We here at Alliance Benefits are proud to be able to offer an excellent retirement 403(b)(9) church plan that helps take care of our pastors and staff with their retirement needs. One nice option the Alliance 403(b) plan offers is Roth employee contributions. If that option is chosen however, be sure to know how to process Roth contributions properly in your church’s payroll and tax documents.
Before getting into our processing tips, let’s define the two types of contributions available to our 403(b) participants.
Roth contributions can be tricky to process since there are some important differences when compared to traditional contribution processing. It’s important that you are always aware of how contributions are being withheld from paychecks.
It’s also important to be aware of how participant W-2s are processed for contributions.
Finally, one thing that is consistent between both contribution types is how the employee contribution dollar amount percentage is calculated. You should come up with the same number regardless of which contribution type is chosen. That is because both contribution types are always calculated on the same gross pay amount. You never want to first withhold the tax, then calculate contribution percentage on the remaining pay amount, even when a Roth contribution type is chosen.
Please remember if your Alliance 403(b) participants would like professional advice on which contribution type is best for them, they are always welcome to contact our plan consultants, Strategic Financial Partners, at phone number 866-963-1843. If you leave a message, calls are generally returned within 2 business days and all advice is free of charge.
Aaron joined Alliance Benefits in September 2017. As a Benefits Consultant, he works on building relationships with churches and districts, and assists with health insurance and retirement 403(b) questions. He is assigned to serve the churches and districts in the Midwestern and Northeastern United States.