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Employee Questions About 403(b) Accounts

Find answers to questions about participation, contributions, investments, fees, rollovers, and withdrawals.

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The 403(b) plan is an effective way to build your retirement savings. Your before-tax contributions reduce your taxable income to help you save on taxes, and your contributions and earnings grow tax-deferred until you begin making withdrawals—usually during retirement. You make your own investment decisions, and T. Rowe Price gives you more than 70 professionally managed funds to choose from.

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You can contribute up to $16,500 in 2009 and 2010 or $22,000 for those age 50 and over. Employees who have completed 15 years of service with certain organizations may make additional catch-up contributions (ordering rules apply).

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Yes. You are permitted to stop contributing at any time by notifying your employer.

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You do. Your employer sends your contributions to your T. Rowe Price account, and contributions are invested based on your investment allocations. Your salary reduction contributions are immediately 100% vested.

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There is a $10 administrative fee for each T. Rowe Price mutual fund in your 403(b) account. The fee is waived for any mutual fund account with a balance of $5,000 or more, for individuals with $50,000 or more, and for households with $100,000 or more invested with T. Rowe Price. Assets held in a 529 plan, a plan that is part of the Century Program, or assets held in a plan that was/is recordkept in the Retirement Plan Services division of T. Rowe Price are not counted on toward these limits. There is a closeout fee applied to 403(b) accounts that are closed at T. Rowe Price. The $10 fee will be deducted automatically from the proceeds of the redemption from each mutual fund unless, at the time of redemption, you have previously paid the annual administrative fee for the year. The closeout fee applies regardless of the size of the mutual fund investments.

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  • Direct rollover from a 403(b) account with a prior employer
    After establishing your 403(b) account at T. Rowe Price (by giving your completed 403(b)(7) Custodial Account Application to your employer), confirm with the plan administrator that the plan accepts rollovers, then call T. Rowe Price to obtain the Rollover Contribution Form, which includes instructions for completing your rollover. In most cases, you will also need to fill out a distribution form for your current custodian. Indicate that you want your distribution in a direct rollover, and your current custodian or insurance company will send your 403(b) distribution directly to T. Rowe Price.
  • Indirect rollover from another 403(b) account
    With an indirect rollover, you will first receive a check for a distribution from your current 403(b) custodian or insurance company. You then have 60 days from the date of receipt to roll over all or part of your distribution.

  • How do I exchange assets from another investment provider?

    You can initiate an exchange of existing 403(b) assets in your current employer's plan from another investment provider to T. Rowe Price by completing the 403(b)(7) Exchange-In Request form. (Roth plan contributions are not eligible for exchange to T. Rowe Price.) Follow the instructions on the form for plan administrator approval and return the completed form to T. Rowe Price.
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You can begin withdrawing money from your account without penalty at age 59½, even if you are working at the time. You also may be eligible to receive an early distribution in case of:

  • Termination of Employment. You are eligible to take a distribution from your
    403(b) account when you end your employment.
  • Death. When you die, your beneficiary or the executor of your estate should call T. Rowe Price for information regarding distributions at death.
  • Disability. You may request a distribution if you are permanently disabled.
  • Plan Termination. In most cases you may request a plan distribution if your 403(b) plan is terminated.
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Copyright 2010, T. Rowe Price Investment Services, Inc., Distributor. All rights reserved.