Benefits News: New Roth Option in Voluntary Retirement Savings Plan (VRSP)
Columbia Benefits is pleased to announce that a new savings option will be added to the Voluntary Retirement Savings Plan (VRSP): Roth contributions. On and after July 1, 2014, you will be able to make Roth contributions, pre-tax contributions or a combination of Roth and pre-tax contributions.
If you contribute to the VRSP today, you know that your current contributions are made on a pre-tax basis. This means the money you contribute is not taxed as part of your pay, but it will be taxable when paid out to you in the future.
The new Roth contribution feature gives you another savings option. Roth contributions will allow you to contribute after-tax dollars from your pay to the VRSP and, so long as you meet certain criteria, these contributions and their investment earnings will be tax-free when paid to you from the plan.
To help you learn more about the VRSP and Roth contributions, we have prepared a brief video:
On April 23, 2014, all eligible faculty and staff also received at your Columbia email address an overview of how Roth contributions work, and features to consider when deciding whether to save on a Roth basis, a pre-tax basis or both.
Building financial security for retirement is important to you and to Columbia University. We offer the VRSP to help you plan and save for the future, and the new Roth contribution option provides additional flexibility. We encourage you to review the materials we have emailed you, and to carefully consider the contribution strategy that is best for you.