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Contribution Limits

Employer Contributions - Your employer is required to contribute an amount equal to 12% of your gross salary. A portion of the employer contribution totaling 1% of your gross salary is used by the WPF to purchase disability and death protection for you and for such other purposes as the WPF board may from time to time determine. The rest is invested in your account in the Plan. If your employer provides you with a parsonage, your actual salary is hypothetically increased by 30% in calculating

Salary Reduction Contributions - These are contributions made by you by means of payroll salary reduction. This type of contribution allows you to contribute a certain portion of your compensation to the Plan on a pre-tax basis. This type of contribution reduces your currently taxable income by the amount of your contribution, saving you current tax dollars. Non-ordained employees do pay Social Security taxes on their salary reduction contributions.

Rollover/Transfer Contributions - If you are participant in another retirement plan or if you have been contributing to another tax sheltered annuity provider through your employer, you may also be able to make a rollover or transfer contribution to this Plan. A rollover contribution is a direct rollover of a distribution made from another retirement plan into your account in this Plan. You can now roll contributions over from a variety of different retirement plans, including 403(b) plans, 401(a) plans, 401(k) plans, government 457(b) plans and IRAs. A transfer contribution is a transfer directly from another 403(b) annuity provider to the WPF.

How Much to Contribute

How much can you contribute to the Plan? The determination of how much you can contribute each year is an extremely complex area of the tax laws and you should consult your tax adviser about this. There are essentially two limits on the amount of contributions that can be made to your account. One limit only applies to your voluntary salary reduction contributions. The other one applies to all contributions made to the Plan on your behalf. You cannot exceed either of these limits.

The first limit on contributions is that your voluntary Salary Reduction Contributions (not counting any Employer Contributions) cannot exceed the statutory dollar limit. This limit is as follows:

Year Salary Reduction 15 or More Yrs of Service Over 50 Catch-up Total
2006 $15,000 See Example Below $5,000 $20,000
2007 $15,000 See Example Below $5,000 $20,500
2008 $15,500 See Example Below $5,000 $20,500

The second limitation on how much you can contribute is that the total of your Salary Reduction and Employer Contributions in a calendar year cannot exceed 100% of your compensation or $46,000.00, whichever is less. Please note that, for this purpose, "compensation" cannot include any tax-exempt housing allowance (if you are a minister).

403(b) plans of certain qualified organizations may allow employees to make two types of catch-up contributions. First, a qualifying plan may allow an employee with at least 15 years of service to make a special 403(b) catch-up contribution (with a maximum amount determined by a complicated formula). Second, any 403(b) plan may allow participants age 50 and older to make catch-up contributions up to an annual limit ($5,000 in 2007).

The regulations adopt a rule for coordinating the two types of catch-up contributions where both are made available to employees. The special 15-years-of-service catch-up will always apply first. Once a special catch-up contribution is made in full for a year, the age-50 catch-up contribution may be made, up to the annual limit.

If you would like more information about how to determine your maximum contributions or assistance with that determination, please contact the WPF office. Again, WPF will rely on you to provide it with accurate information in order to assist you in calculating your maximum contributions. Therefore, you may want to consult with a tax advisor to ensure that you are providing the WPF with correct and complete information.

Phone: 317-774-3954

Fax: 317-774-3955

Email: wpf@wesleyan.org

Mailing: P.O. Box 50434, Indianapolis, IN 46250