ❏ NoIf yes, go to question 4; if no, skip to Section III.

4. What is the total amount of calendar year contributions you will make to a 401(k) retirement plan, SIMPLE Plan, and/or SEP Plan? These plans could be from a position held with a different employer. You do not need to tell us how much you plan to contribute to your 403(b) during the calendar year. We will tell you the maximum allowable contribution.

Do not include 403(b), individual retirement account (IRA) contributions, or Wisconsin Retirement System.

Reductions (calendar year amount):Section 401(k), SIMPLE, or SEP contributions.

$____________________ during calendar year

Section II — Salary

List any employer-paid contributions in addition to your salary that are not taxable to you in the current year. All nonelective contributions are before-tax contributions. If your employer is making 403(b) non-elective contributions, tell us the calendar year amount.

Do not include payroll amounts received from a Section 125 cash option plan that is contributed to a 403(b).

Amount of 403(b) non-elective contributions:

$____________________ during calendar year

Section III — Non-Elective (Employer-Paid) Contributions

Contribution Limit Calculation (CLC) for 403(b) Plan

1. When did you begin working for your current employer? Are you retired or retiring this calendar year?

______________ __________________Month/Year Retirement Date (if retired or retiring this calendar year)

2. Tell us whether you are working full- or part-time during the calendar year. If you are working full-time, write 100%. If you are working part-time, indicate the appropriate percentage of a full-time schedule (50%, 60%, 70%, etc.)

Percentage of time employed during the calendar year: _________%

3. Do you have any part-time years of employment with your current employer? If so, indicate the month and year that each period of part-time employment began and ended and indicate the percentage of time employed.

*Attach a separate sheet if needed.

❏ Yes ❏ No (If no, skip to Question 4.)If yes, indicate the month, year, and percentage of time employed.*

Month/Year Month/Year Percentage From ___________ to ___________, _________%From ___________ to ___________, _________%From ___________ to ___________, _________%From ___________ to ___________, _________%

4. Have you taken unpaid leave(s) of absence while working for your current employer?

❏ Yes ❏ NoIf yes, indicate length of service; if no, skip to Section V.

Month/Year Month/YearFrom ___________ to ___________From ___________ to ___________

Section IV — History With Current Employer

If you have less than 15 years of service with your current employer, please skip to Section VII.

1. Have you ever had another 403(b) besides your WEA TSA Trust 403(b) account?

Have you ever transferred funds to the WEA TSA Trust from another 403(b) account?

❏ Yes ❏ No

❏ Yes ❏ No

2. Are you currently contributing only to the WEA TSA Trust 403(b) ac-count?

❏ Yes ❏ No

3. Tell us the total amount of salary reduction contributions (include salary received from Section 125 cash option plan that is contributed to a 403(b)) in all years to all 403(b)s and other salary reduction retirement plans (e.g., 401(k), SARSEP, SIMPLE) through December 31 of the year prior to the calculation year. WEA TSA Trust or any company with which you have a 403(b) account can provide you with a history of your contributions.

Total salary reductions, including Section 125 cash option amounts, for all prior years to:

WEA TSA Trust 403(b) Before-tax 403(b) $ __________ After-tax (Roth) 403(b)** $ __________

403(b)s with other companies including those transferred to the WEA TSA Trust. (Do not include employer-paid contributions.) $ __________

Other retirement plans* $ __________

*Include 457(b) plan contributions prior to 2002. Do not include IRA contributions.

**Effective 2006

Section V — Employee Contribution History With Current Employer

Over, please

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Employees with 15 or more years of service with their current employer may be eligible for up to $3,000 of annual catch-up contributions (contributions above the base IRC amounts). Fifteen-year catch-up contributions are subject to a lifetime cumulative limit of $15,000.

If you made catch-up contributions (including age-50-or-over catch-up), tell us the amount of the contribution over the base IRC amount for each year beginning in 1987. The WEA TSA Trust, or any company with which you have an account, can provide you with a history of your contributions.

Here’s an example: The maximum IRC base annual contribution in 1999 was $10,000 (as shown at right). If you contributed $11,500 in 1999, enter $1,500 in the space next to 1999: ($11,500 – $10,000 = $1,500).

The CLC amounts we provide are for the specified calendar year only.

We suggest you keep a copy of this form for your records.

Salary reduction contributions for all plans above the yearly limit(s)

Amount contributed above the $9,500 limit:

1987 $_________ 1991 $_________ 1995 $_________

1988 $_________ 1992 $_________ 1996 $_________

1989 $_________ 1993 $_________ 1997 $_________

1990 $_________ 1994 $_________

Including age 50-or-over catch-ups, indicate the amount contributed above the:

$10,000 limit for 1998 $_________

$10,000 limit for 1999 $_________

$10,500 limit for 2000 $_________

$10,500 limit for 2001 $_________

$11,000 limit for 2002 $_________

$12,000 limit for 2003 $_________

$13,000 limit for 2004 $_________

$14,000 limit for 2005 $_________

*Combined total of before-tax and after-tax (Roth) contributions.

Section VI — Catch-Up Eligibility (15 or more years of service)

I certify that all questions have been completed and are correct to the best of my knowledge.

Signature _______________________________________________________________ Date ____________________________

Please sign, date, and return this form to WEA Member Benefits.

Section VII — Signature and Date

Contact Information

Mailing AddressP.O. Box 7893Madison, WI 53707-7893

Phone1-800-279-4030

Fax608-237-2529

E-mailretirement@weabenefits.com

Web siteTSA 1794-280-1214 (W)

$15,000* limit for 2006 $_________

$15,500* limit for 2007 $_________

$15,500* limit for 2008 $_________

$16,500* limit for 2009 $_________

$16,500* limit for 2010 $_________

$16,500* limit for 2011 $_________

$17,000* limit for 2012 $_________

$17,500* limit for 2013 $_________

$17,500* limit for 2014 $_________

The 403(b) retirement program is offered by the WEA TSA Trust. TSA program registered representatives are licensed through WEA Investment Services, Inc., member FINRA.

TSA 3522-280-0115

P.O. Box 7893 • Madison, WI 53707-7893 1-800-279-4030

Fax: (608) 237-2529

403(b) Hardship Withdrawal Request Due to the extensive review process involved with a financial hardship, your request may take up to 30 business days to process.

Please note: Nonelective contributions are not eligible for a hardship distribution.

1.. Participant Information

Social Security No. Employer Name

Name Date of Hire Last First Middle (current employer)

Address Date of Birth

Phone ( ) City State ZIP

�Check here if new address(Information submitted on this form replaces information on file for all your WEA Member Benefits 403(b) and/or IRA accounts.)

2.. Hardship Reason I attest that this hardship withdrawal does not exceed the amount required to relieve my financial need that cannot be satisfied from other reasonably available resources, including assets of my spouse and minor children, and results from an immediate and heavy financial need to cover one of the following:

� Non-reimbursable medical expense for self, spouse, children, dependents, or primary beneficiary—may qualify for waiver of 10%penalty (Attach copies of actual dental or medical bills which clearly state your insurance, etc., does not cover the expenses.)

� Purchase of primary residence—excludes mortgage payments (Attach a copy of the binding contractual agreement includingaddendums, if any, to build or purchase home, signed by both parties—buyer and seller—of the contract.)

� Tuition for post-secondary education and related educational expenses for self, spouse, children, dependents, or primarybeneficiary (Attach copies of actual bills for future tuition, etc., of up to the next 12 months. Bills for previously attended semestersor student loans are not acceptable documentation.)

� Prevention of eviction from primary residence� Attach a copy of the eviction notice—either a court order or letter from the landlord. The landlord must clearly identify

himself/herself as the landlord of the property and provide contact information (address and phone number).� Either the letter or court order must clearly state the dollar amount that is due and the date it is due before eviction

proceedings are to take place.� Prevention of foreclosure from primary residence

� Attach a copy of the foreclosure notice from the financial institution or court order.� The financial institution’s name must be on letterhead, and it must be signed by the institution’s representative.� Either form must clearly state the dollar amount that is due and the date it is due in order to remedy foreclosure proceedings.

� Funeral expenses for immediate family including primary beneficiary (Attach an invoice or accounts payable statement from thefuneral provider, church, and/or cemetery.)

� Repair of damage to primary residence that qualifies for casualty tax deduction (Attach detailed invoices or accounts payablestatement from home repair providers indicating amounts still due after insurance payment.)

3. Other Available ResourcesCan this hardship be completely or partially relieved through any of the following options: Yes No

1. Can the hardship be relieved by reimbursement or compensation by insurance or other means?2. Can the hardship be relieved through liquidation of any assets, (ex., Traditional IRA, Roth IRA, savings) if the

liquidation would not cause a severe financial hardship in and of itself?3. Can the hardship be relieved by canceling your contributions to the plan?4. Can the hardship be relieved by other distributions, loans from other 403(b) plans, or by borrowing from

commercial sources?5. Does the amount requested exceed the amount required to satisfy the hardship indicated above?

If you answered “Yes” to any of the five questions above, you are ineligible for a hardship withdrawal until the option(s) for which you have answered “Yes” have been exhausted or until you can provide documentation that your hardship cannot be completely relieved through the source(s) indicated above.

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The 403(b) retirement program is offered by the WEA TSA Trust. TSA program registered representatives are licensed through WEA Investment Services, Inc., member FINRA.

TSA 3522-280-0115

Please complete the Confidential Financial Data Report below. We are unable to process your hardship request without this information.

Confidential Financial Data Report Prepared as of ___________________________

Assets (what you own)

Liabilities (what you owe)

Cash Accounts Loans Amount Mo. Payment

Checking $ Mortgage $ $

Saving $ Second Mortgage $ $

Life Insurance Cash Value $ Automobile(s) $ $

Other Cash Accounts $ Boat/RV/Motorcycle $ $

Credit Cards $ $

Investments Other $ $

Real Estate (Market Value): $ Other $ $

Primary Residence $ Other $ $

Other $ Other $ $

Non-retirement Securities $

403(b) $

Traditional IRA $

Roth IRA $

Total $ Total $ $

Monthly Income Monthly Expenses

Net Income: Payments (from above) $

Yourself $ Rent (not mortgage shown above) $

Spouse $ Real Estate Taxes, etc. $

Child Support/Alimony $ Living Expenses:

Other Income: Utilities $

Interest $ Food/Clothing $

Dividends $ Medical/Life Insurance $

Rental Property $ Vehicle (gas, insurance, etc.) $

Miscellaneous: Other expenses:

$ $

$ $

$ $

Total $ Total $

4. Amount and Source of Withdrawal I wish to make a hardship withdrawal from my 403(b) account. I understand that any prior elective withdrawals will reduce the amount available for hardship, the withdrawal cannot include earnings, and will be prorated from all available investments. Please withdraw the amount indicated below:

$ Before-tax $ After-tax (Roth) if school plan allows

The 403(b) retirement program is offered by the WEA TSA Trust. TSA program registered representatives are licensed through WEA Investment Services, Inc., member FINRA.

TSA 3522-280-0115

5. Explanation of Tax Rules All withdrawals are subject to a minimum 10% federal income tax withholding unless you choose not to have any income tax withheld. The amount withheld will be sent to the IRS as federal income tax withholding, and next year we will send a Form 1099-R for your records.

In accordance with the Tax Reform Act of 1986, a 10% additional federal tax penalty may be imposed (Wisconsin residents may pay an additional 3.3% tax penalty). You are required to report the early withdrawal and additional tax penalty by attaching IRS Form 5329 to your Form 1040 when filing your tax return.

Hardship distributions can be taken from your pre-tax contributions and/or after-tax (Roth) contributions, (if available).

If you choose to take the withdrawal from your Roth contributions, please note the following:

The maximum hardship withdrawal you may take is limited to your elective contributions and is reduced by any prior hardship distributions. However, for tax purposes, Roth TSA hardship withdrawals are reported to the IRS on a pro rata basis of contributions and earnings, which leaves the earnings fully taxable and possibly subject to penalties (as specified above). A pre-tax hardship withdrawal would subject the entire distribution to tax and penalty.

This explanation is for informational purposes only and may not be construed as legal or tax advice. We encourage you to consult with a professional legal or tax advisor before taking a hardship withdrawal from your WEA TSA Trust account.

6. Tax Withholding Federal Taxes � I want 10% withheld from my withdrawal to be applied to federal income tax (this is the default selection). � I want a percentage between 10% and 100% federal tax withheld from this withdrawal. Please withhold %. � I do not want to have federal income tax withheld from this withdrawal. If you do not specify a withholding amount, we are required by federal law to withhold 10% federal income tax. You may request to withhold either 0% or between 10% and 100%.

State Taxes If you live in a state that mandates state income tax withholding, it will be withheld regardless of any selection below. Please select one below. � Withhold the minimum required by the state. � Withhold $ . WEA Member Benefits will withhold at least your state’s legal minimum requirement. � Do not withhold.

7. Authorization for Electronic Deposit Please provide the following information. If you do not know the routing number and account number, please ask your financial institution to assist you. We cannot electronically transfer your deposit without this information. Please note that it may take up to three business days from the processing date for the funds to be credited by your financial institution.

Financial Institution Routing No.

Address Account No.

City, State, ZIP

Account Type: � Savings � Checking (enclose a voided personal check, not a deposit slip, for this account)

8. Employer Acknowledgment I hereby acknowledge that contributions to all employer-sponsored vendors for the above stated employee will be stopped for the next six months. If the employee is actively contributing, I have obtained a new salary reduction agreement to stop the salary deferral.

Authorized Employer Signature Date

(Please forward a copy of the new salary reduction agreement to WEA Member Benefits.)

9. Signature: Submit Original I hereby attest that I have read and understand the Special Tax Notice Regarding 403(b) (TSA) Distributions that I received with this form. I further attest that this withdrawal meets IRS requirements for hardship. I understand the information I have provided will be relied upon in processing my request and I will be solely responsible for its accuracy in the event any dispute arises with respect to the transaction. Participant’s Signature Date

Please be sure you have attached all required supporting documentation indicated earlier in the form.

We require all original signatures on this form. We cannot accept faxes.