VCOM Faculty Handbook

Please keep in mind that each employee’s retirement account belongs to that individual employee. It is that employee’s responsibility to monitor the progress of their individual account as well as any administrative changes that need to be made. Employees who are within ten years of retirement should check to assure their savings are placed in accounts that will entitle them to withdraw those amounts within ten years. Investment Choices Employees may opt to have the monthly contribution to their account allocated in any way they wish, and once the money is in the accounts the employee can move it among the various accounts as they please with some exceptions. Vesting Vesting in VCOM’s retirement program is immediate. Immediate vesting means that when an employee leaves the employment of VCOM, the contributions which have been made on the employee’s behalf, belong to the employee. Under certain conditions, if an employee leaves VCOM, the employee may opt to withdraw the money in their account. IRS penalties may result if monies are withdrawn from the employee’s account prior to the age of 59½ and are not re-invested in another qualified retirement plan. Deferred Compensation Plan A deferred compensation plan is also available to VCOM employees. This program allows employees to set aside a portion of their income through payroll deductions, with all contributions and earnings free from current state and federal income taxes unless a ROTH option is selected. With such a plan, employees defer receiving that income until they retire and are presumably in a lower tax bracket. Investment choices for the deferred compensation plan are the same as the regular retirement plan. VCOM will match 50 percent of the employee’s contribution to their Supplemental Retirement Annuity (SRA), up to a maximum matching contribution of $20 per pay period. Please contact the VCOM Human Resources Director to determine the maximum amount that they are allowed to defer under this program and to ask other questions an employee might have regarding the benefit. This plan allows employees to use tax-free dollars (free from federal, state and FICA taxes) to purchase flexible benefits from the following: Health Care Reimbursement Through this account, the employee may set aside, up to the maximum amount allowed by the IRS for that tax year, of his or her own tax-free dollars to pay for IRS-eligible medical expenses incurred by the employee or family members. Such expenses could include deductibles, co-payments, orthodontia, eyeglasses, contact lenses, routine physical exams, etc. The dollars remain in an account until needed to reimburse the employee for an expense, which has been incurred. Dependent Care Reimbursement An employee may choose to use this account for dependent care expenses, up to a maximum of $5,000 per year or $2,500 per year if married filing a separate return. These dollars, too, are not subject to federal, state or FICA taxes. Please keep in mind that each employee enrolled in the flexible benefit plan is responsible for maintaining and Cafeteria Plan Services

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