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Tax Deferred Savings Plan

403(b) Supplemental Retirement

Eligible Employees

Classified  |  Operational  |  Executive  | 12-Month Faculty & Professional  |  9-Month Faculty & Professional  |  Hourly

William & Mary offers both this 403(b) Tax Sheltered Plan and a 457(b) Deferred Compensation Plan (DCP) as supplemental retirement plans.

403b Summary Plan Description

Frequently Asked Questions
A single-column table of collapsible items for formatting purposes.
What is a Tax Sheltered Plan (TSP)?

Since 1942 the Internal Revenue Code has permitted certain employers, such as William & Mary, to purchase tax sheltered plans (TSPs) for their employees. The tax sheltered plan arrangement permits an employee to contribute tax-free dollars to supplemental retirement plan. By contributing to a TSP program, an employee's gross income is reduced and state and federal income taxes are reduced. Interest earned on this investment is also exempt from taxes until the money is withdrawn.

Why is consider a TSP?

The tax shelter plans serves as a supplemental retirement funds, in addition to Social Security and a retirement plan through your employer. Although the TSP program is intended to supplement retirement income, it may be used for emergencies (financial hardship) and can provide a source of income to a survivor in the event of death or as income for disability. When money is withdrawn from a tax shelter plan it is reported as income for tax purposes. The tax impact is generally not as great on withdrawal, especially at age 65 and retirement when annual income is lower.

What are the benefits of a TSP or DCP Supplemental Retirement Plan?
  • Your contributions are automatically made through payroll deduction
  • A variety of investment choices are available
  • You don't pay federal or Virginia income tax on the deferrals, earnings on your account, or your plan account savings
  • State employees who contribute the specified amount receive an employer-paid cash match (does not pertain to hourly employees)
  • You choose the amount you want to save, subject to tax code and plan limits.
Can I participate in both the 403(b) TSP and 457(b) DCP plans?

Yes! As an employee of the university, you have the opportunity to contribute up to the maximum in BOTH a 403(b) plan and the 457(b) Deferred Compensation Plan at the same time. However, you are only eligible to receive the cash match 401(a) with one plan (does not pertain to hourly employees). Employees who join both plans will default their cash match plan to the 457(b) unless they specify otherwise.

How much may be contributed to a TSP?

Tax Shelter Limits: In accordance with IRS guidelines, you will be allowed to deduct the following for a 403(b) Tax Shelter Plan (TSP) and the 457(b) Deferred Compensation Program:

  • Standard Maximum - $22,500 for employees under age 50.

To assist you in your future retirement planning, individuals who are 50 and older may contribute an additional (“catch-up”) contribution as follows:

  • Catch-Up Maximum - $30,000 for employees age 50 and older.

15 year Rule: An individual employed by W&M or VIMS for 15 or more years may defer up to an additional $3,000 per year for a maximum five-year contribution of $15,000, subject to certain limits based on prior years' deferrals.  Please inquire with your plan provider for eligibility and required documentation. Employees may participate in a 403(b) TSP and the 457(b) DCP simultaneously.

The Virginia Cash Match Plan 401(a) (does not pertain to hourly employees)

The Virginia Cash Match Plan is an employer-paid program. The cash match program offers a 50% employer match on one plan only, with a cap of $20.00 per pay period.

* Note: Employees who are enrolled in the Virginia Retirement System Hybrid retirement plan must be contributing a total of 9% to the Hybrid plan in order to be eligible for the cash match program.

If you are interested in participating in either the 457(b) or 403(b) with a cash match plan, please contact University Human Resources at 757-221-3169 or email for additional information and/or assistance. 

How do I enroll?

Our Benefits staff has literature and enrollment forms. The effective date of enrollment and contributions in a tax shelter annuity must be the first day of the pay period, the 10th or 25th. You may also enroll using the Retirement@Work platform.

How and when may I make withdrawals from a TSA or DCP account?

The Tax Reform Act of 1986 placed restrictions on withdrawal of contributions to a TSA program. Contributions may be withdrawn due to:

  1. Financial Hardship**
  2. Termination of Employment
  3. Death or Disability
  4. Age 59 ½  

**The Internal Revenue Service has not defined "financial hardship." It is believed that the hardship definition related to 401(k) plans will also apply to 403(b) plans. This definition is "immediate and heavy financial needs of the employee that cannot reasonably be met through other resources." Distribution based on financial hardship will be salary contributions only and will not include any earned interest. With any early distribution there is a 20% penalty in addition to state and federal taxes.

The Tax Reform Act also requires mandatory distribution of your TSA benefits no later than April 1 of the calendar year following the year in which you become age 70 ½,  regardless of your actual retirement date. If you do not begin distribution by this time you will be subject to an additional tax equal to 50% of the minimum required distribution.

How many changes can I make?

In accordance with Internal Revenue Service, effective January 1, 1997, 403(b) participants can legally make unlimited changes in a calendar year. However, you may not exceed the maximum for the calendar year. A TSA Salary Reduction Agreement must be completed with each change and submitted to Human Resources.

Where can I make changes to my 403(b)?

Please visit the Retirement@Work platform.

Who are the participating vendors?

The following applies to 403(b) and 401(a):

TIAA | 1-800-842-2776

Fidelity Investments | 1-800-343-0860

 A four-column table listing IRS Limits
Maximum Limitations on Contributions
403 B Limits
457 Limits
Over 50
2021 $19,500 $19,500


2022 $20,500 $20,500


2023 $22,500 $22,500



Retirement@Work is available to active employees who participate in the Optional Retirement Plan (ORP),  or who are eligible to participate in the any of the 403(b) Savings Plans or associated Cash Match Plan.