Defined Contribution Plans

Tax Savings Arrangements

• Restricted to organizations exempt under IRC Section 501(c)(3) and public school employees
• Employees contribute by payroll deduction on a pre-tax basis, “Roth” basis or after-tax
• Employer may match employee contributions or make contributions for all eligible employees
• In-service withdrawals allowed only upon demonstration of “financial hardship”
• Employees bear investment risk
• Investment options are selected by THA Board of Trustees with guidance from Independent Investment Consultant
• Employees select investment choices from available mutual funds
• Assets held in custodial account with Charles Schwab
• Compliance and Discrimination performed by third-party administrator hired by Board of Trustees
• Loans to Participants from their own accounts may be available

Deferred Compensation Plan

• Generally restricted for employees of a state, county and hospital districts, its political subdivisions, agencies or instrumentalities and certain tax-exempt organizations
• Employees may elect to contribute by payroll deduction on a pre-tax basis, “Roth” basis or after tax
• In Service Withdrawals allowed only in event of an unforeseeable emergency
• Employees bear investment risk
• Employer contributions are generally made to one of the above plans
• Employer may match employee contributions or make contributions for all eligible employees
• Investment options are selected by THA Board of Trustees with guidance from Independent Investment Consultant
• Employees select investment choices from available mutual funds
• Assets are held in a tax-exempt trust for exclusive benefit of the employees by Charles Schwab
• Compliance and Discrimination performed by third-party administrator hired by Board of Trustees
• Loans to Participants from their own accounts may be available

Money Purchase Pension Plan

• Defined contribution
• Individual participant accounts
• Employer typically contributes a set percentage of salary
• Employees may contribute (after-tax)
• Pre-tax employee contributions possible for public sector employees
• Retirement benefits determined by accumulated contributions and earnings
• Contributions may be coordinated with Social Security taxes to provide higher benefits to higher paid employees
• Forfeitures used to reduce employer contributions
• Favorable to short-term and younger employees
• Nondiscrimination rules generally apply to private sector employers
• Same benefit distribution rules as defined benefit plans
• Assets held in tax-exempt trust and invested in stocks, bonds and short-term cash management
• Employees bears investment risk

Profit Sharing Plan

• Defined contribution
• Individual participant accounts
• Employer contributes discretionary amounts
• Contributions may be coordinated with Social Security taxes to provide higher benefits to higher paid employees
• Forfeitures usually shared among participants
• Participant loans may be allowed
• Favorable to short-term and younger employees
• Non discrimination rules generally apply to private sector employers
• Flexible withdrawal and distribution provisions permissible
• Assets held in tax-exempt trust and invested in stocks, bonds and short-term cash management
• Employees bear investment risk